[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[House]
[Pages 29238-29282]
[From the U.S. Government Publishing Office, www.gpo.gov]



       CONFERENCE REPORT ON H.R. 1554, INTELLECTUAL PROPERTY AND 
               COMMUNICATIONS OMNIBUS REFORM ACT OF 1999

  Mr. TAUZIN (during debate on H. Con. Res. 223) submitted the 
following conference report and statement on the bill (H.R. 1554) to 
amend the provisions of title 17, United States Code, and the 
Communications Act of 1934, relating to copyright licensing and 
carriage of broadcast signals by satellite:


[[Page 29239]]

                  Conference Report (H. Rept. 106-464)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     1554), to amend the provisions of title 17, United States 
     Code, and the Communications Act of 1934, relating to 
     copyright licensing and carriage of broadcast signals by 
     satellite, having met, after full and free conference, have 
     agreed to recommend and do recommend to their respective 
     Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:  

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Intellectual Property and Communications Omnibus Reform Act 
     of 1999''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; table of contents.

               TITLE I--SATELLITE HOME VIEWER IMPROVEMENT

Sec. 1001. Short title.
Sec. 1002. Limitations on exclusive rights; secondary transmissions by 
              satellite carriers within local markets.
Sec. 1003. Extension of effect of amendments to section 119 of title 
              17, United States Code.
Sec. 1004. Computation of royalty fees for satellite carriers.
Sec. 1005. Distant signal eligibility for consumers.
Sec. 1006. Public broadcasting service satellite feed.
Sec. 1007. Application of Federal communications commission 
              regulations.
Sec. 1008. Rules for satellite carriers retransmitting television 
              broadcast signals.
Sec. 1009. Retransmission consent.
Sec. 1010. Severability.
Sec. 1011. Technical amendments.
Sec. 1012. Effective dates.

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

Sec. 2001. Short title.
Sec. 2002. Loan guarantees.
Sec. 2003. Administration of loan guarantees.
Sec. 2004. Retransmission of local television broadcast stations.
Sec. 2005. Local television service in unserved and underserved 
              markets.
Sec. 2006. Definitions.

              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

Sec. 3001. Short title; references.
Sec. 3002. Cyberpiracy prevention.
Sec. 3003. Damages and remedies.
Sec. 3004. Limitation on liability.
Sec. 3005. Definitions.
Sec. 3006. Study on abusive domain name registrations involving 
              personal names.
Sec. 3007. Historic preservation.
Sec. 3008. Savings clause.
Sec. 3009. Technical and conforming amendments.
Sec. 3010. Effective date.

                     TITLE IV--INVENTOR PROTECTION

Sec. 4001. Short title.

                     Subtitle A--Inventors' Rights

Sec. 4101. Short title.
Sec. 4102. Integrity in invention promotion services.
Sec. 4103. Effective date.

             Subtitle B--Patent and Trademark Fee Fairness

Sec. 4201. Short title.
Sec. 4202. Adjustment of patent fees.
Sec. 4203. Adjustment of trademark fees.
Sec. 4204. Study on alternative fee structures.
Sec. 4205. Patent and Trademark Office Funding.
Sec. 4206. Effective date.

                   Subtitle C--First Inventor Defense

Sec. 4301. Short title.
Sec. 4302. Defense to patent infringement based on earlier inventor.
Sec. 4303. Effective date and applicability.

                   Subtitle D--Patent Term Guarantee

Sec. 4401. Short title.
Sec. 4402. Patent term guarantee authority.
Sec. 4403. Continued examination of patent applications.
Sec. 4404. Technical clarification.
Sec. 4405. Effective date.

   Subtitle E--Domestic Publication of Patent Applications Published 
                                 Abroad

Sec. 4501. Short title.
Sec. 4502. Publication.
Sec. 4503. Time for claiming benefit of earlier filing date.
Sec. 4504. Provisional rights.
Sec. 4505. Prior art effect of published applications.
Sec. 4506. Cost recovery for publication.
Sec. 4507. Conforming amendments.
Sec. 4508. Effective date.

       Subtitle F--Optional Inter Partes Reexamination Procedure

Sec. 4601. Short title.
Sec. 4602. Ex parte reexamination of patents.
Sec. 4603. Definitions.
Sec. 4604. Optional inter partes reexamination procedures.
Sec. 4605. Conforming amendments.
Sec. 4606. Report to Congress.
Sec. 4607. Estoppel effect of reexamination.
Sec. 4608. Effective date.

               T1Subtitle G--Patent and Trademark Office

Sec. 4701. Short title.

          Chapter 1--United States Patent and Trademark Office

Sec. 4711. Establishment of Patent and Trademark Office.
Sec. 4712. Powers and duties.
Sec. 4713. Organization and management.
Sec. 4714. Public advisory committees.
Sec. 4715. Conforming amendments.
Sec. 4716. Trademark Trial and Appeal Board.
Sec. 4717. Board of Patent Appeals and Interferences.
Sec. 4718. Annual report of Director.
Sec. 4719. Suspension or exclusion from practice.
Sec. 4720. Pay of Director and Deputy Director.

            Chapter 2--Effective Date; Technical Amendments

Sec. 4731. Effective date.
Sec. 4732. Technical and conforming amendments.

                  Chapter 3--Miscellaneous Provisions

Sec. 4741. References.
Sec. 4742. Exercise of authorities.
Sec. 4743. Savings provisions.
Sec. 4744. Transfer of assets.
Sec. 4745. Delegation and assignment.
Sec. 4746. Authority of director of the Office of Management and Budget 
              with respect to functions transferred.
Sec. 4747. Certain vesting of functions considered transfers.
Sec. 4748. Availability of existing funds.
Sec. 4749. Definitions.

              Subtitle H--Miscellaneous Patent Provisions

Sec. 4801. Provisional applications.
Sec. 4802. International applications.
Sec. 4803. Certain limitations on damages for patent infringement not 
              applicable.
Sec. 4804. Electronic filing and publications.
Sec. 4805. Study and report on biological deposits in support of 
              biotechnology patents.
Sec. 4806. Prior invention.
Sec. 4807. Prior art exclusion for certain commonly assigned patents.
Sec. 4808. Exchange of copies of patents with foreign countries.

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 5001. Commission on online child protection.
Sec. 5002. Privacy protection for donors to public broadcasting 
              entities.
Sec. 5003. Completion of biennial regulatory review.
Sec. 5004. Public broadcasting entities.
Sec. 5005. Technical amendments relating to vessel hull design 
              protection.
Sec. 5006. Informal rulemaking of copyright determination.
Sec. 5007. Service of process for surety corporations.
Sec. 5008. Low-power television.
               TITLE I--SATELLITE HOME VIEWER IMPROVEMENT

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Satellite Home Viewer 
     Improvement Act of 1999''.

     SEC. 1002. LIMITATIONS ON EXCLUSIVE RIGHTS; SECONDARY 
                   TRANSMISSIONS BY SATELLITE CARRIERS WITHIN 
                   LOCAL MARKETS.

       (a) In General.--Chapter 1 of title 17, United States Code, 
     is amended by adding after section 121 the following new 
     section:

     ``Sec. 122. Limitations on exclusive rights; secondary 
       transmissions by satellite carriers within local markets

       ``(a) Secondary Transmissions of Television Broadcast 
     Stations by Satellite Carriers.--A secondary transmission of 
     a performance or display of a work embodied in a primary 
     transmission of a television broadcast station into the 
     station's local market shall be subject to statutory 
     licensing under this section if--
       ``(1) the secondary transmission is made by a satellite 
     carrier to the public;
       ``(2) with regard to secondary transmissions, the satellite 
     carrier is in compliance with the rules, regulations, or 
     authorizations of the Federal Communications Commission 
     governing the carriage of television broadcast station 
     signals; and
       ``(3) the satellite carrier makes a direct or indirect 
     charge for the secondary transmission to--
       ``(A) each subscriber receiving the secondary transmission; 
     or
       ``(B) a distributor that has contracted with the satellite 
     carrier for direct or indirect delivery of the secondary 
     transmission to the public.
       ``(b) Reporting Requirements.--
       ``(1) Initial lists.--A satellite carrier that makes 
     secondary transmissions of a primary transmission made by a 
     network station under subsection (a) shall, within 90 days 
     after commencing such secondary transmissions, submit to the 
     network that owns or is affiliated with the network station a 
     list identifying (by name in alphabetical order and street 
     address, including county and zip code) all subscribers to 
     which the satellite carrier makes secondary transmissions of 
     that primary transmission under subsection (a).
       ``(2) Subsequent lists.--After the list is submitted under 
     paragraph (1), the satellite carrier shall, on the 15th of 
     each month, submit to the network a list identifying (by name 
     in alphabetical order and street address, including county

[[Page 29240]]

     and zip code) any subscribers who have been added or dropped 
     as subscribers since the last submission under this 
     subsection.
       ``(3) Use of subscriber information.--Subscriber 
     information submitted by a satellite carrier under this 
     subsection may be used only for the purposes of monitoring 
     compliance by the satellite carrier with this section.
       ``(4) Requirements of networks.--The submission 
     requirements of this subsection shall apply to a satellite 
     carrier only if the network to which the submissions are to 
     be made places on file with the Register of Copyrights a 
     document identifying the name and address of the person to 
     whom such submissions are to be made. The Register of 
     Copyrights shall maintain for public inspection a file of all 
     such documents.
       ``(c) No Royalty Fee Required.--A satellite carrier whose 
     secondary transmissions are subject to statutory licensing 
     under subsection (a) shall have no royalty obligation for 
     such secondary transmissions.
       ``(d) Noncompliance With Reporting and Regulatory 
     Requirements.--Notwithstanding subsection (a), the willful or 
     repeated secondary transmission to the public by a satellite 
     carrier into the local market of a television broadcast 
     station of a primary transmission embodying a performance or 
     display of a work made by that television broadcast station 
     is actionable as an act of infringement under section 501, 
     and is fully subject to the remedies provided under sections 
     502 through 506 and 509, if the satellite carrier has not 
     complied with the reporting requirements of subsection (b) or 
     with the rules, regulations, and authorizations of the 
     Federal Communications Commission concerning the carriage of 
     television broadcast signals.
       ``(e) Willful Alterations.--Notwithstanding subsection (a), 
     the secondary transmission to the public by a satellite 
     carrier into the local market of a television broadcast 
     station of a performance or display of a work embodied in a 
     primary transmission made by that television broadcast 
     station is actionable as an act of infringement under section 
     501, and is fully subject to the remedies provided by 
     sections 502 through 506 and sections 509 and 510, if the 
     content of the particular program in which the performance or 
     display is embodied, or any commercial advertising or station 
     announcement transmitted by the primary transmitter during, 
     or immediately before or after, the transmission of such 
     program, is in any way willfully altered by the satellite 
     carrier through changes, deletions, or additions, or is 
     combined with programming from any other broadcast signal.
       ``(f) Violation of Territorial Restrictions on Statutory 
     License for Television Broadcast Stations.--
       ``(1) Individual violations.--The willful or repeated 
     secondary transmission to the public by a satellite carrier 
     of a primary transmission embodying a performance or display 
     of a work made by a television broadcast station to a 
     subscriber who does not reside in that station's local 
     market, and is not subject to statutory licensing under 
     section 119 or a private licensing agreement, is actionable 
     as an act of infringement under section 501 and is fully 
     subject to the remedies provided by sections 502 through 506 
     and 509, except that--
       ``(A) no damages shall be awarded for such act of 
     infringement if the satellite carrier took corrective action 
     by promptly withdrawing service from the ineligible 
     subscriber; and
       ``(B) any statutory damages shall not exceed $5 for such 
     subscriber for each month during which the violation 
     occurred.
       ``(2) Pattern of violations.--If a satellite carrier 
     engages in a willful or repeated pattern or practice of 
     secondarily transmitting to the public a primary transmission 
     embodying a performance or display of a work made by a 
     television broadcast station to subscribers who do not reside 
     in that station's local market, and are not subject to 
     statutory licensing under section 119 or a private licensing 
     agreement, then in addition to the remedies under paragraph 
     (1)--
       ``(A) if the pattern or practice has been carried out on a 
     substantially nationwide basis, the court--
       ``(i) shall order a permanent injunction barring the 
     secondary transmission by the satellite carrier of the 
     primary transmissions of that television broadcast station 
     (and if such television broadcast station is a network 
     station, all other television broadcast stations affiliated 
     with such network); and
       ``(ii) may order statutory damages not exceeding $250,000 
     for each 6-month period during which the pattern or practice 
     was carried out; and
       ``(B) if the pattern or practice has been carried out on a 
     local or regional basis with respect to more than 1 
     television broadcast station, the court--
       ``(i) shall order a permanent injunction barring the 
     secondary transmission in that locality or region by the 
     satellite carrier of the primary transmissions of any 
     television broadcast station; and
       ``(ii) may order statutory damages not exceeding $250,000 
     for each 6-month period during which the pattern or practice 
     was carried out.
       ``(g) Burden of Proof.--In any action brought under 
     subsection (f), the satellite carrier shall have the burden 
     of proving that its secondary transmission of a primary 
     transmission by a television broadcast station is made only 
     to subscribers located within that station's local market or 
     subscribers being served in compliance with section 119 or a 
     private licensing agreement.
       ``(h) Geographic Limitations on Secondary Transmissions.--
     The statutory license created by this section shall apply to 
     secondary transmissions to locations in the United States.
       ``(i) Exclusivity With Respect to Secondary Transmissions 
     of Broadcast Stations by Satellite to Members of the 
     Public.--No provision of section 111 or any other law (other 
     than this section and section 119) shall be construed to 
     contain any authorization, exemption, or license through 
     which secondary transmissions by satellite carriers of 
     programming contained in a primary transmission made by a 
     television broadcast station may be made without obtaining 
     the consent of the copyright owner.
       ``(j) Definitions.--In this section--
       ``(1) Distributor.--The term `distributor' means an entity 
     which contracts to distribute secondary transmissions from a 
     satellite carrier and, either as a single channel or in a 
     package with other programming, provides the secondary 
     transmission either directly to individual subscribers or 
     indirectly through other program distribution entities.
       ``(2) Local market.--
       ``(A) In general.--The term `local market', in the case of 
     both commercial and noncommercial television broadcast 
     stations, means the designated market area in which a station 
     is located, and--
       ``(i) in the case of a commercial television broadcast 
     station, all commercial television broadcast stations 
     licensed to a community within the same designated market 
     area are within the same local market; and
       ``(ii) in the case of a noncommercial educational 
     television broadcast station, the market includes any station 
     that is licensed to a community within the same designated 
     market area as the noncommercial educational television 
     broadcast station.
       ``(B) County of license.--In addition to the area described 
     in subparagraph (A), a station's local market includes the 
     county in which the station's community of license is 
     located.
       ``(C) Designated market area.--For purposes of subparagraph 
     (A), the term `designated market area' means a designated 
     market area, as determined by Nielsen Media Research and 
     published in the 1999-2000 Nielsen Station Index Directory 
     and Nielsen Station Index United States Television Household 
     Estimates or any successor publication.
       ``(3) Network station; satellite carrier; secondary 
     transmission.--The terms `network station', `satellite 
     carrier' and `secondary transmission' have the meanings given 
     such terms under section 119(d).
       ``(4) Subscriber.--The term `subscriber' means a person who 
     receives a secondary transmission service from a satellite 
     carrier and pays a fee for the service, directly or 
     indirectly, to the satellite carrier or to a distributor.
       ``(5) Television broadcast station.--The term `television 
     broadcast station'--
       ``(A) means an over-the-air, commercial or noncommercial 
     television broadcast station licensed by the Federal 
     Communications Commission under subpart E of part 73 of title 
     47, Code of Federal Regulations, except that such term does 
     not include a low-power or translator television station; and
       ``(B) includes a television broadcast station licensed by 
     an appropriate governmental authority of Canada or Mexico if 
     the station broadcasts primarily in the English language and 
     is a network station as defined in section 119(d)(2)(A).''.
       (b) Infringement of Copyright.--Section 501 of title 17, 
     United States Code, is amended by adding at the end the 
     following new subsection:
       ``(f)(1) With respect to any secondary transmission that is 
     made by a satellite carrier of a performance or display of a 
     work embodied in a primary transmission and is actionable as 
     an act of infringement under section 122, a television 
     broadcast station holding a copyright or other license to 
     transmit or perform the same version of that work shall, for 
     purposes of subsection (b) of this section, be treated as a 
     legal or beneficial owner if such secondary transmission 
     occurs within the local market of that station.
       ``(2) A television broadcast station may file a civil 
     action against any satellite carrier that has refused to 
     carry television broadcast signals, as required under section 
     122(a)(2), to enforce that television broadcast station's 
     rights under section 338(a) of the Communications Act of 
     1934.''.
       (c) Technical and Conforming Amendments.--The table of 
     sections for chapter 1 of title 17, United States Code, is 
     amended by adding after the item relating to section 121 the 
     following:

``122. Limitations on exclusive rights; secondary transmissions by 
              satellite carriers within local market.''.

     SEC. 1003. EXTENSION OF EFFECT OF AMENDMENTS TO SECTION 119 
                   OF TITLE 17, UNITED STATES CODE.

       Section 4(a) of the Satellite Home Viewer Act of 1994 (17 
     U.S.C. 119 note; Public Law 103-369; 108 Stat. 3481) is 
     amended by striking ``December 31, 1999'' and inserting 
     ``December 31, 2004''.

     SEC. 1004. COMPUTATION OF ROYALTY FEES FOR SATELLITE 
                   CARRIERS.

       Section 119(c) of title 17, United States Code, is amended 
     by adding at the end the following new paragraph:
       ``(4) Reduction.--
       ``(A) Superstation.--The rate of the royalty fee in effect 
     on January 1, 1998, payable in each case under subsection 
     (b)(1)(B)(i) shall be reduced by 30 percent.
       ``(B) Network and public broadcasting satellite feed.--The 
     rate of the royalty fee in effect on January 1, 1998, payable 
     under subsection (b)(1)(B)(ii) shall be reduced by 45 
     percent.

[[Page 29241]]

       ``(5) Public broadcasting service as agent.--For purposes 
     of section 802, with respect to royalty fees paid by 
     satellite carriers for retransmitting the Public Broadcasting 
     Service satellite feed, the Public Broadcasting Service shall 
     be the agent for all public television copyright claimants 
     and all Public Broadcasting Service member stations.''.

     SEC. 1005. DISTANT SIGNAL ELIGIBILITY FOR CONSUMERS.

       (a) Unserved Household.--
       (1) In general.--Section 119(d) of title 17, United States 
     Code, is amended by striking paragraph (10) and inserting the 
     following:
       ``(10) Unserved household.--The term `unserved household', 
     with respect to a particular television network, means a 
     household that--
       ``(A) cannot receive, through the use of a conventional, 
     stationary, outdoor rooftop receiving antenna, an over-the-
     air signal of a primary network station affiliated with that 
     network of Grade B intensity as defined by the Federal 
     Communications Commission under section 73.683(a) of title 47 
     of the Code of Federal Regulations, as in effect on January 
     1, 1999;
       ``(B) is subject to a waiver granted under regulations 
     established under section 339(c)(2) of the Communications Act 
     of 1934;
       ``(C) is a subscriber to whom subsection (e) applies;
       ``(D) is a subscriber to whom subsection (a)(11) applies; 
     or
       ``(E) is a subscriber to whom the exemption under 
     subsection (a)(2)(B)(iii) applies.''.
       (2) Conforming amendment.--Section 119(a)(2)(B) of title 
     17, United States Code, is amended to read as follows:
       ``(B) Secondary transmissions to unserved households.--
       ``(i) In general.--The statutory license provided for in 
     subparagraph (A) shall be limited to secondary transmissions 
     of the signals of no more than 2 network stations in a single 
     day for each television network to persons who reside in 
     unserved households.
       ``(ii) Accurate determinations of eligibility.--

       ``(I) Accurate predictive model.--In determining 
     presumptively whether a person resides in an unserved 
     household under subsection (d)(10)(A), a court shall rely on 
     the Individual Location Longley-Rice model set forth by the 
     Federal Communications Commission in Docket No. 98-201, as 
     that model may be amended by the Commission over time under 
     section 339(c)(3) of the Communications Act of 1934 to 
     increase the accuracy of that model.
       ``(II) Accurate measurements.--For purposes of site 
     measurements to determine whether a person resides in an 
     unserved household under subsection (d)(10)(A), a court shall 
     rely on section 339(c)(4) of the Communications Act of 1934.

       ``(iii) C-band exemption to unserved households.--

       ``(I) In general.--The limitations of clause (i) shall not 
     apply to any secondary transmissions by C-band services of 
     network stations that a subscriber to C-band service received 
     before any termination of such secondary transmissions before 
     October 31, 1999.
       ``(II) Definition.--In this clause the term `C-band 
     service' means a service that is licensed by the Federal 
     Communications Commission and operates in the Fixed Satellite 
     Service under part 25 of title 47 of the Code of Federal 
     Regulations.''.

       (b) Exception to Limitation on Secondary Transmissions.--
     Section 119(a)(5) of title 17, United States Code, is amended 
     by adding at the end the following:
       ``(E) Exception.--The secondary transmission by a satellite 
     carrier of a performance or display of a work embodied in a 
     primary transmission made by a network station to subscribers 
     who do not reside in unserved households shall not be an act 
     of infringement if--
       ``(i) the station on May 1, 1991, was retransmitted by a 
     satellite carrier and was not on that date owned or operated 
     by or affiliated with a television network that offered 
     interconnected program service on a regular basis for 15 or 
     more hours per week to at least 25 affiliated television 
     licensees in 10 or more States;
       ``(ii) as of July 1, 1998, such station was retransmitted 
     by a satellite carrier under the statutory license of this 
     section; and
       ``(iii) the station is not owned or operated by or 
     affiliated with a television network that, as of January 1, 
     1995, offered interconnected program service on a regular 
     basis for 15 or more hours per week to at least 25 affiliated 
     television licensees in 10 or more States.''.
       (c) Moratorium on Copyright Liability.--Section 119(e) of 
     title 17, United States Code, is amended to read as follows:
       ``(e) Moratorium on Copyright Liability.--Until December 
     31, 2004, a subscriber who does not receive a signal of grade 
     A intensity (as defined in the regulations of the Federal 
     Communications Commission under section 73.683(a) of title 47 
     of the Code of Federal Regulations, as in effect on January 
     1, 1999, or predicted by the Federal Communications 
     Commission using the Individual Location Longley-Rice 
     methodology described by the Federal Communications 
     Commission in Docket 98-201) of a local network television 
     broadcast station shall remain eligible to receive signals of 
     network stations affiliated with the same network, if that 
     subscriber had satellite service of such network signal 
     terminated after July 11, 1998, and before October 31, 1999, 
     as required by this section, or received such service on 
     October 31, 1999.''.
       (d) Recreational Vehicle and Commercial Truck Exemption.--
     Section 119(a) of title 17, United States Code, is amended by 
     adding at the end the following:
       ``(11) Service to recreational vehicles and commercial 
     trucks.--
       ``(A) Exemption.--
       ``(i) In general.--For purposes of this subsection, and 
     subject to clauses (ii) and (iii), the term `unserved 
     household' shall include--

       ``(I) recreational vehicles as defined in regulations of 
     the Secretary of Housing and Urban Development under section 
     3282.8 of title 24 of the Code of Federal Regulations; and
       ``(II) commercial trucks that qualify as commercial motor 
     vehicles under regulations of the Secretary of Transportation 
     under section 383.5 of title 49 of the Code of Federal 
     Regulations.

       ``(ii) Limitation.--Clause (i) shall apply only to a 
     recreational vehicle or commercial truck if any satellite 
     carrier that proposes to make a secondary transmission of a 
     network station to the operator of such a recreational 
     vehicle or commercial truck complies with the documentation 
     requirements under subparagraphs (B) and (C).
       ``(iii) Exclusion.--For purposes of this subparagraph, the 
     terms `recreational vehicle' and `commercial truck' shall not 
     include any fixed dwelling, whether a mobile home or 
     otherwise.
       ``(B) Documentation requirements.--A recreational vehicle 
     or commercial truck shall be deemed to be an unserved 
     household beginning 10 days after the relevant satellite 
     carrier provides to the network that owns or is affiliated 
     with the network station that will be secondarily transmitted 
     to the recreational vehicle or commercial truck the following 
     documents:
       ``(i) Declaration.--A signed declaration by the operator of 
     the recreational vehicle or commercial truck that the 
     satellite dish is permanently attached to the recreational 
     vehicle or commercial truck, and will not be used to receive 
     satellite programming at any fixed dwelling.
       ``(ii) Registration.--In the case of a recreational 
     vehicle, a copy of the current State vehicle registration for 
     the recreational vehicle.
       ``(iii) Registration and license.--In the case of a 
     commercial truck, a copy of--

       ``(I) the current State vehicle registration for the truck; 
     and
       ``(II) a copy of a valid, current commercial driver's 
     license, as defined in regulations of the Secretary of 
     Transportation under section 383 of title 49 of the Code of 
     Federal Regulations, issued to the operator.

       ``(C) Updated documentation requirements.--If a satellite 
     carrier wishes to continue to make secondary transmissions to 
     a recreational vehicle or commercial truck for more than a 2-
     year period, that carrier shall provide each network, upon 
     request, with updated documentation in the form described 
     under subparagraph (B) during the 90 days before expiration 
     of that 2-year period.''.
       (e) Exception to Satellite Carrier Definition.--Section 
     119(d)(6) of title 17, United States Code, is amended by 
     inserting before the period ``, or provides a digital online 
     communication service''.
       (f) Conforming Amendment.--Section 119(d)(11) of title 17, 
     United States Code, is amended to read as follows:
       ``(11) Local market.--The term `local market' has the 
     meaning given such term under section 122(j).''.

     SEC. 1006. PUBLIC BROADCASTING SERVICE SATELLITE FEED.

       (a) Secondary Transmissions.--Section 119(a)(1) of title 
     17, United States Code, is amended--
       (1) by striking the paragraph heading and inserting ``(1) 
     Superstations and pbs satellite feed.--'';
       (2) by inserting ``or by the Public Broadcasting Service 
     satellite feed'' after ``superstation''; and
       (3) by adding at the end the following: ``In the case of 
     the Public Broadcasting Service satellite feed, the statutory 
     license shall be effective until January 1, 2002.''.
       (b) Royalty Fees.--Section 119(b)(1)(B)(iii) of title 17, 
     United States Code, is amended by inserting ``or the Public 
     Broadcasting Service satellite feed'' after ``network 
     station''.
       (c) Definitions.--Section 119(d) of title 17, United States 
     Code, is amended--
       (1) by amending paragraph (9) to read as follows:
       ``(9) Superstation.--The term `superstation'--
       ``(A) means a television broadcast station, other than a 
     network station, licensed by the Federal Communications 
     Commission that is secondarily transmitted by a satellite 
     carrier; and
       ``(B) except for purposes of computing the royalty fee, 
     includes the Public Broadcasting Service satellite feed.''; 
     and
       (2) by adding at the end the following:
       ``(12) Public broadcasting service satellite feed.--The 
     term `Public Broadcasting Service satellite feed' means the 
     national satellite feed distributed and designated for 
     purposes of this section by the Public Broadcasting Service 
     consisting of educational and informational programming 
     intended for private home viewing, to which the Public 
     Broadcasting Service holds national terrestrial broadcast 
     rights.''.

     SEC. 1007. APPLICATION OF FEDERAL COMMUNICATIONS COMMISSION 
                   REGULATIONS.

       Section 119(a) of title 17, United States Code, is 
     amended--
       (1) in paragraph (1), by inserting ``with regard to 
     secondary transmissions the satellite carrier is in 
     compliance with the rules, regulations, or authorizations of 
     the Federal Communications Commission governing the carriage 
     of

[[Page 29242]]

     television broadcast station signals,'' after ``satellite 
     carrier to the public for private home viewing,'';
       (2) in paragraph (2), by inserting ``with regard to 
     secondary transmissions the satellite carrier is in 
     compliance with the rules, regulations, or authorizations of 
     the Federal Communications Commission governing the carriage 
     of television broadcast station signals,'' after ``satellite 
     carrier to the public for private home viewing,''; and
       (3) by adding at the end of such subsection (as amended by 
     section 1005(e) of this Act) the following new paragraph:
       ``(12) Statutory license contingent on compliance with fcc 
     rules and remedial steps.--Notwithstanding any other 
     provision of this section, the willful or repeated secondary 
     transmission to the public by a satellite carrier of a 
     primary transmission embodying a performance or display of a 
     work made by a broadcast station licensed by the Federal 
     Communications Commission is actionable as an act of 
     infringement under section 501, and is fully subject to the 
     remedies provided by sections 502 through 506 and 509, if, at 
     the time of such transmission, the satellite carrier is not 
     in compliance with the rules, regulations, and authorizations 
     of the Federal Communications Commission concerning the 
     carriage of television broadcast station signals.''.

     SEC. 1008. RULES FOR SATELLITE CARRIERS RETRANSMITTING 
                   TELEVISION BROADCAST SIGNALS.

       (a) Amendments to Communications Act of 1934.--Title III of 
     the Communications Act of 1934 is amended by inserting after 
     section 337 (47 U.S.C. 337) the following new sections:

     ``SEC. 338. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE 
                   CARRIERS.

       ``(a) Carriage Obligations.--
       ``(1) In general.--Subject to the limitations of paragraph 
     (2), each satellite carrier providing, under section 122 of 
     title 17, United States Code, secondary transmissions to 
     subscribers located within the local market of a television 
     broadcast station of a primary transmission made by that 
     station shall carry upon request the signals of all 
     television broadcast stations located within that local 
     market, subject to section 325(b).
       ``(2) Remedies for failure to carry.--The remedies for any 
     failure to meet the obligations under this subsection shall 
     be available exclusively under section 501(f) of title 17, 
     United States Code.
       ``(3) Effective date.--No satellite carrier shall be 
     required to carry local television broadcast stations under 
     paragraph (1) until January 1, 2002.
       ``(b) Good Signal Required.--
       ``(1) Costs.--A television broadcast station asserting its 
     right to carriage under subsection (a) shall be required to 
     bear the costs associated with delivering a good quality 
     signal to the designated local receive facility of the 
     satellite carrier or to another facility that is acceptable 
     to at least one-half the stations asserting the right to 
     carriage in the local market.
       ``(2) Regulations.--The regulations issued under subsection 
     (g) shall set forth the obligations necessary to carry out 
     this subsection.
       ``(c) Duplication Not Required.--
       ``(1) Commercial stations.--Notwithstanding subsection (a), 
     a satellite carrier shall not be required to carry upon 
     request the signal of any local commercial television 
     broadcast station that substantially duplicates the signal of 
     another local commercial television broadcast station which 
     is secondarily transmitted by the satellite carrier within 
     the same local market, or to carry upon request the signals 
     of more than 1 local commercial television broadcast station 
     in a single local market that is affiliated with a particular 
     television network unless such stations are licensed to 
     communities in different States.
       ``(2) Noncommercial stations.--The Commission shall 
     prescribe regulations limiting the carriage requirements 
     under subsection (a) of satellite carriers with respect to 
     the carriage of multiple local noncommercial television 
     broadcast stations. To the extent possible, such regulations 
     shall provide the same degree of carriage by satellite 
     carriers of such multiple stations as is provided by cable 
     systems under section 615.
       ``(d) Channel Positioning.--No satellite carrier shall be 
     required to provide the signal of a local television 
     broadcast station to subscribers in that station's local 
     market on any particular channel number or to provide the 
     signals in any particular order, except that the satellite 
     carrier shall retransmit the signal of the local television 
     broadcast stations to subscribers in the stations' local 
     market on contiguous channels and provide access to such 
     station's signals at a nondiscriminatory price and in a 
     nondiscriminatory manner on any navigational device, on-
     screen program guide, or menu.
       ``(e) Compensation for Carriage.--A satellite carrier shall 
     not accept or request monetary payment or other valuable 
     consideration in exchange either for carriage of local 
     television broadcast stations in fulfillment of the 
     requirements of this section or for channel positioning 
     rights provided to such stations under this section, except 
     that any such station may be required to bear the costs 
     associated with delivering a good quality signal to the local 
     receive facility of the satellite carrier.
       ``(f) Remedies.--
       ``(1) Complaints by broadcast stations.--Whenever a local 
     television broadcast station believes that a satellite 
     carrier has failed to meet its obligations under subsections 
     (b) through (e) of this section, such station shall notify 
     the carrier, in writing, of the alleged failure and identify 
     its reasons for believing that the satellite carrier failed 
     to comply with such obligations. The satellite carrier shall, 
     within 30 days after such written notification, respond in 
     writing to such notification and comply with such obligations 
     or state its reasons for believing that it is in compliance 
     with such obligations. A local television broadcast station 
     that disputes a response by a satellite carrier that it is in 
     compliance with such obligations may obtain review of such 
     denial or response by filing a complaint with the Commission. 
     Such complaint shall allege the manner in which such 
     satellite carrier has failed to meet its obligations and the 
     basis for such allegations.
       ``(2) Opportunity to respond.--The Commission shall afford 
     the satellite carrier against which a complaint is filed 
     under paragraph (1) an opportunity to present data and 
     arguments to establish that there has been no failure to meet 
     its obligations under this section.
       ``(3) Remedial actions; dismissal.--Within 120 days after 
     the date a complaint is filed under paragraph (1), the 
     Commission shall determine whether the satellite carrier has 
     met its obligations under subsections (b) through (e). If the 
     Commission determines that the satellite carrier has failed 
     to meet such obligations, the Commission shall order the 
     satellite carrier to take appropriate remedial action. If the 
     Commission determines that the satellite carrier has fully 
     met the requirements of such subsections, the Commission 
     shall dismiss the complaint.
       ``(g) Regulations by Commission.--Within 1 year after the 
     date of enactment of this section, the Commission shall issue 
     regulations implementing this section following a rulemaking 
     proceeding. The regulations prescribed under this section 
     shall include requirements on satellite carriers that are 
     comparable to the requirements on cable operators under 
     sections 614(b) (3) and (4) and 615(g)(1) and (2).
       ``(h) Definitions.--As used in this section:
       ``(1) Distributor.--The term `distributor' means an entity 
     which contracts to distribute secondary transmissions from a 
     satellite carrier and, either as a single channel or in a 
     package with other programming, provides the secondary 
     transmission either directly to individual subscribers or 
     indirectly through other program distribution entities.
       ``(2) Local receive facility.--The term `local receive 
     facility' means the reception point in each local market 
     which a satellite carrier designates for delivery of the 
     signal of the station for purposes of retransmission.
       ``(3) Local market.--The term `local market' has the 
     meaning given that term under section 122(j) of title 17, 
     United States Code.
       ``(4) Satellite carrier.--The term `satellite carrier' has 
     the meaning given such term under section 119(d) of title 17, 
     United States Code.
       ``(5) Secondary transmission.--The term `secondary 
     transmission' has the meaning given such term in section 
     119(d) of title 17, United States Code.
       ``(6) Subscriber.--The term `subscriber' has the meaning 
     given that term under section 122(j) of title 17, United 
     States Code.
       ``(7) Television broadcast station.--The term `television 
     broadcast station' has the meaning given such term in section 
     325(b)(7).

     ``SEC. 339. CARRIAGE OF DISTANT TELEVISION STATIONS BY 
                   SATELLITE CARRIERS.

       ``(a) Provisions Relating to Carriage of Distant Signals.--
       ``(1) Carriage permitted.--
       ``(A) In general.--Subject to section 119 of title 17, 
     United States Code, any satellite carrier shall be permitted 
     to provide the signals of no more than 2 network stations in 
     a single day for each television network to any household not 
     located within the local markets of those network stations.
       ``(B) Additional service.--In addition to signals provided 
     under subparagraph (A), any satellite carrier may also 
     provide service under the statutory license of section 122 of 
     title 17, United States Code, to the local market within 
     which such household is located. The service provided under 
     section 122 of such title may be in addition to the 2 signals 
     provided under section 119 of such title.
       ``(2) Penalty for violation.--Any satellite carrier that 
     knowingly and willfully provides the signals of television 
     stations to subscribers in violation of this subsection shall 
     be liable for a forfeiture penalty under section 503 in the 
     amount of $50,000 for each violation or each day of a 
     continuing violation.
       ``(b) Extension of Network Nonduplication, Syndicated 
     Exclusivity, and Sports Blackout to Satellite 
     Retransmission.--
       ``(1) Extension of protections.--Within 45 days after the 
     date of enactment of the Satellite Home Viewer Improvement 
     Act of 1999, the Commission shall commence a single 
     rulemaking proceeding to establish regulations that--
       ``(A) apply network nonduplication protection (47 C.F.R. 
     76.92) syndicated exclusivity protection (47 C.F.R. 76.151), 
     and sports blackout protection (47 C.F.R. 76.67) to the 
     retransmission of the signals of nationally distributed 
     superstations by satellite carriers to subscribers; and
       ``(B) to the extent technically feasible and not 
     economically prohibitive, apply sports blackout protection 
     (47 C.F.R. 76.67) to the retransmission of the signals of 
     network stations by satellite carriers to subscribers.
       ``(2) Deadline for action.--The Commission shall complete 
     all actions necessary to prescribe regulations required by 
     this section so that the regulations shall become effective 
     within 1 year after such date of enactment.
       ``(c) Eligibility for Retransmission.--
       ``(1) Signal standard for satellite carrier purposes.--For 
     the purposes of identifying an

[[Page 29243]]

     unserved household under section 119(d)(10) of title 17, 
     United States Code, within 1 year after the date of enactment 
     of the Satellite Home Viewer Improvement Act of 1999, the 
     Commission shall conclude an inquiry to evaluate all possible 
     standards and factors for determining eligibility for 
     retransmissions of the signals of network stations, and, if 
     appropriate--
       ``(A) recommend modifications to the Grade B intensity 
     standard for analog signals set forth in section 73.683(a) of 
     its regulations (47 C.F.R. 73.683(a)), or recommend 
     alternative standards or factors for purposes of determining 
     such eligibility; and
       ``(B) make a further recommendation relating to an 
     appropriate standard for digital signals.
       ``(2) Waivers.--A subscriber who is denied the 
     retransmission of a signal of a network station under section 
     119 of title 17, United States Code, may request a waiver 
     from such denial by submitting a request, through such 
     subscriber's satellite carrier, to the network station 
     asserting that the retransmission is prohibited. The network 
     station shall accept or reject a subscriber's request for a 
     waiver within 30 days after receipt of the request. The 
     subscriber shall be permitted to receive such retransmission 
     under section 119(d)(10)(B) of title 17, United States Code, 
     if such station agrees to the waiver request and files with 
     the satellite carrier a written waiver with respect to that 
     subscriber allowing the subscriber to receive such 
     retransmission. If a television network station fails to 
     accept or reject a subscriber's request for a waiver within 
     the 30-day period after receipt of the request, that station 
     shall be deemed to agree to the waiver request and have filed 
     such written waiver.
       ``(3) Establishment of improved predictive model 
     required.--Within 180 days after the date of enactment of the 
     Satellite Home Viewer Improvement Act of 1999, the Commission 
     shall take all actions necessary, including any 
     reconsideration, to develop and prescribe by rule a point-to-
     point predictive model for reliably and presumptively 
     determining the ability of individual locations to receive 
     signals in accordance with the signal intensity standard in 
     effect under section 119(d)(10)(A) of title 17, United States 
     Code. In prescribing such model, the Commission shall rely on 
     the Individual Location Longley-Rice model set forth by the 
     Federal Communications Commission in Docket 98-201 and ensure 
     that such model takes into account terrain, building 
     structures, and other land cover variations. The Commission 
     shall establish procedures for the continued refinement in 
     the application of the model by the use of additional data as 
     it becomes available.
       ``(4) Objective verification.--
       ``(A) In general.--If a subscriber's request for a waiver 
     under paragraph (2) is rejected and the subscriber submits to 
     the subscriber's satellite carrier a request for a test 
     verifying the subscriber's inability to receive a signal that 
     meets the signal intensity standard in effect under section 
     119(d)(10)(A) of title 17, United States Code, the satellite 
     carrier and the network station or stations asserting that 
     the retransmission is prohibited with respect to that 
     subscriber shall select a qualified and independent person to 
     conduct a test in accordance with section 73.686(d) of its 
     regulations (47 C.F.R. 73.686(d)), or any successor 
     regulation. Such test shall be conducted within 30 days after 
     the date the subscriber submits a request for the test. If 
     the written findings and conclusions of a test conducted in 
     accordance with such section (or any successor regulation) 
     demonstrate that the subscriber does not receive a signal 
     that meets or exceeds the signal intensity standard in effect 
     under section 119(d)(10)(A) of title 17, United States Code, 
     the subscriber shall not be denied the retransmission of a 
     signal of a network station under section 119 of title 17, 
     United States Code.
       ``(B) Designation of tester and allocation of costs.--If 
     the satellite carrier and the network station or stations 
     asserting that the retransmission is prohibited are unable to 
     agree on such a person to conduct the test, the person shall 
     be designated by an independent and neutral entity designated 
     by the Commission by rule. Unless the satellite carrier and 
     the network station or stations otherwise agree, the costs of 
     conducting the test under this paragraph shall be borne by 
     the satellite carrier, if the station's signal meets or 
     exceeds the signal intensity standard in effect under section 
     119(d)(10)(A) of title 17, United States Code, or by the 
     network station, if its signal fails to meet or exceed such 
     standard.
       ``(C) Avoidance of undue burden.-- Commission regulations 
     prescribed under this paragraph shall seek to avoid any undue 
     burden on any party.
       ``(d) Definitions.--For the purposes of this section:
       ``(1) Local market.--The term `local market' has the 
     meaning given that term under section 122(j) of title 17, 
     United States Code.
       ``(2) Nationally distributed superstation.--The term 
     `nationally distributed superstation' means a television 
     broadcast station, licensed by the Commission, that--
       ``(A) is not owned or operated by or affiliated with a 
     television network that, as of January 1, 1995, offered 
     interconnected program service on a regular basis for 15 or 
     more hours per week to at least 25 affiliated television 
     licensees in 10 or more States;
       ``(B) on May 1, 1991, was retransmitted by a satellite 
     carrier and was not a network station at that time; and
       ``(C) was, as of July 1, 1998, retransmitted by a satellite 
     carrier under the statutory license of section 119 of title 
     17, United States Code.
       ``(3) Network station.--The term `network station' has the 
     meaning given such term under section 119(d) of title 17, 
     United States Code.
       ``(4) Satellite carrier.--The term `satellite carrier' has 
     the meaning given such term under section 119(d) of title 17, 
     United States Code.
       ``(5) Television network.--The term `television network' 
     means a television network in the United States which offers 
     an interconnected program service on a regular basis for 15 
     or more hours per week to at least 25 affiliated broadcast 
     stations in 10 or more States.''.
       (b) Network Station Definition.--Section 119(d)(2) of title 
     17, United States Code, is amended--
       (1) in subparagraph (B) by striking the period and 
     inserting a semicolon; and
       (2) by adding after subparagraph (B) the following:
     ``except that the term does not include the signal of the 
     Alaska Rural Communications Service, or any successor entity 
     to that service.''.

     SEC. 1009. RETRANSMISSION CONSENT.

       (a) In General.--Section 325(b) of the Communications Act 
     of 1934 (47 U.S.C. 325(b)) is amended--
       (1) by amending paragraphs (1) and (2) to read as follows:
       ``(b)(1) No cable system or other multichannel video 
     programming distributor shall retransmit the signal of a 
     broadcasting station, or any part thereof, except--
       ``(A) with the express authority of the originating 
     station;
       ``(B) under section 614, in the case of a station electing, 
     in accordance with this subsection, to assert the right to 
     carriage under such section; or
       ``(C) under section 338, in the case of a station electing, 
     in accordance with this subsection, to assert the right to 
     carriage under such section.
       ``(2) This subsection shall not apply--
       ``(A) to retransmission of the signal of a noncommercial 
     television broadcast station;
       ``(B) to retransmission of the signal of a television 
     broadcast station outside the station's local market by a 
     satellite carrier directly to its subscribers, if--
       ``(i) such station was a superstation on May 1, 1991;
       ``(ii) as of July 1, 1998, such station was retransmitted 
     by a satellite carrier under the statutory license of section 
     119 of title 17, United States Code; and
       ``(iii) the satellite carrier complies with any network 
     nonduplication, syndicated exclusivity, and sports blackout 
     rules adopted by the Commission under section 339(b) of this 
     Act;
       ``(C) until December 31, 2004, to retransmission of the 
     signals of network stations directly to a home satellite 
     antenna, if the subscriber receiving the signal--
       ``(i) is located in an area outside the local market of 
     such stations; and
       ``(ii) resides in an unserved household;
       ``(D) to retransmission by a cable operator or other 
     multichannel video provider, other than a satellite carrier, 
     of the signal of a television broadcast station outside the 
     station's local market if such signal was obtained from a 
     satellite carrier and--
       ``(i) the originating station was a superstation on May 1, 
     1991; and
       ``(ii) as of July 1, 1998, such station was retransmitted 
     by a satellite carrier under the statutory license of section 
     119 of title 17, United States Code; or
       ``(E) during the 6-month period beginning on the date of 
     enactment of the Satellite Home Viewer Improvement Act of 
     1999, to the retransmission of the signal of a television 
     broadcast station within the station's local market by a 
     satellite carrier directly to its subscribers under the 
     statutory license of section 122 of title 17, United States 
     Code.
     For purposes of this paragraph, the terms `satellite carrier' 
     and `superstation' have the meanings given those terms, 
     respectively, in section 119(d) of title 17, United States 
     Code, as in effect on the date of enactment of the Cable 
     Television Consumer Protection and Competition Act of 1992, 
     the term `unserved household' has the meaning given that term 
     under section 119(d) of such title, and the term `local 
     market' has the meaning given that term in section 122(j) of 
     such title.'';
       (2) by adding at the end of paragraph (3) the following new 
     subparagraph:
       ``(C) Within 45 days after the date of enactment of the 
     Satellite Home Viewer Improvement Act of 1999, the Commission 
     shall commence a rulemaking proceeding to revise the 
     regulations governing the exercise by television broadcast 
     stations of the right to grant retransmission consent under 
     this subsection, and such other regulations as are necessary 
     to administer the limitations contained in paragraph (2). The 
     Commission shall complete all actions necessary to prescribe 
     such regulations within 1 year after such date of enactment. 
     Such regulations shall--
       ``(i) establish election time periods that correspond with 
     those regulations adopted under subparagraph (B) of this 
     paragraph; and
       ``(ii) until January 1, 2006, prohibit a television 
     broadcast station that provides retransmission consent from 
     engaging in exclusive contracts for carriage or failing to 
     negotiate in good faith, and it shall not be a failure to 
     negotiate in good faith if the television broadcast station 
     enters into retransmission consent agreements containing 
     different terms and conditions, including price terms, with 
     different multichannel video programming distributors if such 
     different terms and conditions are based on competitive 
     marketplace considerations.'';
       (3) in paragraph (4), by adding at the end the following 
     new sentence: ``If an originating television station elects 
     under paragraph (3)(C) to

[[Page 29244]]

     exercise its right to grant retransmission consent under this 
     subsection with respect to a satellite carrier, section 338 
     shall not apply to the carriage of the signal of such station 
     by such satellite carrier.'';
       (4) in paragraph (5), by striking ``614 or 615'' and 
     inserting ``338, 614, or 615''; and
       (5) by adding at the end the following new paragraph:
       ``(7) For purposes of this subsection, the term--
       ``(A) `network station' has the meaning given such term 
     under section 119(d) of title 17, United States Code; and
       ``(B) `television broadcast station' means an over-the-air 
     commercial or noncommercial television broadcast station 
     licensed by the Commission under subpart E of part 73 of 
     title 47, Code of Federal Regulations, except that such term 
     does not include a low-power or translator television 
     station.''.
       (b) Enforcement Provisions for Consent for 
     Retransmissions.--Section 325 of the Communications Act of 
     1934 (47 U.S.C. 325) is amended by adding at the end the 
     following new subsection:
       ``(e) Enforcement Proceedings Against Satellite Carriers 
     Concerning Retransmissions of Television Broadcast Stations 
     in the Respective Local Markets of Such Carriers.--
       ``(1) Complaints by television broadcast stations.--If 
     after the expiration of the 6-month period described under 
     subsection (b)(2)(E) a television broadcast station believes 
     that a satellite carrier has retransmitted its signal to any 
     person in the local market of such station in violation of 
     subsection (b)(1), the station may file with the Commission a 
     complaint providing--
       ``(A) the name, address, and call letters of the station;
       ``(B) the name and address of the satellite carrier;
       ``(C) the dates on which the alleged retransmission 
     occurred;
       ``(D) the street address of at least 1 person in the local 
     market of the station to whom the alleged retransmission was 
     made;
       ``(E) a statement that the retransmission was not expressly 
     authorized by the television broadcast station; and
       ``(F) the name and address of counsel for the station.
       ``(2) Service of complaints on satellite carriers.--For 
     purposes of any proceeding under this subsection, any 
     satellite carrier that retransmits the signal of any 
     broadcast station shall be deemed to designate the Secretary 
     of the Commission as its agent for service of process. A 
     television broadcast station may serve a satellite carrier 
     with a complaint concerning an alleged violation of 
     subsection (b)(1) through retransmission of a station within 
     the local market of such station by filing the original and 2 
     copies of the complaint with the Secretary of the Commission 
     and serving a copy of the complaint on the satellite carrier 
     by means of 2 commonly used overnight delivery services, each 
     addressed to the chief executive officer of the satellite 
     carrier at its principal place of business, and each marked 
     `URGENT LITIGATION MATTER' on the outer packaging. Service 
     shall be deemed complete 1 business day after a copy of the 
     complaint is provided to the delivery services for overnight 
     delivery. On receipt of a complaint filed by a television 
     broadcast station under this subsection, the Secretary of the 
     Commission shall send the original complaint by United States 
     mail, postage prepaid, receipt requested, addressed to the 
     chief executive officer of the satellite carrier at its 
     principal place of business.
       ``(3) Answers by satellite carriers.--Within 5 business 
     days after the date of service, the satellite carrier shall 
     file an answer with the Commission and shall serve the answer 
     by a commonly used overnight delivery service and by United 
     States mail, on the counsel designated in the complaint at 
     the address listed for such counsel in the complaint.
       ``(4) Defenses.--
       ``(A) Exclusive defenses.--The defenses under this 
     paragraph are the exclusive defenses available to a satellite 
     carrier against which a complaint under this subsection is 
     filed.
       ``(B) Defenses.--The defenses referred to under 
     subparagraph (A) are the defenses that--
       ``(i) the satellite carrier did not retransmit the 
     television broadcast station to any person in the local 
     market of the station during the time period specified in the 
     complaint;
       ``(ii) the television broadcast station had, in a writing 
     signed by an officer of the television broadcast station, 
     expressly authorized the retransmission of the station by the 
     satellite carrier to each person in the local market of the 
     television broadcast station to which the satellite carrier 
     made such retransmissions for the entire time period during 
     which it is alleged that a violation of subsection (b)(1) has 
     occurred;
       ``(iii) the retransmission was made after January 1, 2002, 
     and the television broadcast station had elected to assert 
     the right to carriage under section 338 as against the 
     satellite carrier for the relevant period; or
       ``(iv) the station being retransmitted is a noncommercial 
     television broadcast station.
       ``(5) Counting of violations.--The retransmission without 
     consent of a particular television broadcast station on a 
     particular day to 1 or more persons in the local market of 
     the station shall be considered a separate violation of 
     subsection (b)(1).
       ``(6) Burden of proof.--With respect to each alleged 
     violation, the burden of proof shall be on a television 
     broadcast station to establish that the satellite carrier 
     retransmitted the station to at least 1 person in the local 
     market of the station on the day in question. The burden of 
     proof shall be on the satellite carrier with respect to all 
     defenses other than the defense under paragraph (4)(B)(i).
       ``(7) Procedures.--
       ``(A) Regulations.--Within 60 days after the date of 
     enactment of the Satellite Home Viewer Improvement Act of 
     1999, the Commission shall issue procedural regulations 
     implementing this subsection which shall supersede procedures 
     under section 312.
       ``(B) Determinations.--
       ``(i) In general.--Within 45 days after the filing of a 
     complaint, the Commission shall issue a final determination 
     in any proceeding brought under this subsection. The 
     Commission's final determination shall specify the number of 
     violations committed by the satellite carrier. The Commission 
     shall hear witnesses only if it clearly appears, based on 
     written filings by the parties, that there is a genuine 
     dispute about material facts. Except as provided in the 
     preceding sentence, the Commission may issue a final ruling 
     based on written filings by the parties.
       ``(ii) Discovery.--The Commission may direct the parties to 
     exchange pertinent documents, and if necessary to take 
     prehearing depositions, on such schedule as the Commission 
     may approve, but only if the Commission first determines that 
     such discovery is necessary to resolve a genuine dispute 
     about material facts, consistent with the obligation to make 
     a final determination within 45 days.
       ``(8) Relief.--If the Commission determines that a 
     satellite carrier has retransmitted the television broadcast 
     station to at least 1 person in the local market of such 
     station and has failed to meet its burden of proving 1 of the 
     defenses under paragraph (4) with respect to such 
     retransmission, the Commission shall be required to--
       ``(A) make a finding that the satellite carrier violated 
     subsection (b)(1) with respect to that station; and
       ``(B) issue an order, within 45 days after the filing of 
     the complaint, containing--
       ``(i) a cease-and-desist order directing the satellite 
     carrier immediately to stop making any further 
     retransmissions of the television broadcast station to any 
     person within the local market of such station until such 
     time as the Commission determines that the satellite carrier 
     is in compliance with subsection (b)(1) with respect to such 
     station;
       ``(ii) if the satellite carrier is found to have violated 
     subsection (b)(1) with respect to more than 2 television 
     broadcast stations, a cease-and-desist order directing the 
     satellite carrier to stop making any further retransmission 
     of any television broadcast station to any person within the 
     local market of such station, until such time as the 
     Commission, after giving notice to the station, that the 
     satellite carrier is in compliance with subsection (b)(1) 
     with respect to such stations; and
       ``(iii) an award to the complainant of that complainant's 
     costs and reasonable attorney's fees.
       ``(9) Court proceedings on enforcement of commission 
     order.--
       ``(A) In general.--On entry by the Commission of a final 
     order granting relief under this subsection--
       ``(i) a television broadcast station may apply within 30 
     days after such entry to the United States District Court for 
     the Eastern District of Virginia for a final judgment 
     enforcing all relief granted by the Commission; and
       ``(ii) the satellite carrier may apply within 30 days after 
     such entry to the United States District Court for the 
     Eastern District of Virginia for a judgment reversing the 
     Commission's order.
       ``(B) Appeal.--The procedure for an appeal under this 
     paragraph by the satellite carrier shall supersede any other 
     appeal rights under Federal or State law. A United States 
     district court shall be deemed to have personal jurisdiction 
     over the satellite carrier if the carrier, or a company under 
     common control with the satellite carrier, has delivered 
     television programming by satellite to more than 30 customers 
     in that district during the preceding 4-year period. If the 
     United States District Court for the Eastern District of 
     Virginia does not have personal jurisdiction over the 
     satellite carrier, an enforcement action or appeal shall be 
     brought in the United States District Court for the District 
     of Columbia, which may find personal jurisdiction based on 
     the satellite carrier's ownership of licenses issued by the 
     Commission. An application by a television broadcast station 
     for an order enforcing any cease-and-desist relief granted by 
     the Commission shall be resolved on a highly expedited 
     schedule. No discovery may be conducted by the parties in any 
     such proceeding. The district court shall enforce the 
     Commission order unless the Commission record reflects 
     manifest error and an abuse of discretion by the Commission.
       ``(10) Civil action for statutory damages.--Within 6 months 
     after issuance of an order by the Commission under this 
     subsection, a television broadcast station may file a civil 
     action in any United States district court that has personal 
     jurisdiction over the satellite carrier for an award of 
     statutory damages for any violation that the Commission has 
     determined to have been committed by a satellite carrier 
     under this subsection. Such action shall not be subject to 
     transfer under section 1404(a) of title 28, United States 
     Code. On finding that the satellite carrier has committed 1 
     or more violations of subsection (b), the District Court 
     shall be required to award the television broadcast station

[[Page 29245]]

     statutory damages of $25,000 per violation, in accordance 
     with paragraph (5), and the costs and attorney's fees 
     incurred by the station. Such statutory damages shall be 
     awarded only if the television broadcast station has filed a 
     binding stipulation with the court that such station will 
     donate the full amount in excess of $1,000 of any statutory 
     damage award to the United States Treasury for public 
     purposes. Notwithstanding any other provision of law, a 
     station shall incur no tax liability of any kind with respect 
     to any amounts so donated. Discovery may be conducted by the 
     parties in any proceeding under this paragraph only if and to 
     the extent necessary to resolve a genuinely disputed issue of 
     fact concerning 1 of the defenses under paragraph (4). In any 
     such action, the defenses under paragraph (4) shall be 
     exclusive, and the burden of proof shall be on the satellite 
     carrier with respect to all defenses other than the defense 
     under paragraph (4)(B)(i). A judgment under this paragraph 
     may be enforced in any manner permissible under Federal or 
     State law.
       ``(11) Appeals.--
       ``(A) In general.--The nonprevailing party before a United 
     States district court may appeal a decision under this 
     subsection to the United States Court of Appeals with 
     jurisdiction over that district court. The Court of Appeals 
     shall not issue any stay of the effectiveness of any decision 
     granting relief against a satellite carrier unless the 
     carrier presents clear and convincing evidence that it is 
     highly likely to prevail on appeal and only after posting a 
     bond for the full amount of any monetary award assessed 
     against it and for such further amount as the Court of 
     Appeals may believe appropriate.
       ``(B) Appeal.--If the Commission denies relief in response 
     to a complaint filed by a television broadcast station under 
     this subsection, the television broadcast station filing the 
     complaint may file an appeal with the United States Court of 
     Appeals for the District of Columbia Circuit.
       ``(12) Sunset.--No complaint or civil action may be filed 
     under this subsection after December 31, 2001. This 
     subsection shall continue to apply to any complaint or civil 
     action filed on or before such date.''.

     SEC. 1010. SEVERABILITY.

       If any provision of section 325(b) of the Communications 
     Act of 1934 (47 U.S.C. 325(b)), or the application of that 
     provision to any person or circumstance, is held by a court 
     of competent jurisdiction to violate any provision of the 
     Constitution of the United States, then the other provisions 
     of that section, and the application of that provision to 
     other persons and circumstances, shall not be affected.

     SEC. 1011. TECHNICAL AMENDMENTS.

       (a) Technical Amendments Relating to Cable Systems.--Title 
     17, United States Code is amended as follows:
       (1) Such title is amended--
       (A) by striking ``cable system'' and ``cable systems'' each 
     place it appears (other than chapter 12) and inserting 
     ``terrestrial system'' and ``terrestrial systems'', 
     respectively;
       (B) by striking ``cable service'' each place it appears and 
     inserting ``terrestrial service''; and
       (C) by striking ``programing' each place it appears and 
     inserting ``programming''.
       (2) Section 111(d)(1)(C) is amended by striking ``cable 
     system's'' and inserting ``terrestrial system's''.
       (3) Section 111 is amended in the subsection headings for 
     subsections (c), (d), and (e), by striking ``Cable'' and 
     inserting ``Terrestrial''.
       (4) Chapter 5 is amended--
       (A) in the table of contents by amending the item relating 
     to section 510 to read as follows:

``Sec. 510. Remedies for alteration of programming by terrestrial 
              systems.'';
     and
       (B) by amending the section heading for section 510 to read 
     as follows:

     ``Sec. 510. Remedies for alteration of programming by 
       terrestrial systems''.

       (5) Section 801(b)(2)(A) is amended--
       (A) by striking ``cable subscribers'' and inserting 
     ``terrestrial service subscribers''; and
       (B) by striking ``cable industry'' and inserting 
     ``terrestrial service industry''.
       (6) Section 111 is amended by striking ``compulsory'' each 
     place it appears and inserting ``statutory''.
       (7) Section 510(b) is amended by striking ``compulsory'' 
     and inserting ``statutory''.
       (b) Technical Amendments Relating to Performance or 
     Displays Of Works.--
       (1) Section 111 of title 17, United States Code, is 
     amended--
       (A) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``primary transmission embodying a 
     performance or display of a work'' and inserting 
     ``performance or display of a work embodied in a primary 
     transmission'';
       (B) in subsection (b), in the matter preceding paragraph 
     (1), by striking ``primary transmission embodying a 
     performance or display of a work'' and inserting 
     ``performance or display of a work embodied in a primary 
     transmission''; and
       (C) in subsection (c)--
       (i) in paragraph (1)--

       (I) by inserting ``a performance or display of a work 
     embodied in'' after ``by a terrestrial system of''; and
       (II) by striking ``and embodying a performance or display 
     of a work''; and

       (ii) in paragraphs (3) and (4)--

       (I) by striking ``a primary transmission'' and inserting 
     ``a performance or display of a work embodied in a primary 
     transmission''; and
       (II) by striking ``and embodying a performance or display 
     of a work''.

       (2) Section 119(a) of title 17, United States Code, is 
     amended--
       (A) in paragraph (1), by striking ``primary transmission 
     made by a superstation and embodying a performance or display 
     of a work'' and inserting ``performance or display of a work 
     embodied in a primary transmission made by a superstation'';
       (B) in paragraph (2)(A), by striking ``programming'' and 
     all that follows through ``a work'' and inserting ``a 
     performance or display of a work embodied in a primary 
     transmission made by a network station'';
       (C) in paragraph (4)--
       (i) by inserting ``a performance or display of a work 
     embodied in'' after ``by a satellite carrier of''; and
       (ii) by striking ``and embodying a performance or display 
     of a work''; and
       (D) in paragraph (6)--
       (i) by inserting ``performance or display of a work 
     embodied in'' after ``by a satellite carrier of''; and
       (ii) by striking ``and embodying a performance or display 
     of a work''.
       (3) Section 501(e) of title 17, United States Code, is 
     amended by striking ``primary transmission embodying the 
     performance or display of a work'' and inserting 
     ``performance or display of a work embodied in a primary 
     transmission''.
       (c) Technical Amendment Relating to Terrestrial Systems.--
     Section 111(f) of title 17, United States Code, is amended in 
     the first sentence of the definition of `terrestrial system', 
     by inserting ``, other than a digital online communication 
     service,'' after ``other communications channels''.
       (d) Conforming Amendment.--Section 119(a)(2)(C) of title 
     17, United States Code, is amended in the first sentence by 
     striking ``currently''.
       (e) Work Made for Hire.--Section 101 of title 17, United 
     States Code, is amended in the definition relating to work 
     for hire in paragraph (2) by inserting ``as a sound 
     recording,'' after ``audiovisual work''.

     SEC. 1012. EFFECTIVE DATES.

       Sections 1001, 1003, 1005, 1007, 1008, 1009, 1010, and 1011 
     (and the amendments made by such sections) shall take effect 
     on the date of enactment of this Act. The amendments made by 
     sections 1002, 1004, and 1006 shall be effective as of July 
     1, 1999.
                TITLE II--RURAL LOCAL TELEVISION SIGNALS

     SEC. 2001. SHORT TITLE.

       This title may be cited as the ``Rural Local Broadcast 
     Signal Act''.

     SEC. 2002. LOAN GUARANTEES.

       (a) Purpose.--The purpose of this title is to ensure 
     improved access to the signals of local television stations 
     by multichannel video providers to all households which 
     desire such service in unserved and underserved rural areas 
     by December 31, 2006.
       (b) Assistance to Borrowers.--Subject to the appropriations 
     limitation under subsection (c)(2), the Secretary, after 
     consultation with the Secretary of the Treasury and the 
     Federal Communications Commission, may provide loan 
     guarantees to borrowers to finance projects to provide local 
     television broadcast signals by providers of multichannel 
     video services including direct broadcast satellite licensees 
     and licensees of multichannel multipoint distribution 
     systems, to areas that do not receive local television 
     broadcast signals over commercial for-profit direct-to-home 
     satellite distribution systems. A borrower that receives a 
     loan guarantee under this title may not transfer any part of 
     the proceeds of the monies from the loans guaranteed under 
     this program to an affiliate of the borrower.
       (c) Underwriting Criteria; Prerequisites.--
       (1) In general.--The Secretary shall administer the 
     underwriting criteria developed under subsection (f)(1) to 
     determine which loans are eligible for a guarantee under this 
     title.
       (2) Authority to make loan guarantees.--The Secretary shall 
     be authorized to guarantee loans under this title only to the 
     extent provided for in advance by appropriations Acts.
       (3) Prerequisites.--In addition to meeting the underwriting 
     criteria under paragraph (1), a loan is not eligible for a 
     loan guarantee under this title unless--
       (A) the loan is made to finance the acquisition, 
     improvement, enhancement, construction, deployment, launch, 
     or rehabilitation of the means by which local television 
     broadcast signals will be delivered to an area not receiving 
     such signals over commercial for-profit direct-to-home 
     satellite distribution systems;
       (B) the proceeds of the loan will not be used for operating 
     expenses;
       (C) the total amount of all such loans may not exceed in 
     the aggregate $1,250,000,000;
       (D) the loan does not exceed $100,000,000, except that 1 
     loan under this title may exceed $100,000,000, but shall not 
     exceed $625,000,000;
       (E) the loan bears interest and penalties which, in the 
     Secretary's judgment, are not unreasonable, taking into 
     consideration the prevailing interest rates and customary 
     fees incurred under similar obligations in the private 
     capital market; and
       (F) the Secretary determines that taking into account the 
     practices of the private capital markets with respect to the 
     financing of similar projects, the security of the loan is 
     adequate.
       (4) Additional criteria.--In addition to the requirements 
     of paragraphs (1), (2), and (3), a loan for which a guarantee 
     is sought under this title shall meet any additional criteria 
     promulgated under subsection (f)(1).

[[Page 29246]]

       (d) Additional Requirements.--The Secretary may not make a 
     loan guarantee under this title unless--
       (1) repayment of the obligation is required to be made 
     within a term of the lesser of--
       (A) 25 years from the date of its execution; or
       (B) the useful life of the primary assets used in the 
     delivery of relevant signals;
       (2) the Secretary has been given the assurances and 
     documentation necessary to review and approve the guaranteed 
     loans;
       (3) the Secretary makes a determination in writing that--
       (A) the applicant has given reasonable assurances that the 
     assets, facilities, or equipment will be utilized 
     economically and efficiently;
       (B) necessary and sufficient regulatory approvals, spectrum 
     rights, and delivery permissions have been received by 
     project participants to assure the project's ability to repay 
     obligations under this title; and
       (C) repayment of the obligation can reasonably be expected, 
     including the use of an appropriate combination of credit 
     risk premiums and collateral offered by the applicant to 
     protect the Federal Government.
       (e) Approval of NTIA Required.--
       (1) In general.--The Secretary may not issue a loan 
     guarantee under this title unless the National 
     Telecommunications and Information Administration consults 
     with the Secretary and certifies that--
       (A) the issuance of the loan guarantee is consistent with 
     subsection (a) of this section; and
       (B) consistent with subsection (b) of this section, the 
     project to be financed by a loan guaranteed under this 
     section is not likely to have a substantial adverse impact on 
     competition between multichannel video programming 
     distributors that outweighs the benefits of improving access 
     to the signals of a local television station by a 
     multichannel video provider.
       (2) Certification.--The Secretary shall provide the 
     appropriate information on each loan guarantee application 
     recommended by the Secretary to the National 
     Telecommunications and Information Administration for 
     certification. The National Telecommunications and 
     Information Administration shall make the determination 
     required under this subsection within 90 days, without regard 
     to the provision of chapter 5 of title 5, United States Code, 
     and sections 10 and 11 of the Federal Advisory Committee Act 
     (5 U.S.C. App.).
       (f) Requirements.--
       (1) In general.--Within 180 days after the date of 
     enactment of this Act, the Secretary shall consult with the 
     Office of Management and Budget and an independent public 
     accounting firm to develop underwriting criteria relating to 
     the issuance of loan guarantees, appropriate collateral and 
     cash flow levels for the types of loan guarantees that might 
     be issued under this title, and such other matters as the 
     Secretary determines appropriate.
       (2) Authority of secretary.--In lieu of or in combination 
     with appropriations of budget authority to cover the costs of 
     loan guarantees as required under section 504(b)(1) of the 
     Federal Credit Reform Act of 1990, the Secretary may accept 
     on behalf of an applicant for assistance under this title a 
     commitment from a non-Federal source to fund in whole or in 
     part the credit risk premiums with respect to the applicant's 
     loan. The aggregate of appropriations of budget authority and 
     credit risk premiums described in this paragraph with respect 
     to a loan guarantee may not be less than the cost of that 
     loan guarantee.
       (3) Credit risk premium amount.--The Secretary shall 
     determine the amount required for credit risk premiums under 
     this subsection on the basis of--
       (A) the circumstances of the applicant, including the 
     amount of collateral offered;
       (B) the proposed schedule of loan disbursements;
       (C) the borrower's business plans for providing service;
       (D) financial commitment from the broadcast signal 
     provider;
       (E) approval of the Office of Management and Budget; and
       (F) any other factors the Secretary considers relevant.
       (4) Payment of premiums.--Credit risk premiums under this 
     subsection shall be paid to an account established in the 
     Treasury which shall accrue interest and such interest shall 
     be retained by the account, subject to paragraph (5).
       (5) Cohorts of loans.--In order to maintain sufficient 
     balances of credit risk premiums to adequately protect the 
     Federal Government from risk of default, while minimizing the 
     length of time the Government retains possession of those 
     balances, the Secretary in consultation with the Office of 
     Management and Budget shall establish cohorts of loans. When 
     all obligations attached to a cohort of loans have been 
     satisfied, credit risk premiums paid for the cohort, and 
     interest accrued thereon, which were not used to mitigate 
     losses shall be returned to the original source on a pro rata 
     basis.
       (g) Conditions of Assistance.--A borrower shall agree to 
     such terms and conditions as are sufficient, in the judgment 
     of the Secretary to ensure that, as long as any principal or 
     interest is due and payable on such obligation, the 
     borrower--
       (1) will maintain assets, equipment, facilities, and 
     operations on a continuing basis;
       (2) will not make any discretionary dividend payments that 
     reduce the ability to repay obligations incurred under this 
     section; and
       (3) will remain sufficiently capitalized.
       (h) Lien on Interests in Assets.--Upon providing a loan 
     guarantee to a borrower under this title, the Secretary shall 
     have liens which shall be superior to all other liens on 
     assets of the borrower equal to the unpaid balance of the 
     loan subject to such guarantee.
       (i) Perfected Interest.--The Secretary and the lender shall 
     have a perfected security interest in those assets of the 
     borrower fully sufficient to protect the Secretary and the 
     lender.
       (j) Insurance Policies.--In accordance with practices of 
     private lenders, as determined by the Secretary, the borrower 
     shall obtain, at its expense, insurance sufficient to protect 
     the interests of the Federal Government, as determined by the 
     Secretary.
       (k) Special Provision for Satellite Carriers.--No satellite 
     carrier that provided television broadcast signals to 
     subscribers on October 1, 1999, and no company that is an 
     affiliate of any such carrier, shall be eligible for a loan 
     guarantee under this section if either the carrier or its 
     affiliate holds a license for unused spectrum that would be 
     suitable for delivering local television signals into 
     unserved and underserved markets.
       (l) Authorization of Appropriations.--For the additional 
     costs of the loans guaranteed under this title, including the 
     cost of modifying the loans as defined in section 502 of the 
     Congressional Budget Act of 1974 (2 U.S.C. 661(a)), there are 
     authorized to be appropriated for fiscal years 2000 through 
     2006, such amounts as may be necessary. In addition there are 
     authorized to be appropriated such sums as may be necessary 
     to administer this title. Any amounts appropriated under this 
     subsection shall remain available until expended.

     SEC. 2003. ADMINISTRATION OF LOAN GUARANTEES.

       (a) Applications.--The Secretary shall prescribe the form 
     and contents for an application for a loan guarantee under 
     section 2002.
       (b) Assignment of Loan Guarantees.--The holder of a loan 
     guaranteed under this title may assign the loan guarantee in 
     whole or in part, subject to such requirements as the 
     Secretary may prescribe.
       (c) Modifications.--The Secretary may approve the 
     modification of any term or condition of a loan guarantee 
     including the rate of interest, time of payment of interest 
     or principal, or security requirements, if the Secretary 
     finds in writing that--
       (1) the modification is equitable and is in the overall 
     best interests of the United States;
       (2) consent has been obtained from the borrower and the 
     lender;
       (3) the modification is consistent with the objective 
     underwriting criteria developed in consultation with the 
     Office of Management and Budget and an independent public 
     accounting firm under section 2002(f);
       (4) the modification does not adversely affect the Federal 
     Government's interest in the entity's assets or loan 
     collateral;
       (5) the modification does not adversely affect the entity's 
     ability to repay the loan; and
       (6) the National Telecommunications and Information 
     Administration does not object to the modification on the 
     ground that it is inconsistent with the certification under 
     section 2002(e).
       (d) Priority Markets.--
       (1) In general.--To the maximum extent practicable, the 
     Secretary shall give priority to projects which serve the 
     most underserved rural markets, as determined by the 
     Secretary. In making prioritization determinations, the 
     Secretary shall consider prevailing market conditions, 
     feasibility of providing service, population, terrain, and 
     other factors the Secretary determines appropriate.
       (2) Priority relating to consumer costs and separate tier 
     of signals.--The Secretary shall give priority to projects 
     that--
       (A) offer a separate tier of local broadcast signals; and
       (B) provide lower projected costs to consumers of such 
     separate tier.
       (3) Performance schedules.--Applicants for priority 
     projects under this section shall enter into stipulated 
     performance schedules with the Secretary.
       (4) Penalty.--The Secretary may assess a borrower a penalty 
     not to exceed 3 times the interest due on the guaranteed 
     loan, if the borrower fails to meet its stipulated 
     performance schedule. The penalty shall be paid to the 
     account established by the Treasury under section 2002.
       (5) Limitation on consideration of most populated areas.--
     The Secretary shall not provide a loan guarantee for a 
     project that is primarily designed to serve the 40 most 
     populated designated market areas and shall take into 
     consideration the importance of serving rural markets that 
     are not likely to be otherwise offered service under section 
     122 of title 17, United States Code, except through the loan 
     guarantee program under this title.
       (e) Compliance.--The Secretary shall enforce compliance by 
     an applicant and any other party to the loan guarantee for 
     whose benefit assistance is intended, with the provisions of 
     this title, regulations issued hereunder, and the terms and 
     conditions of the loan guarantee, including through regular 
     periodic inspections and audits.
       (f) Commercial Validity.--For purposes of claims by any 
     party other than the Secretary, a loan guarantee or loan 
     guarantee commitment shall be conclusive evidence that the 
     underlying obligation is in compliance with the provisions of 
     the title, and that such obligation has been approved and is 
     legal as to principal, interest, and other terms. Such a 
     guarantee or commitment shall be valid and incontestable in 
     the hands of a holder thereof, including the original

[[Page 29247]]

     lender or any other holder, as of the date when the Secretary 
     granted the application therefor, except as to fraud or 
     material misrepresentation by such holder.
       (g) Defaults.--The Secretary shall prescribe regulations 
     governing a default on a loan guaranteed under this title.
       (h) Rights of the Secretary.--
       (1) Subrogation.--If the Secretary authorizes payment to a 
     holder, or a holder's agent, under subsection (g) in 
     connection with a loan guarantee made under section 2002, the 
     Secretary shall be subrogated to all of the rights of the 
     holder with respect to the obligor under the loan.
       (2) Disposition of property.--The Secretary may complete, 
     recondition, reconstruct, renovate, repair, maintain, 
     operate, rent, sell, or otherwise dispose of any property or 
     other interests obtained under this section in a manner that 
     maximizes taxpayer return and is consistent with the public 
     convenience and necessity.
       (3) Warrants.--To ensure that the United States Government 
     is compensated for the risk in making guarantees under this 
     title, the Secretary shall enter into contracts under which 
     the Government, contingent on the financial success of the 
     borrower, would participate in a percentage of the gains of 
     any for profit borrower or its security holders in connection 
     with the project funded by loans so guaranteed.
       (i) Action Against Obligor.--The Secretary may bring a 
     civil action in an appropriate district court of the United 
     States in the name of the United States or of the holder of 
     the obligation in the event of a default on a loan guaranteed 
     under this title. The holder of a guarantee shall make 
     available to the Secretary all records and evidence necessary 
     to prosecute the civil action. The Secretary may accept 
     property in full or partial satisfaction of any sums owed as 
     a result of default. If the Secretary receives, through the 
     sale or other disposition of such property, an amount greater 
     than the aggregate of--
       (1) the amount paid to the holder of a guarantee under 
     subsection (g) of this section; and
       (2) any other cost to the United States of remedying the 
     default, the Secretary shall pay such excess to the obligor.
       (j) Breach of Conditions.--The Attorney General shall 
     commence a civil action in a court of appropriate 
     jurisdiction to enjoin any activity which the Secretary finds 
     is in violation of this title, regulations issued hereunder, 
     or any conditions which were duly agreed to, and to secure 
     any other appropriate relief, including relief against any 
     affiliate of the borrower.
       (k) Attachment.--No attachment or execution may be issued 
     against the Secretary or any property in the control of the 
     Secretary prior to the entry of final judgment to such effect 
     in any State, Federal, or other court.
       (l) Investigation Charge and Fees.--
       (1) Appraisal fee.--The Secretary may charge and collect 
     from an applicant a reasonable fee for appraisal for the 
     value of the equipment or facilities for which the loan 
     guarantee is sought, and for making necessary determinations 
     and findings. The fee may not, in the aggregate, be more than 
     one-half of one percent of the principal amount of the 
     obligation. The fee imposed under this paragraph shall be 
     used to offset the administrative costs of the program.
       (2) Loan origination fee.--The Secretary may charge a loan 
     origination fee.
       (m) Annual Audit.--The General Accounting Office shall 
     annually audit the administration of this title and report 
     the results to the Agriculture, Appropriations, and Judiciary 
     Committees of the Senate and the House of Representatives, 
     the House of Representatives Committee on Commerce, the 
     Senate Committee on Commerce, Science, and Transportation, 
     the Senate Committee on Banking, Housing, and Urban Affairs, 
     and the House of Representatives Committee on Banking and 
     Financial Services.
       (n) Indemnification.--An affiliate of the borrower shall 
     indemnify the Government for any losses it incurs as a result 
     of--
       (1) a judgment against the borrower;
       (2) any breach by the borrower of its obligations under the 
     loan guarantee agreement;
       (3) any violation of the provisions of this title by the 
     borrower;
       (4) any penalties incurred by the borrower for any reason, 
     including the violation of the stipulated performance; and
       (5) any other circumstances that the Secretary determines 
     to be appropriate.
       (o) Sunset.--The Secretary may not approve a loan guarantee 
     under this title after December 31, 2006.

     SEC. 2004. RETRANSMISSION OF LOCAL TELEVISION BROADCAST 
                   STATIONS.

       A borrower shall be subject to applicable rights, 
     obligations, and limitations of title 17, United States Code. 
     If a local broadcast station requests carriage of its signal 
     and is located in a market not served by a satellite carrier 
     providing service under a statutory license under section 122 
     of title 17, United States Code, the borrower shall carry the 
     signal of that station without charge and shall be subject to 
     the applicable rights, obligations, and limitations of 
     sections 338, 614, and 615 of the Communications Act of 1934.

     SEC. 2005. LOCAL TELEVISION SERVICE IN UNSERVED AND 
                   UNDERSERVED MARKETS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall take all actions 
     necessary to make a determination regarding licenses or other 
     authorizations for facilities that will utilize, for 
     delivering local broadcast television station signals to 
     satellite television subscribers in unserved and underserved 
     local television markets, spectrum otherwise allocated to 
     commercial use.
       (b) Rules.--
       (1) Form of business.--To the extent not inconsistent with 
     the Communications Act of 1934 and the Commission's rules, 
     the Commission shall permit applicants under subsection (a) 
     to engage in partnerships, joint ventures, and similar 
     operating arrangements for the purpose of carrying out 
     subsection (a).
       (2) Harmful interference.--The Commission shall ensure that 
     no facility licensed or authorized under subsection (a) 
     causes harmful interference to the primary users of that 
     spectrum or to public safety spectrum use.
       (3) Limitation on commission.--Except as provided in 
     paragraphs (1) and (2), the Commission may not restrict any 
     entity granted a license or other authorization under 
     subsection (a) from using any reasonable compression, 
     reformatting, or other technology.
       (c) Report.--Not later than January 1, 2001, the Commission 
     shall report to the Agriculture, Appropriations, and 
     Judiciary Committees of the Senate and the House of 
     Representatives, the Senate Committee on Commerce, Science, 
     and Transportation, and the House of Representatives 
     Committee on Commerce, on the extent to which licenses and 
     other authorizations under subsection (a) have facilitated 
     the delivery of local signals to satellite television 
     subscribers in unserved and underserved local television 
     markets. The report shall include--
       (1) an analysis of the extent to which local signals are 
     being provided by direct-to-home satellite television 
     providers and by other multichannel video program 
     distributors;
       (2) an enumeration of the technical, economic, and other 
     impediments each type of multichannel video programming 
     distributor has encountered; and
       (3) recommendations for specific measures to facilitate the 
     provision of local signals to subscribers in unserved and 
     underserved markets by direct-to-home satellite television 
     providers and by other distributors of multichannel video 
     programming service.

     SEC. 2006. DEFINITIONS.

       In this title:
       (1) Affiliate.--The term ``affiliate'' means any person or 
     entity that controls, or is controlled by, or is under common 
     control with, another person or entity.
       (2) Borrower.--The term ``borrower'' means any person or 
     entity receiving a loan guarantee under this program.
       (3) Commission.--The term ``Commission'' means the Federal 
     Communications Commission.
       (4) Cost.--
       (A) In general.--The term ``cost'' means the estimated 
     long-term cost to the Government of a loan guarantee or 
     modification thereof, calculated on a net present value 
     basis, excluding administrative costs and any incidental 
     effects on governmental receipts or outlays.
       (B) Loan guarantees.--For purposes of this paragraph the 
     cost of a loan guarantee--
       (i) shall be the net present value, at the time when the 
     guaranteed loan is disbursed, of the estimated cash flows 
     of--

       (I) payments by the Government to cover defaults and 
     delinquencies, interest subsidies, or other payments;
       (II) payments to the Government, including origination and 
     other fees, penalties, and recoveries; and

       (ii) shall include the effects of changes in loan terms 
     resulting from the exercise by the guaranteed lender of an 
     option included in the loan guarantee contract, or by the 
     borrower of an option included in the guaranteed loan 
     contract.
       (C) Cost of modification.--The cost of the modification 
     shall be the difference between the current estimate of the 
     net present value of the remaining cash flows under the terms 
     of a loan guarantee contract, and the current estimate of the 
     net present value of the remaining cash flows under the terms 
     of the contract, as modified.
       (D) Discount rate.--In estimating net present value, the 
     discount rate shall be the average interest rate on 
     marketable Treasury securities of similar maturity to the 
     cash flows of the guarantee for which the estimate is being 
     made.
       (E) Fiscal year assumptions.--When funds of a loan 
     guarantee under this title are obligated, the estimated cost 
     shall be based on the current assumptions, adjusted to 
     incorporate the terms of the loan contract, for the fiscal 
     year in which the funds are obligated.
       (5) Current.--The term ``current'' has the same meaning as 
     in section 250(c)(9) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985.
       (6) Designated market area.--The term ``designated market 
     area'' has the meaning given that term under section 122(j) 
     of title 17, United States Code.
       (7) Loan guarantee.--The term ``loan guarantee'' means any 
     guarantee, insurance, or other pledge with respect to the 
     payment of all or part of the principal or interest on any 
     debt obligation of a non-Federal borrower to the Federal 
     Financing Bank or a non-Federal lender, but does not include 
     the insurance of deposits, shares, or other withdrawable 
     accounts in financial institutions.
       (8) Modification.--The term ``modification'' means any 
     Government action that alters the estimated cost of an 
     outstanding loan guarantee (or loan guarantee commitment) 
     from the current estimate of cash flows, including the sale 
     of loan assets, with or without recourse, and the purchase of 
     guaranteed loans.

[[Page 29248]]

        (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (10) Common terms.--Except as provided in paragraphs (1) 
     through (9), any term used in this title that is defined in 
     the Communications Act of 1934 (47 U.S.C. 151 et seq.) has 
     the meaning given it in that Act.
              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

     SEC. 3001. SHORT TITLE; REFERENCES.

       (a) Short Title.--This title may be cited as the 
     ``Anticybersquatting Consumer Protection Act''.
       (b) References to the Trademark Act of 1946.--Any reference 
     in this title to the Trademark Act of 1946 shall be a 
     reference to the Act entitled ``An Act to provide for the 
     registration and protection of trademarks used in commerce, 
     to carry out the provisions of certain international 
     conventions, and for other purposes'', approved July 5, 1946 
     (15 U.S.C. 1051 et seq.).

     SEC. 3002. CYBERPIRACY PREVENTION.

       (a) In General.--Section 43 of the Trademark Act of 1946 
     (15 U.S.C. 1125) is amended by inserting at the end the 
     following:
       ``(d)(1)(A) A person shall be liable in a civil action by 
     the owner of a mark, including a personal name which is 
     protected as a mark under this section, if, without regard to 
     the goods or services of the parties, that person--
       ``(i) has a bad faith intent to profit from that mark, 
     including a personal name which is protected as a mark under 
     this section; and
       ``(ii) registers, traffics in, or uses a domain name that--
       ``(I) in the case of a mark that is distinctive at the time 
     of registration of the domain name, is identical or 
     confusingly similar to that mark;
       ``(II) in the case of a famous mark that is famous at the 
     time of registration of the domain name, is identical or 
     confusingly similar to or dilutive of that mark; or
       ``(III) is a trademark, word, or name protected by reason 
     of section 706 of title 18, United States Code, or section 
     220506 of title 36, United States Code.
       ``(B)(i) In determining whether a person has a bad faith 
     intent described under subparagraph (A), a court may consider 
     factors such as, but not limited to--
       ``(I) the trademark or other intellectual property rights 
     of the person, if any, in the domain name;
       ``(II) the extent to which the domain name consists of the 
     legal name of the person or a name that is otherwise commonly 
     used to identify that person;
       ``(III) the person's prior use, if any, of the domain name 
     in connection with the bona fide offering of any goods or 
     services;
       ``(IV) the person's bona fide noncommercial or fair use of 
     the mark in a site accessible under the domain name;
       ``(V) the person's intent to divert consumers from the mark 
     owner's online location to a site accessible under the domain 
     name that could harm the goodwill represented by the mark, 
     either for commercial gain or with the intent to tarnish or 
     disparage the mark, by creating a likelihood of confusion as 
     to the source, sponsorship, affiliation, or endorsement of 
     the site;
       ``(VI) the person's offer to transfer, sell, or otherwise 
     assign the domain name to the mark owner or any third party 
     for financial gain without having used, or having an intent 
     to use, the domain name in the bona fide offering of any 
     goods or services, or the person's prior conduct indicating a 
     pattern of such conduct;
       ``(VII) the person's provision of material and misleading 
     false contact information when applying for the registration 
     of the domain name, the person's intentional failure to 
     maintain accurate contact information, or the person's prior 
     conduct indicating a pattern of such conduct;
       ``(VIII) the person's registration or acquisition of 
     multiple domain names which the person knows are identical or 
     confusingly similar to marks of others that are distinctive 
     at the time of registration of such domain names, or dilutive 
     of famous marks of others that are famous at the time of 
     registration of such domain names, without regard to the 
     goods or services of the parties; and
       ``(IX) the extent to which the mark incorporated in the 
     person's domain name registration is or is not distinctive 
     and famous within the meaning of subsection (c)(1) of section 
     43.
       ``(ii) Bad faith intent described under subparagraph (A) 
     shall not be found in any case in which the court determines 
     that the person believed and had reasonable grounds to 
     believe that the use of the domain name was a fair use or 
     otherwise lawful.
       ``(C) In any civil action involving the registration, 
     trafficking, or use of a domain name under this paragraph, a 
     court may order the forfeiture or cancellation of the domain 
     name or the transfer of the domain name to the owner of the 
     mark.
       ``(D) A person shall be liable for using a domain name 
     under subparagraph (A) only if that person is the domain name 
     registrant or that registrant's authorized licensee.
       ``(E) As used in this paragraph, the term `traffics in' 
     refers to transactions that include, but are not limited to, 
     sales, purchases, loans, pledges, licenses, exchanges of 
     currency, and any other transfer for consideration or receipt 
     in exchange for consideration.
       ``(2)(A) The owner of a mark may file an in rem civil 
     action against a domain name in the judicial district in 
     which the domain name registrar, domain name registry, or 
     other domain name authority that registered or assigned the 
     domain name is located if--
       ``(i) the domain name violates any right of the owner of a 
     mark registered in the Patent and Trademark Office, or 
     protected under subsection (a) or (c); and
       ``(ii) the court finds that the owner--
       ``(I) is not able to obtain in personam jurisdiction over a 
     person who would have been a defendant in a civil action 
     under paragraph (1); or
       ``(II) through due diligence was not able to find a person 
     who would have been a defendant in a civil action under 
     paragraph (1) by--
       ``(aa) sending a notice of the alleged violation and intent 
     to proceed under this paragraph to the registrant of the 
     domain name at the postal and e-mail address provided by the 
     registrant to the registrar; and
       ``(bb) publishing notice of the action as the court may 
     direct promptly after filing the action.
       ``(B) The actions under subparagraph (A)(ii) shall 
     constitute service of process.
       ``(C) In an in rem action under this paragraph, a domain 
     name shall be deemed to have its situs in the judicial 
     district in which--
       ``(i) the domain name registrar, registry, or other domain 
     name authority that registered or assigned the domain name is 
     located; or
       ``(ii) documents sufficient to establish control and 
     authority regarding the disposition of the registration and 
     use of the domain name are deposited with the court.
       ``(D)(i) The remedies in an in rem action under this 
     paragraph shall be limited to a court order for the 
     forfeiture or cancellation of the domain name or the transfer 
     of the domain name to the owner of the mark. Upon receipt of 
     written notification of a filed, stamped copy of a complaint 
     filed by the owner of a mark in a United States district 
     court under this paragraph, the domain name registrar, domain 
     name registry, or other domain name authority shall--
       ``(I) expeditiously deposit with the court documents 
     sufficient to establish the court's control and authority 
     regarding the disposition of the registration and use of the 
     domain name to the court; and
       ``(II) not transfer, suspend, or otherwise modify the 
     domain name during the pendency of the action, except upon 
     order of the court.
       ``(ii) The domain name registrar or registry or other 
     domain name authority shall not be liable for injunctive or 
     monetary relief under this paragraph except in the case of 
     bad faith or reckless disregard, which includes a willful 
     failure to comply with any such court order.
       ``(3) The civil action established under paragraph (1) and 
     the in rem action established under paragraph (2), and any 
     remedy available under either such action, shall be in 
     addition to any other civil action or remedy otherwise 
     applicable.
       ``(4) The in rem jurisdiction established under paragraph 
     (2) shall be in addition to any other jurisdiction that 
     otherwise exists, whether in rem or in personam.''.
       (b) Cyberpiracy Protections for Individuals.--
       (1) In general.--
       (A) Civil liability.--Any person who registers a domain 
     name that consists of the name of another living person, or a 
     name substantially and confusingly similar thereto, without 
     that person's consent, with the specific intent to profit 
     from such name by selling the domain name for financial gain 
     to that person or any third party, shall be liable in a civil 
     action by such person.
       (B) Exception.--A person who in good faith registers a 
     domain name consisting of the name of another living person, 
     or a name substantially and confusingly similar thereto, 
     shall not be liable under this paragraph if such name is used 
     in, affiliated with, or related to a work of authorship 
     protected under title 17, United States Code, including a 
     work made for hire as defined in section 101 of title 17, 
     United States Code, and if the person registering the domain 
     name is the copyright owner or licensee of the work, the 
     person intends to sell the domain name in conjunction with 
     the lawful exploitation of the work, and such registration is 
     not prohibited by a contract between the registrant and the 
     named person. The exception under this subparagraph shall 
     apply only to a civil action brought under paragraph (1) and 
     shall in no manner limit the protections afforded under the 
     Trademark Act of 1946 (15 U.S.C. 1051 et seq.) or other 
     provision of Federal or State law.
       (2) Remedies.--In any civil action brought under paragraph 
     (1), a court may award injunctive relief, including the 
     forfeiture or cancellation of the domain name or the transfer 
     of the domain name to the plaintiff. The court may also, in 
     its discretion, award costs and attorneys fees to the 
     prevailing party.
       (3) Definition.--In this subsection, the term ``domain 
     name'' has the meaning given that term in section 45 of the 
     Trademark Act of 1946 (15 U.S.C. 1127).
       (4) Effective date.--This subsection shall apply to domain 
     names registered on or after the date of enactment of this 
     Act.

     SEC. 3003. DAMAGES AND REMEDIES.

       (a) Remedies in Cases of Domain Name Piracy.--
       (1) Injunctions.--Section 34(a) of the Trademark Act of 
     1946 (15 U.S.C. 1116(a)) is amended in the first sentence by 
     striking ``(a) or (c)'' and inserting ``(a), (c), or (d)''.
       (2) Damages.--Section 35(a) of the Trademark Act of 1946 
     (15 U.S.C. 1117(a)) is amended in the first sentence by 
     inserting ``, (c), or (d)'' after ``section 43(a)''.
       (b) Statutory Damages.--Section 35 of the Trademark Act of 
     1946 (15 U.S.C. 1117) is amended by adding at the end the 
     following:
       ``(d) In a case involving a violation of section 43(d)(1), 
     the plaintiff may elect, at any time before final judgment is 
     rendered by the trial

[[Page 29249]]

     court, to recover, instead of actual damages and profits, an 
     award of statutory damages in the amount of not less than 
     $1,000 and not more than $100,000 per domain name, as the 
     court considers just.

     SEC. 3004. LIMITATION ON LIABILITY.

       Section 32(2) of the Trademark Act of 1946 (15 U.S.C. 1114) 
     is amended--
       (1) in the matter preceding subparagraph (A) by striking 
     ``under section 43(a)'' and inserting ``under section 43(a) 
     or (d)''; and
       (2) by redesignating subparagraph (D) as subparagraph (E) 
     and inserting after subparagraph (C) the following:
       ``(D)(i)(I) A domain name registrar, a domain name 
     registry, or other domain name registration authority that 
     takes any action described under clause (ii) affecting a 
     domain name shall not be liable for monetary relief or, 
     except as provided in subclause (II), for injunctive relief, 
     to any person for such action, regardless of whether the 
     domain name is finally determined to infringe or dilute the 
     mark.
       ``(II) A domain name registrar, domain name registry, or 
     other domain name registration authority described in 
     subclause (I) may be subject to injunctive relief only if 
     such registrar, registry, or other registration authority 
     has--
       ``(aa) not expeditiously deposited with a court, in which 
     an action has been filed regarding the disposition of the 
     domain name, documents sufficient for the court to establish 
     the court's control and authority regarding the disposition 
     of the registration and use of the domain name;
       ``(bb) transferred, suspended, or otherwise modified the 
     domain name during the pendency of the action, except upon 
     order of the court; or
       ``(cc) willfully failed to comply with any such court 
     order.
       ``(ii) An action referred to under clause (i)(I) is any 
     action of refusing to register, removing from registration, 
     transferring, temporarily disabling, or permanently canceling 
     a domain name--
       ``(I) in compliance with a court order under section 43(d); 
     or
       ``(II) in the implementation of a reasonable policy by such 
     registrar, registry, or authority prohibiting the 
     registration of a domain name that is identical to, 
     confusingly similar to, or dilutive of another's mark.
       ``(iii) A domain name registrar, a domain name registry, or 
     other domain name registration authority shall not be liable 
     for damages under this section for the registration or 
     maintenance of a domain name for another absent a showing of 
     bad faith intent to profit from such registration or 
     maintenance of the domain name.
       ``(iv) If a registrar, registry, or other registration 
     authority takes an action described under clause (ii) based 
     on a knowing and material misrepresentation by any other 
     person that a domain name is identical to, confusingly 
     similar to, or dilutive of a mark, the person making the 
     knowing and material misrepresentation shall be liable for 
     any damages, including costs and attorney's fees, incurred by 
     the domain name registrant as a result of such action. The 
     court may also grant injunctive relief to the domain name 
     registrant, including the reactivation of the domain name or 
     the transfer of the domain name to the domain name 
     registrant.
       ``(v) A domain name registrant whose domain name has been 
     suspended, disabled, or transferred under a policy described 
     under clause (ii)(II) may, upon notice to the mark owner, 
     file a civil action to establish that the registration or use 
     of the domain name by such registrant is not unlawful under 
     this Act. The court may grant injunctive relief to the domain 
     name registrant, including the reactivation of the domain 
     name or transfer of the domain name to the domain name 
     registrant.''.

     SEC. 3005. DEFINITIONS.

       Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is 
     amended by inserting after the undesignated paragraph 
     defining the term ``counterfeit'' the following:
       ``The term `domain name' means any alphanumeric designation 
     which is registered with or assigned by any domain name 
     registrar, domain name registry, or other domain name 
     registration authority as part of an electronic address on 
     the Internet.
       ``The term `Internet' has the meaning given that term in 
     section 230(f)(1) of the Communications Act of 1934 (47 
     U.S.C. 230(f)(1)).''.

     SEC. 3006. STUDY ON ABUSIVE DOMAIN NAME REGISTRATIONS 
                   INVOLVING PERSONAL NAMES.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of Commerce, in 
     consultation with the Patent and Trademark Office and the 
     Federal Election Commission, shall conduct a study and report 
     to Congress with recommendations on guidelines and procedures 
     for resolving disputes involving the registration or use by a 
     person of a domain name that includes the personal name of 
     another person, in whole or in part, or a name confusingly 
     similar thereto, including consideration of and 
     recommendations for--
       (1) protecting personal names from registration by another 
     person as a second level domain name for purposes of selling 
     or otherwise transferring such domain name to such other 
     person or any third party for financial gain;
       (2) protecting individuals from bad faith uses of their 
     personal names as second level domain names by others with 
     malicious intent to harm the reputation of the individual or 
     the goodwill associated with that individual's name;
       (3) protecting consumers from the registration and use of 
     domain names that include personal names in the second level 
     domain in manners which are intended or are likely to confuse 
     or deceive the public as to the affiliation, connection, or 
     association of the domain name registrant, or a site 
     accessible under the domain name, with such other person, or 
     as to the origin, sponsorship, or approval of the goods, 
     services, or commercial activities of the domain name 
     registrant;
       (4) protecting the public from registration of domain names 
     that include the personal names of government officials, 
     official candidates, and potential official candidates for 
     Federal, State, or local political office in the United 
     States, and the use of such domain names in a manner that 
     disrupts the electoral process or the public's ability to 
     access accurate and reliable information regarding such 
     individuals;
       (5) existing remedies, whether under State law or 
     otherwise, and the extent to which such remedies are 
     sufficient to address the considerations described in 
     paragraphs (1) through (4); and
       (6) the guidelines, procedures, and policies of the 
     Internet Corporation for Assigned Names and Numbers and the 
     extent to which they address the considerations described in 
     paragraphs (1) through (4).
       (b) Guidelines and Procedures.--The Secretary of Commerce 
     shall, under its Memorandum of Understanding with the 
     Internet Corporation for Assigned Names and Numbers, 
     collaborate to develop guidelines and procedures for 
     resolving disputes involving the registration or use by a 
     person of a domain name that includes the personal name of 
     another person, in whole or in part, or a name confusingly 
     similar thereto.

     SEC. 3007. HISTORIC PRESERVATION.

       Section 101(a)(1)(A) of the National Historic Preservation 
     Act (16 U.S.C. 470a(a)(1)(A)) is amended by adding at the end 
     the following: ``Notwithstanding section 43(c) of the Act 
     entitled `An Act to provide for the registration and 
     protection of trademarks used in commerce, to carry out the 
     provisions of certain international conventions, and for 
     other purposes', approved July 5, 1946 (commonly known as the 
     `Trademark Act of 1946' (15 U.S.C. 1125(c))), buildings and 
     structures on or eligible for inclusion on the National 
     Register of Historic Places (either individually or as part 
     of a historic district), or designated as an individual 
     landmark or as a contributing building in a historic district 
     by a unit of State or local government, may retain the name 
     historically associated with the building or structure.''.

     SEC. 3008. SAVINGS CLAUSE.

       Nothing in this title shall affect any defense available to 
     a defendant under the Trademark Act of 1946 (including any 
     defense under section 43(c)(4) of such Act or relating to 
     fair use) or a person's right of free speech or expression 
     under the first amendment of the United States Constitution.

     SEC. 3009. TECHNICAL AND CONFORMING AMENDMENTS.

       Chapter 85 of title 28, United States Code, is amended as 
     follows:
       (1) Section 1338 of title 28, United States Codes, is 
     amended--
       (A) in the section heading by striking ``trade-marks'' and 
     inserting ``trademarks'';
       (B) in subsection (a) by striking ``trade-marks'' and 
     inserting ``trademarks''; and
       (C) in subsection (b) by striking ``trade-mark'' and 
     inserting ``trademark''.
       (2) The item relating to section 1338 in the table of 
     sections for chapter 85 of title 28, United States Code, is 
     amended by striking ``trade-marks'' and inserting 
     ``trademarks''.

     SEC. 3010. EFFECTIVE DATE.

       Sections 3002(a), 3003, 3004, 3005, and 3008 of this title 
     shall apply to all domain names registered before, on, or 
     after the date of enactment of this Act, except that damages 
     under subsection (a) or (d) of section 35 of the Trademark 
     Act of 1946 (15 U.S.C. 1117), as amended by section 3003 of 
     this title, shall not be available with respect to the 
     registration, trafficking, or use of a domain name that 
     occurs before the date of enactment of this Act.
                     TITLE IV--INVENTOR PROTECTION

     SEC. 4001. SHORT TITLE.

       This title may be cited as the ``American Inventors 
     Protection Act of 1999''.
                     Subtitle A--Inventors' Rights

     SEC. 4101. SHORT TITLE.

       This subtitle may be cited as the ``Inventors' Rights Act 
     of 1999''.

     SEC. 4102. INTEGRITY IN INVENTION PROMOTION SERVICES.

       (a) In General.--Chapter 29 of title 35, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 297. Improper and deceptive invention promotion

       ``(a) In General.--An invention promoter shall have a duty 
     to disclose the following information to a customer in 
     writing, prior to entering into a contract for invention 
     promotion services:
       ``(1) the total number of inventions evaluated by the 
     invention promoter for commercial potential in the past 5 
     years, as well as the number of those inventions that 
     received positive evaluations, and the number of those 
     inventions that received negative evaluations;
       ``(2) the total number of customers who have contracted 
     with the invention promoter in the past 5 years, not 
     including customers who have purchased trade show services, 
     research, advertising, or other nonmarketing services from 
     the invention promoter, or who have defaulted in their 
     payment to the invention promoter;
       ``(3) the total number of customers known by the invention 
     promoter to have received a net financial profit as a direct 
     result of the invention

[[Page 29250]]

     promotion services provided by such invention promoter;
       ``(4) the total number of customers known by the invention 
     promoter to have received license agreements for their 
     inventions as a direct result of the invention promotion 
     services provided by such invention promoter; and
       ``(5) the names and addresses of all previous invention 
     promotion companies with which the invention promoter or its 
     officers have collectively or individually been affiliated in 
     the previous 10 years.
       ``(b) Civil Action.--(1) Any customer who enters into a 
     contract with an invention promoter and who is found by a 
     court to have been injured by any material false or 
     fraudulent statement or representation, or any omission of 
     material fact, by that invention promoter (or any agent, 
     employee, director, officer, partner, or independent 
     contractor of such invention promoter), or by the failure of 
     that invention promoter to disclose such information as 
     required under subsection (a), may recover in a civil action 
     against the invention promoter (or the officers, directors, 
     or partners of such invention promoter), in addition to 
     reasonable costs and attorneys' fees--
       ``(A) the amount of actual damages incurred by the 
     customer; or
       ``(B) at the election of the customer at any time before 
     final judgment is rendered, statutory damages in a sum of not 
     more than $5,000, as the court considers just.
       ``(2) Notwithstanding paragraph (1), in a case where the 
     customer sustains the burden of proof, and the court finds, 
     that the invention promoter intentionally misrepresented or 
     omitted a material fact to such customer, or willfully failed 
     to disclose such information as required under subsection 
     (a), with the purpose of deceiving that customer, the court 
     may increase damages to not more than 3 times the amount 
     awarded, taking into account past complaints made against the 
     invention promoter that resulted in regulatory sanctions or 
     other corrective actions based on those records compiled by 
     the Commissioner of Patents under subsection (d).
       ``(c) Definitions.--For purposes of this section--
       ``(1) a `contract for invention promotion services' means a 
     contract by which an invention promoter undertakes invention 
     promotion services for a customer;
       ``(2) a `customer' is any individual who enters into a 
     contract with an invention promoter for invention promotion 
     services;
       ``(3) the term `invention promoter' means any person, firm, 
     partnership, corporation, or other entity who offers to 
     perform or performs invention promotion services for, or on 
     behalf of, a customer, and who holds itself out through 
     advertising in any mass media as providing such services, but 
     does not include--
       ``(A) any department or agency of the Federal Government or 
     of a State or local government;
       ``(B) any nonprofit, charitable, scientific, or educational 
     organization, qualified under applicable State law or 
     described under section 170(b)(1)(A) of the Internal Revenue 
     Code of 1986;
       ``(C) any person or entity involved in the evaluation to 
     determine commercial potential of, or offering to license or 
     sell, a utility patent or a previously filed nonprovisional 
     utility patent application;
       ``(D) any party participating in a transaction involving 
     the sale of the stock or assets of a business; or
       ``(E) any party who directly engages in the business of 
     retail sales of products or the distribution of products; and
       ``(4) the term `invention promotion services' means the 
     procurement or attempted procurement for a customer of a 
     firm, corporation, or other entity to develop and market 
     products or services that include the invention of the 
     customer.
       ``(d) Records of Complaints.--
       ``(1) Release of complaints.--The Commissioner of Patents 
     shall make all complaints received by the Patent and 
     Trademark Office involving invention promoters publicly 
     available, together with any response of the invention 
     promoters. The Commissioner of Patents shall notify the 
     invention promoter of a complaint and provide a reasonable 
     opportunity to reply prior to making such complaint publicly 
     available.
       ``(2) Request for complaints.--The Commissioner of Patents 
     may request complaints relating to invention promotion 
     services from any Federal or State agency and include such 
     complaints in the records maintained under paragraph (1), 
     together with any response of the invention promoters.''.
       (b) Conforming Amendment.--The table of sections at the 
     beginning of chapter 29 of title 35, United States Code, is 
     amended by adding at the end the following new item:

``Sec. 297. Improper and deceptive invention promotion.''.

     SEC. 4103. EFFECTIVE DATE.

       This subtitle and the amendments made by this subtitle 
     shall take effect 60 days after the date of enactment of this 
     Act.
             Subtitle B--Patent and Trademark Fee Fairness

     SEC. 4201. SHORT TITLE.

       This subtitle may be cited as the ``Patent and Trademark 
     Fee Fairness Act of 1999''.

     SEC. 4202. ADJUSTMENT OF PATENT FEES.

       (a) Original Filing Fee.--Section 41(a)(1)(A) of title 35, 
     United States Code, relating to the fee for filing an 
     original patent application, is amended by striking ``$760'' 
     and inserting ``$690''.
       (b) Reissue Fee.--Section 41(a)(4)(A) of title 35, United 
     States Code, relating to the fee for filing for a reissue of 
     a patent, is amended by striking ``$760'' and inserting 
     ``$690''.
       (c) National Fee for Certain International Applications.--
     Section 41(a)(10) of title 35, United States Code, relating 
     to the national fee for certain international applications, 
     is amended by striking ``$760'' and inserting ``$690''.
       (d) Maintenance Fees.--Section 41(b)(1) of title 35, United 
     States Code, relating to certain maintenance fees, is amended 
     by striking ``$940'' and inserting ``$830''.

     SEC. 4203. ADJUSTMENT OF TRADEMARK FEES.

       Notwithstanding the second sentence of section 31(a) of the 
     Trademark Act of 1946 (15 U.S.C. 111(a)), the Under Secretary 
     of Commerce for Intellectual Property and Director of the 
     United States Patent and Trademark Office is authorized in 
     fiscal year 2000 to adjust trademark fees without regard to 
     fluctuations in the Consumer Price Index during the preceding 
     12 months.

     SEC. 4204. STUDY ON ALTERNATIVE FEE STRUCTURES.

       The Under Secretary of Commerce for Intellectual Property 
     and Director of the United States Patent and Trademark Office 
     shall conduct a study of alternative fee structures that 
     could be adopted by the United States Patent and Trademark 
     Office to encourage maximum participation by the inventor 
     community in the United States. The Director shall submit 
     such study to the Committees on the Judiciary of the House of 
     Representatives and the Senate not later than 1 year after 
     the date of enactment of this Act.

     SEC. 4205. PATENT AND TRADEMARK OFFICE FUNDING.

       Section 42(c) of title 35, United States Code, is amended 
     in the second sentence--
       (1) by striking ``Fees available'' and inserting ``All fees 
     available''; and
       (2) by striking ``may'' and inserting ``shall''.

     SEC. 4206. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by this subtitle shall take effect on the 
     date of enactment of this Act.
       (b) Section 4202.--The amendments made by section 4202 of 
     this subtitle shall take effect 30 days after the date of 
     enactment of this Act.
                   Subtitle C--First Inventor Defense

     SEC. 4301. SHORT TITLE.

       This subtitle may be cited as the ``First Inventor Defense 
     Act of 1999''.

     SEC. 4302. DEFENSE TO PATENT INFRINGEMENT BASED ON EARLIER 
                   INVENTOR.

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

     ``Sec. 273. Defense to infringement based on earlier inventor

       ``(a) Definitions.--For purposes of this section--
       ``(1) the terms `commercially used' and `commercial use' 
     mean use of a method in the United States, so long as such 
     use is in connection with an internal commercial use or an 
     actual arm's-length sale or other arm's-length commercial 
     transfer of a useful end result, whether or not the subject 
     matter at issue is accessible to or otherwise known to the 
     public, except that the subject matter for which commercial 
     marketing or use is subject to a premarketing regulatory 
     review period during which the safety or efficacy of the 
     subject matter is established, including any period specified 
     in section 156(g), shall be deemed `commercially used' and in 
     `commercial use' during such regulatory review period;
       ``(2) in the case of activities performed by a nonprofit 
     research laboratory, or nonprofit entity such as a 
     university, research center, or hospital, a use for which the 
     public is the intended beneficiary shall be considered to be 
     a use described in paragraph (1), except that the use--
       ``(A) may be asserted as a defense under this section only 
     for continued use by and in the laboratory or nonprofit 
     entity; and
       ``(B) may not be asserted as a defense with respect to any 
     subsequent commercialization or use outside such laboratory 
     or nonprofit entity;
       ``(3) the term `method' means a method of doing or 
     conducting business; and
       ``(4) the `effective filing date' of a patent is the 
     earlier of the actual filing date of the application for the 
     patent or the filing date of any earlier United States, 
     foreign, or international application to which the subject 
     matter at issue is entitled under section 119, 120, or 365 of 
     this title.
       ``(b) Defense to Infringement.--
       ``(1) In general.--It shall be a defense to an action for 
     infringement under section 271 of this title with respect to 
     any subject matter that would otherwise infringe one or more 
     claims for a method in the patent being asserted against a 
     person, if such person had, acting in good faith, actually 
     reduced the subject matter to practice at least one year 
     before the effective filing date of such patent, and 
     commercially used the subject matter before the effective 
     filing date of such patent.
       ``(2) Exhaustion of right.--The sale or other disposition 
     of a useful end product produced by a patented method, by a 
     person entitled to assert a defense under this section with 
     respect to that useful end result shall exhaust the patent 
     owner's rights under the patent to the extent such rights 
     would have been exhausted had such sale or other disposition 
     been made by the patent owner.
       ``(3) Limitations and qualifications of defense.--The 
     defense to infringement under this section is subject to the 
     following:

[[Page 29251]]

       ``(A) Patent.--A person may not assert the defense under 
     this section unless the invention for which the defense is 
     asserted is for a method.
       ``(B) Derivation.--A person may not assert the defense 
     under this section if the subject matter on which the defense 
     is based was derived from the patentee or persons in privity 
     with the patentee.
       ``(C) Not a general license.--The defense asserted by a 
     person under this section is not a general license under all 
     claims of the patent at issue, but extends only to the 
     specific subject matter claimed in the patent with respect to 
     which the person can assert a defense under this chapter, 
     except that the defense shall also extend to variations in 
     the quantity or volume of use of the claimed subject matter, 
     and to improvements in the claimed subject matter that do not 
     infringe additional specifically claimed subject matter of 
     the patent.
       ``(4) Burden of proof.--A person asserting the defense 
     under this section shall have the burden of establishing the 
     defense by clear and convincing evidence.
       ``(5) Abandonment of use.--A person who has abandoned 
     commercial use of subject matter may not rely on activities 
     performed before the date of such abandonment in establishing 
     a defense under this section with respect to actions taken 
     after the date of such abandonment.
       ``(6) Personal defense.--The defense under this section may 
     be asserted only by the person who performed the acts 
     necessary to establish the defense 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.
       ``(7) Limitation on sites.--A defense under this section, 
     when acquired as part of a good faith assignment or transfer 
     of an entire enterprise or line of business to which the 
     defense relates, may only be asserted for uses at sites where 
     the subject matter that would otherwise infringe one or more 
     of the claims is in use before the later of the effective 
     filing date of the patent or the date of the assignment or 
     transfer of such enterprise or line of business.
       ``(8) Unsuccessful assertion of defense.--If the defense 
     under this section is pleaded by a person who is found to 
     infringe the patent and who subsequently fails to demonstrate 
     a reasonable basis for asserting the defense, the court shall 
     find the case exceptional for the purpose of awarding 
     attorney fees under section 285 of this title.
       ``(9) Invalidity.--A patent shall not be deemed to be 
     invalid under section 102 or 103 of this title solely because 
     a defense is raised or established under this section.''.
       (b) Conforming Amendment.--The table of sections at the 
     beginning of chapter 28 of title 35, United States Code, is 
     amended by adding at the end the following new item:

``273. Defense to infringement based on earlier inventor.''.

     SEC. 4303. EFFECTIVE DATE AND APPLICABILITY.

       This subtitle and the amendments made by this subtitle 
     shall take effect on the date of enactment of this Act, but 
     shall not apply to any action for infringement that is 
     pending on such date of enactment or with respect to any 
     subject matter for which an adjudication of infringement, 
     including a consent judgment, has been made before such date 
     of enactment.
                   Subtitle D--Patent Term Guarantee

     SEC. 4401. SHORT TITLE.

       This subtitle may be cited as the ``Patent Term Guarantee 
     Act of 1999''.

     SEC. 4402. PATENT TERM GUARANTEE AUTHORITY.

       (a) Adjustment of Patent Term.--Section 154(b) of title 35, 
     United States Code, is amended to read as follows:
       ``(b) Adjustment of Patent Term.--
       ``(1) Patent term guarantees.--
       ``(A) Guarantee of prompt patent and trademark office 
     responses.--Subject to the limitations under paragraph (2), 
     if the issue of an original patent is delayed due to the 
     failure of the Patent and Trademark Office to--
       ``(i) provide at least 1 of the notifications under section 
     132 of this title or a notice of allowance under section 151 
     of this title not later than 14 months after--

       ``(I) the date on which an application was filed under 
     section 111(a) of this title; or
       ``(II) the date on which an international application 
     fulfilled the requirements of section 371 of this title;

       ``(ii) respond to a reply under section 132, or to an 
     appeal taken under section 134, within 4 months after the 
     date on which the reply was filed or the appeal was taken;
       ``(iii) act on an application within 4 months after the 
     date of a decision by the Board of Patent Appeals and 
     Interferences under section 134 or 135 or a decision by a 
     Federal court under section 141, 145, or 146 in a case in 
     which allowable claims remain in the application; or
       ``(iv) issue a patent within 4 months after the date on 
     which the issue fee was paid under section 151 and all 
     outstanding requirements were satisfied,

     the term of the patent shall be extended one day for each day 
     after the end of the period specified in clause (i), (ii), 
     (iii), or (iv), as the case may be, until the action 
     described in such clause is taken.
       ``(B) Guarantee of no more than 3-year application 
     pendency.--Subject to the limitations under paragraph (2), if 
     the issue of an original patent is delayed due to the failure 
     of the United States Patent and Trademark Office to issue a 
     patent within 3 years after the actual filing date of the 
     application in the United States, not including--
       ``(i) any time consumed by continued examination of the 
     application requested by the applicant under section 132(b);
       ``(ii) any time consumed by a proceeding under section 
     135(a), any time consumed by the imposition of an order under 
     section 181, or any time consumed by appellate review by the 
     Board of Patent Appeals and Interferences or by a Federal 
     court; or
       ``(iii) any delay in the processing of the application by 
     the United States Patent and Trademark Office requested by 
     the applicant except as permitted by paragraph (3)(C),

     the term of the patent shall be extended 1 day for each day 
     after the end of that 3-year period until the patent is 
     issued.
       ``(C) Guarantee or adjustments for delays due to 
     interferences, secrecy orders, and appeals.--Subject to the 
     limitations under paragraph (2), if the issue of an original 
     patent is delayed due to--
       ``(i) a proceeding under section 135(a);
       ``(ii) the imposition of an order under section 181; or
       ``(iii) appellate review by the Board of Patent Appeals and 
     Interferences or by a Federal court in a case in which the 
     patent was issued under a decision in the review reversing an 
     adverse determination of patentability,

     the term of the patent shall be extended one day for each day 
     of the pendency of the proceeding, order, or review, as the 
     case may be.
       ``(2) Limitations.--
       ``(A) In general.--To the extent that periods of delay 
     attributable to grounds specified in paragraph (1) overlap, 
     the period of any adjustment granted under this subsection 
     shall not exceed the actual number of days the issuance of 
     the patent was delayed.
       ``(B) Disclaimed term.--No patent the term of which has 
     been disclaimed beyond a specified date may be adjusted under 
     this section beyond the expiration date specified in the 
     disclaimer.
       ``(C) Reduction of period of adjustment.--
       ``(i) The period of adjustment of the term of a patent 
     under paragraph (1) shall be reduced by a period equal to the 
     period of time during which the applicant failed to engage in 
     reasonable efforts to conclude prosecution of the 
     application.
       ``(ii) With respect to adjustments to patent term made 
     under the authority of paragraph (1)(B), an applicant shall 
     be deemed to have failed to engage in reasonable efforts to 
     conclude processing or examination of an application for the 
     cumulative total of any periods of time in excess of 3 months 
     that are taken to respond to a notice from the Office making 
     any rejection, objection, argument, or other request, 
     measuring such 3-month period from the date the notice was 
     given or mailed to the applicant.
       ``(iii) The Director shall prescribe regulations 
     establishing the circumstances that constitute a failure of 
     an applicant to engage in reasonable efforts to conclude 
     processing or examination of an application.
       ``(3) Procedures for patent term adjustment 
     determination.--
       ``(A) The Director shall prescribe regulations establishing 
     procedures for the application for and determination of 
     patent term adjustments under this subsection.
       ``(B) Under the procedures established under subparagraph 
     (A), the Director shall--
       ``(i) make a determination of the period of any patent term 
     adjustment under this subsection, and shall transmit a notice 
     of that determination with the written notice of allowance of 
     the application under section 151; and
       ``(ii) provide the applicant one opportunity to request 
     reconsideration of any patent term adjustment determination 
     made by the Director.
       ``(C) The Director shall reinstate all or part of the 
     cumulative period of time of an adjustment under paragraph 
     (2)(C) if the applicant, prior to the issuance of the patent, 
     makes a showing that, in spite of all due care, the applicant 
     was unable to respond within the 3-month period, but in no 
     case shall more than 3 additional months for each such 
     response beyond the original 3-month period be reinstated.
       ``(D) The Director shall proceed to grant the patent after 
     completion of the Director's determination of a patent term 
     adjustment under the procedures established under this 
     subsection, notwithstanding any appeal taken by the applicant 
     of such determination.
       ``(4) Appeal of patent term adjustment determination.--
       ``(A) An applicant dissatisfied with a determination made 
     by the Director under paragraph (3) shall have remedy by a 
     civil action against the Director filed in the United States 
     District Court for the District of Columbia within 180 days 
     after the grant of the patent. Chapter 7 of title 5 shall 
     apply to such action. Any final judgment resulting in a 
     change to the period of adjustment of the patent term shall 
     be served on the Director, and the Director shall thereafter 
     alter the term of the patent to reflect such change.
       ``(B) The determination of a patent term adjustment under 
     this subsection shall not be subject to appeal or challenge 
     by a third party prior to the grant of the patent.''.
       (b) Conforming Amendments.--
       (1) Section 282 of title 35, United States Code, is amended 
     in the fourth paragraph by striking ``156 of this title'' and 
     inserting ``154(b) or 156 of this title''.

[[Page 29252]]

       (2) Section 1295(a)(4)(C) of title 28, United States Code, 
     is amended by striking ``145 or 146'' and inserting ``145, 
     146, or 154(b)''.

     SEC. 4403. CONTINUED EXAMINATION OF PATENT APPLICATIONS.

       Section 132 of title 35, United States Code, is amended--
       (1) in the first sentence by striking ``Whenever'' and 
     inserting ``(a) Whenever''; and
       (2) by adding at the end the following:
       ``(b) The Director shall prescribe regulations to provide 
     for the continued examination of applications for patent at 
     the request of the applicant. The Director may establish 
     appropriate fees for such continued examination and shall 
     provide a 50 percent reduction in such fees for small 
     entities that qualify for reduced fees under section 41(h)(1) 
     of this title.''.

     SEC. 4404. TECHNICAL CLARIFICATION.

       Section 156(a) of title 35, United States Code, is amended 
     in the matter preceding paragraph (1) by inserting ``, which 
     shall include any patent term adjustment granted under 
     section 154(b),'' after ``the original expiration date of the 
     patent''.

     SEC. 4405. EFFECTIVE DATE.

       (a) Amendments Made by Sections 4402 and 4404.--The 
     amendments made by sections 4402 and 4404 shall take effect 
     on the date that is 6 months after the date of enactment of 
     this Act and, except for a design patent application filed 
     under chapter 16 of title 35, United States Code, shall apply 
     to any application filed on or after the date that is 6 
     months after the date of enactment of this Act.
       (b) Amendments Made by Section 4403.--The amendments made 
     by section 4403--
       (1) shall take effect on the date that is 6 months after 
     the date of enactment of this Act, and shall apply to all 
     applications filed under section 111(a) of title 35, United 
     States Code, on or after June 8, 1995, and all applications 
     complying with section 371 of title 35, United States Code, 
     that resulted from international applications filed on or 
     after June 8, 1995; and
       (2) do not apply to applications for design patents under 
     chapter 16 of title 35, United States Code.
   Subtitle E--Domestic Publication of Patent Applications Published 
                                 Abroad

     SEC. 4501. SHORT TITLE.

       This subtitle may be cited as the ``Domestic Publication of 
     Foreign Filed Patent Applications Act of 1999''.

     SEC. 4502. PUBLICATION.

       (a) Publication.--Section 122 of title 35, United States 
     Code, is amended to read as follows:

     ``Sec. 122. Confidential status of applications; publication 
       of patent applications

       ``(a) Confidentiality.--Except as provided in subsection 
     (b), applications for patents shall be kept in confidence by 
     the Patent and Trademark Office and no information concerning 
     the same given without authority of the applicant or owner 
     unless necessary to carry out the provisions of an Act of 
     Congress or in such special circumstances as may be 
     determined by the Director.
       ``(b) Publication.--
       ``(1) In general.--(A) Subject to paragraph (2), each 
     application for a patent shall be published, in accordance 
     with procedures determined by the Director, promptly after 
     the expiration of a period of 18 months from the earliest 
     filing date for which a benefit is sought under this title. 
     At the request of the applicant, an application may be 
     published earlier than the end of such 18-month period.
       ``(B) No information concerning published patent 
     applications shall be made available to the public except as 
     the Director determines.
       ``(C) Notwithstanding any other provision of law, a 
     determination by the Director to release or not to release 
     information concerning a published patent application shall 
     be final and nonreviewable.
       ``(2) Exceptions.--(A) An application shall not be 
     published if that application is--
       ``(i) no longer pending;
       ``(ii) subject to a secrecy order under section 181 of this 
     title;
       ``(iii) a provisional application filed under section 
     111(b) of this title; or
       ``(iv) an application for a design patent filed under 
     chapter 16 of this title.
       ``(B)(i) If an applicant makes a request upon filing, 
     certifying that the invention disclosed in the application 
     has not and will not be the subject of an application filed 
     in another country, or under a multilateral international 
     agreement, that requires publication of applications 18 
     months after filing, the application shall not be published 
     as provided in paragraph (1).
       ``(ii) An applicant may rescind a request made under clause 
     (i) at any time.
       ``(iii) An applicant who has made a request under clause 
     (i) but who subsequently files, in a foreign country or under 
     a multilateral international agreement specified in clause 
     (i), an application directed to the invention disclosed in 
     the application filed in the Patent and Trademark Office, 
     shall notify the Director of such filing not later than 45 
     days after the date of the filing of such foreign or 
     international application. A failure of the applicant to 
     provide such notice within the prescribed period shall result 
     in the application being regarded as abandoned, unless it is 
     shown to the satisfaction of the Director that the delay in 
     submitting the notice was unintentional.
       ``(iv) If an applicant rescinds a request made under clause 
     (i) or notifies the Director that an application was filed in 
     a foreign country or under a multilateral international 
     agreement specified in clause (i), the application shall be 
     published in accordance with the provisions of paragraph (1) 
     on or as soon as is practical after the date that is 
     specified in clause (i).
       ``(v) If an applicant has filed applications in one or more 
     foreign countries, directly or through a multilateral 
     international agreement, and such foreign filed applications 
     corresponding to an application filed in the Patent and 
     Trademark Office or the description of the invention in such 
     foreign filed applications is less extensive than the 
     application or description of the invention in the 
     application filed in the Patent and Trademark Office, the 
     applicant may submit a redacted copy of the application filed 
     in the Patent and Trademark Office eliminating any part or 
     description of the invention in such application that is not 
     also contained in any of the corresponding applications filed 
     in a foreign country. The Director may only publish the 
     redacted copy of the application unless the redacted copy of 
     the application is not received within 16 months after the 
     earliest effective filing date for which a benefit is sought 
     under this title. The provisions of section 154(d) shall not 
     apply to a claim if the description of the invention 
     published in the redacted application filed under this clause 
     with respect to the claim does not enable a person skilled in 
     the art to make and use the subject matter of the claim.
       ``(c) Protest and Pre-Issuance Opposition.--The Director 
     shall establish appropriate procedures to ensure that no 
     protest or other form of pre-issuance opposition to the grant 
     of a patent on an application may be initiated after 
     publication of the application without the express written 
     consent of the applicant.
       ``(d) National Security.--No application for patent shall 
     be published under subsection (b)(1) if the publication or 
     disclosure of such invention would be detrimental to the 
     national security. The Director shall establish appropriate 
     procedures to ensure that such applications are promptly 
     identified and the secrecy of such inventions is maintained 
     in accordance with chapter 17 of this title.''.
       (b) Study.--
       (1) In general.--The Comptroller General shall conduct a 3-
     year study of the applicants who file only in the United 
     States on or after the effective date of this subtitle and 
     shall provide the results of such study to the Judiciary 
     Committees of the House of Representatives and the Senate.
       (2) Contents.--The study conducted under paragraph (1) 
     shall--
       (A) consider the number of such applicants in relation to 
     the number of applicants who file in the United States and 
     outside of the United States;
       (B) examine how many domestic-only filers request at the 
     time of filing not to be published;
       (C) examine how many such filers rescind that request or 
     later choose to file abroad;
       (D) examine the status of the entity seeking an application 
     and any correlation that may exist between such status and 
     the publication of patent applications; and
       (E) examine the abandonment/issuance ratios and length of 
     application pendency before patent issuance or abandonment 
     for published versus unpublished applications.

     SEC. 4503. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE.

       (a) In a Foreign Country.--Section 119(b) of title 35, 
     United States Code, is amended to read as follows:
       ``(b)(1) No application for patent shall be entitled to 
     this right of priority unless a claim is filed in the Patent 
     and Trademark Office, identifying the foreign application by 
     specifying the application number on that foreign 
     application, the intellectual property authority or country 
     in or for which the application was filed, and the date of 
     filing the application, at such time during the pendency of 
     the application as required by the Director.
       ``(2) The Director may consider the failure of the 
     applicant to file a timely claim for priority as a waiver of 
     any such claim. The Director may establish procedures, 
     including the payment of a surcharge, to accept an 
     unintentionally delayed claim under this section.
       ``(3) The Director may require a certified copy of the 
     original foreign application, specification, and drawings 
     upon which it is based, a translation if not in the English 
     language, and such other information as the Director 
     considers necessary. Any such certification shall be made by 
     the foreign intellectual property authority in which the 
     foreign application was filed and show the date of the 
     application and of the filing of the specification and other 
     papers.''.
       (b) In the United States.--
       (1) In general.--Section 120 of title 35, United States 
     Code, is amended by adding at the end the following: ``No 
     application shall be entitled to the benefit of an earlier 
     filed application under this section unless an amendment 
     containing the specific reference to the earlier filed 
     application is submitted at such time during the pendency of 
     the application as required by the Director. The Director may 
     consider the failure to submit such an amendment within that 
     time period as a waiver of any benefit under this section. 
     The Director may establish procedures, including the payment 
     of a surcharge, to accept an unintentionally delayed 
     submission of an amendment under this section.''.
       (2) Right of priority.--Section 119(e)(1) of title 35, 
     United States Code, is amended by adding at the end the 
     following: ``No application shall be entitled to the benefit 
     of an earlier filed provisional application under this 
     subsection unless an amendment containing the specific

[[Page 29253]]

     reference to the earlier filed provisional application is 
     submitted at such time during the pendency of the application 
     as required by the Director. The Director may consider the 
     failure to submit such an amendment within that time period 
     as a waiver of any benefit under this subsection. The 
     Director may establish procedures, including the payment of a 
     surcharge, to accept an unintentionally delayed submission of 
     an amendment under this subsection during the pendency of the 
     application.''.

     SEC. 4504. PROVISIONAL RIGHTS.

       Section 154 of title 35, United States Code, is amended--
       (1) in the section caption by inserting ``; provisional 
     rights'' after ``patent''; and
       (2) by adding at the end the following new subsection:
       ``(d) Provisional Rights.--
       ``(1) In general.--In addition to other rights provided by 
     this section, a patent shall include the right to obtain a 
     reasonable royalty from any person who, during the period 
     beginning on the date of publication of the application for 
     such patent under section 122(b), or in the case of an 
     international application filed under the treaty defined in 
     section 351(a) designating the United States under Article 
     21(2)(a) of such treaty, the date of publication of the 
     application, and ending on the date the patent is issued--
       ``(A)(i) makes, uses, offers for sale, or sells in the 
     United States the invention as claimed in the published 
     patent application or imports such an invention into the 
     United States; or
       ``(ii) if the invention as claimed in the published patent 
     application is a process, uses, offers for sale, or sells in 
     the United States or imports into the United States products 
     made by that process as claimed in the published patent 
     application; and
       ``(B) had actual notice of the published patent application 
     and, in a case in which the right arising under this 
     paragraph is based upon an international application 
     designating the United States that is published in a language 
     other than English, had a translation of the international 
     application into the English language.
       ``(2) Right based on substantially identical inventions.--
     The right under paragraph (1) to obtain a reasonable royalty 
     shall not be available under this subsection unless the 
     invention as claimed in the patent is substantially identical 
     to the invention as claimed in the published patent 
     application.
       ``(3) Time limitation on obtaining a reasonable royalty.--
     The right under paragraph (1) to obtain a reasonable royalty 
     shall be available only in an action brought not later than 6 
     years after the patent is issued. The right under paragraph 
     (1) to obtain a reasonable royalty shall not be affected by 
     the duration of the period described in paragraph (1).
       ``(4) Requirements for international applications.--
       ``(A) Effective date.--The right under paragraph (1) to 
     obtain a reasonable royalty based upon the publication under 
     the treaty defined in section 351(a) of an international 
     application designating the United States shall commence on 
     the date on which the Patent and Trademark Office receives a 
     copy of the publication under the treaty of the international 
     application, or, if the publication under the treaty of the 
     international application is in a language other than 
     English, on the date on which the Patent and Trademark Office 
     receives a translation of the international application in 
     the English language.
       ``(B) Copies.--The Director may require the applicant to 
     provide a copy of the international application and a 
     translation thereof.''.

     SEC. 4505. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.

       Section 102(e) of title 35, United States Code, is amended 
     to read as follows:
       ``(e) The invention was described in--
       ``(1) an application for patent, published under section 
     122(b), by another filed in the United States before the 
     invention by the applicant for patent, except that an 
     international application filed under the treaty defined in 
     section 351(a) shall have the effect under this subsection of 
     a national application published under section 122(b) only if 
     the international application designating the United States 
     was published under Article 21(2)(a) of such treaty in the 
     English language; or
       ``(2) a patent granted on an application for patent by 
     another filed in the United States before the invention by 
     the applicant for patent, except that a patent shall not be 
     deemed filed in the United States for the purposes of this 
     subsection based on the filing of an international 
     application filed under the treaty defined in section 351(a); 
     or''.

     SEC. 4506. COST RECOVERY FOR PUBLICATION.

       The Under Secretary of Commerce for Intellectual Property 
     and Director of the United States Patent and Trademark Office 
     shall recover the cost of early publication required by the 
     amendment made by section 4502 by charging a separate 
     publication fee after notice of allowance is given under 
     section 151 of title 35, United States Code.

     SEC. 4507. CONFORMING AMENDMENTS.

       The following provisions of title 35, United States Code, 
     are amended:
       (1) Section 11 is amended in paragraph 1 of subsection (a) 
     by inserting ``and published applications for patents'' after 
     ``Patents''.
       (2) Section 12 is amended--
       (A) in the section caption by inserting ``and 
     applications'' after ``patents''; and
       (B) by inserting ``and published applications for patents'' 
     after ``patents''.
       (3) Section 13 is amended--
       (A) in the section caption by inserting ``and 
     applications'' after ``patents''; and
       (B) by inserting ``and published applications for patents'' 
     after ``patents''.
       (4) The items relating to sections 12 and 13 in the table 
     of sections for chapter 1 are each amended by inserting ``and 
     applications'' after ``patents''.
       (5) The item relating to section 122 in the table of 
     sections for chapter 11 is amended by inserting ``; 
     publication of patent applications'' after ``applications''.
       (6) The item relating to section 154 in the table of 
     sections for chapter 14 is amended by inserting ``; 
     provisional rights'' after ``patent''.
       (7) Section 181 is amended--
       (A) in the first undesignated paragraph--
       (i) by inserting ``by the publication of an application 
     or'' after ``disclosure''; and
       (ii) by inserting ``the publication of the application or'' 
     after ``withhold'';
       (B) in the second undesignated paragraph by inserting ``by 
     the publication of an application or'' after ``disclosure of 
     an invention'';
       (C) in the third undesignated paragraph--
       (i) by inserting ``by the publication of the application 
     or'' after ``disclosure of the invention''; and
       (ii) by inserting ``the publication of the application or'' 
     after ``withhold''; and
       (D) in the fourth undesignated paragraph by inserting ``the 
     publication of an application or'' after ``and'' in the first 
     sentence.
       (8) Section 252 is amended in the first undesignated 
     paragraph by inserting ``substantially'' before ``identical'' 
     each place it appears.
       (9) Section 284 is amended by adding at the end of the 
     second undesignated paragraph the following: ``Increased 
     damages under this paragraph shall not apply to provisional 
     rights under section 154(d) of this title.''.
       (10) Section 374 is amended to read as follows:

     ``Sec. 374. Publication of international application

       ``The publication under the treaty defined in section 
     351(a) of this title, of an international application 
     designating the United States shall confer the same rights 
     and shall have the same effect under this title as an 
     application for patent published under section 122(b), except 
     as provided in sections 102(e) and 154(d) of this title.''.
       (11) Section 135(b) is amended--
       (A) by inserting ``(1)'' after ``(b)''; and
       (B) by adding at the end the following:
       ``(2) A claim which is the same as, or for the same or 
     substantially the same subject matter as, a claim of an 
     application published under section 122(b) of this title may 
     be made in an application filed after the application is 
     published only if the claim is made before 1 year after the 
     date on which the application is published.''.

     SEC. 4508. EFFECTIVE DATE.

       Sections 4502 through 4507, and the amendments made by such 
     sections, shall take effect on the date that is 1 year after 
     the date of enactment of this Act and shall apply to all 
     applications filed under section 111 of title 35, United 
     States Code, on or after that date, and all applications 
     complying with section 371 of title 35, United States Code, 
     that resulted from international applications filed on or 
     after that date. The amendments made by sections 4504 and 
     4505 shall apply to any such application voluntarily 
     published by the applicant under procedures established under 
     this subtitle that is pending on the date that is 1 year 
     after the date of enactment of this Act. The amendment made 
     by section 4504 shall also apply to international 
     applications designating the United States that are filed on 
     or after the date that is 1 year after the date of enactment 
     of this Act.
       Subtitle F--Optional Inter Partes Reexamination Procedure

     SEC. 4601. SHORT TITLE.

       This subtitle may be cited as the ``Optional Inter Partes 
     Reexamination Procedure Act of 1999''.

     SEC. 4602. EX PARTE REEXAMINATION OF PATENTS.

       The chapter heading for chapter 30 of title 35, United 
     States Code, is amended by inserting ``EX PARTE'' before 
     ``REEXAMINATION OF PATENTS''.

     SEC. 4603. DEFINITIONS.

       Section 100 of title 35, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(e) The term `third-party requester' means a person 
     requesting ex parte reexamination under section 302 or inter 
     partes reexamination under section 311 who is not the patent 
     owner.''.

     SEC. 4604. OPTIONAL INTER PARTES REEXAMINATION PROCEDURES.

       (a) In General.--Part 3 of title 35, United States Code, is 
     amended by adding after chapter 30 the following new chapter:

      ``CHAPTER 31--OPTIONAL INTER PARTES REEXAMINATION PROCEDURES

``Sec.
``311. Request for inter partes reexamination.
``312. Determination of issue by Director.
``313. Inter partes reexamination order by Director.
``314. Conduct of inter partes reexamination proceedings.
``315. Appeal.
``316. Certificate of patentability, unpatentability, and claim 
              cancellation.
``317. Inter partes reexamination prohibited.

[[Page 29254]]

``318. Stay of litigation.

     ``Sec. 311. Request for inter partes reexamination

       ``(a) In General.--Any person at any time may file a 
     request for inter partes reexamination by the Office of a 
     patent on the basis of any prior art cited under the 
     provisions of section 301.
       ``(b) Requirements.--The request shall--
       ``(1) be in writing, include the identity of the real party 
     in interest, and be accompanied by payment of an inter partes 
     reexamination fee established by the Director under section 
     41; and
       ``(2) set forth the pertinency and manner of applying cited 
     prior art to every claim for which reexamination is 
     requested.
       ``(c) Copy.--Unless the requesting person is the owner of 
     the patent, the Director promptly shall send a copy of the 
     request to the owner of record of the patent.

     ``Sec. 312. Determination of issue by Director

       ``(a) Reexamination.--Not later than 3 months after the 
     filing of a request for inter partes reexamination under 
     section 311, the Director shall determine whether a 
     substantial new question of patentability affecting any claim 
     of the patent concerned is raised by the request, with or 
     without consideration of other patents or printed 
     publications. On the Director's initiative, and at any time, 
     the Director may determine whether a substantial new question 
     of patentability is raised by patents and publications.
       ``(b) Record.--A record of the Director's determination 
     under subsection (a) shall be placed in the official file of 
     the patent, and a copy shall be promptly given or mailed to 
     the owner of record of the patent and to the third-party 
     requester, if any.
       ``(c) Final Decision.--A determination by the Director 
     under subsection (a) shall be final and non-appealable. Upon 
     a determination that no substantial new question of 
     patentability has been raised, the Director may refund a 
     portion of the inter partes reexamination fee required under 
     section 311.

     ``Sec. 313. Inter partes reexamination order by Director

       ``If, in a determination made under section 312(a), the 
     Director finds that a substantial new question of 
     patentability affecting a claim of a patent is raised, the 
     determination shall include an order for inter partes 
     reexamination of the patent for resolution of the question. 
     The order may be accompanied by the initial action of the 
     Patent and Trademark Office on the merits of the inter partes 
     reexamination conducted in accordance with section 314.

     ``Sec. 314. Conduct of inter partes reexamination proceedings

       ``(a) In General.--Except as otherwise provided in this 
     section, reexamination shall be conducted according to the 
     procedures established for initial examination under the 
     provisions of sections 132 and 133. In any inter partes 
     reexamination proceeding under this chapter, the patent owner 
     shall be permitted to propose any amendment to the patent and 
     a new claim or claims, except that no proposed amended or new 
     claim enlarging the scope of the claims of the patent shall 
     be permitted.
       ``(b) Response.--(1) This subsection shall apply to any 
     inter partes reexamination proceeding in which the order for 
     inter partes reexamination is based upon a request by a 
     third-party requester.
       ``(2) With the exception of the inter partes reexamination 
     request, any document filed by either the patent owner or the 
     third-party requester shall be served on the other party. In 
     addition, the third-party requester shall receive a copy of 
     any communication sent by the Office to the patent owner 
     concerning the patent subject to the inter partes 
     reexamination proceeding.
       ``(3) Each time that the patent owner files a response to 
     an action on the merits from the Patent and Trademark Office, 
     the third-party requester shall have one opportunity to file 
     written comments addressing issues raised by the action of 
     the Office or the patent owner's response thereto, if those 
     written comments are received by the Office within 30 days 
     after the date of service of the patent owner's response.
       ``(c) Special Dispatch.--Unless otherwise provided by the 
     Director for good cause, all inter partes reexamination 
     proceedings under this section, including any appeal to the 
     Board of Patent Appeals and Interferences, shall be conducted 
     with special dispatch within the Office.

     ``Sec. 315. Appeal

       ``(a) Patent Owner.--The patent owner involved in an inter 
     partes reexamination proceeding under this chapter--
       ``(1) may appeal under the provisions of section 134 and 
     may appeal under the provisions of sections 141 through 144, 
     with respect to any decision adverse to the patentability of 
     any original or proposed amended or new claim of the patent; 
     and
       ``(2) may be a party to any appeal taken by a third-party 
     requester under subsection (b).
       ``(b) Third-Party Requester.--A third-party requester may--
       ``(1) appeal under the provisions of section 134 with 
     respect to any final decision favorable to the patentability 
     of any original or proposed amended or new claim of the 
     patent; or
       ``(2) be a party to any appeal taken by the patent owner 
     under the provisions of section 134, subject to subsection 
     (c).
       ``(c) Civil Action.--A third-party requester whose request 
     for an inter partes reexamination results in an order under 
     section 313 is estopped from asserting at a later time, in 
     any civil action arising in whole or in part under section 
     1338 of title 28, the invalidity of any claim finally 
     determined to be valid and patentable on any ground which the 
     third-party requester raised or could have raised during the 
     inter partes reexamination proceedings. This subsection does 
     not prevent the assertion of invalidity based on newly 
     discovered prior art unavailable to the third-party requester 
     and the Patent and Trademark Office at the time of the inter 
     partes reexamination proceedings.

     ``Sec. 316. Certificate of patentability, unpatentability, 
       and claim cancellation

       ``(a) In General.--In an inter partes reexamination 
     proceeding under this chapter, when the time for appeal has 
     expired or any appeal proceeding has terminated, the Director 
     shall issue and publish a certificate canceling any claim of 
     the patent finally determined to be unpatentable, confirming 
     any claim of the patent determined to be patentable, and 
     incorporating in the patent any proposed amended or new claim 
     determined to be patentable.
       ``(b) Amended or New Claim.--Any proposed amended or new 
     claim determined to be patentable and incorporated into a 
     patent following an inter partes reexamination proceeding 
     shall have the same effect as that specified in section 252 
     of this title for reissued patents on the right of any person 
     who made, purchased, or used within the United States, or 
     imported into the United States, anything patented by such 
     proposed amended or new claim, or who made substantial 
     preparation therefor, prior to issuance of a certificate 
     under the provisions of subsection (a) of this section.

     ``Sec. 317. Inter partes reexamination prohibited

       ``(a) Order for Reexamination.--Notwithstanding any 
     provision of this chapter, once an order for inter partes 
     reexamination of a patent has been issued under section 313, 
     neither the patent owner nor the third-party requester, if 
     any, nor privies of either, may file a subsequent request for 
     inter partes reexamination of the patent until an inter 
     partes reexamination certificate is issued and published 
     under section 316, unless authorized by the Director.
       ``(b) Final Decision.--Once a final decision has been 
     entered against a party in a civil action arising in whole or 
     in part under section 1338 of title 28 that the party has not 
     sustained its burden of proving the invalidity of any patent 
     claim in suit or if a final decision in an inter partes 
     reexamination proceeding instituted by a third-party 
     requester is favorable to the patentability of any original 
     or proposed amended or new claim of the patent, then neither 
     that party nor its privies may thereafter request an inter 
     partes reexamination of any such patent claim on the basis of 
     issues which that party or its privies raised or could have 
     raised in such civil action or inter partes reexamination 
     proceeding, and an inter partes reexamination requested by 
     that party or its privies on the basis of such issues may not 
     thereafter be maintained by the Office, notwithstanding any 
     other provision of this chapter. This subsection does not 
     prevent the assertion of invalidity based on newly discovered 
     prior art unavailable to the third-party requester and the 
     Patent and Trademark Office at the time of the inter partes 
     reexamination proceedings.

     ``Sec. 318. Stay of litigation

       ``Once an order for inter partes reexamination of a patent 
     has been issued under section 313, the patent owner may 
     obtain a stay of any pending litigation which involves an 
     issue of patentability of any claims of the patent which are 
     the subject of the inter partes reexamination order, unless 
     the court before which such litigation is pending determines 
     that a stay would not serve the interests of justice.''.
       (b) Conforming Amendment.--The table of chapters for part 
     III of title 25, United States Code, is amended by striking 
     the item relating to chapter 30 and inserting the following:

``30. Prior Art Citations to Office and Ex Parte Reexamination of 
    Patents.....................................................301....

``31. Optional Inter Partes Reexamination of Patents.........311''.....

     SEC. 4605. CONFORMING AMENDMENTS.

       (a) Patent Fees; Patent Search Systems.--Section 41(a)(7) 
     of title 35, United States Code, is amended to read as 
     follows:
       ``(7) 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, $1,210, unless 
     the petition is filed under section 133 or 151 of this title, 
     in which case the fee shall be $110.''.
       (b) Appeal to the Board of Patents Appeals and 
     Interferences.--Section 134 of title 35, United States Code, 
     is amended to read as follows:

     ``Sec. 134. Appeal to the Board of Patent Appeals and 
       Interferences

       ``(a) Patent Applicant.--An applicant for a patent, any of 
     whose claims has been twice rejected, may appeal from the 
     decision of the administrative patent judge to the Board of 
     Patent Appeals and Interferences, having once paid the fee 
     for such appeal.
       ``(b) Patent Owner.--A patent owner in any reexamination 
     proceeding may appeal from the final rejection of any claim 
     by the administrative patent judge to the Board of Patent 
     Appeals and Interferences, having once paid the fee for such 
     appeal.

[[Page 29255]]

       ``(c) Third-Party.--A third-party requester in an inter 
     partes proceeding may appeal to the Board of Patent Appeals 
     and Interferences from the final decision of the 
     administrative patent judge favorable to the patentability of 
     any original or proposed amended or new claim of a patent, 
     having once paid the fee for such appeal. The third-party 
     requester may not appeal the decision of the Board of Patent 
     Appeals and Interferences.''.
       (c) Appeal to Court of Appeals for the Federal Circuit.--
     Section 141 of title 35, United States Code, is amended by 
     adding the following after the second sentence: ``A patent 
     owner in any reexamination proceeding dissatisfied with the 
     final decision in an appeal to the Board of Patent Appeals 
     and Interferences under section 134 may appeal the decision 
     only to the United States Court of Appeals for the Federal 
     Circuit.''.
       (d) Proceedings on Appeal.--Section 143 of title 35, United 
     States Code, is amended by amending the third sentence to 
     read as follows: ``In any reexamination case, the Director 
     shall submit to the court in writing the grounds for the 
     decision of the Patent and Trademark Office, addressing all 
     the issues involved in the appeal.''.
       (e) Civil Action To Obtain Patent.--Section 145 of title 
     35, United States Code, is amended in the first sentence by 
     inserting ``(a)'' after ``section 134''.

     SEC. 4606. REPORT TO CONGRESS.

       Not later than 5 years after the date of the enactment of 
     this Act, the Under Secretary of Commerce for Intellectual 
     Property and Director of the United States Patent and 
     Trademark Office shall submit to the Congress a report 
     evaluating whether the inter partes reexamination proceedings 
     established under the amendments made by this subtitle are 
     inequitable to any of the parties in interest and, if so, the 
     report shall contain recommendations for changes to the 
     amendments made by this subtitle to remove such inequity.

     SEC. 4607. ESTOPPEL EFFECT OF REEXAMINATION.

       Any party who requests an inter partes reexamination under 
     section 311 of title 35, United States Code, is estopped from 
     challenging at a later time, in any civil action, any fact 
     determined during the process of such reexamination, except 
     with respect to a fact determination later proved to be 
     erroneous based on information unavailable at the time of the 
     inter partes reexamination decision. If this section is held 
     to be unenforceable, the enforceability of the remainder of 
     this subtitle or of this title shall not be denied as a 
     result.

     SEC. 4608. EFFECTIVE DATE.

       (a) In General.--Subject to subsection (b), this subtitle 
     and the amendments made by this subtitle shall take effect on 
     the date of enactment of this Act and shall apply to any 
     patent that issues from an original application filed in the 
     United States on or after that date.
       (b) Section 4605(a).--The amendments made by section 
     4605(a) shall take effect on the date that is 1 year after 
     the date of enactment of this Act.
                Subtitle G--Patent and Trademark Office

     SEC. 4701. SHORT TITLE.

       This subtitle may be cited as the ``Patent and Trademark 
     Office Efficiency Act''.

          CHAPTER 1--UNITED STATES PATENT AND TRADEMARK OFFICE

     SEC. 4711. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE.

       Section 1 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 1. Establishment

       ``(a) Establishment.--The United States Patent and 
     Trademark Office is established as an agency of the United 
     States, within the Department of Commerce. In carrying out 
     its functions, the United States Patent and Trademark Office 
     shall be subject to the policy direction of the Secretary of 
     Commerce, but otherwise shall retain responsibility for 
     decisions regarding the management and administration of its 
     operations and shall exercise independent control of its 
     budget allocations and expenditures, personnel decisions and 
     processes, procurements, and other administrative and 
     management functions in accordance with this title and 
     applicable provisions of law. Those operations designed to 
     grant and issue patents and those operations which are 
     designed to facilitate the registration of trademarks shall 
     be treated as separate operating units within the Office.
       ``(b) Offices.--The United States Patent and Trademark 
     Office shall maintain its principal office in the 
     metropolitan Washington, DC, area, for the service of process 
     and papers and for the purpose of carrying out its functions. 
     The United States Patent and Trademark Office shall be 
     deemed, for purposes of venue in civil actions, to be a 
     resident of the district in which its principal office is 
     located, except where jurisdiction is otherwise provided by 
     law. The United States Patent and Trademark Office may 
     establish satellite offices in such other places in the 
     United States as it considers necessary and appropriate in 
     the conduct of its business.
       ``(c) Reference.--For purposes of this title, the United 
     States Patent and Trademark Office shall also be referred to 
     as the `Office' and the `Patent and Trademark Office'.''.

     SEC. 4712. POWERS AND DUTIES.

       Section 2 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 2. Powers and duties

       ``(a) In General.--The United States Patent and Trademark 
     Office, subject to the policy direction of the Secretary of 
     Commerce--
       ``(1) shall be responsible for the granting and issuing of 
     patents and the registration of trademarks; and
       ``(2) shall be responsible for disseminating to the public 
     information with respect to patents and trademarks.
       ``(b) Specific Powers.--The Office--
       ``(1) shall adopt and use a seal of the Office, which shall 
     be judicially noticed and with which letters patent, 
     certificates of trademark registrations, and papers issued by 
     the Office shall be authenticated;
       ``(2) may establish regulations, not inconsistent with law, 
     which--
       ``(A) shall govern the conduct of proceedings in the 
     Office;
       ``(B) shall be made in accordance with section 553 of title 
     5;
       ``(C) shall facilitate and expedite the processing of 
     patent applications, particularly those which can be filed, 
     stored, processed, searched, and retrieved electronically, 
     subject to the provisions of section 122 relating to the 
     confidential status of applications;
       ``(D) may govern the recognition and conduct of agents, 
     attorneys, or other persons representing applicants or other 
     parties before the Office, and may require them, before being 
     recognized as representatives of applicants or other persons, 
     to show that they are of good moral character and reputation 
     and are possessed of the necessary qualifications to render 
     to applicants or other persons valuable service, advice, and 
     assistance in the presentation or prosecution of their 
     applications or other business before the Office;
       ``(E) shall recognize the public interest in continuing to 
     safeguard broad access to the United States patent system 
     through the reduced fee structure for small entities under 
     section 41(h)(1) of this title; and
       ``(F) provide for the development of a performance-based 
     process that includes quantitative and qualitative measures 
     and standards for evaluating cost-effectiveness and is 
     consistent with the principles of impartiality and 
     competitiveness;
       ``(3) may acquire, construct, purchase, lease, hold, 
     manage, operate, improve, alter, and renovate any real, 
     personal, or mixed property, or any interest therein, as it 
     considers necessary to carry out its functions;
       ``(4)(A) may make such purchases, contracts for the 
     construction, maintenance, or management and operation of 
     facilities, and contracts for supplies or services, without 
     regard to the provisions of the Federal Property and 
     Administrative Services Act of 1949 (40 U.S.C. 471 et seq.), 
     the Public Buildings Act (40 U.S.C. 601 et seq.), and the 
     Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301 
     et seq.); and
       ``(B) may enter into and perform such purchases and 
     contracts for printing services, including the process of 
     composition, platemaking, presswork, silk screen processes, 
     binding, microform, and the products of such processes, as it 
     considers necessary to carry out the functions of the Office, 
     without regard to sections 501 through 517 and 1101 through 
     1123 of title 44;
       ``(5) may use, with their consent, services, equipment, 
     personnel, and facilities of other departments, agencies, and 
     instrumentalities of the Federal Government, on a 
     reimbursable basis, and cooperate with such other 
     departments, agencies, and instrumentalities in the 
     establishment and use of services, equipment, and facilities 
     of the Office;
       ``(6) may, when the Director determines that it is 
     practicable, efficient, and cost-effective to do so, use, 
     with the consent of the United States and the agency, 
     instrumentality, patent and trademark office, or 
     international organization concerned, the services, records, 
     facilities, or personnel of any State or local government 
     agency or instrumentality or foreign patent and trademark 
     office or international organization to perform functions on 
     its behalf;
       ``(7) may retain and use all of its revenues and receipts, 
     including revenues from the sale, lease, or disposal of any 
     real, personal, or mixed property, or any interest therein, 
     of the Office;
       ``(8) shall advise the President, through the Secretary of 
     Commerce, on national and certain international intellectual 
     property policy issues;
       ``(9) shall advise Federal departments and agencies on 
     matters of intellectual property policy in the United States 
     and intellectual property protection in other countries;
       ``(10) shall provide guidance, as appropriate, with respect 
     to proposals by agencies to assist foreign governments and 
     international intergovernmental organizations on matters of 
     intellectual property protection;
       ``(11) may conduct programs, studies, or exchanges of items 
     or services regarding domestic and international intellectual 
     property law and the effectiveness of intellectual property 
     protection domestically and throughout the world;
       ``(12)(A) shall advise the Secretary of Commerce on 
     programs and studies relating to intellectual property policy 
     that are conducted, or authorized to be conducted, 
     cooperatively with foreign intellectual property offices and 
     international intergovernmental organizations; and
       ``(B) may conduct programs and studies described in 
     subparagraph (A); and
       ``(13)(A) in coordination with the Department of State, may 
     conduct programs and studies cooperatively with foreign 
     intellectual property offices and international 
     intergovernmental organizations; and
       ``(B) with the concurrence of the Secretary of State, may 
     authorize the transfer of not to exceed $100,000 in any year 
     to the Department of

[[Page 29256]]

     State for the purpose of making special payments to 
     international intergovernmental organizations for studies and 
     programs for advancing international cooperation concerning 
     patents, trademarks, and other matters.
       ``(c) Clarification of Specific Powers.--(1) The special 
     payments under subsection (b)(13)(B) shall be in addition to 
     any other payments or contributions to international 
     organizations described in subsection (b)(13)(B) and shall 
     not be subject to any limitations imposed by law on the 
     amounts of such other payments or contributions by the United 
     States Government.
       ``(2) Nothing in subsection (b) shall derogate from the 
     duties of the Secretary of State or from the duties of the 
     United States Trade Representative as set forth in section 
     141 of the Trade Act of 1974 (19 U.S.C. 2171).
       ``(3) Nothing in subsection (b) shall derogate from the 
     duties and functions of the Register of Copyrights or 
     otherwise alter current authorities relating to copyright 
     matters.
       ``(4) In exercising the Director's powers under paragraphs 
     (3) and (4)(A) of subsection (b), the Director shall consult 
     with the Administrator of General Services.
       ``(5) In exercising the Director's powers and duties under 
     this section, the Director shall consult with the Register of 
     Copyrights on all copyright and related matters.
       ``(d) Construction.--Nothing in this section shall be 
     construed to nullify, void, cancel, or interrupt any pending 
     request-for-proposal let or contract issued by the General 
     Services Administration for the specific purpose of 
     relocating or leasing space to the United States Patent and 
     Trademark Office.''.

     SEC. 4713. ORGANIZATION AND MANAGEMENT.

       Section 3 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 3. Officers and employees

       ``(a) Under Secretary and Director.--
       ``(1) In general.--The powers and duties of the United 
     States Patent and Trademark Office shall be vested in an 
     Under Secretary of Commerce for Intellectual Property and 
     Director of the United States Patent and Trademark Office (in 
     this title referred to as the `Director'), who shall be a 
     citizen of the United States and who shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate. The Director shall be a person who has a professional 
     background and experience in patent or trademark law.
       ``(2) Duties.--
       ``(A) In general.--The Director shall be responsible for 
     providing policy direction and management supervision for the 
     Office and for the issuance of patents and the registration 
     of trademarks. The Director shall perform these duties in a 
     fair, impartial, and equitable manner.
       ``(B) Consulting with the public advisory committees.--The 
     Director shall consult with the Patent Public Advisory 
     Committee established in section 5 on a regular basis on 
     matters relating to the patent operations of the Office, 
     shall consult with the Trademark Public Advisory Committee 
     established in section 5 on a regular basis on matters 
     relating to the trademark operations of the Office, and shall 
     consult with the respective Public Advisory Committee before 
     submitting budgetary proposals to the Office of Management 
     and Budget or changing or proposing to change patent or 
     trademark user fees or patent or trademark regulations which 
     are subject to the requirement to provide notice and 
     opportunity for public comment under section 553 of title 5, 
     as the case may be.
       ``(3) Oath.--The Director shall, before taking office, take 
     an oath to discharge faithfully the duties of the Office.
       ``(4) Removal.--The Director may be removed from office by 
     the President. The President shall provide notification of 
     any such removal to both Houses of Congress.
       ``(b) Officers and Employees of the Office.--
       ``(1) Deputy under secretary and deputy director.--The 
     Secretary of Commerce, upon nomination by the Director, shall 
     appoint a Deputy Under Secretary of Commerce for Intellectual 
     Property and Deputy Director of the United States Patent and 
     Trademark Office who shall be vested with the authority to 
     act in the capacity of the Director in the event of the 
     absence or incapacity of the Director. The Deputy Director 
     shall be a citizen of the United States who has a 
     professional background and experience in patent or trademark 
     law.
       ``(2) Commissioners.--
       ``(A) Appointment and duties.--The Secretary of Commerce 
     shall appoint a Commissioner for Patents and a Commissioner 
     for Trademarks, without regard to chapter 33, 51, or 53 of 
     title 5. The Commissioner for Patents shall be a citizen of 
     the United States with demonstrated management ability and 
     professional background and experience in patent law and 
     serve for a term of 5 years. The Commissioner for Trademarks 
     shall be a citizen of the United States with demonstrated 
     management ability and professional background and experience 
     in trademark law and serve for a term of 5 years. The 
     Commissioner for Patents and the Commissioner for Trademarks 
     shall serve as the chief operating officers for the 
     operations of the Office relating to patents and trademarks, 
     respectively, and shall be responsible for the management and 
     direction of all aspects of the activities of the Office that 
     affect the administration of patent and trademark operations, 
     respectively. The Secretary may reappoint a Commissioner to 
     subsequent terms of 5 years as long as the performance of the 
     Commissioner as set forth in the performance agreement in 
     subparagraph (B) is satisfactory.
       ``(B) Salary and performance agreement.--The Commissioners 
     shall be paid an annual rate of basic pay not to exceed the 
     maximum rate of basic pay for the Senior Executive Service 
     established under section 5382 of title 5, including any 
     applicable locality-based comparability payment that may be 
     authorized under section 5304(h)(2)(C) of title 5. The 
     compensation of the Commissioners shall be considered, for 
     purposes of section 207(c)(2)(A) of title 18, to be the 
     equivalent of that described under clause (ii) of section 
     207(c)(2)(A) of title 18. In addition, the Commissioners may 
     receive a bonus in an amount of up to, but not in excess of, 
     50 percent of the Commissioners' annual rate of basic pay, 
     based upon an evaluation by the Secretary of Commerce, acting 
     through the Director, of the Commissioners' performance as 
     defined in an annual performance agreement between the 
     Commissioners and the Secretary. The annual performance 
     agreements shall incorporate measurable organization and 
     individual goals in key operational areas as delineated in an 
     annual performance plan agreed to by the Commissioners and 
     the Secretary. Payment of a bonus under this subparagraph may 
     be made to the Commissioners only to the extent that such 
     payment does not cause the Commissioners' total aggregate 
     compensation in a calendar year to equal or exceed the amount 
     of the salary of the Vice President under section 104 of 
     title 3.
       ``(C) Removal.--The Commissioners may be removed from 
     office by the Secretary for misconduct or nonsatisfactory 
     performance under the performance agreement described in 
     subparagraph (B), without regard to the provisions of title 
     5. The Secretary shall provide notification of any such 
     removal to both Houses of Congress.
       ``(3) Other officers and employees.--The Director shall--
       ``(A) appoint such officers, employees (including 
     attorneys), and agents of the Office as the Director 
     considers necessary to carry out the functions of the Office; 
     and
       ``(B) define the title, authority, and duties of such 
     officers and employees and delegate to them such of the 
     powers vested in the Office as the Director may determine.
     The Office shall not be subject to any administratively or 
     statutorily imposed limitation on positions or personnel, and 
     no positions or personnel of the Office shall be taken into 
     account for purposes of applying any such limitation.
       ``(4) Training of examiners.--The Office shall submit to 
     the Congress a proposal to provide an incentive program to 
     retain as employees patent and trademark examiners of the 
     primary examiner grade or higher who are eligible for 
     retirement, for the sole purpose of training patent and 
     trademark examiners.
       ``(5) National security positions.--The Director, in 
     consultation with the Director of the Office of Personnel 
     Management, shall maintain a program for identifying national 
     security positions and providing for appropriate security 
     clearances, in order to maintain the secrecy of certain 
     inventions, as described in section 181, and to prevent 
     disclosure of sensitive and strategic information in the 
     interest of national security.
       ``(c) Continued Applicability of Title 5.--Officers and 
     employees of the Office shall be subject to the provisions of 
     title 5 relating to Federal employees.
       ``(d) Adoption of Existing Labor Agreements.--The Office 
     shall adopt all labor agreements which are in effect, as of 
     the day before the effective date of the Patent and Trademark 
     Office Efficiency Act, with respect to such Office (as then 
     in effect).
       ``(e) Carryover of Personnel.--
       ``(1) From pto.--Effective as of the effective date of the 
     Patent and Trademark Office Efficiency Act, all officers and 
     employees of the Patent and Trademark Office on the day 
     before such effective date shall become officers and 
     employees of the Office, without a break in service.
       ``(2) Other personnel.--Any individual who, on the day 
     before the effective date of the Patent and Trademark Office 
     Efficiency Act, is an officer or employee of the Department 
     of Commerce (other than an officer or employee under 
     paragraph (1)) shall be transferred to the Office, as 
     necessary to carry out the purposes of this Act, if--
       ``(A) such individual serves in a position for which a 
     major function is the performance of work reimbursed by the 
     Patent and Trademark Office, as determined by the Secretary 
     of Commerce;
       ``(B) such individual serves in a position that performed 
     work in support of the Patent and Trademark Office during at 
     least half of the incumbent's work time, as determined by the 
     Secretary of Commerce; or
       ``(C) such transfer would be in the interest of the Office, 
     as determined by the Secretary of Commerce in consultation 
     with the Director.
     Any transfer under this paragraph shall be effective as of 
     the same effective date as referred to in paragraph (1), and 
     shall be made without a break in service.
       ``(f) Transition Provisions.--
       ``(1) Interim appointment of director.--On or after the 
     effective date of the Patent and Trademark Office Efficiency 
     Act, the President shall appoint an individual to serve as 
     the Director until the date on which a Director qualifies 
     under subsection (a). The President shall not make more than 
     one such appointment under this subsection.
       ``(2) Continuation in office of certain officers.--(A) The 
     individual serving as the Assistant Commissioner for Patents 
     on the day before the effective date of the Patent and 
     Trademark Office Efficiency Act may serve as the

[[Page 29257]]

     Commissioner for Patents until the date on which a 
     Commissioner for Patents is appointed under subsection (b).
       ``(B) The individual serving as the Assistant Commissioner 
     for Trademarks on the day before the effective date of the 
     Patent and Trademark Office Efficiency Act may serve as the 
     Commissioner for Trademarks until the date on which a 
     Commissioner for Trademarks is appointed under subsection 
     (b).''.

     SEC. 4714. PUBLIC ADVISORY COMMITTEES.

       Chapter 1 of part I of title 35, United States Code, is 
     amended by inserting after section 4 the following:

     ``Sec. 5. Patent and Trademark Office Public Advisory 
       Committees

       ``(a) Establishment of Public Advisory Committees.--
       ``(1) Appointment.--The United States Patent and Trademark 
     Office shall have a Patent Public Advisory Committee and a 
     Trademark Public Advisory Committee, each of which shall have 
     nine voting members who shall be appointed by the Secretary 
     of Commerce and serve at the pleasure of the Secretary of 
     Commerce. Members of each Public Advisory Committee shall be 
     appointed for a term of 3 years, except that of the members 
     first appointed, three shall be appointed for a term of 1 
     year, and three shall be appointed for a term of 2 years. In 
     making appointments to each Committee, the Secretary of 
     Commerce shall consider the risk of loss of competitive 
     advantage in international commerce or other harm to United 
     States companies as a result of such appointments.
       ``(2) Chair.--The Secretary shall designate a chair of each 
     Advisory Committee, whose term as chair shall be for 3 years.
       ``(3) Timing of appointments.--Initial appointments to each 
     Advisory Committee shall be made within 3 months after the 
     effective date of the Patent and Trademark Office Efficiency 
     Act. Vacancies shall be filled within 3 months after they 
     occur.
       ``(b) Basis for Appointments.--Members of each Advisory 
     Committee--
       ``(1) shall be citizens of the United States who shall be 
     chosen so as to represent the interests of diverse users of 
     the United States Patent and Trademark Office with respect to 
     patents, in the case of the Patent Public Advisory Committee, 
     and with respect to trademarks, in the case of the Trademark 
     Public Advisory Committee;
       ``(2) shall include members who represent small and large 
     entity applicants located in the United States in proportion 
     to the number of applications filed by such applicants, but 
     in no case shall members who represent small entity patent 
     applicants, including small business concerns, independent 
     inventors, and nonprofit organizations, constitute less than 
     25 percent of the members of the Patent Public Advisory 
     Committee, and such members shall include at least one 
     independent inventor; and
       ``(3) shall include individuals with substantial background 
     and achievement in finance, management, labor relations, 
     science, technology, and office automation.
     In addition to the voting members, each Advisory Committee 
     shall include a representative of each labor organization 
     recognized by the United States Patent and Trademark Office. 
     Such representatives shall be nonvoting members of the 
     Advisory Committee to which they are appointed.
       ``(c) Meetings.--Each Advisory Committee shall meet at the 
     call of the chair to consider an agenda set by the chair.
       ``(d) Duties.--Each Advisory Committee shall--
       ``(1) review the policies, goals, performance, budget, and 
     user fees of the United States Patent and Trademark Office 
     with respect to patents, in the case of the Patent Public 
     Advisory Committee, and with respect to Trademarks, in the 
     case of the Trademark Public Advisory Committee, and advise 
     the Director on these matters;
       ``(2) within 60 days after the end of each fiscal year--
       ``(A) prepare an annual report on the matters referred to 
     in paragraph (1);
       ``(B) transmit the report to the Secretary of Commerce, the 
     President, and the Committees on the Judiciary of the Senate 
     and the House of Representatives; and
       ``(C) publish the report in the Official Gazette of the 
     United States Patent and Trademark Office.
       ``(e) Compensation.--Each member of each Advisory Committee 
     shall be compensated for each day (including travel time) 
     during which such member is attending meetings or conferences 
     of that Advisory Committee or otherwise engaged in the 
     business of that Advisory Committee, at the rate which is the 
     daily equivalent of the annual rate of basic pay in effect 
     for level III of the Executive Schedule under section 5314 of 
     title 5. While away from such member's home or regular place 
     of business such member shall be allowed travel expenses, 
     including per diem in lieu of subsistence, as authorized by 
     section 5703 of title 5, United States Code.
       ``(f) Access to Information.--Members of each Advisory 
     Committee shall be provided access to records and information 
     in the United States Patent and Trademark Office, except for 
     personnel or other privileged information and information 
     concerning patent applications required to be kept in 
     confidence by section 122.
       ``(g) Applicability of Certain Ethics Laws.--Members of 
     each Advisory Committee shall be special Government employees 
     within the meaning of section 202 of title 18.
       ``(h) Inapplicability of Federal Advisory Committee Act.--
     The Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to each Advisory Committee.
       ``(i) Open Meetings.--The meetings of each Advisory 
     Committee shall be open to the public, except that each 
     Advisory Committee may by majority vote meet in executive 
     session when considering personnel or other confidential 
     information.''.

     SEC. 4715. CONFORMING AMENDMENTS.

       (a) Duties.--Chapter 1 of title 35, United States Code, is 
     amended by striking section 6.
       (b) Regulations for Agents and Attorneys.--Section 31 of 
     title 35, United States Code, and the item relating to such 
     section in the table of sections for chapter 3 of title 35, 
     United States Code, are repealed.
       (c) Suspension or Exclusion From Practice.--Section 32 of 
     title 35, United States Code, is amended by striking ``31'' 
     and inserting ``2(b)(2)(D)''.

     SEC. 4716. TRADEMARK TRIAL AND APPEAL BOARD.

       Section 17 of the Act of July 5, 1946 (commonly referred to 
     as the ``Trademark Act of 1946'') (15 U.S.C. 1067) is amended 
     to read as follows:
       ``Sec. 17. (a) In every case of interference, opposition to 
     registration, application to register as a lawful concurrent 
     user, or application to cancel the registration of a mark, 
     the Director shall give notice to all parties and shall 
     direct a Trademark Trial and Appeal Board to determine and 
     decide the respective rights of registration.
       ``(b) The Trademark Trial and Appeal Board shall include 
     the Director, the Commissioner for Patents, the Commissioner 
     for Trademarks, and administrative trademark judges who are 
     appointed by the Director.''.

     SEC. 4717. BOARD OF PATENT APPEALS AND INTERFERENCES.

       Chapter 1 of title 35, United States Code, is amended--
       (1) by striking section 7 and redesignating sections 8 
     through 14 as sections 7 through 13, respectively; and
       (2) by inserting after section 5 the following:

     ``Sec. 6. Board of Patent Appeals and Interferences

       ``(a) Establishment and Composition.--There shall be in the 
     United States Patent and Trademark Office a Board of Patent 
     Appeals and Interferences. The Director, the Commissioner for 
     Patents, the Commissioner for Trademarks, and the 
     administrative patent judges shall constitute the Board. The 
     administrative patent judges shall be persons of competent 
     legal knowledge and scientific ability who are appointed by 
     the Director.
       ``(b) Duties.--The Board of Patent Appeals and 
     Interferences shall, on written appeal of an applicant, 
     review adverse decisions of examiners upon applications for 
     patents and shall determine priority and patentability of 
     invention in interferences declared under section 135(a). 
     Each appeal and interference shall be heard by at least 3 
     members of the Board, who shall be designated by the 
     Director. Only the Board of Patent Appeals and Interferences 
     may grant rehearings.''.

     SEC. 4718. ANNUAL REPORT OF DIRECTOR.

       Section 13 of title 35, United States Code, as redesignated 
     by section 4717 of this subtitle, is amended to read as 
     follows:

     ``Sec. 13. Annual report to Congress

       ``The Director shall report to the Congress, not later than 
     180 days after the end of each fiscal year, the moneys 
     received and expended by the Office, the purposes for which 
     the moneys were spent, the quality and quantity of the work 
     of the Office, the nature of training provided to examiners, 
     the evaluation of the Commissioner of Patents and the 
     Commissioner of Trademarks by the Secretary of Commerce, the 
     compensation of the Commissioners, and other information 
     relating to the Office.''.

     SEC. 4719. SUSPENSION OR EXCLUSION FROM PRACTICE.

       Section 32 of title 35, United States Code, is amended by 
     inserting before the last sentence the following: ``The 
     Director shall have the discretion to designate any attorney 
     who is an officer or employee of the United States Patent and 
     Trademark Office to conduct the hearing required by this 
     section.''.

     SEC. 4720. PAY OF DIRECTOR AND DEPUTY DIRECTOR.

       (a) Pay of Director.--Section 5314 of title 5, United 
     States Code, is amended by striking:
       ``Assistant Secretary of Commerce and Commissioner of 
     Patents and Trademarks.''.
     and inserting:
       ``Under Secretary of Commerce for Intellectual Property and 
     Director of the United States Patent and Trademark Office.''.
       (b) Pay of Deputy Director.--Section 5315 of title 5, 
     United States Code, is amended by adding at the end the 
     following:
       ``Deputy Under Secretary of Commerce for Intellectual 
     Property and Deputy Director of the United States Patent and 
     Trademark Office.''.

            CHAPTER 2--EFFECTIVE DATE; TECHNICAL AMENDMENTS

     SEC. 4731. EFFECTIVE DATE.

       This subtitle and the amendments made by this subtitle 
     shall take effect 4 months after the date of enactment of 
     this Act.

     SEC. 4732. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Amendments to Title 35.--
       (1) The item relating to part I in the table of parts for 
     chapter 35, United States Code, is amended to read as 
     follows:
``I. United States Patent and Trademark Office.................1''.....

       (2) The heading for part I of title 35, United States Code, 
     is amended to read as follows:

[[Page 29258]]



         ``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.

       (3) The table of chapters for part I of title 35, United 
     States Code, is amended by amending the item relating to 
     chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions..........1''.....

       (4) The table of sections for chapter 1 of title 35, United 
     States Code, is amended to read as follows:

     ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

``Sec.
`` 1. Establishment.
`` 2. Powers and duties.
`` 3. Officers and employees.
`` 4. Restrictions on officers and employees as to interest in patents.
`` 5. Patent and Trademark Office Public Advisory Committees.
`` 6. Board of Patent Appeals and Interferences.
`` 7. Library.
`` 8. Classification of patents.
`` 9. Certified copies of records.
``10. Publications.
``11. Exchange of copies of patents and applications with foreign 
              countries.
``12. Copies of patents and applications for public libraries.
``13. Annual report to Congress.''.
       (5) Section 41(h) of title 35, United States Code, is 
     amended by striking ``Commissioner of Patents and 
     Trademarks'' and inserting ``Director''.
       (6) Section 155 of title 35, United States Code, is amended 
     by striking ``Commissioner of Patents and Trademarks'' and 
     inserting ``Director''.
       (7) Section 155A(c) of title 35, United States Code, is 
     amended by striking ``Commissioner of Patents and 
     Trademarks'' and inserting ``Director''.
       (8) Section 302 of title 35, United States Code, is amended 
     by striking ``Commissioner of Patents'' and inserting 
     ``Director''.
       (9)(A) Section 303 of title 35, United States Code, is 
     amended--
       (i) in the section heading by striking ``Commissioner'' and 
     inserting ``Director''; and
       (ii) by striking ``Commissioner's'' and inserting 
     ``Director's''.
       (B) The item relating to section 303 in the table of 
     sections for chapter 30 of title 35, United States Code, is 
     amended by striking ``Commissioner'' and inserting 
     ``Director''.
       (10)(A) Except as provided in subparagraph (B), title 35, 
     United States Code, is amended by striking ``Commissioner'' 
     each place it appears and inserting ``Director''.
       (B) Chapter 17 of title 35, United States Code, is amended 
     by striking ``Commissioner'' each place it appears and 
     inserting ``Commissioner of Patents''.
       (11) Section 157(d) of title 35, United States Code, is 
     amended by striking ``Secretary of Commerce'' and inserting 
     ``Director''.
       (12) Section 202(a) of title 35, United States Code, is 
     amended--
       (A) by striking ``iv)'' and inserting ``(iv)''; and
       (B) by striking the second period after ``Department of 
     Energy'' at the end of the first sentence.
       (b) Other Provisions of Law.--
       (1)(A) Section 45 of the Act of July 5, 1946 (commonly 
     referred to as the ``Trademark Act of 1946''; 15 U.S.C. 
     1127), is amended by striking ``The term `Commissioner'' 
     means the Commissioner of Patents and Trademarks.' and 
     inserting ``The term `Director' means the Under Secretary of 
     Commerce for Intellectual Property and Director of the United 
     States Patent and Trademark Office.''.
       (B) The Act of July 5, 1946 (commonly referred to as the 
     ``Trademark Act of 1946''; 15 U.S.C. 1051 and following), 
     except for section 17, as amended by 4716 of this subtitle, 
     is amended by striking ``Commissioner'' each place it appears 
     and inserting ``Director''.
       (C) Sections 8(e) and 9(b) of the Trademark Act of 1946 are 
     each amended by striking ``Commissioner'' and inserting 
     ``Director''.
       (2) Section 500(e) of title 5, United States Code, is 
     amended by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office''.
       (3) Section 5102(c)(23) of title 5, United States Code, is 
     amended to read as follows:
       ``(23) administrative patent judges and designated 
     administrative patent judges in the United States Patent and 
     Trademark Office;''.
       (4) Section 5316 of title 5, United States Code (5 U.S.C. 
     5316) is amended by striking ``Commissioner of Patents, 
     Department of Commerce.'', ``Deputy Commissioner of Patents 
     and Trademarks.'', ``Assistant Commissioner for Patents.'', 
     and ``Assistant Commissioner for Trademarks.''.
       (5) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 
     638(p)(1)(B)) is amended to read as follows:
       ``(B) the Under Secretary of Commerce for Intellectual 
     Property and Director of the United States Patent and 
     Trademark Office; and''.
       (6) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
     1511) is amended--
       (A) by striking ``(d) Patent and Trademark Office;'' and 
     inserting:
       ``(4) United States Patent and Trademark Office''; and
       (B) by redesignating subsections (a), (b), (c), (e), (f), 
     and (g) as paragraphs (1), (2), (3), (5), (6), and (7), 
     respectively and indenting the paragraphs as so redesignated 
     2 ems to the right.
       (7) Section 19 of the Tennessee Valley Authority Act of 
     1933 (16 U.S.C. 831r) is amended--
       (A) by striking ``Patent Office of the United States'' and 
     inserting ``United States Patent and Trademark Office''; and
       (B) by striking ``Commissioner of Patents'' and inserting 
     ``Under Secretary of Commerce for Intellectual Property and 
     Director of the United States Patent and Trademark Office''.
       (8) Section 182(b)(2)(A) of the Trade Act of 1974 (19 
     U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner 
     of Patents and Trademarks'' and inserting ``Under Secretary 
     of Commerce for Intellectual Property and Director of the 
     United States Patent and Trademark Office''.
       (9) Section 302(b)(2)(D) of the Trade Act of 1974 (19 
     U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner 
     of Patents and Trademarks'' and inserting ``Under Secretary 
     of Commerce for Intellectual Property and Director of the 
     United States Patent and Trademark Office''.
       (10) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
     is amended by striking ``Patent Office'' and inserting 
     ``United States Patent and Trademark Office''.
       (11) Sections 505(m) and 512(o) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
     amended by striking ``Patent and Trademark Office of the 
     Department of Commerce'' and inserting ``United States Patent 
     and Trademark Office''.
       (12) Section 702(d) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner 
     of Patents'' and inserting ``Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office'' and by striking 
     ``Commissioner'' and inserting ``Director''.
       (13) Section 105(e) of the Federal Alcohol Administration 
     Act (27 U.S.C. 205(e)) is amended by striking ``United States 
     Patent Office'' and inserting ``United States Patent and 
     Trademark Office''.
       (14) Section 1295(a)(4) of title 28, United States Code, is 
     amended--
       (A) in subparagraph (A) by inserting ``United States'' 
     before ``Patent and Trademark''; and
       (B) in subparagraph (B) by striking ``Commissioner of 
     Patents and Trademarks'' and inserting ``Under Secretary of 
     Commerce for Intellectual Property and Director of the United 
     States Patent and Trademark Office''.
       (15) Chapter 115 of title 28, United States Code, is 
     amended--
       (A) in the item relating to section 1744 in the table of 
     sections by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office'';
       (B) in section 1744--
       (i) by striking ``Patent Office'' each place it appears in 
     the text and section heading and inserting ``United States 
     Patent and Trademark Office''; and
       (ii) by striking ``Commissioner of Patents'' and inserting 
     ``Under Secretary of Commerce for Intellectual Property and 
     Director of the United States Patent and Trademark Office''; 
     and
       (C) by striking ``Commissioner'' and inserting 
     ``Director''.
       (16) Section 1745 of title 28, United States Code, is 
     amended by striking ``United States Patent Office'' and 
     inserting ``United States Patent and Trademark Office''.
       (17) Section 1928 of title 28, United States Code, is 
     amended by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office''.
       (18) Section 151 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2181) is amended in subsections c. and d. by striking 
     ``Commissioner of Patents'' and inserting ``Under Secretary 
     of Commerce for Intellectual Property and Director of the 
     United States Patent and Trademark Office''.
       (19) Section 152 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2182) is amended by striking ``Commissioner of 
     Patents'' each place it appears and inserting ``Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office''.
       (20) Section 305 of the National Aeronautics and Space Act 
     of 1958 (42 U.S.C. 2457) is amended--
       (A) in subsection (c) by striking ``Commissioner of 
     Patents'' and inserting ``Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office (hereafter in this section 
     referred to as the `Director')''; and
       (B) by striking ``Commissioner'' each subsequent place it 
     appears and inserting ``Director''.
       (21) Section 12(a) of the Solar Heating and Cooling 
     Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
     striking ``Commissioner of the Patent Office'' and inserting 
     ``Under Secretary of Commerce for Intellectual Property and 
     Director of the United States Patent and Trademark Office''.
       (22) Section 1111 of title 44, United States Code, is 
     amended by striking ``the Commissioner of Patents,''.
       (23) Section 1114 of title 44, United States Code, is 
     amended by striking ``the Commissioner of Patents,''.
       (24) Section 1123 of title 44, United States Code, is 
     amended by striking ``the Patent Office,''.
       (25) Sections 1337 and 1338 of title 44, United States 
     Code, and the items relating to those sections in the table 
     of contents for chapter 13 of such title, are repealed.
       (26) Section 10(i) of the Trading with the enemy Act (50 
     U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
     Patents'' and inserting ``Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office''.

[[Page 29259]]



                  CHAPTER 3--MISCELLANEOUS PROVISIONS

     SEC. 4741. REFERENCES.

       (a) In General.--Any reference in any other Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or pertaining to a department 
     or office from which a function is transferred by this 
     subtitle--
       (1) to the head of such department or office is deemed to 
     refer to the head of the department or office to which such 
     function is transferred; or
       (2) to such department or office is deemed to refer to the 
     department or office to which such function is transferred.
       (b) Specific References.--Any reference in any other 
     Federal law, Executive order, rule, regulation, or delegation 
     of authority, or any document of or pertaining to the Patent 
     and Trademark Office--
       (1) to the Commissioner of Patents and Trademarks is deemed 
     to refer to the Under Secretary of Commerce for Intellectual 
     Property and Director of the United States Patent and 
     Trademark Office;
       (2) to the Assistant Commissioner for Patents is deemed to 
     refer to the Commissioner for Patents; or
       (3) to the Assistant Commissioner for Trademarks is deemed 
     to refer to the Commissioner for Trademarks.

     SEC. 4742. EXERCISE OF AUTHORITIES.

       Except as otherwise provided by law, a Federal official to 
     whom a function is transferred by this subtitle may, for 
     purposes of performing the function, exercise all authorities 
     under any other provision of law that were available with 
     respect to the performance of that function to the official 
     responsible for the performance of the function immediately 
     before the effective date of the transfer of the function 
     under this subtitle.

     SEC. 4743. SAVINGS PROVISIONS.

       (a) Legal Documents.--All orders, determinations, rules, 
     regulations, permits, grants, loans, contracts, agreements, 
     certificates, licenses, and privileges--
       (1) that have been issued, made, granted, or allowed to 
     become effective by the President, the Secretary of Commerce, 
     any officer or employee of any office transferred by this 
     subtitle, or any other Government official, or by a court of 
     competent jurisdiction, in the performance of any function 
     that is transferred by this subtitle; and
       (2) that are in effect on the effective date of such 
     transfer (or become effective after such date pursuant to 
     their terms as in effect on such effective date), shall 
     continue in effect according to their terms until modified, 
     terminated, superseded, set aside, or revoked in accordance 
     with law by the President, any other authorized official, a 
     court of competent jurisdiction, or operation of law.
       (b) Proceedings.--This subtitle shall not affect any 
     proceedings or any application for any benefits, service, 
     license, permit, certificate, or financial assistance pending 
     on the effective date of this subtitle before an office 
     transferred by this subtitle, but such proceedings and 
     applications shall be continued. Orders shall be issued in 
     such proceedings, appeals shall be taken therefrom, and 
     payments shall be made pursuant to such orders, as if this 
     subtitle had not been enacted, and orders issued in any such 
     proceeding shall continue in effect until modified, 
     terminated, superseded, or revoked by a duly authorized 
     official, by a court of competent jurisdiction, or by 
     operation of law. Nothing in this subsection shall be 
     considered to prohibit the discontinuance or modification of 
     any such proceeding under the same terms and conditions and 
     to the same extent that such proceeding could have been 
     discontinued or modified if this subtitle had not been 
     enacted.
       (c) Suits.--This subtitle shall not affect suits commenced 
     before the effective date of this subtitle, and in all such 
     suits, proceedings shall be had, appeals taken, and judgments 
     rendered in the same manner and with the same effect as if 
     this subtitle had not been enacted.
       (d) Nonabatement of Actions.--No suit, action, or other 
     proceeding commenced by or against the Department of Commerce 
     or the Secretary of Commerce, or by or against any individual 
     in the official capacity of such individual as an officer or 
     employee of an office transferred by this subtitle, shall 
     abate by reason of the enactment of this subtitle.
       (e) Continuance of Suits.--If any Government officer in the 
     official capacity of such officer is party to a suit with 
     respect to a function of the officer, and under this subtitle 
     such function is transferred to any other officer or office, 
     then such suit shall be continued with the other officer or 
     the head of such other office, as applicable, substituted or 
     added as a party.
       (f) Administrative Procedure and Judicial Review.--Except 
     as otherwise provided by this subtitle, any statutory 
     requirements relating to notice, hearings, action upon the 
     record, or administrative or judicial review that apply to 
     any function transferred by this subtitle shall apply to the 
     exercise of such function by the head of the Federal agency, 
     and other officers of the agency, to which such function is 
     transferred by this subtitle.

     SEC. 4744. TRANSFER OF ASSETS.

       Except as otherwise provided in this subtitle, so much of 
     the personnel, property, records, and unexpended balances of 
     appropriations, allocations, and other funds employed, used, 
     held, available, or to be made available in connection with a 
     function transferred to an official or agency by this 
     subtitle shall be available to the official or the head of 
     that agency, respectively, at such time or times as the 
     Director of the Office of Management and Budget directs for 
     use in connection with the functions transferred.

     SEC. 4745. DELEGATION AND ASSIGNMENT.

       Except as otherwise expressly prohibited by law or 
     otherwise provided in this subtitle, an official to whom 
     functions are transferred under this subtitle (including the 
     head of any office to which functions are transferred under 
     this subtitle) may delegate any of the functions so 
     transferred to such officers and employees of the office of 
     the official as the official may designate, and may authorize 
     successive redelegations of such functions as may be 
     necessary or appropriate. No delegation of functions under 
     this section or under any other provision of this subtitle 
     shall relieve the official to whom a function is transferred 
     under this subtitle of responsibility for the administration 
     of the function.

     SEC. 4746. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT 
                   AND BUDGET WITH RESPECT TO FUNCTIONS 
                   TRANSFERRED.

       (a) Determinations.--If necessary, the Director of the 
     Office of Management and Budget shall make any determination 
     of the functions that are transferred under this subtitle.
       (b) Incidental Transfers.--The Director of the Office of 
     Management and Budget, at such time or times as the Director 
     shall provide, may make such determinations as may be 
     necessary with regard to the functions transferred by this 
     subtitle, and to make such additional incidental dispositions 
     of personnel, assets, liabilities, grants, contracts, 
     property, records, and unexpended balances of appropriations, 
     authorizations, allocations, and other funds held, used, 
     arising from, available to, or to be made available in 
     connection with such functions, as may be necessary to carry 
     out the provisions of this subtitle. The Director shall 
     provide for the termination of the affairs of all entities 
     terminated by this subtitle and for such further measures and 
     dispositions as may be necessary to effectuate the purposes 
     of this subtitle.

     SEC. 4747. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

       For purposes of this subtitle, the vesting of a function in 
     a department or office pursuant to reestablishment of an 
     office shall be considered to be the transfer of the 
     function.

     SEC. 4748. AVAILABILITY OF EXISTING FUNDS.

       Existing appropriations and funds available for the 
     performance of functions, programs, and activities terminated 
     pursuant to this subtitle shall remain available, for the 
     duration of their period of availability, for necessary 
     expenses in connection with the termination and resolution of 
     such functions, programs, and activities, subject to the 
     submission of a plan to the Committees on Appropriations of 
     the House and Senate in accordance with the procedures set 
     forth in section 605 of the Departments of Commerce, Justice, 
     and State, the Judiciary, and Related Agencies Appropriations 
     Act, 1999, as contained in Public Law 105-277.

     SEC. 4749. DEFINITIONS.

       For purposes of this subtitle--
       (1) the term ``function'' includes any duty, obligation, 
     power, authority, responsibility, right, privilege, activity, 
     or program; and
       (2) the term ``office'' includes any office, 
     administration, agency, bureau, institute, council, unit, 
     organizational entity, or component thereof.
              Subtitle H--Miscellaneous Patent Provisions

     SEC. 4801. PROVISIONAL APPLICATIONS.

       (a) Abandonment.--Section 111(b)(5) of title 35, United 
     States Code, is amended to read as follows:
       ``(5) Abandonment.--Notwithstanding the absence of a claim, 
     upon timely request and as prescribed by the Director, a 
     provisional application may be treated as an application 
     filed under subsection (a). Subject to section 119(e)(3) of 
     this title, if no such request is made, the provisional 
     application shall be regarded as abandoned 12 months after 
     the filing date of such application and shall not be subject 
     to revival after such 12-month period.''.
       (b) Technical Amendment Relating to Weekends and 
     Holidays.--Section 119(e) of title 35, United States Code, is 
     amended by adding at the end the following:
       ``(3) If the day that is 12 months after the filing date of 
     a provisional application falls on a Saturday, Sunday, or 
     Federal holiday within the District of Columbia, the period 
     of pendency of the provisional application shall be extended 
     to the next succeeding secular or business day.''.
       (c) Elimination of Copendency Requirement.--Section 
     119(e)(2) of title 35, United States Code, is amended by 
     striking ``and the provisional application was pending on the 
     filing date of the application for patent under section 
     111(a) or section 363 of this title''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act and 
     shall apply to any provisional application filed on or after 
     June 8, 1995, except that the amendments made by subsections 
     (b) and (c) shall have no effect with respect to any patent 
     which is the subject of litigation in an action commenced 
     before such date of enactment.

     SEC. 4802. INTERNATIONAL APPLICATIONS.

       Section 119 of title 35, United States Code, is amended as 
     follows:
       (1) In subsection (a), insert ``or in a WTO member 
     country,'' after ``or citizens of the United States,''.
       (2) At the end of section 119 add the following new 
     subsections:
       ``(f) Applications for plant breeder's rights filed in a 
     WTO member country (or in a foreign UPOV Contracting Party) 
     shall have the same

[[Page 29260]]

     effect for the purpose of the right of priority under 
     subsections (a) through (c) of this section as applications 
     for patents, subject to the same conditions and requirements 
     of this section as apply to applications for patents.
       ``(g) As used in this section--
       ``(1) the term `WTO member country' has the same meaning as 
     the term is defined in section 104(b)(2) of this title; and
       ``(2) the term `UPOV Contracting Party' means a member of 
     the International Convention for the Protection of New 
     Varieties of Plants.''.

     SEC. 4803. CERTAIN LIMITATIONS ON DAMAGES FOR PATENT 
                   INFRINGEMENT NOT APPLICABLE.

       Section 287(c)(4) of title 35, United States Code, is 
     amended by striking ``before the date of enactment of this 
     subsection'' and inserting ``based on an application the 
     earliest effective filing date of which is prior to September 
     30, 1996''.

     SEC. 4804. ELECTRONIC FILING AND PUBLICATIONS.

       (a) Printing of Papers Filed.--Section 22 of title 35, 
     United States Code, is amended by striking ``printed or 
     typewritten'' and inserting ``printed, typewritten, or on an 
     electronic medium''.
       (b) Publications.--Section 11(a) of title 35, United States 
     Code, is amended by amending the matter preceding paragraph 1 
     to read as follows:
       ``(a) The Director may publish in printed, typewritten, or 
     electronic form, the following:''.
       (c) Copies of Patents for Public Libraries.--Section 13 of 
     title 35, United States Code, is amended by striking 
     ``printed copies of specifications and drawings of patents'' 
     and inserting ``copies of specifications and drawings of 
     patents in printed or electronic form''.
       (d) Maintenance of Collections.--
       (1) Electronic collections.--Section 41(i)(1) of title 35, 
     United States Code, is amended by striking ``paper or 
     microform'' and inserting ``paper, microform, or 
     electronic''.
       (2) Continuation of maintenance.--The Under Secretary of 
     Commerce for Intellectual Property and Director of the United 
     States Patent and Trademark Office shall not, pursuant to the 
     amendment made by paragraph (1), cease to maintain, for use 
     by the public, paper or microform collections of United 
     States patents, foreign patent documents, and United States 
     trademark registrations, except pursuant to notice and 
     opportunity for public comment and except that the Director 
     shall first submit a report to the Committees on the 
     Judiciary of the Senate and the House of Representatives 
     detailing such plan, including a description of the 
     mechanisms in place to ensure the integrity of such 
     collections and the data contained therein, as well as to 
     ensure prompt public access to the most current available 
     information, and certifying that the implementation of such 
     plan will not negatively impact the public.

     SEC. 4805. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN SUPPORT 
                   OF BIOTECHNOLOGY PATENTS.

       (a) In General.--Not later than 6 months after the date of 
     enactment of this Act, the Comptroller General of the United 
     States, in consultation with the Under Secretary of Commerce 
     for Intellectual Property and Director of the United States 
     Patent and Trademark Office, shall conduct a study and submit 
     a report to Congress on the potential risks to the United 
     States biotechnology industry relating to biological deposits 
     in support of biotechnology patents.
       (b) Contents.--The study conducted under this section shall 
     include--
       (1) an examination of the risk of export and the risk of 
     transfers to third parties of biological deposits, and the 
     risks posed by the change to 18-month publication 
     requirements made by this subtitle;
       (2) an analysis of comparative legal and regulatory 
     regimes; and
       (3) any related recommendations.
       (c) Consideration of Report.--In drafting regulations 
     affecting biological deposits (including any modification of 
     title 37, Code of Federal Regulations, section 1.801 et 
     seq.), the United States Patent and Trademark Office shall 
     consider the recommendations of the study conducted under 
     this section.

     SEC. 4806. PRIOR INVENTION.

       Section 102(g) of title 35, United States Code, is amended 
     to read as follows:
       ``(g)(1) during the course of an interference conducted 
     under section 135 or section 291, another inventor involved 
     therein establishes, to the extent permitted in section 104, 
     that before such person's invention thereof the invention was 
     made by such other inventor and not abandoned, suppressed, or 
     concealed, or (2) before such person's invention thereof, the 
     invention was made in this country by another inventor who 
     had not abandoned, suppressed, or concealed it. In 
     determining priority of invention under this subsection, 
     there shall be considered not only the respective dates of 
     conception and reduction to practice of the invention, but 
     also the reasonable diligence of one who was first to 
     conceive and last to reduce to practice, from a time prior to 
     conception by the other.''.

     SEC. 4807. PRIOR ART EXCLUSION FOR CERTAIN COMMONLY ASSIGNED 
                   PATENTS.

       (a) Prior Art Exclusion.--Section 103(c) of title 35, 
     United States Code, is amended by striking ``subsection (f) 
     or (g)'' and inserting ``one or more of subsections (e), (f), 
     and (g)''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to any application for patent filed on or after 
     the date of enactment of this Act.

     SEC. 4808. EXCHANGE OF COPIES OF PATENTS WITH FOREIGN 
                   COUNTRIES.

       Section 12 of title 35, United States Code, is amended by 
     adding at the end the following: ``The Director shall not 
     enter into an agreement to provide such copies of 
     specifications and drawings of United States patents and 
     applications to a foreign country, other than a NAFTA country 
     or a WTO member country, without the express authorization of 
     the Secretary of Commerce. For purposes of this section, the 
     terms `NAFTA country' and `WTO member country' have the 
     meanings given those terms in section 104(b).''.
                   TITLE V--MISCELLANEOUS PROVISIONS

     SEC. 5001. COMMISSION ON ONLINE CHILD PROTECTION.

       (a) References.--Wherever in this section an amendment is 
     expressed in terms of an amendment to any provision, the 
     reference shall be considered to be made to such provision of 
     section 1405 of the Child Online Protection Act (47 U.S.C. 
     231 note).
       (b) Membership.--Subsection (b) is amended--
       (1) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Industry members.--The Commission shall include 16 
     members who shall consist of representatives of--
       ``(A) providers of Internet filtering or blocking services 
     or software;
       ``(B) Internet access services;
       ``(C) labeling or ratings services;
       ``(D) Internet portal or search services;
       ``(E) domain name registration services;
       ``(F) academic experts; and
       ``(G) providers that make content available over the 
     Internet.
     Of the members of the Commission by reason of this paragraph, 
     an equal number shall be appointed by the Speaker of the 
     House of Representatives and by the Majority Leader of the 
     Senate. Members of the Commission appointed on or before 
     October 31, 1999, shall remain members.''; and
       (2) by adding at the end the following new paragraph:
       ``(3) Prohibition of pay.--Members of the Commission shall 
     not receive any pay by reason of their membership on the 
     Commission.''.
       (c) Extension of Reporting Deadline.--The matter in 
     subsection (d) that precedes paragraph (1) is amended by 
     striking ``1 year'' and inserting ``2 years''.
       (d) Termination.--Subsection (f) is amended by inserting 
     before the period at the end the following: ``or November 30, 
     2000, whichever occurs earlier''.
       (e) First Meeting and Chairperson.--Section 1405 is 
     amended--
       (1) by striking subsection (e);
       (2) by redesignating subsections (f) (as amended by the 
     preceding provisions of this section) and (g) as subsections 
     (l) and (m), respectively;
       (3) by redesignating subsections (c) and (d) (as amended by 
     the preceding provisions of this section) as subsections (e) 
     and (f), respectively; and
       (4) by inserting after subsection (b) the following new 
     subsections:
       ``(c) First Meeting.--The Commission shall hold its first 
     meeting not later than March 31, 2000.
       ``(d) Chairperson.--The chairperson of the Commission shall 
     be elected by a vote of a majority of the members, which 
     shall take place not later than 30 days after the first 
     meeting of the Commission.''.
       (f) Rules of the Commission.--Section 1405 is amended by 
     inserting after subsection (f) (as so redesignated by 
     subsection (e)(3) of this section) the following new 
     subsection:
       ``(g) Rules of the Commission.--
       ``(1) Quorum.--Nine members of the Commission shall 
     constitute a quorum for conducting the business of the 
     Commission.
       ``(2) Meetings.--Any meetings held by the Commission shall 
     be duly noticed at least 14 days in advance and shall be open 
     to the public.
       ``(3) Opportunities to testify.--The Commission shall 
     provide opportunities for representatives of the general 
     public to testify.
       ``(4) Additional rules.--The Commission may adopt other 
     rules as necessary to carry out this section.''.

     SEC. 5002. PRIVACY PROTECTION FOR DONORS TO PUBLIC 
                   BROADCASTING ENTITIES.

       (a) Amendment.--Section 396(k) of the Communications Act of 
     1934 (47 U.S.C. 396(k)) is amended by adding at the end the 
     following new paragraph:
       ``(12) Funds may not be distributed under this subsection 
     to any public broadcasting entity that directly or 
     indirectly--
       ``(A) rents contributor or donor names (or other personally 
     identifiable information) to or from, or exchanges such names 
     or information with, any Federal, State, or local candidate, 
     political party, or political committee; or
       ``(B) discloses contributor or donor names, or other 
     personally identifiable information, to any nonaffiliated 
     third party unless--
       ``(i) such entity clearly and conspicuously discloses to 
     the contributor or donor that such information may be 
     disclosed to such third party;
       ``(ii) the contributor or donor is given the opportunity, 
     before the time that such information is initially disclosed, 
     to direct that such information not be disclosed to such 
     third party; and
       ``(iii) the contributor or donor is given an explanation of 
     how the contributor or donor may exercise that nondisclosure 
     option.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to

[[Page 29261]]

     funds distributed on or after 6 months after the date of 
     enactment of this Act. 33

     SEC. 5003. COMPLETION OF BIENNIAL REGULATORY REVIEW.

       Within 180 days after the date of enactment of this Act, 
     the Federal Communications Commission shall complete the 
     first biennial review required by section 202(h) of the 
     Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 
     111).

     SEC. 5004. PUBLIC BROADCASTING ENTITIES.

       (a) Civil Remittance of Damages.--Section 1203(c)(5)(B) of 
     title 17, United States Code, is amended to read as follows:
       ``(B) Nonprofit library, archives, educational 
     institutions, or public broadcasting entities.--
       ``(i) Definition.--In this subparagraph, the term `public 
     broadcasting entity' has the meaning given such term under 
     section 118(g).
       ``(ii) In general.--In the case of a nonprofit library, 
     archives, educational institution, or public broadcasting 
     entity, the court shall remit damages in any case in which 
     the library, archives, educational institution, or public 
     broadcasting entity sustains the burden of proving, and the 
     court finds, that the library, archives, educational 
     institution, or public broadcasting entity was not aware and 
     had no reason to believe that its acts constituted a 
     violation.''.
       (b) Criminal Offenses and Penalties.--Section 1204(b) of 
     title 17, United States Code, is amended to read as follows:
       ``(b) Limitation for Nonprofit Library, Archives, 
     Educational Institution, or Public Broadcasting Entity.--
     Subsection (a) shall not apply to a nonprofit library, 
     archives, educational institution, or public broadcasting 
     entity (as defined under section 118(g).''.

     SEC. 5005. TECHNICAL AMENDMENTS RELATING TO VESSEL HULL 
                   DESIGN PROTECTION.

       (a) In General.--
       (1) Section 504(a) of the Digital Millennium Copyright Act 
     (Public Law 105-304) is amended to read as follows:
       ``(a) In General.--Not later than November 1, 2003, the 
     Register of Copyrights and the Commissioner of Patents and 
     Trademarks shall submit to the Committees on the Judiciary of 
     the Senate and the House of Representatives a joint report 
     evaluating the effect of the amendments made by this 
     title.''.
       (2) Section 505 of the Digital Millennium Copyright Act is 
     amended by striking ``and shall remain in effect'' and all 
     that follows through the end of the section and inserting a 
     period.
       (3) Section 1301(b)(3) of title 17, United States Code, is 
     amended to read as follows:
       ``(3) A `vessel' is a craft--
       ``(A) that is designed and capable of independently 
     steering a course on or through water through its own means 
     of propulsion; and
       ``(B) that is designed and capable of carrying and 
     transporting one or more passengers.''.
       (4) Section 1313(c) of title 17, United States Code, is 
     amended by adding at the end the following: ``Costs of the 
     cancellation procedure under this subsection shall be borne 
     by the nonprevailing party or parties, and the Administrator 
     shall have the authority to assess and collect such costs.''. 
     33
       (b) Tariff Act of 1930.--Section 337 of the Tariff Act of 
     1930 (19 U.S.C. 1337) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``and (D)'' and 
     inserting ``(D), and (E)''; and
       (ii) by adding at the end the following:
       ``(E) The importation into the United States, the sale for 
     importation, or the sale within the United States after 
     importation by the owner, importer, or consigner, of an 
     article that constitutes infringement of the exclusive rights 
     in a design protected under chapter 13 of title 17, United 
     States Code.''; and
       (B) in paragraphs (2) and (3), by striking ``or mask work'' 
     and inserting ``mask work, or design''; and
       (2) in subsection (l), by striking ``or mask work'' each 
     place it appears and inserting ``mask work, or design''.

     SEC. 5006. INFORMAL RULEMAKING OF COPYRIGHT DETERMINATION.

       Section 1201(a)(1)(C) of title 17, United States Code, is 
     amended in the first sentence by striking ``on the record''.

     SEC. 5007. SERVICE OF PROCESS FOR SURETY CORPORATIONS.

       Section 9306 of title 31, United States Code, is amended--
       (1) in subsection (a) by striking all beginning with 
     ``designates a person by written power of attorney'' through 
     the end of such subsection and inserting the following: ``has 
     a resident agent for service of process for that district. 
     The resident agent--
       ``(1) may be an official of the State, the District of 
     Columbia, the territory or possession in which the court sits 
     who is authorized or appointed under the law of the State, 
     District, territory or possession to receive service of 
     process on the corporation; or
       ``(2) may be an individual who resides in the jurisdiction 
     of the district court for the district in which a surety bond 
     is to be provided and who is appointed by the corporation as 
     provided in subsection (b)''; and
       (2) in subsection (b) by striking ``The'' and inserting 
     ``If the surety corporation meets the requirement of 
     subsection (a) by appointing an individual under subsection 
     (a)(2), the''.

     SEC. 5008. LOW-POWER TELEVISION.

       (a) Short Title.--This section may be cited as the 
     ``Community Broadcasters Protection Act of 1999''.
       (b) Findings.--Congress finds the following:
       (1) Since the creation of low-power television licenses by 
     the Federal Communications Commission, a small number of 
     license holders have operated their stations in a manner 
     beneficial to the public good providing broadcasting to their 
     communities that would not otherwise be available.
       (2) These low-power broadcasters have operated their 
     stations in a manner consistent with the programming 
     objectives and hours of operation of full-power broadcasters 
     providing worthwhile services to their respective communities 
     while under severe license limitations compared to their 
     full-power counterparts.
       (3) License limitations, particularly the temporary nature 
     of the license, have blocked many low-power broadcasters from 
     having access to capital, and have severely hampered their 
     ability to continue to provide quality broadcasting, 
     programming, or improvements.
       (4) The passage of the Telecommunications Act of 1996 has 
     added to the uncertainty of the future status of these 
     stations by the lack of specific provisions regarding the 
     permanency of their licenses, or their treatment during the 
     transition to high definition, digital television.
       (5) It is in the public interest to promote diversity in 
     television programming such as that currently provided by 
     low-power television stations to foreign-language 
     communities.
       (c) Preservation of Low-Power Community Television 
     Broadcasting.--Section 336 of the Communications Act of 1934 
     (47 U.S.C. 336) is amended--
       (1) by redesignating subsections (f) and (g) as subsections 
     (g) and (h), respectively; and
       (2) by inserting after subsection (e) the following new 
     subsection:
       ``(f) Preservation of Low-Power Community Television 
     Broadcasting.--
       ``(1) Creation of class a licenses.--
       ``(A) Rulemaking Required.--Within 120 days after the date 
     of enactment of the Community Broadcasters Protection Act of 
     1999, the Commission shall prescribe regulations to establish 
     a class A television license to be available to licensees of 
     qualifying low-power television stations. Such regulations 
     shall provide that--
       ``(i) the license shall be subject to the same license 
     terms and renewal standards as the licenses for full-power 
     television stations except as provided in this subsection; 
     and
       ``(ii) each such class A licensee shall be accorded primary 
     status as a television broadcaster as long as the station 
     continues to meet the requirements for a qualifying low-power 
     station in paragraph (2).
       ``(B) Notice to and certification by licensees.--Within 30 
     days after the date of enactment of the Community 
     Broadcasters Protection Act of 1999, the Commission shall 
     send a notice to the licensees of all low-power televisions 
     licenses that describes the requirements for class A 
     designation. Within 60 days after such date of enactment, 
     licensees intending to seek class A designation shall submit 
     to the Commission a certification of eligibility based on the 
     qualification requirements of this subsection. Absent a 
     material deficiency, the Commission shall grant certification 
     of eligibility to apply for class A status.
       ``(C) Application for and award of licenses.--Consistent 
     with the requirements set forth in paragraph (2)(A) of this 
     subsection, a licensee may submit an application for class A 
     designation under this paragraph within 30 days after final 
     regulations are adopted under subparagraph (A) of this 
     paragraph. Except as provided in paragraphs (6) and (7), the 
     Commission shall, within 30 days after receipt of an 
     application of a licensee of a qualifying low-power 
     television station that is acceptable for filing, award such 
     a class A television station license to such licensee.
       ``(D) Resolution of technical problems.--The Commission 
     shall act to preserve the service areas of low-power 
     television licensees pending the final resolution of a class 
     A application. If, after granting certification of 
     eligibility for a class A license, technical problems arise 
     requiring an engineering solution to a full-power station's 
     allotted parameters or channel assignment in the digital 
     television Table of Allotments, the Commission shall make 
     such modifications as necessary--
       ``(i) to ensure replication of the full-power digital 
     television applicant's service area, as provided for in 
     sections 73.622 and 73.623 of the Commission's regulations 
     (47 C.F.R. 73.622, 73.623); and
       ``(ii) to permit maximization of a full power digital 
     television applicant's service area consistent with such 
     sections 73.622 and 73.623;
     if such applicant has filed an application for maximization 
     or a notice of its intent to seek such maximization by 
     December 31, 1999, and filed a bona fide application for 
     maximization by May 1, 2000. Any such applicant shall comply 
     with all applicable Commission rules regarding the 
     construction of digital television facilities.
       (E) Change applications.--If a station that is awarded a 
     construction permit to maximize or significantly enhance its 
     digital television service area, later files a change 
     application to reduce its digital television service area, 
     the protected contour of that station shall be reduced in 
     accordance with such change modification.
       ``(2) Qualifying low-power television stations.--For 
     purposes of this subsection, a station is a qualifying low-
     power television station if--
       ``(A)(i) during the 90 days preceding the date of enactment 
     of the Community Broadcasters Protection Act of 1999--

[[Page 29262]]

       ``(I) such station broadcast a minimum of 18 hours per day;
       ``(II) such station broadcast an average of at least 3 
     hours per week of programming that was produced within the 
     market area served by such station, or the market area served 
     by a group of commonly controlled low-power stations that 
     carry common local programming produced within the market 
     area served by such group; and
       ``(III) such station was in compliance with the 
     Commission's requirements applicable to low-power television 
     stations; and
       ``(ii) from and after the date of its application for a 
     class A license, the station is in compliance with the 
     Commission's operating rules for full-power television 
     stations; or
       ``(B) the Commission determines that the public interest, 
     convenience, and necessity would be served by treating the 
     station as a qualifying low-power television station for 
     purposes of this section, or for other reasons determined by 
     the Commission.
       ``(3) Common ownership.--No low-power television station 
     authorized as of the date of enactment of the Community 
     Broadcasters Protection Act of 1999 shall be disqualified for 
     a class A license based on common ownership with any other 
     medium of mass communication.
       ``(4) Issuance of licenses for advanced television services 
     to television translator stations and qualifying low-power 
     television stations.--The Commission is not required to issue 
     any additional license for advanced television services to 
     the licensee of a class A television station under this 
     subsection, or to any licensee of any television translator 
     station, but shall accept a license application for such 
     services proposing facilities that will not cause 
     interference to the service area of any other broadcast 
     facility applied for, protected, permitted, or authorized on 
     the date of filing of the advanced television application. 
     Such new license or the original license of the applicant 
     shall be forfeited after the end of the digital television 
     service transition period, as determined by the Commission. A 
     licensee of a low-power television station or television 
     translator station may, at the option of licensee, elect to 
     convert to the provision of advanced television services on 
     its analog channel, but shall not be required to convert to 
     digital operation until the end of such transition period.
       ``(5) No preemption of section 337.--Nothing in this 
     subsection preempts or otherwise affects section 337 of this 
     Act.
       ``(6) Interim qualification.--
       ``(A) Stations operating within certain bandwidth.--The 
     Commission may not grant a class A license to a low-power 
     television station for operation between 698 and 806 
     megahertz, but the Commission shall provide to low-power 
     television stations assigned to and temporarily operating in 
     that bandwidth the opportunity to meet the qualification 
     requirements for a class A license. If such a qualified 
     applicant for a class A license is assigned a channel within 
     the core spectrum (as such term is defined in MM Docket 87-
     286, February 17, 1998), the Commission shall issue a class A 
     license simultaneously with the assignment of such channel.
       ``(B) Certain channels off-limits.--The Commission may not 
     grant under this subsection a class A license to a low-power 
     television station operating on a channel within the core 
     spectrum that includes any of the 175 additional channels 
     referenced in paragraph 45 of its February 23, 1998, 
     Memorandum Opinion and Order on Reconsideration of the Sixth 
     Report and Order (MM Docket No. 87-268). Within 18 months 
     after the date of enactment of the Community Broadcasters 
     Protection Act of 1999, the Commission shall identify by 
     channel, location, and applicable technical parameters those 
     175 channels.
       ``(7) No interference requirement.--The Commission may not 
     grant a class A license, nor approve a modification of a 
     class A license, unless the applicant or licensee shows that 
     the class A station for which the license or modification is 
     sought will not cause--
       ``(A) interference within--
       ``(i) the predicted Grade B contour (as of the date of 
     enactment of the Community Broadcasters Protection Act of 
     1999, or November 1, 1999, whichever is later, or as proposed 
     in a change application filed on or before such date) of any 
     television station transmitting in analog format; or
       ``(ii)(I) the digital television service areas provided in 
     the DTV Table of Allotments; (II) the areas protected in the 
     Commission's digital television regulations (47 C.F.R. 
     73.622(e) and (f)); (III) the digital television service 
     areas of stations subsequently granted by the Commission 
     prior to the filing of a class A application; and (IV) 
     stations seeking to maximize power under the Commission's 
     rules, if such station has complied with the notification 
     requirements in paragraph (1)(D);
       ``(B) interference within the protected contour of any low-
     power television station or low-power television translator 
     station that--
       ``(i) was licensed prior to the date on which the 
     application for a class A license, or for the modification of 
     such a license, was filed;
       ``(ii) was authorized by construction permit prior to such 
     date; or
       ``(iii) had a pending application that was submitted prior 
     to such date;
       ``(C) interference within the protected contour of 80 miles 
     from the geographic center of the areas listed in section 
     22.625(b)(1) or 90.303 of the Commission's regulations (47 
     C.F.R. 22.625(b)(1) and 90.303) for frequencies in--
       ``(i) the 470-512 megahertz band identified in section 
     22.621 or 90.303 of such regulations; or
       ``(ii) the 482-488 megahertz band in New York.
       ``(8) Priority for displaced low-power stations.--Low-power 
     stations that are displaced by an application filed under 
     this section shall have priority over other low-power 
     stations in the assignment of available channels.''.
       And the Senate agree to the same.
     From the Committee on Commerce, for consideration of the 
     House bill and the Senate amendment, and modifications 
     committed to conference:
     Tom Bliley,
     Billy Tauzin,
     Michael G. Oxley,
     John D. Dingell,
     Edward J. Markey,
     Provided that Mr. Boucher is appointed in lieu of Mr. Markey 
     for consideration of secs. 712(b)(1), 712(b)(2), and 
     712(c)(1) of the Communications Act of 1934 as added by sec. 
     104 of the House bill.
     Rick Boucher,
     From the Committee on the Judiciary, for consideration of the 
     House bill and the Senate amendment, and modifications 
     committed to conference:
     Henry Hyde,
     Howard Coble,
     Bob Goodlatte,
     John Conyers,
     Howard L. Berman,
                                Managers on the Part of the House.

     From the Committee on the Judiciary:
     Orrin Hatch,
     Strom Thurmond,
     Mike DeWine,
     Patrick Leahy,
     Herb Kohl,
     From the Committee on Commerce, Science, and Transportation:
     Ted Stevens,
     Fritz Hollings,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 1554), to amend the 
     provisions of title 17, United States Code, and the 
     Communications Act of 1934, relating to copyright licensing 
     and carriage of broadcast signals by satellite, submit the 
     following joint statement to the House and the Senate in 
     explanation of the effect of the action agreed upon by the 
     managers and recommended in the accompanying conference 
     report:
       The Senate amendment struck out all of the House bill after 
     the enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment which is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clarifying 
     changes.
     Section 1. Short title.
       This Act may be cited as the ``Intellectual Property and 
     Communications Omnibus Reform Act of 1999.''

         TITLE I--SATELLITE HOME VIEWER IMPROVEMENT ACT OF 1999

       When Congress passed the Satellite Home Viewer Act in 1988, 
     few Americans were familiar with satellite television. They 
     typically resided in rural areas of the country where the 
     only means of receiving television programming was through 
     use of a large, backyard C-band satellite dish. Congress 
     recognized the importance of providing these people with 
     access to broadcast programming, and created a compulsory 
     copyright license in the Satellite Home Viewer Act that 
     enabled satellite carriers to easily license the copyrights 
     to the broadcast programming that they retransmitted to their 
     subscribers.
       The 1988 Act fostered a boom in the satellite television 
     industry. Coupled with the development of high-powered 
     satellite service, or DSS, which delivers programming to a 
     satellite dish as small as 18 inches in diameter, the 
     satellite industry now serves homes nationwide with a wide 
     range of high quality programming. Satellite is no longer 
     primarily a rural service, for it offers an attractive 
     alternative to other providers of multichannel video 
     programming; in particular, cable television. Because 
     satellite can provide direct competition with the cable 
     industry, it is in the public interest to ensure that 
     satellite operates under a copyright framework that permits 
     it to be an effective competitor.
       The compulsory copyright license created by the 1988 Act 
     was limited to a five year period to enable Congress to 
     consider its effectiveness and renew it where necessary. The 
     license was renewed in 1994 for an additional five years, and 
     amendments made that were intended to increase the 
     enforcement of the network territorial restrictions of the 
     compulsory license. Two-year transitional provisions were 
     created to enable local network broadcasters to challenge 
     satellite subscribers' receipt of satellite network service 
     where the local network broadcaster had reason to believe 
     that these subscribers received an adequate off-the-air 
     signal from the broadcaster. The transitional provisions

[[Page 29263]]

     were minimally effective and caused much consumer confusion 
     and anger regarding receipt of television network stations.
       The satellite license is slated to expire at the end of 
     this year, requiring Congress to again consider the copyright 
     licensing regime for satellite retransmissions of over-the-
     air television broadcast stations. In passing this 
     legislation, the Conference Committee was guided by several 
     principles. First, the Conference Committee believes that 
     promotion of competition in the marketplace for delivery of 
     multichannel video programming is an effective policy to 
     reduce costs to consumers. To that end, it is important that 
     the satellite industry be afforded a statutory scheme for 
     licensing television broadcast programming similar to that of 
     the cable industry. At the same time, the practical 
     differences between the two industries must be recognized and 
     accounted for.
       Second, the Conference Committee reasserts the importance 
     of protecting and fostering the system of television networks 
     as they relate to the concept of localism. It is well 
     recognized that television broadcast stations provide 
     valuable programming tailored to local needs, such as news, 
     weather, special announcements and information related to 
     local activities. To that end, the Committee has structured 
     the copyright licensing regime for satellite to encourage and 
     promote retransmissions by satellite of local television 
     broadcast stations to subscribers who reside in the local 
     markets of those stations.
       Third, perhaps most importantly, the Conference Committee 
     is aware that in creating compulsory licenses, it is acting 
     in derogation of the exclusive property rights granted by the 
     Copyright Act to copyright holders, and that it therefore 
     needs to act as narrowly as possible to minimize the effects 
     of the government's intrusion on the broader market in which 
     the affected property rights and industries operate. In this 
     context, the broadcast television market has developed in 
     such a way that copyright licensing practices in this area 
     take into account the national network structure, which 
     grants exclusive territorial rights to programming in a local 
     market to local stations either directly or through 
     affiliation agreements. The licenses granted in this 
     legislation attempt to hew as closely to those arrangements 
     as possible. For example, these arrangements are mirrored in 
     the section 122 ``local-to-local'' license, which grants 
     satellite carriers the right to retransmit local stations 
     within the station's local market, and does not require a 
     separate copyright payment because the works have already 
     been licensed and paid for with respect to viewers in those 
     local markets. By contrast, allowing the importation of 
     distant or out-of-market network stations in derogation of 
     the local stations' exclusive right--bought and paid for in 
     market-negotiated arrangements--to show the works in question 
     undermines those market arrangements. Therefore, the specific 
     goal of the 119 license, which is to allow for a life-line 
     network television service to those homes beyond the reach of 
     their local television stations, must be met by only allowing 
     distant network service to those homes which cannot receive 
     the local network television stations. Hence, the ``unserved 
     household'' limitation that has been in the license since its 
     inception. The Committee is mindful and respectful of the 
     interrelationship between the communications policy of 
     ``localism'' outlined above and property rights 
     considerations in copyright law, and seeks a proper balance 
     between the two.
       Finally, although the legislation promotes satellite 
     retransmissions of local stations, the Conference Committee 
     recognizes the continued need to monitor the effects of 
     distant signal importation by satellite. To that end, the 
     compulsory license for retransmission of distant signals is 
     extended for a period of five years, to afford Congress the 
     opportunity to evaluate the effectiveness and continuing need 
     for that license at the end of the five-year period.
     Section 1001. Short title
       This title may be cited as the ``Satellite Home Viewer 
     Improvement Act.''
     Section 1002. Limitations on exclusive rights; secondary 
         transmissions by satellite carriers within local markets
       The House and the Senate provisions were in most respects 
     highly similar. The conference substitute generally follows 
     the House approach, with the differences described here.
       Section 1002 of this Act creates a new statutory license, 
     with no sunset provision, as a new section 122 of the 
     Copyright Act of 1976. The new license authorizes the 
     retransmission of television broadcast stations by satellite 
     carriers to subscribers located within the local markets of 
     those stations.
       Creation of a new statutory license for retransmission of 
     local signals is necessary because the current section 119 
     license is limited to the retransmission of distance signals 
     by satellite. The section 122 license allows satellite 
     carriers for the first time to provide their subscribers with 
     the television signals they want most: their local stations. 
     A carrier may retransmit the signal of a network station (or 
     superstation) to all subscribers who reside within the local 
     market of that station, without regard to whether the 
     subscriber resides in an ``unserved household.'' The term 
     ``local market'' is defined in Section 119(j)(2), and 
     generally refers to a station's Designated Market Area as 
     defined by Nielsen.
       Because the section 122 license is permanent, subscribers 
     may obtain their local television stations without fear that 
     their local broadcast service may be turned off at a future 
     date. In addition, satellite carriers may deliver local 
     stations to commercial establishments as well as homes, as 
     the cable industry does under its license. These amendments 
     create parity and enhanced competition between the satellite 
     and cable industries in the provision of local television 
     broadcast stations.
       For a satellite carrier to be eligible for this license, 
     this Act, following the House approach, provides both in new 
     section 122(a) and in new section 122(d) that a carrier may 
     use the new local-to-local license only if it is in full 
     compliance with all applicable rules and regulations of the 
     Federal Communications Commission, including any requirements 
     that the Commission may adopt by regulation concerning 
     carriage of stations or programming exclusivity. These 
     provisions are modeled on similar provisions in section 111, 
     the terrestrial compulsory license. Failure to fully comply 
     with Commission rules with respect to retransmission of one 
     or more stations in the local market precludes the carrier 
     from making use of the section 122 license. Put another way, 
     the statutory license overrides the normal copyright scheme 
     only to the extent that carriers strictly comply with the 
     limits Congress has put on that license.
       Because terrestrial systems, such as cable, as a general 
     rule do not pay any copyright royalty for local 
     retransmissions of broadcast stations, the section 122 
     license does not require payment of any copyright royalty by 
     satellite carriers for transmissions made in compliance with 
     the requirements of section 122. By contrast, the section 119 
     statutory license for distant signals does require payment of 
     royalties. In addition, the section 122 statutory license 
     contains no ``unserved household'' limitation, while the 
     section 119 license does contain that limitation.
       Satellite carriers are liable for copyright infringement, 
     and subject to the full remedies of the Copyright Act, if 
     they violate one or more of the following requirements of the 
     section 122 license. First, satellite carriers may not in any 
     way willfully alter the programming contained on a local 
     broadcast station.
       Second, satellite carriers may not use the section 122 
     license to retransmit a television broadcast station to a 
     subscriber located outside the local market of the station. 
     Retransmission of a station to a subscriber located outside 
     the station's local market is covered by section 119, and is 
     permitted only when all conditions of that license are 
     satisfied. Accordingly, satellite carriers are required to 
     provide local broadcasters with accurate lists of the street 
     addresses of their local-to-local subscribers so that 
     broadcasters may verify that satellite carriers are making 
     proper use of the license. The subscriber information 
     supplied to broadcasters is for verification purposes only, 
     and may not be used by broadcasters for any other reason. Any 
     knowing provision of false information by a satellite carrier 
     would, under section 122(d), bar use of the Section 122 
     license by the carrier engaging in such practices. The 
     section 122 license contains remedial provisions parallel to 
     those of Section 119, including a ``pattern or practice'' 
     provision that requires termination of the Section 122 
     statutory license as to a particular satellite carrier if it 
     engages in certain abuses of the license.
       Under this provision, just as in the statutory licenses 
     codified in sections 111 and 119, a violation may be proven 
     by showing willful activity, or simple delivery of the 
     secondary transmission over a certain period of time. In 
     addition to termination of service on a nationwide or local 
     or regional basis, statutory damages are available up to 
     $250,000 for each 6-month period during which the pattern or 
     practice of violations was carried out. Satellite carriers 
     have the burden of proving that they are not improperly 
     making use of the section 122 license to serve subscribers 
     outside the local markets of the television broadcast 
     stations they are providing. The penalties created under this 
     section parallel those under Section 119, and are to deter 
     satellite carriers from providing signals to subscribers in 
     violation of the licenses.
       The section 122 license is limited in geographic scope to 
     service to locations in the United States, including any 
     commonwealth, territory or possession of the United States. 
     In addition, section 122(j) makes clear that local 
     retransmission of television broadcast stations to 
     subscribers is governed solely by the section 122 license, 
     and that no provision of the section 111 cable compulsory 
     license should be interpreted to allow satellite carriers to 
     make local retransmissions of television broadcast stations 
     under that license. Likewise, no provision of the section 119 
     license (or any other law) should be interpreted as 
     authorizing local-to-local retransmissions. As with all 
     statutory licenses, these explicit limitations are consistent 
     with the general rule that, because statutory licenses are in 
     derogation of the exclusive

[[Page 29264]]

     rights granted under the Copyright Act, they should be 
     interpreted narrowly.
       Section 1002(a) of this Act contains new standing 
     provisions. Adopting the approach of the House bill, section 
     122(f)(1) of the Copyright Act is parallel to section 119(e), 
     and ensures that local stations, in addition to any other 
     parties that qualify under other standing provisions of the 
     Act, will have the ability to sue for violations of section 
     122. New section 122(f)(2) of the Copyright Act enables a 
     local television station that is not being carried by a 
     satellite carrier in violation of the license to file a 
     copyright infringement lawsuit in federal court to enforce 
     its rights.
     Section 1003. Extension of effect of amendments to section 
         119 of title 17, United States Code
       As in both the House bill and the Senate amendment, this 
     Act extends the section 119 satellite statutory license for a 
     period of five years by changing the expiration date of the 
     legislation from December 31, 1999, to December 31, 2004. The 
     procedural and remedial provisions of section 119, which have 
     already been interpreted by the courts, are being extended 
     without change. Should the section 119 license be allowed to 
     expire in 2004, it shall do so at midnight on December 31, 
     2004, so that the license will cover the entire second 
     accounting period of 2004.
       The advent of digital terrestrial broadcasting will 
     necessitate additional review and reform of the distant 
     signal statutory license. And responsibility to oversee the 
     development of the nascent local station satellite service 
     may also require for review of the distant signal statutory 
     license in the future. For each of these reasons, this Act 
     establishes a period for review in 5 years.
       Although the section 119 regime is largely being extended 
     in its current form, certain sections of the Act may have a 
     near-term effect on pending copyright infringement lawsuits 
     brought by broadcasters against satellite carriers. These 
     changes are prospective only; Congress does not intend to 
     change the legality of any conduct that occurred prior to the 
     date of enactment. Congress does intend, however, to benefit 
     consumers where possible and consistent with existing 
     copyright law and principles.
       This Act attempts to strike a balance among a variety of 
     public policy goals. While increasing the number of potential 
     subscribers to distant network signals, this Act clarifies 
     that satellite carriers may carry up to, but no more than, 
     two stations affiliated with the same network. The original 
     purpose of the Satellite Home Viewer Act was to ensure that 
     all Americans could receive network programming and other 
     television services provided they could not receive those 
     services over-the-air or in any other way. This bill reflects 
     the desire of the Conference to meet this requirement and 
     consumers' expectations to receive the traditional level of 
     satellite service that has built up over the years, while 
     avoiding an erosion of the programming market affected by the 
     statutory licenses.
     Section 1004. Computation of royalty fees for satellite 
         carriers
       Like both the House bill and the Senate amendment, this Act 
     reduces the royalty fees currently paid by satellite carriers 
     for the retransmission of network and superstations by 45 
     percent and 30 percent, respectively. These are reductions of 
     the 27-cent royalty fees made effective by the Librarian of 
     Congress on January 1, 1998. The reductions take effect on 
     July 1, 1999, which is the beginning of the second accounting 
     period for 1999, and apply to all accounting periods for the 
     five-year extension of the section 119 license. The Committee 
     has drafted this provision such that, if the section 119 
     license is renewed after 2004, the 45 percent and 30 percent 
     reductions of the 27-cent fee will remain in effect, unless 
     altered by legislative amendment.
       In addition, section 119(c) of title 17, United States 
     Code, is amended to clarify that in royalty distribution 
     proceedings conducted under section 802 of the Copyright Act, 
     the Public Broadcasting Service may act as agent for all 
     public television copyright claimants and all Public 
     Broadcasting Service member stations.
     Section 1005. Distant signal eligibility for consumers
       The Senate bill contained provisions retaining the existing 
     Grade B intensity standard in the definition of ``unserved 
     household.'' The House agreed to the Senate provisions with 
     amendments, which extend the ``unserved household'' 
     definition of section 119 of title 17 intact in certain 
     respects and amend it in other respects. Consistent with the 
     approach of the Senate amendment, the central feature of the 
     existing definition of ``unserved household''--inability to 
     receive, through use of a conventional outdoor rooftop 
     receiving antenna, a signal of Grade B intensity from a 
     primary network station--remains intact. The legislation 
     directs the FCC, however, to examine the definition of 
     ``Grade B intensity'', reflecting the dBu levels long set by 
     the Federal Communications Commission in 47 C.F.R. 
     Sec. 73.683(a), and issue a rulemaking within 6 months after 
     enactment to evaluate the standard and, if appropriate, make 
     recommendations to Congress about how to modify the analog 
     standard, and make a further recommendation about what an 
     appropriate standard would be for digital signals. In this 
     fashion, the Congress will have the best input and 
     recommendations from the Commission, allowing the Commission 
     wide latitude in its inquiry and recommendations, but reserve 
     for itself the final decision-making authority over the scope 
     of the copyright licenses in question, in light of all 
     relevant factors.
       The amended definition of ``unserved household'' makes 
     other consumer-friendly changes. It will eliminate the 
     requirement that a cable subscriber wait 90 days to be 
     eligible for satellite delivery of distant network signals. 
     After enactment, cable subscribers will be eligible to 
     receive distant network signals by satellite, upon choosing 
     to do so, if they satisfy the other requirements of section 
     119.
       In addition, this Act adds three new categories to the 
     definition of ``unserved household'' in section 119(d)(10): 
     (a) certain subscribers to network programming who are not 
     predicted to receive a signal of Grade A intensity from any 
     station of the relevant network, (b) operators of 
     recreational vehicles and commercial trucks who have complied 
     with certain documentation requirements, and (c) certain C-
     band subscribers to network programming. This Act also 
     confirms in new section 119(d)(10)(B) what has long been 
     understood by the parties and accepted by the courts, namely 
     that a subscriber may receive distant network service if all 
     network stations affiliated with the relevant network that 
     are predicted to serve that subscriber give their written 
     consent.
       Section 105(a)(2) of the bill creates a new section 
     119(a)(2)(B)(i) of the Copyright Act to prohibit a satellite 
     carrier from delivering more than two distant TV stations 
     affiliated with a single network in a single day to a 
     particular customer. This clarifies that a satellite carrier 
     provides a signal of a television station throughout the 
     broadcast day, rather than switching between stations 
     throughout a day to pick the best programming among different 
     signals.
       Section 1005(a)(2) of this Act creates a new section 
     119(a)(2)(B)(ii)(I) of the Copyright Act to confirm that 
     courts should rely on the FCC's ILLR model to presumptively 
     determine whether a household is capable of receiving a 
     signal of Grade B intensity. The conferees understand that 
     the parties to copyright infringement litigation under the 
     Satellite Home Viewer Act have agreed on detailed procedures 
     for implementing the current version of ILLR, and nothing in 
     this Act requires any change in those procedures. In the 
     future, when the FCC amends the ILLR model to make it more 
     accurate pursuant to section 339(c)(3) of the Communications 
     Act of 1934, the amended model should be used in place of the 
     current version of ILLR. The new language also confirms in 
     new section 119(a)(2)(B)(ii)(II) that the ultimate 
     determination of eligibility to receive network signals shall 
     be a signal intensity test pursuant to 47 C.F.R. 
     Sec. 73.686(d), as reflected in new section 339(c)(5) of the 
     Communications Act of 1934. Again, the conferees understand 
     that existing Satellite Home Viewer Act court orders already 
     incorporate this FCC-approved measurement method, and nothing 
     in this Act requires any change in such orders. Such a signal 
     intensity test may be conducted by any party to resolve a 
     customer's eligibility in litigation under section 119.
       Section 1005(a)(2) of this Act creates a new section 
     119(a)(2)(B)(iii) of the Copyright Act to permit continued 
     delivery by means of C-band transmissions of network stations 
     to C-band dish owners who received signals of the pertinent 
     network on October 31, 1999, or were recently required to 
     have such service terminated pursuant to court orders or 
     settlements under section 119. This provision does not 
     authorize satellite delivery of network stations to such 
     persons by any technology other than C-band.
       Section 1005(b) also adds a new provision (E) to section 
     119(a)(5). The purpose of this provision is to allow certain 
     longstanding superstations to continue to be delivered to 
     satellite customers without regard to the ``unserved 
     household'' limitation, even if the station now technically 
     qualifies as a ``network station'' under the 15-hour-per-week 
     definition of the Act. This exception will cease to apply if 
     such a station in the future becomes affiliated with one of 
     the four networks (ABC, CBS, Fox, and NBC) that qualified as 
     networks as of January 1, 1995.
       Section 1005(c) of this Act adds a new section 119(e) of 
     the Copyright Act. This provision contains a moratorium on 
     terminations of network stations to certain otherwise 
     ineligible recent subscribers to network programming whose 
     service has been (or soon would have been) terminated and 
     allows them to continue to be eligible for distant signal 
     services. The subscribers affected are those predicted by the 
     current version of the ILLR model to receive a signal of less 
     than Grade A intensity from any network station of the 
     relevant network defined in section 73.683(a) of Commission 
     regulations (47 C.F.R. 73.683(a)) as in effect January 1, 
     1999. As the statutory language reflects, recent court orders 
     and settlements between the satellite and broadcasting 
     industries have required (or will in the near future require) 
     significant numbers of terminations of network stations to 
     ineligible subscribers in

[[Page 29265]]

     this category. Although the conferees strongly condemn 
     lawbreaking by satellite carriers, and intend for satellite 
     carriers to be subject to all other available legal remedies 
     for any infringements in which the carriers have engaged, the 
     conferees have concluded that the public interest will be 
     served by the grandfathering of this limited category of 
     subscribers whose service would otherwise be terminated.
       The decision by the conferees to direct this limited 
     grandfathering should not be understood as condoning unlawful 
     conduct by satellite carriers, but rather reflects the 
     concern of the conference for those subscribers who would 
     otherwise be punished for the actions of the satellite 
     carriers. Note that in the previous 18 months, court 
     decisions have required the termination of some distant 
     network signals to some subscribers. However, the Conferees 
     are aware that in some cases satellite carriers terminated 
     distant network service that was not subject to the original 
     lawsuit. The Conferees intend that affected subscribers 
     remain eligible for such service.
       The words ``shall remain eligible'' in section 119(e) refer 
     to eligibility to receive stations affiliated with the same 
     network from the same satellite carrier through use of the 
     same transmission technology at the same location; in other 
     words, grandfathered status is not transferable to a 
     different carrier or a different type of dish or at a new 
     address. The provisions of new section 119(e) are 
     incorporated by reference in the definition of ``unserved 
     household'' as new section 119(d)(10)(C).
       Section 1005(d) of this Act creates a new section 
     119(a)(11), which contains provisions governing delivery of 
     network stations to recreational vehicles and commercial 
     trucks. This provision is, in turn, incorporated in the 
     definition of ``unserved household'' in new section 
     119(d)(10)(D). The purpose of these amendments is to allow 
     the operators of recreational vehicles and commercial trucks 
     to use satellite dishes permanently attached to those 
     vehicles to receive, on television sets located inside those 
     vehicles, distant network signals pursuant to section 119. To 
     prevent abuse of this provision, the exception for 
     recreational vehicles and commercial trucks is limited to 
     persons who have strictly complied with the documentation 
     requirements set forth in section 119(a)(11). Among other 
     things, the exception will only become available as to a 
     particular recreational vehicle or commercial truck after the 
     satellite carrier has provided all affected networks with all 
     documentation set forth in section 119(a). The exception will 
     apply only for reception in that particular recreational 
     vehicle or truck, and does not authorize any delivery of 
     network stations to any fixed dwelling.
       Section 1005(e) of this Act adds a new proviso to the 
     definition of ``satellite carrier'' to exclude from that 
     definition the provision of any ``digital online 
     communications service.'' As the Copyright Office concluded 
     in its 1997 Review of the Copyright Licensing Regimes 
     Covering Retransmission of Broadcast Signals, no existing 
     statutory license (whether in section 111, section 119, or 
     otherwise) authorizes retransmission of television broadcast 
     signals via the Internet or any other online service. The 
     extension of any statutory license for television programming 
     to online transmissions would raise profound policy 
     considerations, including, most notably, the apparent 
     impossibility of limiting such transmissions to ``unserved 
     households.'' In any event, the committee's intent is that, 
     neither section 111, section 119, nor section 122 creates any 
     authorization for third parties to disseminate television 
     programming via online delivery of any kind, and the 
     amendment to the definition of ``satellite carrier'' simply 
     confirms existing law on that point.
     Section 1006. Public Broadcasting Service satellite feed
       The conference agreement follows the Senate bill with an 
     amendment that applies the network copyright royalty rate to 
     the Public Broadcasting Service the satellite feed. The 
     conference agreement grants satellite carriers a section 119 
     compulsory license to retransmit a national satellite feed 
     distributed and designated by PBS. The license would apply to 
     educational and informational programming to which PBS 
     currently holds broadcast rights. The license, which would 
     extend to all households in the United States, would sunset 
     on January 1, 2002, the date when local-to-local must-carry 
     obligations become effective. Under the conference agreement, 
     PBS will designate the national satellite feed for purposes 
     of this section.
     Section 1007. Application of Federal Communications 
         Commission regulations
       The section 119 license is amended to clarify that 
     satellite carriers must comply with all rules, regulations, 
     and authorizations of the Federal Communications Commission 
     in order to obtain the benefits of the section 119 license. 
     As provided in the House bill, this would include any 
     programming exclusivity provisions or carriage requirements 
     that the Commission may adopt. Violations of such rules, 
     regulations or authorizations would render a carrier 
     ineligible for the copyright statutory license with respect 
     to that retransmission.
     Section 1008. Rules for satellite carriers retransmitting 
         television broadcast signals
       The Senate agrees to the House bill provisions regarding 
     carriage of television broadcast signals, with certain 
     amendments, as discussed below. Section 108 creates new 
     sections 338 and 339 of the Communications Act of 1934. 
     Section 338 addresses carriage of local television signals, 
     while section 339 addresses distant television signals.
       New section 338 requires satellite carriers, by January 1, 
     2002, to carry upon request all local broadcast stations' 
     signals in local markets in which the satellite carriers 
     carry at least one signal pursuant to section 122 of title 
     17, United States Code. The conference report added the 
     cross-reference to section 122 to the House provision to 
     indicate the relationship between the benefits of the 
     statutory license and the carriage requirements imposed by 
     this Act. Thus, the conference report provides that, as of 
     January 1, 2002, royalty-free copyright licenses for 
     satellite carriers to retransmit broadcast signals to viewers 
     in the broadcasters' service areas will be available only on 
     a market-by-market basis.
       The procedural provisions applicable to section 338 
     (concerning costs, avoidance of duplication, channel 
     positioning, compensation for carriage, and complaints by 
     broadcast stations) are generally parallel to those 
     applicable to cable systems. Within one year after enactment, 
     the Federal Communications Commission is to issue 
     implementing regulations which are to impose obligations 
     comparable to those imposed on cable systems under paragraphs 
     (3) and (4) of section 614(b) and paragraphs (1) and (2) of 
     section 615(g), such as the requirement to carry a station's 
     entire signal without additions or deletions. The obligation 
     to carry local stations on contiguous channels is 
     illustrative of the general requirement to ensure that 
     satellite carriers position local stations in a way that is 
     convenient and practically accessible for consumers. By 
     directing the FCC to promulgate these must-carry rules, the 
     conferees do not take any position regarding the application 
     of must-carry rules to carriage of digital television signals 
     by either cable or satellite systems.
       To make use of the local license, satellite carriers must 
     provide the local broadcast station signal as part of their 
     satellite service, in a manner consistent with paragraphs 
     (b), (c), (d), and (e), FCC regulations, and retransmission 
     consent requirements. Until January 1, 2002, satellite 
     carriers are granted a royalty-free copyright license to 
     retransmit broadcast signals on a station-by-station basis, 
     consistent with retransmission consent requirements. The 
     transition period is intended to provide the satellite 
     industry with a transitional period to begin providing local-
     into-local satellite service to communities throughout the 
     country.
       The conferees believe that the must-carry provisions of 
     this Act neither implicate nor violate the First Amendment. 
     Rather than requiring carriage of stations in the manner of 
     cable's mandated duty, this Act allows a satellite carrier to 
     choose whether to incur the must-carry obligation in a 
     particular market in exchange for the benefits of the local 
     statutory license. It does not deprive any programmers of 
     potential access to carriage by satellite carriers. Satellite 
     carriers remain free to carry any programming for which they 
     are able to acquire the property rights. The provisions of 
     this Act allow carriers an easier and more inexpensive way to 
     obtain the right to use the property of copyright holders 
     when they retransmit signals from all of a market's broadcast 
     stations to subscribers in that market. The choice whether to 
     retransmit those signals is made by carriers, not by the 
     Congress. The proposed licenses are a matter of legislative 
     grace, in the nature of subsidies to satellite carriers, and 
     reviewable under the rational basis standard.\1\
---------------------------------------------------------------------------
     \1\ See Rust v. Sullivan, 500 U.S. 173 (1991) (grants); 
     Indopco, Inc. v. Commissioner, 503 U.S. 79, 84 (1992) (tax 
     benefits). The First Amendment requires only that Congress 
     not aim at ``the suppression of dangerous ideas.'' NEA v. 
     Finley, 118 S. Ct. 2168, 2178-79 (1998).
---------------------------------------------------------------------------
       In addition, the conferees are confident that the proposed 
     license provisions would pass constitutional muster even if 
     subjected to the O'Brien standard applied to the cable must-
     carry requirement.\2\ The proposed provisions are intended to 
     preserve free television for those not served by satellite or 
     cable systems and to promote widespread dissemination of 
     information from a multiplicity of sources. The Supreme Court 
     has found both to be substantial interests, unrelated to the 
     suppression of free expression.\3\ Providing the proposed 
     license on a market-by-market basis furthers both goals by 
     preventing satellite carriers from choosing to carry only 
     certain stations and effectively preventing many other local 
     broadcasters from reaching potential viewers in their service 
     areas. The Conference Committee is concerned that, absent 
     must-carry obligations, satellite carriers would carry the 
     major network affiliates and few other signals. Non-carried 
     stations would face the

[[Page 29266]]

     same loss of viewership Congress previously found with 
     respect to cable noncarriage.\4\
---------------------------------------------------------------------------
     \2\ See United States v. O'Brien, 391 U.S. 367 (1968).
     \3\ See Turner Broadcasting Sys., Inc. v. FCC, 512 U.S. 622, 
     663 (1994).
     \4\ See, e.g., H.R. Rep. No. 102-628, p. 51 (1992); S. Rep. 
     No. 102-92, p. 62 (1991); see also Feb. 24 Hearing (Al 
     DeVaney).
---------------------------------------------------------------------------
       The proposed licenses place satellite carrier in a 
     comparable position to cable systems, competing for the same 
     customers. Applying a must-carry rule in markets which 
     satellite carriers choose to serve benefits consumers and 
     enhances competition with cable by allowing consumers the 
     same range of choice in local programming they receive 
     through cable service. The conferees expect that, by January 
     1, 2002, satellite carriers' market share will have increased 
     and that the Congress' interest in maintaining free over-the-
     air television will be undermined if local broadcasters are 
     prevented from reaching viewers by either cable or satellite 
     distribution systems. The Congress' preference for must-carry 
     obligations has already been proven effective, as attested by 
     the appearance of several emerging networks, which often 
     serve underserved market segments. There are no narrower 
     alternatives that would achieve the Congress' goals. Although 
     the conferees expect that subscribers who receive no 
     broadcast signals at all from their satellite service may 
     install antennas or subscribe to cable service in addition to 
     satellite service, the Conference Committee is less sanguine 
     that subscribers who receive network signals and hundreds of 
     other programming choices from their satellite carrier will 
     undertake such trouble and expense to obtain over-the-air 
     signals from independent broadcast stations. National feeds 
     would also be counterproductive because they siphon potential 
     viewers from local over-the-air affiliates. In sum, the 
     Conference Committee finds that trading the benefits of the 
     copyright license for the must carry requirement is a fair 
     and reasonable way of helping viewers have access to all 
     local programming while benefitting satellite carriers and 
     their customers.
       Section 338(c) contains a limited exception to the general 
     must-carry requirements, stating that a satellite carrier 
     need not carry two local affiliates of the same network that 
     substantially duplicate each others' programming, unless the 
     duplicating stations are licensed to communities in different 
     states. The latter provisions address unique and limited 
     cases, including WMUR (Manchester, New Hampshire)/WCVB 
     (Boston, Massachusetts) and WPTZ (Plattsburg, New York)/WNNE 
     (White River Junction, Vermont), in which mandatory carriage 
     of both duplicating local stations upon request assures that 
     satellite subscribers will not be precluded from receiving 
     the network affiliate that is licensed to the state in which 
     they reside.
       Because of unique technical challenges on satellite 
     technology and constraints on the use of satellite spectrum, 
     satellite carriers may initially be limited in their ability 
     to deliver must carry signals into multiple markets. New 
     compression technologies, such as video streaming, may help 
     overcome these barriers however, and, if deployed, could 
     enable satellite carriers to deliver must-carry signals into 
     many more markets than they could otherwise. Accordingly, the 
     conferees urge the FCC, pursuant to its obligations under 
     section 338, or in any other related proceedings, to not 
     prohibit satellite carriers from using reasonable 
     compression, reformatting, or similar technologies to meet 
     their carriage obligations, consistent with existing 
     authority.
       New section 339 of the Communications Act contains 
     provisions concerning carriage of distant television stations 
     by satellite carriers. Section 339(a)(1) limits satellite 
     carriers to providing a subscriber with no more than two 
     stations affiliated with a given television network from 
     outside the local market. In addition, a satellite carrier 
     that provides two distant signals to eligible households may 
     also provide the local television signals pursuant to section 
     122 of title 17 if the subscriber offers local-to-local 
     service in the subscriber's market. This provision furthers 
     the congressional policy of localism and diversity of 
     broadcast programming, which provides locally-relevant news, 
     weather, and information, but also allows consumers in 
     unserved households to enjoy network programming obtained via 
     distant signals. Under new section 339(a)(2), which is based 
     on the Senate amendment, the knowing and willful provision of 
     distant television signals in violation of these restrictions 
     is subject to a forfeiture penalty under section 503 of the 
     Communications Act of $50,000 per violation or for each day 
     of a continuing violation.
       New section 339(b)(1)(A) requires the Commission to 
     commence within 45 days of enactment, and complete within one 
     year after the date of enactment, a rulemaking to develop 
     regulations to apply network nonduplication, syndicated 
     exclusivity and sports blackout rules to the transmission of 
     nationally distributed superstations by satellite carriers. 
     New section 339(b)(1)(B) requires the Commission to 
     promulgate regulations on the same schedule with regard to 
     the application of sports blackout rules to network stations. 
     These regulations under subparagraph (B) are to be imposed 
     ``to the extent technically feasible and not economically 
     prohibitive'' with respect to the affected parties. The 
     burden of showing that conforming to rules similar to cable 
     would be ``economically prohibitive'' is a heavy one. It 
     would entail a very serious economic threat to the health of 
     the carrier. Without that showing, the rules should be as 
     similar as possible to that applicable to cable services.
       Section 339(c) of the Communications Act of 1934 addresses 
     the three distinct areas discussed by the Commission in its 
     Report & Order in Docket No. 98-201: (i) the definition of 
     ``Grade B intensity,'' which is the substantive standard for 
     determining eligibility to receive distant network stations 
     by satellite, (ii) prediction of whether a signal of Grade B 
     intensity from a particular station is present at a 
     particular household, and (iii) measurement of whether a 
     signal of Grade B intensity from a particular station is 
     present at a particular household. Section 339(c) addresses 
     each of these topics.
       New section 339(c) addresses evaluation and possible 
     recommendations for modification by the Commission of the 
     definition of Grade B intensity, which is incorporated into 
     the definition of ``unserved household'' in section 119 of 
     the Copyright Act. Under section 339(c), the Commission is to 
     complete a rulemaking within 1 year after enactment to 
     evaluate, and if appropriate to recommend modifications to 
     the Grade B intensity standard for analog signals set forth 
     in 47 C.F.R. Sec. 73.683(a), for purposes of determining 
     eligibility for distant signal satellite service. In 
     addition, the Commission is to recommend a signal standard 
     for digital signals to prepare Congress to update the 
     statutory license for digital television broadcasting. The 
     Committee intends that this report would reflect the FCC's 
     best recommendations in light of all relevant considerations, 
     and be based on whatever factors and information the 
     Commission deems relevant to determining whether the signal 
     intensity standard should be modified and in what way. As 
     discussed above, the two-part process allows the Commission 
     to recommend modifications leaving to Congress the decision-
     making power on modifications of the copyright licenses at 
     issue.
       Section 339(c)(3) addresses requests to local television 
     stations by consumers for waivers of the eligibility 
     requirements under section 119 of title 17, United States 
     Code. If a satellite carrier is barred from delivering 
     distant network signals to a particular customer because the 
     ILLR model predicts the customer to be served by one or more 
     television stations affiliated with the relevant network, the 
     consumer may submit to those stations, through his or her 
     satellite carrier, a written request for a waiver. The 
     statutory phrase ``station asserting that the retransmission 
     is prohibited'' refers to a station that is predicted by the 
     ILLR model to serve the household. Each such station must 
     accept or reject the waiver request within 30 days after 
     receiving the request from the satellite carrier. If a 
     relevant network station grants the requested waiver, or 
     fails to act on the waiver within 30 days, the viewer shall 
     be deemed unserved with respect to the local network station 
     in question.
       Section 339(c)(4) addresses the ILLR predictive model 
     developed by the Commission in Docket No. 98-201. The 
     provision requires the Commission to attempt to increase its 
     accuracy further by taking into account not only terrain, as 
     the ILLR model does now, but also land cover variations such 
     as buildings and vegetation. If the Commission discovers 
     other practical ways to improve the accuracy of the ILLR 
     model still further, it shall implement those methods as 
     well. The linchpin of whether particular proposed refinements 
     to the ILLR model result in greater accuracy is whether the 
     revised model's predictions are closer to the results of 
     actual field testing in terms of predicting whether 
     households are served by a local affiliate of the relevant 
     network.
       The ILLR model of predicting subscribers' eligibility will 
     be of particular use in rural areas. To make the ILLR more 
     accurate and more useful to this group of Americans, the 
     Conference Committee believes the Commission should be 
     particularly careful to ensure that the ILLR is accurate in 
     areas that use star routes, postal routes, or other 
     addressing systems that may not indicate clearly the location 
     of the actual dwelling of a potential subscriber. The 
     Commission should to ensure the model accurately predicts the 
     signal strength at the viewers' actual location.
       New section 339(c)(5) addresses the third area discussed in 
     the Commission's Report & Order in Docket No. 98-201, namely 
     signal intensity testing. This provision permits satellite 
     carriers and broadcasters to carry out signal intensity 
     measurements, using the procedures set forth by the 
     Commission in 47 C.F.R. Sec. 73.686(d), to determine whether 
     particular households are unserved. Unless the parties 
     otherwise agree, any such tests shall be conducted on a 
     ``loser pays'' basis, with the network station bearing the 
     costs of tests showing the household to be unserved, and the 
     satellite carrier bearing the costs of tests showing the 
     household to be served. If the satellite carrier and station 
     is unable to agree on a qualified individual to perform the 
     test, the Commission is to designate an independent and 
     neutral entity by rule. The

[[Page 29267]]

     Commission is to promulgate rules that avoid any undue 
     burdens being imposed on any party.
     Section 1009. Retransmission consent
       Section 1009 amends the provisions of section 325 of the 
     Communications Act governing retransmission consent. As 
     revised, section 325(b)(1) bars multichannel video 
     programming distributors from retransmitting the signals of 
     television broadcast stations, or any part thereof, without 
     the express authority of the originating station. Section 
     325(b)(2) contains several exceptions to this general 
     prohibition, including noncommercial stations, certain 
     superstations, and, until the end of 2004, retransmission of 
     not more than two distant signals by satellite carriers to 
     unserved households outside of the local market of the 
     retransmitted stations, and (E) for six months to the 
     retransmission of local stations pursuant to the statutory 
     license in section 122 of the title 17.
       Section 1009 also amends section 325(b) of the 
     Communications Act to require the Commission to issue 
     regulations concerning the exercise by television broadcast 
     stations of the right to grant retransmission consent. The 
     regulations would, until January 1, 2006, prohibit a 
     television broadcast station from entering into an exclusive 
     retransmission consent agreement with a multichannel video 
     programming distributor or refusing to negotiate in good 
     faith regarding retransmission consent agreements. A 
     television station may generally offer different 
     retransmission consent terms or conditions, including price 
     terms, to different distributors. The FCC may determine that 
     such different terms represent a failure to negotiate in good 
     faith only if they are not based on competitive marketplace 
     considerations.
       Section 1009 of the bill adds a new subsection (e) to 
     section 325 of the Communications Act. New subsection 325(e) 
     creates a set of expedited enforcement procedures for the 
     alleged retransmission of a television broadcast station in 
     its own local market without the station's consent. The 
     purpose of these expedited procedure is to ensure that delays 
     in obtaining relief from violations do not make the right to 
     retransmission consent an empty one. The new provision 
     requires 45-day processing of local-to-local retransmission 
     consent complaints at the Commission, followed by expedited 
     enforcement of any Commission orders in the United States 
     District Court for the Eastern District of Virginia. In 
     addition, a television broadcast station that has been 
     retransmitted in its local market without its consent will be 
     entitled to statutory damages of $25,000 per violation in an 
     action in federal district court. Such damages will be 
     awarded only if the television broadcast station agrees to 
     contribute any statutory damage award above $1,000 to the 
     United States Treasury for public purposes. The expedited 
     enforcement provision contains a sunset which prevents the 
     filing of any complaint with the Commission or any action in 
     federal district court to enforce any Commission order under 
     this section after December 31, 2001. The conferees believe 
     that these procedural provisions, which provide ample due 
     process protections while ensuring speedy enforcement, will 
     ensure that retransmission consent will be respected by all 
     parties and promote a smoothly functioning marketplace.
     Section 1010. Severability
       Section 1010 of the Act provides that if any provision of 
     section 325(b) of the Communications Act as amended by this 
     Act is declared unconstitutional, the remaining provisions of 
     that section will stand.
     Section 1011. Technical amendments
       Section 1011 of this Act makes technical and conforming 
     amendments to sections 101, 111, 119, 501, and 510 of the 
     Copyright Act. Section 1011(e) makes a technical and 
     clarifying change to the definition of a ``work made for 
     hire'' in section 101 of the Copyright Act. Sound recordings 
     have been registered in the Copyright Office as works made 
     for hire since being protected in their own right. This 
     clarifying amendment shall not be deemed to imply that any 
     sound recording or any other work would not otherwise qualify 
     as a work made for hire in the absence of the amendment made 
     by this subsection.
     Section 1012. Effective dates
       Under section 1012 of this Act, sections 1001, 1003, 1005, 
     and 1007 through 1011 shall be effective on the date of 
     enactment. The amendments made by sections 1002, 1004, and 
     1006 shall be effective as of July 1, 1999.

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

       The Conference Committee agrees that it is very important 
     that rural Americans receive the benefits of this Act along 
     with urban residents. There are concerns that without this 
     title, many rural Americans would not receive local broadcast 
     signals.
       Conferees were advised that major satellite carriers 
     intended to provide local broadcast TV stations via satellite 
     only in the largest markets rather than in more rural areas. 
     These satellite providers have stated that is it not 
     economically feasible to provide such service in rural areas 
     at the present time. Many rural areas of the United States 
     are not served by broadcast television or cable service.
       Title II of this Act authorizes the Department of 
     Agriculture, in consultation with OMB, the Secretary of 
     Treasury, and the FCC, and with the certification of the 
     National Telecommunications and Information Administration, 
     to guarantee loans not exceeding $1.25 billion for providing 
     local broadcast TV signals in rural areas. In addition, 
     providers can offer other services, such as data service, 
     should excess capacity permit. No single loan can exceed $625 
     million to any one provider and the rest of the loans may not 
     exceed $100 million face value.
       No loan shall be guaranteed unless: 1) approved in advance 
     by an appropriations Act; 2) USDA consults with OMB, NTIA, 
     and with a public accounting firm; 3) USDA has security that 
     is ``adequate'' to protect the government's interests; 4) 
     USDA can reasonably expect repayment ``using an appropriate 
     combination of credit risk premiums and collateral offered by 
     the applicant to protect the Federal Government;'' and, 5) 
     the borrower has ``insurance sufficient to protect the 
     interests of the Federal Government.''
       The provisions are technology neutral in that the borrower 
     can use any delivery mechanism to provide local TV that 
     otherwise meets the requirements of this title.
       The language of Title II is similar to the Railroad 
     Rehabilitation and Improvement Financing Act which provided 
     up to $3.5 billion in federal loan guarantees to help 
     shortline railroads serve rural America. The underwriting 
     criteria for the USDA loan guarantee--such as cash flow 
     levels and appropriate collateral--will be developed in 
     consultation with OMB and a public accounting firm and are 
     modeled after the Railroad Act language.
     Section 2001. Short title
       This title may be referred to as the ``Rural Local 
     Broadcast Signal Act.''
     Section 2002. Loan guarantees
       Subject to appropriations Acts, the Secretary of 
     Agriculture is authorized to establish a program of loan 
     guarantees to fund projects which finance the acquisition, 
     improvement, enhancement, deployment, launch, or 
     rehabilitation of the means by which local television 
     broadcast signals will be delivered to areas not receiving 
     such signals over commercial for-profit direct-to-home 
     satellite distribution systems.
       No single guaranteed loan can exceed $625 million to any 
     one provider of local TV stations and none of the remaining 
     loans may exceed $100 million in face value. Strict 
     requirements for insurance, collateral, assurances of 
     repayments to the Secretary, perfected interests of the 
     Secretary, liens on assets, and strong security provisions 
     are set forth in the law. All of these provisions are 
     designed to protect the interests of the taxpayers.
       In developing underwriting standards relating to the 
     issuance of loan guarantees, appropriate collateral and cash 
     flow levels, the Secretary is required to consult with OMB 
     and with a public accounting firm. In addition, the Secretary 
     may accept on behalf of an applicant a commitment from a non-
     Federal source to fund in whole or in part the credit risk 
     premiums with respect to the loan.
     Section 2003. Administration of loan guarantees
       In deciding which loan guarantees to approve, the 
     Secretary, to the maximum extent practicable shall give 
     priority to projects which serve the most unserved and 
     underserved rural markets, taking into account such factors 
     as feasibility, population, terrain, prevailing market 
     conditions, and projected costs to consumers. These 
     applicants for priority projects shall agree to performance 
     schedules which if missed make the borrower potentially 
     subject to stiff penalties. Detailed subrogation, disposition 
     of property, default, breach of agreement, attachment, and 
     audit provisions are designed to protect the interests of the 
     taxpayers.
       The Secretary may require an affiliate of the borrower to 
     indemnify the Government for any losses it incurs as a result 
     of a judgment against the borrower, and breach of the 
     borrower's obligations, or any violation of the provisions of 
     the Act.
       The sunset clause provides that the Secretary may not 
     approve a loan guarantee under this title after December 31, 
     2006.
     Section 2004. Retransmission of local television broadcast 
         stations
       Borrowers shall have the same copyright authority and other 
     rights to transmit the signals of local television broadcast 
     stations as provided in this title and shall carry the 
     signals of local stations without charge.
     Section 2005. Local television service in unserved and 
         underserved markets
       To encourage the FCC to approve needed licenses (or other 
     authorizations to use spectrum) to provide local TV service 
     in rural areas, the Commission is required to make 
     determinations regarding needed licenses within one year of 
     enactment.
       However, the FCC shall ensure that no license or 
     authorization provided under this section will cause 
     ``harmful interference'' to the primary users of the spectrum 
     or to public safety use. Subparagraph (2), states that the 
     Commission shall not license under subsection (a) any 
     facility that causes harmful interference to existing primary 
     users of spectrum or to public safety use. The Commission 
     typically categorizes a licensed service as primary or 
     secondary. Under Commission rules, a secondary service cannot 
     be authorized to operate in the same band as a

[[Page 29268]]

     primary user of that band unless the proposed secondary user 
     conclusively demonstrates that the proposed secondary use 
     will not cause harmful interference to the primary service. 
     The Commission is to define ``harmful interference'' pursuant 
     to the definition at 47 C.F.R. section 2.1 and in accordance 
     with Commission rules and policies.
       For purposes of section 2005(b)(3) the FCC may consider a 
     compression, reformatting or other technology to be 
     unreasonable if the technology is incompatible with other 
     applicable FCC regulation or policy under the Communications 
     Act of 1934, as amended.
       The Commission also may not restrict any entity granted a 
     license or other authorization under this section, except as 
     otherwise specified, from using any reasonable compression, 
     reformatting, or other technology.
     Section 2006. Definitions
       Section 2006 defines terms used in the title such as ``loan 
     guarantees,'' ``discount rate,'' ``loan guarantee,'' 
     ``modification,'' and ``borrower.''

              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

     Section 3001. Short title; references
       This section provides that the Act may be cited as the 
     ``Anticybersquatting Consumer Protection Act'' and that any 
     references within the bill to the Trademark Act of 1946 shall 
     be a reference to the Act entitled ``An Act to provide for 
     the registration and protection of trademarks used in 
     commerce, to carry out the provisions of certain 
     international conventions, and for other purposes,'' approved 
     July 5, 1946 (15 U.S.C. 1051 et seq.), also commonly referred 
     to as the Lanham Act.
     Sec. 3002. Cyberpiracy prevention
       Subsection (a). In general
       This subsection amends the Trademark Act to provide an 
     explicit trademark remedy for cybersquatting under a new 
     section 43(d). Under paragraph (1)(A) of the new section 
     43(d), actionable conduct would include the registration, 
     trafficking in, or use of a domain name that is identical or 
     confusingly similar to, or dilutive of, the mark of another, 
     including a personal name that is protected as a mark under 
     section 43 of the Lanham Act, provided that the mark was 
     distinctive (i.e., enjoyed trademark status) at the time the 
     domain name was registered, or in the case of trademark 
     dilution, was famous at the time the domain name was 
     registered. The bill is carefully and narrowly tailored, 
     however, to extend only to cases where the plaintiff can 
     demonstrate that the defendant registered, trafficked in, or 
     used the offending domain name with bad-faith intent to 
     profit from the goodwill of a mark belonging to someone else. 
     Thus, the bill does not extend to innocent domain name 
     registrations by those who are unaware of another's use of 
     the name, or even to someone who is aware of the trademark 
     status of the name but registers a domain name containing the 
     mark for any reason other than with bad faith intent to 
     profit from the goodwill associated with that mark.
       The phrase ``including a personal name which is protected 
     as a mark under this section'' addresses situations in which 
     a person's name is protected under section 43 of the Lanham 
     Act and is used as a domain name. The Lanham Act prohibits 
     the use of false designations of origin and false or 
     misleading representations. Protection under 43 of the Lanham 
     Act has been applied by the courts to personal names which 
     function as marks, such as service marks, when such marks are 
     infringed. Infringement may occur when the endorsement of 
     products or services in interstate commerce is falsely 
     implied through the use of a personal name, or otherwise, 
     without regard to the goods or services of the parties. This 
     protection also applies to domain names on the Internet, 
     where falsely implied endorsements and other types of 
     infringement can cause greater harm to the owner and 
     confusion to a consumer in a shorter amount of time than is 
     the case with traditional media. The protection offered by 
     section 43 to a personal name which functions as a mark, as 
     applied to domain names, is subject to the same fair use and 
     first amendment protections as have been applied 
     traditionally under trademark law, and is not intended to 
     expand or limit any rights to publicity recognized by States 
     under State law.
       Paragraph (1)(B)(i) of the new section 43(d) sets forth a 
     number of nonexclusive, nonexhaustive factors to assist a 
     court in determining whether the required bad-faith element 
     exists in any given case. These factors are designed to 
     balance the property interests of trademark owners with the 
     legitimate interests of Internet users and others who seek to 
     make lawful uses of others' marks, including for purposes 
     such as comparative advertising, comment, criticism, parody, 
     news reporting, fair use, etc. The bill suggests a total of 
     nine factors a court may wish to consider. The first four 
     suggest circumstances that may tend to indicate an absence of 
     bad-faith intent to profit from the goodwill of a mark, and 
     the next four suggest circumstances that may tend to indicate 
     that such bad-faith intent exists. The last factor may 
     suggest either bad-faith or an absence thereof depending on 
     the circumstances.
       First, under paragraph (1)(B)(i)(I), a court may consider 
     whether the domain name registrant has trademark or any other 
     intellectual property rights in the name. This factor 
     recognizes, as does trademark law in general, that there may 
     be concurring uses of the same name that are noninfringing, 
     such as the use of the ``Delta'' mark for both air travel and 
     sink faucets. Similarly, the registration of the domain name 
     ``deltaforce.com'' by a movie studio would not tend to 
     indicate a bad faith intent on the part of the registrant to 
     trade on Delta Airlines or Delta Faucets' trademarks.
       Second, under paragraph (1)(B)(i)(II), a court may consider 
     the extent to which the domain name is the same as the 
     registrant's own legal name or a nickname by which that 
     person is commonly identified. This factor recognizes, again 
     as does the concept of fair use in trademark law, that a 
     person should be able to be identified by their own name, 
     whether in their business or on a web site. Similarly, a 
     person may bear a legitimate nickname that is identical or 
     similar to a well-known trademark, such as in the well-
     publicized case of the parents who registered the domain name 
     ``pokey.org'' for their young son who goes by that name, and 
     these individuals should not be deterred by this bill from 
     using their name online. This factor is not intended to 
     suggest that domain name registrants may evade the 
     application of this act by merely adopting Exxon, Ford, or 
     other well-known marks as their nicknames. It merely provides 
     a court with the appropriate discretion to determine whether 
     or not the fact that a person bears a nickname similar to a 
     mark at issue is an indication of an absence of bad-faith on 
     the part of the registrant.
       Third, under paragraph (1)(B)(i)(III), a court may consider 
     the domain name registrant's prior use, if any, of the domain 
     name in connection with the bona fide offering of goods or 
     services. Again, this factor recognizes that the legitimate 
     use of the domain name in online commerce may be a good 
     indicator of the intent of the person registering that name. 
     Where the person has used the domain name in commerce without 
     creating a likelihood of confusion as to the source or origin 
     of the goods or services and has not otherwise attempted to 
     use the name in order to profit from the goodwill of the 
     trademark owner's name, a court may look to this as an 
     indication of the absence of bad faith on the part of the 
     registrant.
       Fourth, under paragraph (1)(B)(i)(IV), a court may consider 
     the person's bona fide noncommercial or fair use of the mark 
     in a web site that is accessible under the domain name at 
     issue. This factor is intended to balance the interests of 
     trademark owners with the interests of those who would make 
     lawful noncommercial or fair uses of others' marks online, 
     such as in comparative advertising, comment, criticism, 
     parody, news reporting, etc. Under the bill, the mere fact 
     that the domain name is used for purposes of comparative 
     advertising, comment, criticism, parody, news reporting, 
     etc., would not alone establish a lack of bad-faith intent. 
     The fact that a person uses a mark in a site in such a lawful 
     manner may be an appropriate indication that the person's 
     registration or use of the domain name lacked the required 
     element of bad-faith. This factor is not intended to create a 
     loophole that otherwise might swallow the bill, however, by 
     allowing a domain name registrant to evade application of the 
     Act by merely putting up a noninfringing site under an 
     infringing domain name. For example, in the well know case of 
     Panavision Int'l v. Toeppen, 141 F.3d 1316 (9th Cir. 1998), a 
     well known cybersquatter had registered a host of domain 
     names mirroring famous trademarks, including names for 
     Panavision, Delta Airlines, Neiman Marcus, Eddie Bauer, 
     Lufthansa, and more than 100 other marks, and had attempted 
     to sell them to the mark owners for amounts in the range of 
     $10,000 to $15,000 each. His use of the ``panavision.com'' 
     and ``panaflex.com'' domain names was seemingly more 
     innocuous, however, as they served as addresses for sites 
     that merely displayed pictures of Pana Illinois and the word 
     ``Hello'' respectively. This bill would not allow a person to 
     evade the holding of that case--which found that Mr. Toeppen 
     had made a commercial use of the Panavision marks and that 
     such uses were, in fact, diluting under the Federal Trademark 
     Dilution Act--merely by posting noninfringing uses of the 
     trademark on a site accessible under the offending domain 
     name, as Mr. Toeppen did. Similarly, the bill does not affect 
     existing trademark law to the extent it has addressed the 
     interplay between First Amendment protections and the rights 
     of trademark owners. Rather, the bill gives courts the 
     flexibility to weigh appropriate factors in determining 
     whether the name was registered or used in bad faith, and it 
     recognizes that one such factor may be the use the domain 
     name registrant makes of the mark.
       Fifth, under paragraph (1)(B)(i)(V), a court may consider 
     whether, in registering or using the domain name, the 
     registrant intended to divert consumers away from the 
     trademark owner's website to a website that could harm the 
     goodwill of the mark, either for purposes of commercial gain 
     or with the intent to tarnish or disparage the mark, by 
     creating a likelihood of confusion as to the

[[Page 29269]]

     source, sponsorship, affiliation, or endorsement of the site. 
     This factor recognizes that one of the main reasons 
     cybersquatters use other people's trademarks is to divert 
     Internet users to their own sites by creating confusion as to 
     the source, sponsorship, affiliation, or endorsement of the 
     site. This is done for a number of reasons, including to pass 
     off inferior goods under the name of a well-known mark 
     holder, to defraud consumers into providing personally 
     identifiable information, such as credit card numbers, to 
     attract ``eyeballs'' to sites that price online advertising 
     according to the number of ``hits'' the site receives, or 
     even just to harm the value of the mark. Under this 
     provision, a court may give appropriate weight to evidence 
     that a domain name registrant intended to confuse or deceive 
     the public in this manner when making a determination of bad-
     faith intent.
       Sixth, under paragraph (1)(B)(i)(VI), a court may consider 
     a domain name registrant's offer to transfer, sell, or 
     otherwise assign the domain name to the mark owner or any 
     third party for financial gain, where the registrant has not 
     used, and did not have any intent to use, the domain name in 
     the bona fide offering of any goods or services. A court may 
     also consider a person's prior conduct indicating a pattern 
     of such conduct. This factor is consistent with the court 
     cases, like the Panavision case mentioned above, where courts 
     have found a defendant's offer to sell the domain name to the 
     legitimate mark owner as being indicative of the defendant's 
     intent to trade on the value of a trademark owner's marks by 
     engaging in the business of registering those marks and 
     selling them to the rightful trademark owners. It does not 
     suggest that a court should consider the mere offer to sell a 
     domain name to a mark owner or the failure to use a name in 
     the bona fide offering of goods or services as sufficient to 
     indicate bad faith. Indeed, there are cases in which a person 
     registers a name in anticipation of a business venture that 
     simply never pans out. And someone who has a legitimate 
     registration of a domain name that mirrors someone else's 
     domain name, such as a trademark owner that is a lawful 
     concurrent user of that name with another trademark owner, 
     may, in fact, wish to sell that name to the other trademark 
     owner. This bill does not imply that these facts are an 
     indication of bad-faith. It merely provides a court with the 
     necessary discretion to recognize the evidence of bad-faith 
     when it is present. In practice, the offer to sell domain 
     names for exorbitant amounts to the rightful mark owner has 
     been one of the most common threads in abusive domain name 
     registrations. Finally, by using the financial gain standard, 
     this paragraph allows a court to examine the motives of the 
     seller.
       Seventh, under paragraph (1)(B)(i)(VII), a court may 
     consider the registrant's intentional provision of material 
     and misleading false contact information in an application 
     for the domain name registration, the person's intentional 
     failure to maintain accurate contact information, and the 
     person's prior conduct indicating a pattern of such conduct. 
     Falsification of contact information with the intent to evade 
     identification and service of process by trademark owners is 
     also a common thread in cases of cybersquatting. This factor 
     recognizes that fact, while still recognizing that there may 
     be circumstances in which the provision of false information 
     may be due to other factors, such as mistake or, as some have 
     suggested in the case of political dissidents, for purposes 
     of anonymity. This bill balances those factors by limiting 
     consideration to the person's contact information, and even 
     then requiring that the provision of false information be 
     material and misleading. As with the other factors, this 
     factor is nonexclusive and a court is called upon to make a 
     determination based on the facts presented whether or not the 
     provision of false information does, in fact, indicate bad-
     faith.
       Eight, under paragraph (1)(B)(i)(VIII), a court may 
     consider the domain name registrant's acquisition of multiple 
     domain names which the person knows are identical or 
     confusingly similar to, or dilutive of, others' marks. This 
     factor recognizes the increasingly common cybersquatting 
     practice known as ``warehousing'', in which a cybersquatter 
     registers multiple domain names--sometimes hundreds, even 
     thousands--that mirror the trademarks of others. By sitting 
     on these marks and not making the first move to offer to sell 
     them to the mark owner, these cybersquatters have been 
     largely successful in evading the case law developed under 
     the Federal Trademark Dilution Act. This bill does not 
     suggest that the mere registration of multiple domain names 
     is an indication of bad faith, but it allows a court to weigh 
     the fact that a person has registered multiple domain names 
     that infringe or dilute the trademarks of others as part of 
     its consideration of whether the requisite bad-faith intent 
     exists.
       Lastly, under paragraph (1)(B)(i)(IX), a court may consider 
     the extent to which the mark incorporated in the person's 
     domain name registration is or is not distinctive and famous 
     within the meaning of subsection (c)(1) of section 43 of the 
     Trademark Act of 1946. The more distinctive or famous a mark 
     has become, the more likely the owner of that mark is 
     deserving of the relief available under this act. At the same 
     time, the fact that a mark is not well-known may also suggest 
     a lack of bad-faith.
       Paragraph (1)(B)(ii) underscores the bad-faith requirement 
     by making clear that bad-faith shall not be found in any case 
     in which the court determines that the person believed and 
     had reasonable grounds to believe that the use of the domain 
     name was a fair use or otherwise lawful.
       Paragraph (1)(C) makes clear that in any civil action 
     brought under the new section 43(d), a court may order the 
     forfeiture, cancellation, or transfer of a domain name to the 
     owner of the mark.
       Paragraph (1)(D) clarifies that a prohibited ``use'' of a 
     domain name under the bill applies only to a use by the 
     domain name registrant or that registrant's authorized 
     licensee.
       Paragraph (1)(E) defines what means to ``traffic in'' a 
     domain name. Under this Act, ``traffics in'' refers to 
     transactions that include, but are not limited to, sales, 
     purchases, loans, pledges, licenses, exchanges of currency, 
     and any other transfer for consideration or receipt in 
     exchange for consideration.
       Paragraph (2)(A) provides for in rem jurisdiction, which 
     allows a mark owner to seek the forfeiture, cancellation, or 
     transfer of an infringing domain name by filing an in rem 
     action against the name itself, where the mark owner has 
     satisfied the court that it has exercised due diligence in 
     trying to locate the owner of the domain name but is unable 
     to do so, or where the mark owner is otherwise unable to 
     obtain in personam jurisdiction over such person. As 
     indicated above, a significant problem faced by trademark 
     owners in the fight against cybersquatting is the fact that 
     many cybersquatters register domain names under aliases or 
     otherwise provide false information in their registration 
     applications in order to avoid identification and service of 
     process by the mark owner. This bill will alleviate this 
     difficulty, while protecting the notions of fair play and 
     substantial justice, by enabling a mark owner to seek an 
     injunction against the infringing property in those cases 
     where, after due diligence, a mark owner is unable to proceed 
     against the domain name registrant because the registrant has 
     provided false contact information and is otherwise not to be 
     found, or where a court is unable to assert personal 
     jurisdiction over such person, provided the mark owner can 
     show that the domain name itself violates substantive federal 
     trademark law (i.e., that the domain name violates the rights 
     of the registrant of a mark registered in the Patent and 
     Trademark Office, or section 43(a) or (c) of the Trademark 
     Act). Under the bill, a mark owner will be deemed to have 
     exercised due diligence in trying to find a defendant if the 
     mark owner sends notice of the alleged violation and intent 
     to proceed to the domain name registrant at the postal and e-
     mail address provided by the registrant to the registrar and 
     publishes notice of the action as the court may direct 
     promptly after filing the action. Such acts are deemed to 
     constitute service of process by paragraph (2)(B).
       The concept of in rem jurisdiction has been with us since 
     well before the Supreme Court's landmark decision in Pennoyer 
     v. Neff, 95 U.S. 714 (1877). Although more recent decisions 
     have called into question the viability of quasi in rem 
     ``attachment'' jurisdiction, see Shaffer v. Heitner, 433 U.S. 
     186 (1977), the Court has expressly acknowledged the 
     propriety of true in rem proceedings (or even type I quasi in 
     rem proceedings \5\) where ``claims to the property itself 
     are the source of the underlying controversy between the 
     plaintiff and the defendant.'' Id. at 207-08. The Act 
     clarifies the availability of in rem jurisdiction in 
     appropriate cases involving claims by trademark holders 
     against cyberpirates. In so doing, the Act reinforces the 
     view that in rem jurisdiction has continuing constitutional 
     vitality, see R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 
     957-58 (4th Cir. 1999) (``In rem actions only require that a 
     party seeking an interest in a res bring the res into the 
     custody of the court and provide reasonable, public notice of 
     its intention to enable others to appear in the action to 
     claim an interest in the res.''); Chapman v. Vande Bunte, 604 
     F. Supp. 714, 716-17 (E.D. N.C. 1985) (``In a true in rem 
     proceeding, in order to subject property to a judgment in 
     rem, due process requires only that the property itself have 
     certain minimum contacts with the territory of the forum.'').
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     \5\ The Supreme Court has described the ``two types'' of 
     quasi in rem proceedings: a type I proceeding, in which ``the 
     plaintiff is seeking to secure a pre-existing claim in the 
     subject property and to extinguish or establish the 
     nonexistence of similar interests of particular persons,'' 
     and a type II action, in which ``the plaintiff seeks to apply 
     what he concedes to be the property of the defendant to the 
     satisfaction of a claim against him.'' Hanson v. Denckla, 357 
     U.S. 235, 246 n.12 (1958).
---------------------------------------------------------------------------
       By authorizing in rem jurisdiction, the Act also attempts 
     to respond to the problems faced by trademark holders in 
     attempting to effect personal service of process on 
     cyberpirates. In an effort to avoid being held accountable 
     for their infringement or dilution of famous trademarks, 
     cyberpirates often have registered domain names under 
     fictitious names and addresses or have used

[[Page 29270]]

     offshore addresses or companies to register domain names. 
     Even when they actually do receive notice of a trademark 
     holder's claim, cyberpirates often either refuse to 
     acknowledge demands from a trademark holder altogether, or 
     simply respond to an initial demand and then ignore all 
     further efforts by the trademark holder to secure the 
     cyberpirate's compliance. The in rem provisions of the Act 
     accordingly contemplate that a trademark holder may initiate 
     in rem proceedings in cases where domain name registrants are 
     not subject to personal jurisdiction or cannot reasonably be 
     found by the trademark holder.
       Paragraph (2)(C) provides that in an in rem proceeding, a 
     domain name shall be deemed to have its situs in the judicial 
     district in which (1) the domain name registrar, registry, or 
     other domain name authority that registered or assigned the 
     domain name is located, or (2) documents sufficient to 
     establish control and authority regarding the disposition of 
     the registration and use of the domain name are deposited 
     with the court.
       Paragraph (2)(D) limits the relief available in such an in 
     rem action to an injunction ordering the forfeiture, 
     cancellation, or transfer of the domain name. Upon receipt of 
     a written notification of the complaint, the domain name 
     registrar, registry, or other authority is required to 
     deposit with the court documents sufficient to establish the 
     court's control and authority regarding the disposition of 
     the registration and use of the domain name to the court, and 
     may not transfer, suspend, or otherwise modify the domain 
     name during the pendency of the action, except upon order of 
     the court. Such domain name registrar, registry, or other 
     authority is immune from injunctive or monetary relief in 
     such an action, except in the case of bad faith or reckless 
     disregard, which would include a willful failure to comply 
     with any such court order.
       Paragraph (3) makes clear that the new civil action created 
     by this Act and the in rem action established therein, and 
     any remedies available under such actions, shall be in 
     addition to any other civil action or remedy otherwise 
     applicable. This paragraph thus makes clear that the creation 
     of a new section 43(d) in the Trademark Act does not in any 
     way limit the application of current provisions of trademark, 
     unfair competition and false advertising, or dilution law, or 
     other remedies under counterfeiting or other statutes, to 
     cybersquatting cases.
       Paragraph (4) makes clear that the in rem jurisdiction 
     established by the bill is in addition to any other 
     jurisdiction that otherwise exists, whether in rem or in 
     personam.
       Subsection (b). Cyberpiracy protection for individuals
       Subsection (b) prohibits the registration of a domain name 
     that is the name of another living person, or a name that is 
     substantially and confusingly similar thereto, without such 
     person's permission, if the registrant's specific intent is 
     to profit from the domain name by selling it for financial 
     gain to such person or a third party. While the provision is 
     broad enough to apply to the registration of full names 
     (e.g., johndoe.com), appellations (e.g., doe.com), and 
     variations thereon (e.g. john-doe.com or jondoe.com), the 
     provision is still very narrow in that it requires a showing 
     that the registrant of the domain name registered that name 
     with a specific intent to profit from the name by selling it 
     to that person or to a third party for financial gain. This 
     section authorizes the court to grant injunctive relief, 
     including ordering the forfeiture or cancellation of the 
     domain name or the transfer of the domain name to the 
     plaintiff. Although the subsection does not authorize a court 
     to grant monetary damages, the court may award costs and 
     attorneys' fees to the prevailing party in appropriate cases.
       This subsection does not prohibit the registration of a 
     domain name in good faith by an owner or licensee of a 
     copyrighted work, such as an audiovisual work, a sound 
     recording, a book, or other work of authorship, where the 
     personal name is used in, affiliated with, or related to that 
     work, where the person's intent in registering the domain is 
     not to sell the domain name other than in conjunction with 
     the lawful exploitation of the work, and where such 
     registration is not prohibited by a contract between the 
     domain name registered and the named person. This limited 
     exemption recognizes the First Amendment issues that may 
     arise in such cases and defers to existing bodies of law that 
     have developed under State and Federal law to address such 
     uses of personal names in conjunction with works of 
     expression. Such an exemption is not intended to provide a 
     loophole for those whose specific intent is to profit from 
     another's name by selling the domain name to that person or a 
     third party other than in conjunction with the bona fide 
     exploitation of a legitimate work of authorship. For example, 
     the registration of a domain name containing a personal name 
     by the author of a screenplay that bears the same name, with 
     the intent to sell the domain name in conjunction with the 
     sale or license of the screenplay to a production studio 
     would not be barred by this subsection, although other 
     provisions of State or Federal law may apply. On the other 
     hand, the exemption for good faith registrations of domain 
     names tied to legitimate works of authorship would not exempt 
     a person who registers a personal name as a domain name with 
     the intent to sell the domain name by itself, or in 
     conjunction with a work of authorship (e.g., a copyrighted 
     web page) where the real object of the sale is the domain 
     name, rather than the copyrighted work.
       In sum, this subsection is a narrow provision intended to 
     curtail one form of ``cybersquatting''--the act of 
     registering someone else's name as a domain name for the 
     purpose of demanding remuneration from the person in exchange 
     for the domain name. Neither this section nor any other 
     section in this bill is intended to create a right of 
     publicity of any kind with respect to domain names. Nor is it 
     intended to create any new property rights, intellectual or 
     otherwise, in a domain name that is the name of a person. 
     This subsection applies prospectively only, affecting only 
     those domain names registered on or after the date of 
     enactment of this Act.
     Sec. 3003. Damages and remedies
       This section applies traditional trademark remedies, 
     including injunctive relief, recovery of defendant's profits, 
     actual damages, and costs, to cybersquatting cases under the 
     new section 43(d) of the Trademark Act. The bill also amends 
     section 35 of the Trademark Act to provide for statutory 
     damages in cybersquatting cases, in an amount of not less 
     than $1,000 and not more than $100,000 per domain name, as 
     the court considers just.
     Sec. 3004. Limitation on liability
       This section amends section 32(2) of the Trademark Act to 
     extend the Trademark Act's existing limitations on liability 
     to the cybersquatting context. This section also creates a 
     new subparagraph (D) in section 32(2) to encourage domain 
     name registrars and registries to work with trademark owners 
     to prevent cybersquatting through a limited exemption from 
     liability for domain name registrars and registries that 
     suspend, cancel, or transfer domain names pursuant to a court 
     order or in the implementation of a reasonable policy 
     prohibiting cybersquatting. Under this exemption, a 
     registrar, registry, or other domain name registration 
     authority that suspends, cancels, or transfers a domain name 
     pursuant to a court order or a reasonable policy prohibiting 
     cybersquatting will not be held liable for monetary damages, 
     and will not be subject to injunctive relief provided that 
     the registrar, registry, or other registration authority has 
     deposited control of the domain name with a court in which an 
     action has been filed regarding the disposition of the domain 
     name, it has not transferred, suspended, or otherwise 
     modified the domain name during the pendency of the action, 
     other than in response to a court order, and it has not 
     willfully failed to comply with any such court order. Thus, 
     the exemption will allow a domain name registrar, registry, 
     or other registration authority to avoid being joined in a 
     civil action regarding the disposition of a domain name that 
     has been taken down pursuant to a dispute resolution policy, 
     provided the court has obtained control over the name from 
     the registrar, registry, or other registration authority, but 
     such registrar, registry, or other registration authority 
     would not be immune from suit for injunctive relief where no 
     such action has been filed or where the registrar, registry, 
     or other registration authority has transferred, suspended, 
     or otherwise modified the domain name during the pendency of 
     the action or wilfully failed to comply with a court order.
       This section also protects the rights of domain name 
     registrants against overreaching trademark owners. Under a 
     new subparagraph (D)(iv) in section 32(2), a trademark owner 
     who knowingly and materially misrepresents to the domain name 
     registrar or registry that a domain name is infringing shall 
     be liable to the domain name registrant for damages resulting 
     from the suspension, cancellation, or transfer of the domain 
     name. In addition, the court may grant injunctive relief to 
     the domain name registrant by ordering the reactivation of 
     the domain name or the transfer of the domain name back to 
     the domain name registrant. In creating a new subparagraph 
     (D)(iii) of section 32(2), this section codifies current case 
     law limiting the secondary liability of domain name 
     registrars and registries for the act of registration of a 
     domain name, absent bad-faith on the part of the registrar 
     and registry.
       Finally, subparagraph (D)(v) provides additional 
     protections for domain name holders by allowing a domain name 
     registrant whose name has been suspended, disabled, or 
     transferred to file a civil action to establish that the 
     registration or use of the domain name by such registrant is 
     not a violation of the Lanham Act. In such cases, a court may 
     grant injunctive relief to the domain name registrant, 
     including the reactivation of the domain name or transfer of 
     the domain name to the domain name registrant.
     Sec. 3005. Definitions
       This section amends the Trademark Act's definitions section 
     (section 45) to add definitions for key terms used in this 
     Act. First, the term ``Internet'' is defined consistent with 
     the meaning given that term in the Communications Act (47 
     U.S.C. 230(f)(1)).

[[Page 29271]]

     Second, this section creates a narrow definition of ``domain 
     name'' to target the specific bad faith conduct sought to be 
     addressed while excluding such things as screen names, file 
     names, and other identifiers not assigned by a domain name 
     registrar or registry.
     Sec. 3006. Study on abusive domain name registrations 
         involving personal names
       This section directs the Secretary of Commerce, in 
     consultation with the Patent and Trademark Office and the 
     Federal Election Commission, to conduct a study and report to 
     Congress with recommendations on guidelines and procedures 
     for resolving disputes involving the registration or use of 
     domain names that include personal names of others or names 
     that are confusingly similar thereto. This section further 
     directs the Secretary of Commerce to collaborate with the 
     Internet Corporation for Assigned Names and Numbers (ICANN) 
     to develop guidelines and procedures for resolving disputes 
     involving the registration or use of domain names that 
     include personal names of others or names that are 
     confusingly similar thereto.
     Sec. 3007. Historic preservation
       This section provides a limited immunity from suit under 
     trademark law for historic buildings that are on or eligible 
     for inclusion on the National Register of Historic Places, or 
     that are designated as an individual landmark or as a 
     contributing building in a historic district.
     Sec. 3008. Savings clause
       This section provides an explicit savings clause making 
     clear that the bill does not affect traditional trademark 
     defenses, such as fair use, or a person's first amendment 
     rights.
     Sec. 3009. Effective date
       This section provides that damages provided for under this 
     bill shall not apply to the registration, trafficking, or use 
     of a domain name that took place prior to the enactment of 
     this Act.

                     TITLE VI--INVENTOR PROTECTION

     Sec. 4001. Short title
       This title may be cited as the ``American Inventors 
     Protection Act of 1999.''
     Sec. 4002. Table of contents
       Section 4002 enumerates the table of contents of this 
     title.

                     Subtitle A--Inventors' Rights

       Subtitle A creates a new section 297 in chapter 29 of title 
     35 of the United States Code, designed to curb the deceptive 
     practices of certain invention promotion companies. Many of 
     these companies advertise on television and in magazines that 
     inventors may call a toll-free number for assistance in 
     marketing their inventions. They are sent an invention 
     evaluation form, which they are asked to complete to allow 
     the promoter to provide expert analysis of the market 
     potential of their inventions. The inventors return the form 
     with descriptions of the inventions, which become the basis 
     for contacts by salespeople at the promotion companies. The 
     next step is usually a ``professional''-appearing product 
     research report which contains nothing more than boilerplate 
     information stating that the invention has outstanding market 
     potential and fills an important need in the field. The 
     promotion companies attempt to convince the inventor to buy 
     their marketing services, normally on a sliding scale in 
     which the promoter will ask for a front-end payment of up to 
     $10,000 and a percentage of resulting profits, or a reduced 
     front-end payment of $6,000 or $8,000 with commensurately 
     larger royalties on profits. Once paid under such a scenario, 
     a promoter will typically and only forward information to a 
     list of companies that never respond.
       This subtitle addresses these problems by (1) requiring an 
     invention promoter to disclose certain materially relevant 
     information to a customer in writing prior to entering into a 
     contract for invention promotion services; (2) establishing a 
     federal cause of action for inventors who are injured by 
     material false or fraudulent statements or representations, 
     or any omission of material fact, by an invention promoter, 
     or by the invention promoter's failure to make the required 
     written disclosures; and (3) requiring the Director of the 
     United States Patent and Trademark Office to make publicly 
     available complaints received involving invention promoters, 
     along with the response to such complaints, if any, from the 
     invention promoters.
     Sec. 4101. Short title
       This subtitle may be cited as the ``Inventors' Rights Act 
     of 1999.''
     Sec. 4102. Integrity in invention promotion services
       This section adds a new section 297 to chapter 29 of title 
     35, United States Code, intended to promote integrity in 
     invention promotion services. Legitimate invention assistance 
     and development organizations can be of great assistance to 
     novice inventors by providing information on how to protect 
     an invention, how to develop it, how to obtain financing to 
     manufacture it, or how to license or sell the invention. 
     While many invention developers are legitimate, the 
     unscrupulous ones take advantage of untutored inventors, 
     asking for large sums of money up front for which they 
     provide no real service in return. This new section provides 
     a much needed safeguard to assist independent inventors in 
     avoiding becoming victims of the predatory practices of 
     unscrupulous invention promoters.
       New section 297(a) of title 35 requires an invention 
     promoter to disclose certain materially relevant information 
     to a customer in writing prior to entering into a contract 
     for invention promotion services. Such information includes: 
     (1) The number of inventions evaluated by the invention 
     promoter and stating the number of those evaluated positively 
     and the number negatively; (2) The number of customers who 
     have contracted for services with the invention promoter in 
     the prior five years; (3) The number of customers known by 
     the invention promoter to have received a net financial 
     profit as a direct result of the invention promoter's 
     services; (4) The number of customers known by the invention 
     promoter to have received license agreements for their 
     inventions as a direct result of the invention promoter's 
     services; and (5) the names and addresses of all previous 
     invention promotion companies with which the invention 
     promoter or its officers have collectively or individually 
     been affiliated in the previous 10 years to enable the 
     customer to evaluate the reputations of these companies.
       New section 297(b) of title 35 establishes a civil cause of 
     action against any invention promoter who injures a customer 
     through any material false or fraudulent statement, 
     representation, or omission of material fact by the invention 
     promoter, or any person acting on behalf of the invention 
     promoter, or through failure of the invention promoter to 
     make all the disclosures required under subsection (a). In 
     such a civil action, the customer may recover, in addition to 
     reasonable costs and attorneys' fees, the amount of actual 
     damages incurred by the customer or, at the customer's 
     election, statutory damages up to $5,000, as the court 
     considers just. Subsection (b)(2) authorizes the court to 
     increase damages to an amount not to exceed three times the 
     amount awarded as statutory or actual damages in a case where 
     the customer demonstrates, and the court finds, that the 
     invention promoter intentionally misrepresented or omitted a 
     material fact to such customer, or failed to make the 
     required disclosures under subsection (a), for the purpose of 
     deceiving the customer. In determining the amount of 
     increased damages, courts may take into account whether 
     regulatory sanctions or other corrective action has been 
     taken as a result of previous complaints against the 
     invention promoter.
       New section 297(c) defines the terms used in the section. 
     These definitions are carefully crafted to cover true 
     invention promoters without casting the net too broadly. 
     Paragraph (3) excepts from the definition of ``invention 
     promoter'' departments and agencies of the Federal, state, 
     and local governments; any nonprofit, charitable, scientific, 
     or educational organizations qualified under applicable State 
     laws or described under Sec. 170(b)(1)(A) of the Internal 
     Revenue Code of 1986; persons or entities involved in 
     evaluating the commercial potential of, or offering to 
     license or sell, a utility patent or a previously filed 
     nonprovisional utility patent application; any party 
     participating in a transaction involving the sale of the 
     stock or assets of a business; or any party who directly 
     engages in the business of retail sales or distribution of 
     products. Paragraph (4) defines the term ``invention 
     promotion services'' to mean the procurement or attempted 
     procurement for a customer of a firm, corporation, or other 
     entity to develop and market products or services that 
     include the customer's invention.
       New section 297(d) requires the Director of the USPTO to 
     make publicly available all complaints submitted to the USPTO 
     regarding invention promoters, together with any responses by 
     invention promoters to those complaints. The Director is 
     required to notify the invention promoter of a complaint and 
     provide a reasonable opportunity to reply prior to making 
     such complaint public. Section 297(d)(2) authorizes the 
     Director to request from Federal and State agencies copies of 
     any complaints relating to invention promotion services they 
     have received and to include those complaints in the records 
     maintained by the USPTO regarding invention promotion 
     services. It is anticipated that the Director will use 
     appropriate discretion in making such complaints available to 
     the public for a reasonably sufficient, yet limited, length 
     of time, such as a period of three years from the date of 
     receipt, and that the Director will consult with the Federal 
     Trade Commission to determine whether the disclosure 
     requirements of the FTC and section 297(a) can be 
     coordinated.
     Sec. 4103. Effective date
       This section provides that the effective date of section 
     297 will be 60 days after the date of enactment of this Act.

             Subtitle B--Patent and Trademark Fee Fairness

       Subtitle B provides patent and trademark fee reform, by 
     lowering patent fees, by directing the Director of the USPTO 
     to study alternative fee structures to encourage full 
     participation in our patent system by all inventors, large 
     and small, and by strengthening the prohibition against the 
     use of trademark fees for non-trademark uses.

[[Page 29272]]


     Sec. 4201. Short title
       This subtitle may be cited as the ``Patent and Trademark 
     Fee Fairness Act of 1999.''
       Sec. 4202. Adjustment of patent fees
       This section reduces patent filing and reissue fees by $50, 
     and reduces patent maintenance fees by $110. This would mark 
     only the second time in history that patent fees have been 
     reduced. Because trademark fees have not been increased since 
     1993 and because of the application of accounting based cost 
     principles and systems, patent fee income has been partially 
     offsetting the cost of trademark operations. This section 
     will restore fairness to patent and trademark fees by 
     reducing patent fees to better reflect the cost of services.
     Sec. 4203. Adjustment of trademark fees
       This section will allow the Director of the USPTO to adjust 
     trademark fees in fiscal year 2000 without regard to 
     fluctuations in the Consumer Price Index in order to better 
     align those fees with the costs of services.
     Sec. 4204. Study on alternative fee structures
       This section directs the Director of the USPTO to conduct a 
     study and report to the Judiciary Committees of the House and 
     Senate within one year on alternative fee structures that 
     could be adopted by the USPTO to encourage maximum 
     participation in the patent system by the American inventor 
     community.
     Sec. 4205. Patent and Trademark Office funding
       Pursuant to section 42(c) of the Patent Act, fees available 
     to the Commissioner under section 31 of the Trademark Act of 
     1946 \6\ may be used only for the processing of trademark 
     registrations and for other trademark-related activities, and 
     to cover a proportionate share of the administrative costs of 
     the USPTO. In an effort to more tightly ``fence'' trademark 
     funds for trademark purposes, section 4205 amends this 
     language such that all (trademark) fees available to the 
     Commissioner shall be used for trademark registration and 
     other trademark-related purposes. In other words, the 
     Commissioner may exercise no discretion when spending funds; 
     they must be earmarked for trademark purposes.
---------------------------------------------------------------------------
     \6\ 615 U.S.C. Sec. 1051, et seq.
---------------------------------------------------------------------------

                   Subtitle C--First Inventor Defense

       Subtitle C strikes an equitable balance between the 
     interests of U.S. inventors who have invented and 
     commercialized business methods and processes, many of which 
     until recently were thought not to be patentable, and U.S. or 
     foreign inventors who later patent the methods and processes. 
     The subtitle creates a defense for inventors who have reduced 
     an invention to practice in the U.S. at least one year before 
     the patent filing date of another, typically later, inventor 
     and commercially used the invention in the U.S. before the 
     filing date. A party entitled to the defense must not have 
     derived the invention from the patent owner. The bill 
     protects the patent owner by providing that the establishment 
     of the defense by such an inventor or entrepreneur does not 
     invalidate the patent.
       The subtitle clarifies the interface between two key 
     branches of intellectual property law--patents and trade 
     secrets. Patent law serves the public interest by encouraging 
     innovation and investment in new technology, and may be 
     thought of as providing a right to exclude other parties from 
     an invention in return for the inventor making a public 
     disclosure of the invention. Trade secret law, however, also 
     serves the public interest by protecting investments in new 
     technology. Trade secrets have taken on a new importance with 
     an increase in the ability to patent all business methods and 
     processes. It would be administratively and economically 
     impossible to expect any inventor to apply for a patent on 
     all methods and processes now deemed patentable. In order to 
     protect inventors and to encourage proper disclosure, this 
     subtitle focuses on methods for doing and conducting 
     business, including methods used in connection with internal 
     commercial operations as well as those used in connection 
     with the sale or transfer of useful end results--whether in 
     the form of physical products, or in the form of services, or 
     in the form of some other useful results; for example, 
     results produced through the manipulation of data or other 
     inputs to produce a useful result.
       The earlier-inventor defense is important to many small and 
     large businesses, including financial services, software 
     companies, and manufacturing firms--any business that relies 
     on innovative business processes and methods. The 1998 
     opinion by the U.S. Court of Appeals for the Federal Circuit 
     in State Street Bank and Trust Co. v. Signature Financial 
     Group,\7\ which held that methods of doing business are 
     patentable, has added to the urgency of the issue. As the 
     Court noted, the reference to the business method exception 
     had been improperly applied to a wide variety of processes, 
     blurring the essential question of whether the invention 
     produced a ``useful, concrete, and tangible result.'' In the 
     wake of State Street, thousands of methods and processes used 
     internally are now being patented. In the past, many 
     businesses that developed and used such methods and processes 
     thought secrecy was the only protection available. Under 
     established law, any of these inventions which have been in 
     commercial use--public or secret--for more than one year 
     cannot now be the subject of a valid U.S. patent.
---------------------------------------------------------------------------
     \7\ 149 F.3d 1368 (Fed. Cir. 1998) [hereinafter State 
     Street].
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     Sec. 4301. Short title
       This subtitle may be cited as the ``First Inventor Defense 
     Act of 1999.''
     Sec.4302. Defense to patent infringement based on earlier 
         inventor
       In establishing the defense, subsection (a) of section 4302 
     creates a new section 273 of the Patent Act, which in 
     subsection (a) sets forth the following definitions:
       (1) ``Commercially used and commercial use'' mean use of 
     any method in the United States so long as the use is in 
     connection with an internal commercial use or an actual sale 
     or transfer of a useful end result;
       (2) ``Commercial use as applied to a nonprofit research 
     laboratory and nonprofit entities such as a university, 
     research center, or hospital intended to benefit the public'' 
     means that such entities may assert the defense only based on 
     continued use by and in the entities themselves, but that the 
     defense is inapplicable to subsequent commercialization or 
     use outside the entities;
       (3) ``Method'' means any method for doing or conducting an 
     entity's business; and
       (4) ``Effective filing date'' means the earlier of the 
     actual filing date of the application for the patent or the 
     filing date of any earlier U.S., foreign, or international 
     application to which the subject matter at issue is entitled 
     under the Patent Act.
       To be ``commercially used'' or in ``commercial use'' for 
     purposes of subsection (a), the use must be in connection 
     with either an internal commercial use or an actual arm's- 
     length sale or other arm's-length commercial transfer of a 
     useful end result. The method that is the subject matter of 
     the defense may be an internal method for doing business, 
     such as an internal human resources management process, or a 
     method for conducting business such as a preliminary or 
     intermediate manufacturing procedure, which contributes to 
     the effectiveness of the business by producing a useful end 
     result for the internal operation of the business or for 
     external sale. Commercial use does not require the subject 
     matter at issue to be accessible to or otherwise known to the 
     public.
       Subject matter that must undergo a premarketing regulatory 
     review period during which safety or efficacy is established 
     before commercial marketing or use is considered to be 
     commercially used and in commercial use during the regulatory 
     review period.
       The issue of whether an invention is a method is to be 
     determined based on its underlying nature and not on the 
     technicality of the form of the claims in the patent. For 
     example, a method for doing or conducting business that has 
     been claimed in a patent as a programmed machine, as in the 
     State Street case, is a method for purposes of section 273 if 
     the invention could have as easily been claimed as a method. 
     Form should not rule substance.
       Subsection (b)(1) of section 273 establishes a general 
     defense against infringement under section 271 of the Patent 
     Act. Specifically, a person will not be held liable with 
     respect to any subject matter that would otherwise infringe 
     one or more claims to a method in another party's patent if 
     the person:
       (1) Acting in good faith, actually reduced the subject 
     matter to practice at least one year before the effective 
     filing date of the patent; and
       (2) Commercially used the subject matter before the 
     effective filing date of the patent.
       The first inventor defense is not limited to methods in any 
     particular industry such as the financial services industry, 
     but applies to any industry which relies on trade secrecy for 
     protecting methods for doing or conducting the operations of 
     their business.
       Subsection (b)(2) states that the sale or other lawful 
     disposition of a useful end result produced by a patented 
     method, by a person entitled to assert a section 273 defense, 
     exhausts the patent owner's rights with respect to that end 
     result to the same extent such rights would have been 
     exhausted had the sale or other disposition been made by the 
     patent owner. For example, if a purchaser would have had the 
     right to resell a product or other end result if bought from 
     the patent owner, the purchaser will have the same right if 
     the product is purchased from a person entitled to a section 
     273 defense.
       Subsection (b)(3) creates limitations and qualifications on 
     the use of the defense. First, a person may not assert the 
     defense unless the invention for which the defense is 
     asserted is for a commercial use of a method as defined in 
     section 273(a)(1) and (3). Second, a person may not assert 
     the defense if the subject matter was derived from the patent 
     owner or persons in privity with the patent owner. Third, 
     subsection (b)(3) makes clear that the application of the 
     defense does not create a general license under all claims of 
     the patent in question--it extends only to the specific 
     subject matter claimed in the patent with respect to which 
     the person can assert the defense. At the same time, however, 
     the defense does extend to variations in

[[Page 29273]]

     the quantity or volume of use of the claimed subject matter, 
     and to improvements that do not infringe additional, 
     specifically-claimed subject matter.
       Subsection (b)(4) requires that the person asserting the 
     defense has the burden of proof in establishing it by clear 
     and convincing evidence. Subsection (b)(5) establishes that 
     the person who abandons the commercial use of subject matter 
     may not rely on activities performed before the date of such 
     abandonment in establishing the defense with respect to 
     actions taken after the date of abandonment. Such a person 
     can rely only on the date when commercial use of the subject 
     matter was resumed.
       Subsection (b)(6) notes that the defense may only be 
     asserted by the person who performed the acts necessary to 
     establish the defense, and, except for transfer to the patent 
     owner, the right to assert the defense cannot be licensed, 
     assigned, or transferred to a third party 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.
       When the defense has been transferred along with the 
     enterprise or line of business to which it relates as 
     permitted by subsection (b)(6), subsection (b)(7) limits the 
     sites for which the defense may be asserted. Specifically, 
     when the enterprise or line of business to which the defense 
     relates has been transferred, the defense may be asserted 
     only for uses at those sites where the subject matter was 
     used before the later of the patent filing date or the date 
     of transfer of the enterprise or line of business.
       Subsection (b)(8) states that a person who fails to 
     demonstrate a reasonable basis for asserting the defense may 
     be held liable for attorneys' fees under section 285 of the 
     Patent Act.
       Subsection (b)(9) specifies that the successful assertion 
     of the defense does not mean that the affected patent is 
     invalid. Paragraph (9) eliminates a point of uncertainty 
     under current law, and strikes a balance between the rights 
     of an inventor who obtains a patent after another inventor 
     has taken the steps to qualify for a prior use defense. The 
     bill provides that the commercial use of a method in 
     operating a business before the patentee's filing date, by an 
     individual or entity that can establish a section 273 
     defense, does not invalidate the patent. For example, under 
     current law, although the matter has seldom been litigated, a 
     party who commercially used an invention in secrecy before 
     the patent filing date and who also invented the subject 
     matter before the patent owner's invention may argue that the 
     patent is invalid under section 102 (g) of the Patent Act. 
     Arguably, commercial use of an invention in secrecy is not 
     suppression or concealment of the invention within the 
     meaning of section 102(g), and therefore the party's earlier 
     invention could invalidate the patent.\8\
---------------------------------------------------------------------------
     \8\ See Dunlop Holdings v. Ram Golf Corp., 524 F.2d 33 (7th 
     Cir. 1975), cert. denied, 424 US 985 (1976).
---------------------------------------------------------------------------
     Sec. 4303. Effective date and applicability
       The effective date for subtitle C is the date of enactment, 
     except that the title does not apply to any infringement 
     action pending on the date of enactment or to any subject 
     matter for which an adjudication of infringement, including a 
     consent judgment, has been made before the date of enactment.

                   Subtitle D--Patent Term Guarantee

       Subtitle D amends the provisions in the Patent Act that 
     compensate patent applicants for certain reductions in patent 
     term that are not the fault of the applicant. The provisions 
     that were initially included in the term adjustment 
     provisions of patent bills in the 105th Congress only 
     provided adjustments for up to 10 years for secrecy orders, 
     interferences, and successful appeals. Not only are these 
     adjustments too short in some cases, but no adjustments were 
     provided for administrative delays caused by the USPTO that 
     were beyond the control of the applicant. Accordingly, 
     subtitle D removes the 10-year caps from the existing 
     provisions, adds a new provision to compensate applicants 
     fully for USPTO-caused administrative delays, and, for good 
     measure, includes a new provision guaranteeing diligent 
     applicants at least a 17-year term by extending the term of 
     any patent not granted within three years of filing. Thus, no 
     patent applicant diligently seeking to obtain a patent will 
     receive a term of less than the 17 years as provided under 
     the pre-GATT\9\ standard; in fact, most will receive 
     considerably more. Only those who purposely manipulate the 
     system to delay the issuance of their patents will be 
     penalized under subtitle D, a result that the Conferees 
     believe entirely appropriate.
---------------------------------------------------------------------------
     \9\ General Agreement on Tariffs and Trade, Pub. L. No. 103-
     465. The framework for international trade since its 
     inception in 1948, GATT is now administered under the 
     auspices of the World Trade Organization (WTO) (see note 19, 
     infra).
---------------------------------------------------------------------------
     Sec. 4401. Short title
       This subtitle may be cited as the ``Patent Term Guarantee 
     Act of 1999.''
     Sec. 4402. Patent term guarantee authority
       Section 4402 amends section 154(b) of the Patent Act 
     covering term. First, new subsection (b)(1)(A)(i)-(iv) 
     guarantees day-for-day restoration of term lost as a result 
     of delay created by the USPTO when the agency fails to:
       (1) Make a notification of the rejection of any claim for a 
     patent or any objection or argument under Sec. 132, or give 
     or mail a written notice of allowance under Sec. 151, within 
     14 months after the date on which a non-provisional 
     application was actually filed in the USPTO;
       (2) Respond to a reply under Sec. 132, or to an appeal 
     taken under Sec. 134, within four months after the date on 
     which the reply was filed or the appeal was taken;
       (3) Act on an application within four months after the date 
     of a decision by the Board of Patent Appeals and 
     Interferences under Sec. 134 or Sec. 135 or a decision by a 
     Federal court under Sec. Sec. 141, 145, or 146 in a case in 
     which allowable claims remain in the application; or
       (4) Issue a patent within four months after the date on 
     which the issue fee was paid under Sec. 151 and all 
     outstanding requirements were satisfied.
       Further, subject to certain limitations, infra, section 
     154(b)(1)(B) guarantees a total application pendency of no 
     more than three years. Specifically, day-for-day restoration 
     of term is granted if the USPTO has not issued a patent 
     within three years after ``the actual date of the application 
     in the United States.'' This language was intentionally 
     selected to exclude the filing date of an application under 
     the Patent Cooperation Treaty (PCT).\10\ Otherwise, an 
     applicant could obtain up to a 30-month extension of a U.S. 
     patent merely by filing under PCT, rather than directly in 
     the USPTO, gaining an unfair advantage in contrast to 
     strictly domestic applicants. Any periods of time--
---------------------------------------------------------------------------
     \10\ See Herbert F. Schwartz, Patent Law & Practice (2d ed., 
     Federal Judicial Center, 1995), note 72 at 22. The PCT is a 
     multilateral treaty among more than 50 nations that is 
     designed to simplify the patenting process when an applicant 
     seeks a patent on the same invention in more than one nation. 
     See also 35 U.S.C.A. chs. 35-37 and PCT Applicant's Guide 
     (1992, rev. 1994).
---------------------------------------------------------------------------
       (1) consumed in the continued examination of the 
     application under Sec. 132(b) of the Patent Act as added by 
     section 4403 of this Act;
       (2) lost due to an interference under section135(a), a 
     secrecy order under section 181, or appellate review by the 
     Board of Patent Appeals and Interferences or by a Federal 
     court (irrespective of the outcome); and
       (3) incurred at the request of an applicant in excess of 
     the three months to respond to a notice from the Office 
     permitted by section 154(b)(2)(C)(ii) unless excused by a 
     showing by the applicant under section 154(b)(3)(C) that in 
     spite of all due care the applicant could not respond within 
     three months

     shall not be considered a delay by the USPTO and shall not be 
     counted for purposes of determining whether the patent issued 
     within three years from the actual filing date.
       Day-for-day restoration is also granted under new section 
     154(b)(1)(C) for delays resulting from interferences,\11\ 
     secrecy orders,\12\ and appeals by the Board of Patent 
     Appeals and Interferences or a Federal court in which a 
     patent was issued as a result of a decision reversing an 
     adverse determination of patentability.
---------------------------------------------------------------------------
     \11\ 35 U.S.C. Sec. 135(a).
     \12\ 35 U.S.C. Sec. 181.
---------------------------------------------------------------------------
       Section 4402 imposes limitations on restoration of term. In 
     general, pursuant to new Sec. 154(b)(2)(A)-(C) of the bill, 
     total adjustments granted for restorations under (b)(1) are 
     reduced as follows:
       (1) To the extent that there are multiple grounds for 
     extending the term of a patent that may exist simultaneously 
     (e.g., delay due to a secrecy order under section 181 and 
     administrative delay under section 154(b)(1)(A)), the term 
     should not be extended for each ground of delay but only for 
     the actual number of days that the issuance of a patent was 
     delayed;
       (2) The term of any patent which has been disclaimed beyond 
     a date certain may not receive an adjustment beyond the 
     expiration date specified in the disclaimer; and
       (3) Adjustments shall be reduced by a period equal to the 
     time in which the applicant failed to engage in reasonable 
     efforts to conclude prosecution of the application, based on 
     regulations developed by the Director, and an applicant shall 
     be deemed to have failed to engage in such reasonable efforts 
     for any periods of time in excess of three months that are 
     taken to respond to a notice from the Office making any 
     rejection or other request;
       New section 154(b)(3) sets forth the procedures for the 
     adjustment of patent terms. Paragraph (3)(A) empowers the 
     Director to establish regulations by which term extensions 
     are determined and contested. Paragraph (3)(B) requires the 
     Director to send a notice of any determination with the 
     notice of allowance and to give the applicant one opportunity 
     to request reconsideration of the determination. Paragraph 
     (3)(C) requires the Director to reinstate any time the 
     applicant takes to respond to a notice from the Office in 
     excess of three months that was deducted from any patent term 
     extension that would otherwise have been granted if the 
     applicant can show that he or she was, in spite of all due 
     care, unable to respond within three months. In no case shall 
     more than an additional three months be reinstated for

[[Page 29274]]

     each response. Paragraph (3)(D) requires the Director to 
     grant the patent after completion of determining any patent 
     term extension irrespective of whether the applicant appeals.
       New section 154(b)(4) regulates appeals of term adjustment 
     determinations made by the Director. Paragraph (4)(A) 
     requires a dissatisfied applicant to seek remedy in the 
     District Court for the District of Columbia under the 
     Administrative Procedures Act \13\ within 180 days after the 
     grant of the patent. The Director shall alter the term of the 
     patent to reflect any final judgment. Paragraph (4)(B) 
     precludes a third party from challenging the determination of 
     a patent term prior to patent grant.
---------------------------------------------------------------------------
     \13\ 5 U.S.C. Sec. Sec. 551-559, 701-706, 1305, 3105, 3344, 
     5372, 7521.
---------------------------------------------------------------------------
       Section 4402(b) makes certain conforming amendments to 
     section 282 of the Patent Act and the appellate jurisdiction 
     of the U.S. Court of Appeals for the Federal Circuit.\14\
---------------------------------------------------------------------------
     \14\ 28 U.S.C. Sec. 1295.
---------------------------------------------------------------------------
     Sec. 4403. Continued examination of patent applications
       Section 4403 amends section 132 of the Patent Act to permit 
     an applicant to request that an examiner continue the 
     examination of an application following a notice of ``final'' 
     rejection by the examiner. New section 132(b) authorizes the 
     Director to prescribe regulations for the continued 
     examination of an application notwithstanding a final 
     rejection, at the request of the applicant. The Director may 
     also establish appropriate fees for continued examination 
     proceedings, and shall provide a 50% fee reduction for small 
     entities which qualify for such treatment under section 
     41(h)(1) of the Patent Act.
     Section 4404. Technical clarification
       Section 4404 of the bill coordinates technical term 
     adjustment provisions set forth in section 154(b) with those 
     in section 156(a) of the Patent Act.
     Section 4405. Effective date
       The effective date for the amendments in section 4402 and 
     4404 is six months after the date of enactment and, with the 
     exception of design applications (the terms of which are not 
     measured from filing), applies to any application filed on or 
     after such date. The amendments made by section 4403 take 
     effect six months after date of enactment to allow the USPTO 
     to prepare implementing regulations that apply to all 
     national and international (PCT) applications filed on or 
     after June 8, 1995.

   Subtitle E--Domestic Publication of Patent Applications Published 
                                 Abroad

       Subtitle E provides for the publication of pending patent 
     applications which have a corresponding foreign counterpart. 
     Any pending U.S. application filed only in the United States 
     (e.g., one that does not have a foreign counterpart) will not 
     be published if the applicant so requests. Thus, an applicant 
     wishing to maintain her application in confidence may do so 
     merely by filing only in the United States and requesting 
     that the USPTO not publish the application. For those 
     applicants who do file abroad or who voluntarily publish 
     their applications, provisional rights will be available for 
     assertion against any third party who uses the claimed 
     invention between publication and grant provided that 
     substantially similar claims are contained in both the 
     published application and granted patent. This change will 
     ensure that American inventors will be able to see the 
     technology that our foreign competition is seeking to patent 
     much earlier than is possible today.
     Sec. 4501. Short title
       This subtitle may be cited as the ``Domestic Publication of 
     Foreign Filed Patent Applications Act of 1999.''
     Sec. 4502. Publication
       As provided in subsection (a) of section 4502, amended 
     section 122(a) of the Patent Act continues the general rule 
     that patent applications will be maintained in confidence. 
     Paragraph (1)(A) of new subsection (b) of section 122 creates 
     a new exception to this general rule by requiring publication 
     of certain applications promptly after the expiration of an 
     18-month period following the earliest claimed U.S. or 
     foreign filing date. The Director is authorized by 
     subparagraph (B) to determine what information concerning 
     published applications shall be made available to the public, 
     and, under subparagraph (C) any decision made in this regard 
     is final and not subject to review.
       Subsection (b)(2) enumerates exceptions to the general rule 
     requiring publication. Subparagraph (A) precludes publication 
     of any application that is: (1) no longer pending at the 18th 
     month from filing; (2) the subject of a secrecy order until 
     the secrecy order is rescinded; (3) a provisional 
     application; \15\ or (4) a design patent application.\16\
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     \15\ 35 U.S.C. Sec. 111(b). Pursuant to 35 U.S.C. 
     Sec. 111(b)(5), all provisional applications are abandoned 12 
     months after the date of their filing; accordingly, they are 
     not subject to the 18-month publication requirement.
     \16\ 35 U.S.C. Sec. 171. Since design applications do not 
     disclose technology, inventors do not have a particular 
     interest in having them published. The bill as written 
     therefore simplifies the proposed system of publication to 
     confine the requirement to those applications for which there 
     is a need for publication.
---------------------------------------------------------------------------
       Pursuant to subparagraph (B)(i), any applicant who is not 
     filing overseas and does not wish her application to be 
     published can simply make a request and state that her 
     invention has not and will not be the subject of an 
     application filed in a foreign country that requires 
     publication after 18 months. Subparagraph (B)(ii) clarifies 
     that an applicant may rescind this request at any time. 
     Moreover, if an applicant has requested that her application 
     not be published in a foreign country with a publication 
     requirement, subparagraph (B)(iii) imposes a duty on the 
     applicant to notify the Director of this fact. An unexcused 
     failure to notify the Director will result in the abandonment 
     of the application. If an applicant either rescinds a request 
     that her application not be published or notifies the 
     Director that an application has been filed in an early 
     publication country or through the PCT, the U.S. application 
     will be published at 18 months pursuant to subsection (b)(1).
       Finally, under subparagraph (B)(v), where an applicant has 
     filed an application in a foreign country, either directly or 
     through the PCT, so that the application will be published 18 
     months from its earliest effective filing date, the applicant 
     may limit the scope of the publication by the USPTO to the 
     total of the cumulative scope of the applications filed in 
     all foreign countries. Where the foreign application is 
     identical to the application filed in the United States or 
     where an application filed under the PCT is identical to the 
     application filed in the United States, the applicant may not 
     limit the extent to which the application filed in the United 
     States is published. However, where an applicant has limited 
     the description of an application filed in a foreign country, 
     either directly or through the PCT in comparison with the 
     application filed in the USPTO, the applicant may restrict 
     the publication by the USPTO to no more than the cumulative 
     details of what will be published in all of the foreign 
     applications and through the PCT. The applicant may restrict 
     the extent of publication of her U.S. application by 
     submitting a redacted copy of the application to the USPTO 
     eliminating only those details that will not be published in 
     any of the foreign applications. Any description contained in 
     at least one of the foreign national or PCT filings may not 
     be excluded from publication in the corresponding U.S. patent 
     application. To ensure that any redacted copy of the U.S. 
     application is published in place of the original U.S. 
     application, the redacted copy must be received within 16 
     months from the earliest effective filing date. Finally, if 
     the published U.S. application as redacted by the applicant 
     does not enable a person skilled in the art to make and use 
     the claimed invention, provisional rights under section 
     154(d) shall not be available.
       Subsection (c) requires the Director to establish 
     procedures to ensure that no protest or other form of pre-
     issuance opposition to the grant of a patent on an 
     application may be initiated after publication without the 
     express written consent of the applicant.
       Subsection (d) protects our national security by providing 
     that no application may be published under subsection (b)(1) 
     where the publication or disclosure of such invention would 
     be detrimental to the national security. In addition, the 
     Director of the USPTO is required to establish appropriate 
     procedures to ensure that such applications are promptly 
     identified and the secrecy of such inventions is maintained 
     in accordance with chapter 17 of the Patent Act, which 
     governs secrecy of inventions in the interest of national 
     security.
       Subsection (b) of section 4502 of subtitle E requires the 
     Government Accounting Office (GAO) to conduct a study of 
     applicants who file only in the United States during a three-
     year period beginning on the effective date of subtitle E. 
     The study will focus on the percentage of U.S. applicants who 
     file only in the United States versus those who file outside 
     the United States; how many domestic-only filers request not 
     to be published; how many who request not to be published 
     later rescind that request; and whether there is any 
     correlation between the type of applicant (e.g., small vs. 
     large entity) and publication. The Comptroller General must 
     submit the findings of the study, once completed, to the 
     Committees on the Judiciary of the House and Senate.
     Sec. 4503. Time for claiming benefit of earlier filing date
       Section 119 of the Patent Act prescribes procedures to 
     implement the right to claim priority under Article 4 of the 
     Paris Convention for the Protection of Industrial 
     Property.\17\ Under that Article, an applicant seeking 
     protection in the United States may claim the filing date of 
     an application for the same invention filed in another 
     Convention country--provided the subsequent application is 
     filed in the United States within 12 months of the earlier 
     filing in the foreign country.
---------------------------------------------------------------------------
     \17\ Mar. 20, 1883, as revised at Brussels, Dec. 14, 1900, 25 
     Stat. 1645, T.S. No. 579, and subsequently through 1967. The 
     Convention has 156 member nations, including the United 
     States.
---------------------------------------------------------------------------
       Section 4503 of subtitle V amends section 119(b) of the 
     Patent Act to authorize the Director to establish a cut-off 
     date by which

[[Page 29275]]

     the applicant must claim priority. This is to ensure that the 
     claim will be made early enough--generally not later than the 
     16th month from the earliest effective filing date--so as to 
     permit an orderly publication schedule for pending 
     applications. As the USPTO moves to electronic filing, it is 
     envisioned that this date could be moved closer to the 18th 
     month.
       The amendment to Sec. 119(b) also gives the Director the 
     discretion to consider the failure of the applicant to file a 
     timely claim for priority to be a waiver of any such priority 
     claim. The Director is also authorized to establish 
     procedures (including the payment of a surcharge) to accept 
     an unintentionally delayed priority claim.
       Section 4503(b) of subtitle E amends section 120 of the 
     Patent Act in a similar way. This provision empowers the 
     Director to: (1) establish a time by which the priority of an 
     earlier filed United States application must be claimed; (2) 
     consider the failure to meet that time limit to be a waiver 
     of the right to claim such priority; and (3) accept an 
     unintentionally late claim of priority subject to the payment 
     of a surcharge.
     Sec. 4504. Provisional rights
       Section 4504 amends section 154 of the Patent Act by adding 
     a new subsection (d) to accord provisional rights to obtain a 
     reasonable royalty for applicants whose applications are 
     published under amended section 122(b) of the Patent Act, 
     supra, or applications designating the United States filed 
     under the PCT. Generally, this provision establishes the 
     right of an applicant to obtain a reasonable royalty from any 
     person who, during the period beginning on the date that his 
     or her application is published and ending on the date a 
     patent is issued--
       (1) makes, uses, offers for sale, or sells the invention in 
     the United States, or imports such an invention into the 
     United States; or
       (2) if the invention claimed is a process, makes, uses, 
     offers for sale, sells, or imports a product made by that 
     process in the United States; and
       (3) had actual notice of the published application and, in 
     the case of an application filed under the PCT designating 
     the United States that is published in a language other than 
     English, a translation of the application into English.
       The requirement of actual notice is critical. The mere fact 
     that the published application is included in a commercial 
     database where it might be found is insufficient. The 
     published applicant must give actual notice of the published 
     application to the accused infringer and explain what acts 
     are regarded as giving rise to provisional rights.
       Another important limitation on the availability of 
     provisional royalties is that the claims in the published 
     application that are alleged to give rise to provisional 
     rights must also appear in the patent in substantially 
     identical form. To allow anything less than substantial 
     identity would impose an unacceptable burden on the public. 
     If provisional rights were available in the situation where 
     the only valid claim infringed first appeared in 
     substantially that form in the granted patent, the public 
     would have no guidance as to the specific behavior to avoid 
     between publication and grant. Every person or company that 
     might be operating within the scope of the disclosure of the 
     published application would have to conduct her own private 
     examination to determine whether a published application 
     contained patentable subject matter that she should avoid. 
     The burden should be on the applicant to initially draft a 
     schedule of claims that gives adequate notice to the public 
     of what she is seeking to patent.
       Amended section 154(d)(3) imposes a six-year statute of 
     limitations from grant in which an action for reasonable 
     royalties must be brought.
       Amended section 154(d)(4) sets forth some additional rules 
     qualifying when an international application under the PCT 
     will give rise to provisional rights. The date that will give 
     rise to provisional rights for international applications 
     will be the date on which the USPTO receives a copy of the 
     application published under the PCT in the English language; 
     if the application is published under the PCT in a language 
     other than English, then the date on which provisional rights 
     will arise will be the date on which the USPTO receives a 
     translation of the international application in the English 
     language. The Director is empowered to require an applicant 
     to provide a copy of the international application and a 
     translation of it.
     Sec. 4505. Prior art effect of published applications
       Section 4505 amends section 102(e) of the Patent Act to 
     treat an application published by the USPTO in the same 
     fashion as a patent published by the USPTO. Accordingly, a 
     published application is given prior art effect as of its 
     earliest effective U.S. filing date against any subsequently 
     filed U.S. applications. As with patents, any foreign filing 
     date to which the published application is entitled will not 
     be the effective filing date of the U.S. published 
     application for prior art purposes. An exception to this 
     general rule is made for international applications 
     designating the United States that are published under 
     Article 21(2)(a) of the PCT in the English language. Such 
     applications are given a prior art effect as of their 
     international filing date. The prior art effect accorded to 
     patents under section 4505 remains unchanged from present 
     section 102(e) of the Patent Act.
     Sec. 4506. Cost recovery for publications
       Section 4506 authorizes the Director to recover the costs 
     of early publication required by the amendment made by 
     section 4502 of this Act by charging a separate publication 
     fee after a notice of allowance is given pursuant to section 
     151 of the Patent Act.
     Sec. 4507. Conforming amendments
       Section 4507 consists of various technical and conforming 
     amendments to the Patent Act. These include amending section 
     181 of the Patent Act to clarify that publication of pending 
     applications does not apply to applications under secrecy 
     orders, and amending section 284 of the Patent Act to ensure 
     that increased damages authorized under section 284 shall not 
     apply to the reasonable royalties possible under amended 
     section 154(d). In addition, section 374 of the Patent Act is 
     amended to provide that the effect of the publication of an 
     international application designating the United States shall 
     be the same as the publication of an application published 
     under amended section 122(b), except as its effect as prior 
     art is modified by amended section 102(e) and its giving rise 
     to provisional rights is qualified by new section 154(d).
     Sec. 4508. Effective date
       Subtitle E shall take effect on the date that is one year 
     after the date of enactment and shall apply to all 
     applications filed under section 111 of the Patent Act on or 
     after that date; and to all applications complying with 
     section 371 of the Patent Act that resulted from 
     international applications filed on or after that date. The 
     provisional rights provided in amended section 154(d) and the 
     prior art effect provided in amended section 102(e) shall 
     apply to all applications pending on the date that is one 
     year after the date of enactment that are voluntarily 
     published by their applicants. Finally, section 404 
     (provisional rights) shall apply to international 
     applications designating the United States that are filed on 
     or after the date that is one year after the date of 
     enactment.

       Subtitle F--Optional Inter Partes Reexamination Procedure

       Subtitle F is intended to reduce expensive patent 
     litigation in U.S. district courts by giving third-party 
     requesters, in addition to the existing ex parte 
     reexamination in Chapter 30 of title 35, the option of inter 
     partes reexamination proceedings in the USPTO. Congress 
     enacted legislation to authorize ex parte reexamination of 
     patents in the USPTO in 1980, but such reexamination has been 
     used infrequently since a third party who requests 
     reexamination cannot participate at all after initiating the 
     proceedings. Numerous witnesses have suggested that the 
     volume of lawsuits in district courts will be reduced if 
     third parties can be encouraged to use reexamination by 
     giving them an opportunity to argue their case for patent 
     invalidity in the USPTO. Subtitle F provides that opportunity 
     as an option to the existing ex parte reexamination 
     proceedings.
       Subtitle F leaves existing ex parte reexamination 
     procedures in Chapter 30 of title 35 intact, but establishes 
     an inter partes reexamination procedure which third-party 
     requesters can use at their option. Subtitle VI allows third 
     parties who request inter partes reexamination to submit one 
     written comment each time the patent owner files a response 
     to the USPTO. In addition, such third-party requesters can 
     appeal to the USPTO Board of Patent Appeals and Interferences 
     from an examiner's determination that the reexamined patent 
     is valid, but may not appeal to the Court of Appeals for the 
     Federal Circuit. To prevent harassment, anyone who requests 
     inter partes reexamination must identify the real party in 
     interest and third-party requesters who participate in an 
     inter partes reexamination proceeding are estopped from 
     raising in a subsequent court action or inter partes 
     reexamination any issue of patent validity that they raised 
     or could have raised during such inter partes reexamination.
       Subtitle F contains the important threshold safeguard (also 
     applied in ex parte reexamination) that an inter partes 
     reexamination cannot be commenced unless the USPTO makes a 
     determination that a ``substantial new question'' of 
     patentability is raised. Also, as under Chapter 30, this 
     determination cannot be appealed, and grounds for inter 
     partes reexamination are limited to earlier patents and 
     printed publications--grounds that USPTO examiners are well-
     suited to consider.
     Sec. 4601. Short title
       This subtitle may be cited as the ``Optional Inter Partes 
     Reexamination Procedure Act.''
     Sec. 4602. Clarification of Chapter 30
       This section distinguishes Chapter 31 from existing Chapter 
     30 by changing the title of Chapter 30 to ``Ex Parte 
     Reexamination of Patents.''
     Sec. 4603. Definitions
       This section amends section 100 of the Patent Act by 
     defining ``third-party requester''

[[Page 29276]]

     as a person who is not the patent owner requesting ex parte 
     reexamination under section 302 or inter partes reexamination 
     under section 311.
     Sec. 4604. Optional inter partes reexamination procedure
       Section 4604 amends Part III of title 35 by inserting a new 
     Chapter 31 setting forth optional inter partes reexamination 
     procedures.
       New section 311, as amended by this section, differs from 
     section 302 of existing law in Chapter 30 of the Patent Act 
     by requiring any person filing a written request for inter 
     partes reexamination to identify the real party in interest.
       Similar to section 303 of existing law, new section 312 of 
     the Patent Act confers upon the Director the authority and 
     responsibility to determine, within three months after the 
     filing of a request for inter partes reexamination, whether a 
     substantial new question affecting patentability of any claim 
     of the patent is raised by the request. Also, the decision in 
     this regard is final and not subject to judicial review.
       Proposed sections 313-14 under this subtitle are similarly 
     modeled after sections 304-305 of Chapter 30. Under proposed 
     section 313, if the Director determines that a substantial 
     new question of patentability affecting a claim is raised, 
     the determination shall include an order for inter partes 
     reexamination for resolution of the question. The order may 
     be accompanied by the initial USPTO action on the merits of 
     the inter partes reexamination conducted in accordance with 
     section 314. Generally, under proposed section 314, inter 
     partes reexamination shall be conducted according to the 
     procedures set forth in sections 132-133 of the Patent Act. 
     The patent owner will be permitted to propose any amendment 
     to the patent and a new claim or claims, with the same 
     exception contained in section 305: no proposed amended or 
     new claim enlarging the scope of the claims will be allowed.
       Proposed section 314 elaborates on procedure with regard to 
     third-party requesters who, for the first time, are given the 
     option to participate in inter partes reexamination 
     proceedings. With the exception of the inter partes 
     reexamination request, any document filed by either the 
     patent owner or the third-party requester shall be served on 
     the other party. In addition, the third party-requester in an 
     inter partes reexamination shall receive a copy of any 
     communication sent by the USPTO to the patent owner. After 
     each response by the patent owner to an action on the merits 
     by the USPTO, the third-party requester shall have one 
     opportunity to file written comments addressing issues raised 
     by the USPTO or raised in the patent owner's response. Unless 
     ordered by the Director for good cause, the agency must act 
     in an inter partes reexamination matter with special 
     dispatch.
       Proposed section 315 prescribes the procedures for appeal 
     of an adverse USPTO decision by the patent owner and the 
     third-party requester in an inter partes reexamination. Both 
     the patent owner and the third-party requester are entitled 
     to appeal to the Board of Patent Appeals and Interferences 
     (section 134 of the Patent Act), but only the patentee can 
     appeal to the U.S. Court of Appeals for the Federal Circuit 
     (Sec. Sec. 141-144); either may also be a party to any appeal 
     by the other to the Board of Patent Appeals and 
     Interferences. The patentee is not entitled to the 
     alternative of an appeal of an inter partes reexamination to 
     the U.S. District Court for the District of Columbia. Such 
     appeals are rarely taken from ex parte reexamination 
     proceedings under existing law and its removal should speed 
     up the process.
       To deter unnecessary litigation, proposed section 315 
     imposes constraints on the third-party requester. In general, 
     a third-party requester who is granted an inter partes 
     reexamination by the USPTO may not assert at a later time in 
     any civil action in U.S. district court \18\ the invalidity 
     of any claim finally determined to be patentable on any 
     ground that the third-party requester raised or could have 
     raised during the inter partes reexamination. However, the 
     third-party requester may assert invalidity based on newly 
     discovered prior art unavailable at the time of the 
     reexamination. Prior art was unavailable at the time of the 
     inter partes reexamination if it was not known to the 
     individuals who were involved in the reexamination proceeding 
     on behalf of the third-party requester and the USPTO.
---------------------------------------------------------------------------
     \18\ See 28 U.S.C. Sec. 1338.
---------------------------------------------------------------------------
       Section 316 provides for the Director to issue and publish 
     certificates canceling unpatentable claims, confirming 
     patentable claims, and incorporating any amended or new claim 
     determined to be patentable in an inter partes procedure.
       Subtitle F creates a new section 317 which sets forth 
     certain conditions by which inter partes reexamination is 
     prohibited to guard against harassment of a patent holder. In 
     general, once an order for inter partes reexamination has 
     been issued, neither a third-party requester nor the patent 
     owner may file a subsequent request for inter partes 
     reexamination until an inter partes reexamination certificate 
     is issued and published, unless authorized by the Director. 
     Further, if a third-party requester asserts patent invalidity 
     in a civil action and a final decision is entered that the 
     party failed to prove the assertion of invalidity, or if a 
     final decision in an inter partes reexamination instituted by 
     the requester is favorable to patentability, after any 
     appeals, that third-party requester cannot thereafter request 
     inter partes reexamination on the basis of issues which were 
     or which could have been raised. However, the third-party 
     requester may assert invalidity based on newly discovered 
     prior art unavailable at the time of the civil action or 
     inter partes reexamination. Prior art was unavailable at the 
     time if it was not known to the individuals who were involved 
     in the civil action or inter partes reexamination proceeding 
     on behalf of the third-party requester and the USPTO.
       Proposed section 318 gives a patent owner the right, once 
     an inter partes reexamination has been ordered, to obtain a 
     stay of any pending litigation involving an issue of 
     patentability of any claims of the patent that are the 
     subject of the inter partes reexamination, unless the court 
     determines that the stay would not serve the interests of 
     justice.
     Sec. 4605. Conforming amendments
       Section 4605 makes the following conforming amendments to 
     the Patent Act:
       A patent owner must pay a fee of $1,210 for each petition 
     in connection with an unintentionally abandoned application, 
     delayed payment, or delayed response by the patent owner 
     during any reexamination.
       A patent applicant, any of whose claims has been twice 
     rejected; a patent owner in a reexamination proceeding; and a 
     third-party requester in an inter partes reexamination 
     proceeding may all appeal final adverse decisions from a 
     primary examiner to the Board of Patent Appeals and 
     Interferences.
       Proposed section 141 states that a patent owner in a 
     reexamination proceeding may appeal an adverse decision by 
     the Board of Patent Appeals and Interferences only to the 
     U.S. Court of Appeals for the Federal Circuit as earlier 
     noted. A third-party requester in an inter partes 
     reexamination proceeding may not appeal beyond the Board of 
     Patent Appeals and Interferences.
       The Director is required pursuant to section 143 
     (proceedings on appeal to the Federal Circuit) to submit to 
     the court the grounds for the USPTO decision in any 
     reexamination addressing all the issues involved in the 
     appeal.
     Sec. 4606. Report to Congress
       Not later than five years after the effective date of 
     subtitle F, the Director must submit to Congress a report 
     evaluating whether the inter partes reexamination proceedings 
     set forth in the title are inequitable to any of the parties 
     in interest and, if so, the report shall contain 
     recommendations for change to eliminate the inequity.
     Sec. 4607. Estoppel effect of reexamination
       Section 4607 estops any party who requests inter partes 
     reexamination from challenging at a later time, in any civil 
     action, any fact determined during the process of the inter 
     partes reexamination, except with respect to a fact 
     determination later proved to be erroneous based on 
     information unavailable at the time of the inter partes 
     reexamination. The estoppel arises after a final decision in 
     the inter partes reexamination or a final decision in any 
     appeal of such reexamination. If section 4607 is held to be 
     unenforceable, the enforceability of the rest of subtitle F 
     or the Act is not affected.
     Sec. 4608. Effective date
       Subtitle F shall take effect on the date of the enactment 
     and shall apply to any patent that issues from an original 
     application filed in the United States on or after that date, 
     except that the amendments made by section 4605(a) shall take 
     effect one year from the date of enactment.

         Subtitle G--United States Patent and Trademark Office

       Subtitle G establishes the United States Patent and 
     Trademark Office (USPTO) as an agency of the United States 
     within the Department of Commerce. The Secretary of Commerce 
     gives policy direction to the agency, but the agency is 
     autonomous and responsible for the management and 
     administration of its operations and has independent control 
     of budget allocations and expenditures, personnel decisions 
     and processes, and procurement. The Committee intends that 
     the Office will conduct its patent and trademark operations 
     without micro-management by Department of Commerce officials, 
     with the exception of policy guidance of the Secretary. The 
     agency is headed by an Under Secretary of Commerce for 
     Intellectual Property and Director of the United States 
     Patent and Trademark Office, a Deputy, and a Commissioner of 
     Patents and a Commissioner of Trademarks. The agency is 
     exempt from government-wide personnel ceilings. A patent 
     public advisory committee and a trademark public advisory 
     committee are established to advise the Director on agency 
     policies, goals, performance, budget and user fees.
     Sec. 4701. Short title
       This subtitle may be cited as the ``Patent and Trademark 
     Office Efficiency Act.''

[[Page 29277]]




        Subchapter A--United States Patent and Trademark Office

     Sec. 4711. Establishment of Patent and Trademark Office
       Section 4711 establishes the USPTO as an agency of the 
     United States within the Department of Commerce and under the 
     policy direction of the Secretary of Commerce. The USPTO, as 
     an autonomous agency, is explicitly responsible for decisions 
     regarding the management and administration of its operations 
     and has independent control of budget allocations and 
     expenditures, personnel decisions and processes, 
     procurements, and other administrative and management 
     functions. Patent operations and trademark operations are to 
     be treated as separate operating units within the Office, 
     each under the direction of its respective Commissioner, as 
     supervised by the Director.
       The USPTO shall maintain its principal office in the 
     metropolitan Washington, D.C., area, for the service of 
     process and papers and for the purpose of discharging its 
     functions. For purposes of venue in civil actions, the agency 
     is deemed to be a resident of the district in which its 
     principal office is located, except where otherwise provided 
     by law. The USPTO is also permitted to establish satellite 
     offices in such other places in the United States as it 
     considers necessary and appropriate to conduct business. This 
     is intended to allow the USPTO, if appropriate, to serve 
     American applicants better.
     Sec. 4712. Powers and duties
       Subject to the policy direction of the Secretary of the 
     Commerce, in general the USPTO will be responsible for the 
     granting and issuing of patents, the registration of 
     trademarks, and the dissemination of patent and trademark 
     information to the public.
       The USPTO will also possess specific powers, which include:
       (1) a requirement to adopt and use an Office seal for 
     judicial notice purposes and for authenticating patents, 
     trademark certificates and papers issued by the Office;
       (2) the authority to establish regulations, not 
     inconsistent with law, that
       (A) govern the conduct of USPTO proceedings within the 
     Office,
       (B) are in accordance with Sec. 553 of title 5,
       (C) facilitate and expedite the processing of patent 
     applications, particularly those which can be processed 
     electronically,
       (D) govern the recognition, conduct, and qualifications of 
     agents, attorneys, or other persons representing applicants 
     or others before the USPTO,
       (E) recognize the public interest in ensuring that the 
     patent system retain a reduced fee structure for small 
     entities, and
       (F) provide for the development of a performance-based 
     process for managing that includes quantitative and 
     qualitative measures, standards for evaluating cost-
     effectiveness, and consistency with principles of 
     impartiality and competitiveness;
       (3) the authority to acquire, construct, purchase, lease, 
     hold, manage, operate, improve, alter and renovate any real, 
     personal, or mixed property as it considers necessary to 
     discharge its functions;
       (4) the authority to make purchases of property, contracts 
     for construction, maintenance, or management and operation of 
     facilities, as well as to contract for and purchase printing 
     services without regard to those federal laws which govern 
     such proceedings;
       (5) the authority to use services, equipment, personnel, 
     facilities and equipment of other federal entities, with 
     their consent and on a reimbursable basis;
       (6) the authority to use, with the consent of the United 
     States and the agency, government, or international 
     organization concerned, the services, records, facilities or 
     personnel of any State or local government agency or foreign 
     patent or trademark office or international organization to 
     perform functions on its behalf;
       (7) the authority to retain and use all of its revenues and 
     receipts;
       (8) a requirement to advise the President, through the 
     Secretary of Commerce, on national and certain international 
     intellectual property policy issues;
       (9) a requirement to advise Federal departments and 
     agencies of intellectual property policy in the United States 
     and intellectual property protection abroad;
       (10) a requirement to provide guidance regarding proposals 
     offered by agencies to assist foreign governments and 
     international intergovernmental organizations on matters of 
     intellectual property protection;
       (11) the authority to conduct programs, studies or 
     exchanges regarding domestic or international intellectual 
     property law and the effectiveness of intellectual property 
     protection domestically and abroad;
       (12) a requirement to advise the Secretary of Commerce on 
     any programs and studies relating to intellectual property 
     policy that the USPTO may conduct or is authorized to 
     conduct, cooperatively with foreign intellectual property 
     offices and international intergovernmental organizations; 
     and
       (13) the authority to (A) coordinate with the Department of 
     State in conducting programs and studies cooperatively with 
     foreign intellectual property offices and international 
     intergovernmental organizations, and (B) transfer, with the 
     concurrence of the Secretary of State, up to $100,000 in any 
     year to the Department of State to pay an international 
     intergovernmental organization for studies and programs 
     advancing international cooperation concerning patents, 
     trademarks, and other matters.
       The specific powers set forth in new subsection (b) are 
     clarified in new subsection (c). The special payments of 
     paragraph (14)(B) are additional to other payments or 
     contributions and are not subject to any limitation imposed 
     by law. Nothing in subsection (b) derogates from the duties 
     of the Secretary of State or the United States Trade 
     Representative as set forth in section 141 of the Trade Act 
     of 1974,\19\ nor derogates from the duties and functions of 
     the Register of Copyrights. The Director is required to 
     consult with the Administrator of General Services when 
     exercising authority under paragraphs (3) and (4)(A). Nothing 
     in section 4712 may be construed to nullify, void, cancel, or 
     interrupt any pending request-for-proposal let or contract 
     issued by the General Services Administration for the 
     specific purpose of relocating or leasing space to the USPTO. 
     Finally, in exercising the powers and duties under this 
     section, the Director shall consult with the Register of 
     Copyright on all Copyright and related matters.
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     \19\ 19 U.S.C. Sec. 2171.
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     Sec. 4713. Organization and management
       Section 4713 details the organization and management of the 
     agency. The powers and duties of the USPTO shall be vested in 
     the Under Secretary and Director, who shall be appointed by 
     the President, by and with the consent of the Senate. The 
     Under Secretary and Director performs two main functions. As 
     Under Secretary of Commerce for Intellectual Property, she 
     serves as the policy advisor to the Secretary of Commerce and 
     the President on intellectual property issues. As Director, 
     she is responsible for supervising the management and 
     direction of the USPTO. She shall consult with the Public 
     Advisory Committees, infra, on a regular basis regarding 
     operations of the agency and before submitting budgetary 
     proposals and fee or regulation changes. The Director shall 
     take an oath of office. The President may remove the Director 
     from office, but must provide notification to both houses of 
     Congress.
       The Secretary of Commerce, upon nomination of the Director, 
     shall appoint a Deputy Director to act in the capacity of the 
     Director if the Director is absent or incapacitated. The 
     Secretary of Commerce shall also appoint two Commissioners, 
     one for Patents, the other for Trademarks, without regard to 
     chapters 33, 51, or 53 of title 5 of the U.S. Code. The 
     Commissioners will have five-year terms and may be 
     reappointed to new terms by the Secretary. Each Commissioner 
     shall possess a demonstrated experience in patent and 
     trademark law, respectively; and they shall be responsible 
     for the management and direction of the patent and trademark 
     operations, respectively. In addition to receiving a basic 
     rate of compensation under the Senior Executive Service \20\ 
     and a locality payment,\21\ the Commissioners may receive 
     bonuses of up to 50 percent of their annual basic rate of 
     compensation, not to exceed the salary of the Vice President, 
     based on a performance evaluation by the Secretary, acting 
     through the Director. The Secretary may remove Commissioners 
     for misconduct or unsatisfactory performance. It is intended 
     that the Commissioners will be non-political expert 
     appointees, independently responsible for operations, subject 
     to supervision by the Director.
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     \20\ 28 U.S.C. Sec. 5382.
     \21\ 5 U.S.C. Sec. 5304(h)(2)(C).
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       The Director may appoint all other officers, agents, and 
     employees as she sees fit, and define their responsibilities 
     with equal discretion. The USPTO is specifically not subject 
     to any administratively or statutorily imposed limits (full-
     time equivalents, or ``FTEs'') on positions or personnel.
       The USPTO is charged with developing and submitting to 
     Congress a proposal for an incentive program to retain senior 
     (of the primary examiner grade or higher) patent and 
     trademark examiners eligible for retirement for the sole 
     purpose of training patent and trademark examiners.
       The Director of the USPTO, in consultation with the 
     Director of the Office of Personnel Management, is required 
     to maintain a program for identifying national security 
     positions at the USPTO and for providing for appropriate 
     security clearances for USPTO employees in order to maintain 
     the secrecy of inventions as described in section 181 of the 
     Patent Act and to prevent disclosure of sensitive and 
     strategic information in the interest of national security.
       The USPTO will be subject to all provisions of title 5 of 
     the U.S. Code governing federal employees. All relevant labor 
     agreements which are in effect the day before enactment of 
     subtitle G shall be adopted by the agency. All USPTO 
     employees as of the day before the effective date of subtitle 
     G shall remain officers and employees of the agency without a 
     break in service. Other personnel of the Department of 
     Commerce shall be transferred to the USPTO only if necessary 
     to carry out purposes of subtitle G of the bill and if a 
     major function of their work is reimbursed by the USPTO, they 
     spend at least half of their work time in support of the

[[Page 29278]]

     USPTO, or a transfer to the USPTO would be in the interest of 
     the agency, as determined by the Secretary of Commerce in 
     consultation with the Director.
       On or after the effective date of the Act, the President 
     shall appoint an individual to serve as Director until a 
     Director qualifies under subsection (a). The persons serving 
     as the Assistant Commissioner for Patents and the Assistant 
     Commissioner for Trademarks on the day before the effective 
     date of the Act may serve as the Commissioner for Patents and 
     the Commissioner for Trademarks, respectively, until a 
     respective Commissioner is appointed under subsection (b)(2).
     Sec. 4714. Public Advisory Committees
       Section 4714 provides a new section 5 of the Patent Act 
     which establishes a Patent Public Advisory Committee and a 
     Trademark Public Advisory Committee. Each Committee has nine 
     voting members with three-year terms appointed by and serving 
     at the pleasure of the Secretary of Commerce. Initial 
     appointments will be made within three months of the 
     effective date of the Act; and three of the initial 
     appointees will receive one-year terms, three will receive 
     two-year terms, and three will receive full terms. Vacancies 
     will be filled within three months. The Secretary will also 
     designate chairpersons for three-year terms.
       The members of the Committees will be U.S. citizens and 
     will be chosen to represent the interests of USPTO users. The 
     Patent Public Advisory Committee shall have members who 
     represent small and large entity applicants in the United 
     States in proportion to the number of applications filed by 
     the small and large entity applicants. In no case shall the 
     small entity applicants be represented by less than 25 
     percent of the members of the Patent Public Advisory 
     Committee, at least one of whom shall be an independent 
     inventor. The members of both Committees shall include 
     individuals with substantial background and achievement in 
     finance, management, labor relations, science, technology, 
     and office automation. The patent and trademark examiners' 
     unions are entitled to have one representative on their 
     respective Advisory Committee in a non-voting capacity.
       The Committees meet at the call of the chair to consider an 
     agenda established by the chair. Each Committee reviews the 
     policies, goals, performance, budget, and user fees that bear 
     on its area of concern and advises the Director on these 
     matters. Within 60 days of the end of a fiscal year, the 
     Committees prepare annual reports, transmit the reports to 
     the Secretary of Commerce, the President, and the Committees 
     on the Judiciary of the Congress, and publish the reports in 
     the Official Gazette of the USPTO.
       Members of the Committees are compensated at a defined 
     daily rate for meeting and travel days. Members are provided 
     access to USPTO records and information other than personnel 
     or other privileged information including that concerning 
     patent applications. Members are special Government employees 
     within the meaning of section 202 of title 18. The Federal 
     Advisory Committee Act shall not apply to the Committees. 
     Finally, section 4714 provides that Committee meetings shall 
     be open to the public unless by a majority vote the Committee 
     meets in executive session to consider personnel or other 
     confidential information.
     Sec. 4715. Conforming amendments
       Technical conforming amendments to the Patent Act are set 
     forth in section 4715.
     Sec. 4716. Trademark Trial and Appeal Board
       Section 4716 amends section 17 of the Trademark Act of 1946 
     by specifying that the Director shall give notice to all 
     affected parties and shall direct a Trademark Trial and 
     Appeal Board to determine the respective rights of those 
     parties before it in a relevant proceeding. The section also 
     invests the Director with the power of appointing 
     administrative trademark judges to the Board. The Director, 
     the Commissioner for Trademarks, the Commissioner for 
     Patents, and the administrative trademark judges shall serve 
     on the Board.
     Sec. 4717. Board of Patent Appeals and Interferences
       Under existing section 7 of the Patent Act, the 
     Commissioner, Deputy Commissioner, Assistant Commissioners, 
     and the examiners-in-chief constitute the Board of Patent 
     Appeals and Interferences. Pursuant to section 4717 of 
     subtitle G, the Board shall be comprised of the Director, the 
     Commissioner for Patents, the Commissioner for Trademarks, 
     and the administrative patent judges. In addition, the 
     existing statute allows each appellant a hearing before three 
     members of the Board who are designated by the Director. 
     Section 4717 empowers the Director with this authority.
     Sec. 4718. Annual report of Director
       No later than 180 days after the end of each fiscal year, 
     the Director must provide a report to Congress detailing 
     funds received and expended by the USPTO, the purposes for 
     which the funds were spent, the quality and quantity of USPTO 
     work, the nature of training provided to examiners, the 
     evaluations of the Commissioners by the Secretary of 
     Commerce, the Commissioners' compensation, and other 
     information relating to the agency.
     Sec. 4719. Suspension or exclusion from practice
       Under existing section 32 of the Patent Act, the 
     Commissioner (the Director pursuant to this Act) has the 
     authority, after notice and a hearing, to suspend or exclude 
     from further practice before the USPTO any person who is 
     incompetent, disreputable, indulges in gross misconduct or 
     fraud, or is noncompliant with USPTO regulations. Section 
     4719 permits the Director to designate an attorney who is an 
     officer or employee of the USPTO to conduct a hearing under 
     section 32.
     Sec. 4720. Pay of Director and Deputy Director
       Section 4720 replaces the Assistant Secretary of Commerce 
     and Commissioner of Patents and Trademarks with the Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office to receive 
     pay at Level III of the Executive Schedule.\22\ Section 4720 
     also establishes the pay of the Deputy Director at Level IV 
     of the Executive Schedule.\23\
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     \22\ 5 U.S.C. Sec. 5314.
     \23\ 5 U.S.C. Sec. 5315.
---------------------------------------------------------------------------


           Subchapter B--Effective Date; Technical Amendments

     Sec. 4731. Effective date
       The effective date of subtitle G is four months after the 
     date of enactment.
     Sec. 4732. Technical and conforming amendments
       Section 4732 sets forth numerous technical and conforming 
     amendments related to subtitle G.


                 Subchapter C--Miscellaneous Provisions

     Sec. 4741. References
       Section 4741 clarifies that any reference to the transfer 
     of a function from a department or office to the head of such 
     department or office means the head of such department or 
     office to which the function is transferred. In addition, 
     references in other federal materials to the current 
     Commissioner of Patents and Trademarks refer, upon enactment, 
     to the Under Secretary of Commerce for Intellectual Property 
     and Director of the United States Patent and Trademark 
     Office. Similarly, references to the Assistant Commissioner 
     for Patents are deemed to refer to the Commissioner for 
     Patents and references to the Assistant Commissioner for 
     Trademarks are deemed to refer to the Commissioner for 
     Trademarks.
     Sec. 4742. Exercise of authorities
       Under section 4742, except as otherwise provided by law, a 
     federal official to whom a function is transferred pursuant 
     to subtitle G may exercise all authorities under any other 
     provision of law that were available regarding the 
     performance of that function to the official empowered to 
     perform that function immediately before the date of the 
     transfer of the function.
     Sec. 4743. Savings provisions
       Relevant legal documents that relate to a function which is 
     transferred by subtitle G, and which are in effect on the 
     date of such transfer, shall continue in effect according to 
     their terms unless later modified or repealed in an 
     appropriate manner. Applications or proceedings concerning 
     any benefit, service, or license pending on the effective 
     date of subtitle G before an office transferred shall not be 
     affected, and shall continue thereafter, but may later be 
     modified or repealed in the appropriate manner.
       Subtitle G will not affect suits commenced before the 
     effective date of passage. Suits or actions by or against the 
     Department of Commerce, its employees, or the Secretary shall 
     not abate by reason of enactment of subtitle G. Suits against 
     a relevant government officer in her official capacity shall 
     continue post enactment, and if a function has transferred to 
     another officer by virtue of enactment, that other officer 
     shall substitute as the defendant. Finally, administrative 
     and judicial review procedures that apply to a function 
     transferred shall apply to the head of the relevant federal 
     agency and other officers to which the function is 
     transferred.
     Sec. 4744. Transfer of assets
       Section 4744 states that all available personnel, property, 
     records, and funds related to a function transferred pursuant 
     to subtitle G shall be made available to the relevant 
     official or head of the agency to which the function 
     transfers at such time or times as the Director of the Office 
     of Management and Budget (OMB) directs.
     Sec. 4745. Delegation and assignment
       Section 4745 allows an official to whom a function is 
     transferred under subtitle G to delegate that function to 
     another officer or employee. The official to whom the 
     function was originally transferred nonetheless remains 
     responsible for the administration of the function.
     Sec. 4746. Authority of Director of the Office of Management 
         and Budget with respect to functions transferred
       Pursuant to section 4746, if necessary the Director of OMB 
     shall make any determination of the functions transferred 
     pursuant to subtitle G.

[[Page 29279]]


     Sec. 4747. Certain vesting of functions considered transfers
       Section 4747 states that the vesting of a function in a 
     department or office pursuant to reestablishment of an office 
     shall be considered to be the transfer of that function.
     Sec. 4748. Availability of existing funds
       Under section 4748, existing appropriations and funds 
     available for the performance of functions and other 
     activities terminated pursuant to subtitle G shall remain 
     available (for the duration of their period of availability) 
     for necessary expenses in connection with the termination and 
     resolution of such functions and activities, subject to the 
     submission of a plan to House and Senate appropriators in 
     accordance with Public Law 105-277 (Departments of Commerce, 
     Justice, and State, the Judiciary and Related Agencies 
     Appropriations Act, Fiscal Year 1999).
     Sec. 4749. Definitions
       ``Function'' includes any duty, obligation, power, 
     authority, responsibility, right, privilege, activity, or 
     program.
       ``Office'' includes any office, administration, agency, 
     bureau, institute, council, unit, organizational entity, or 
     component thereof.

              Subtitle H--Miscellaneous Patent Provisions

       Subtitle H consists of seven largely-unrelated provisions 
     that make needed clarifying and technical changes to the 
     Patent Act. Subtitle H also authorizes a study. The 
     provisions in Subtitle H take effect on the date of enactment 
     except where stated otherwise in certain sections.
     Sec. 4801. Provisional applications
       Section 4801 amends section 111(b)(5) of the Patent Act by 
     permitting a provisional application to be converted into a 
     non-provisional application. The applicant must make a 
     request within 12 months after the filing date of the 
     provisional application for it to be converted into a non-
     provisional application.
       Section 4801 also amends section 119(e) of the Patent Act 
     by clarifying the treatment of a provisional application when 
     its last day of pendency falls on a weekend or a Federal 
     holiday, and by eliminating the requirement that a 
     provisional application must be co-pending with a non-
     provisional application if the provisional application is to 
     be relied on in any USPTO proceeding.
     Sec. 4802. International applications
       Section 4802 amends section 119(a) of the Patent Act to 
     permit persons who filed an application for patent first in a 
     WTO \24\ member country to claim the right of priority in a 
     subsequent patent application filed in the United States, 
     even if such country does not yet afford similar privileges 
     on the basis of applications filed in the United States. This 
     amendment was made in conformity with the requirements of 
     Articles 1 and 2 of the TRIPS Agreement.\25\ These Articles 
     require that WTO member countries apply the substantive 
     provisions of the Paris Convention for the Protection of 
     Industrial Property to other WTO member countries. As some 
     WTO member countries are not yet members of the Paris 
     Convention, and as developing countries are generally 
     permitted periods of up to 5 years before complying with all 
     provisions of the TRIPS Agreement, they are not required to 
     extend the right of priority to other WTO member countries 
     until such time.
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     \24\ World Trade Organization. The agreement establishing the 
     WTO is a multilateral instrument which creates a permanent 
     organization to oversee the implementation of the Uruguay 
     Round Agreements, including the GATT 1994, to provide a forum 
     for multilateral trade negotiations and to administer dispute 
     settlements (see note 3, supra). Staff of the House Comm. on 
     Ways and Means, 104th Cong., 1st Sess., Overview and 
     Compilation of U.S. Trade Statutes 1040 (Comm. Print 1995) 
     [hereinafter, Overview and Compilation of U.S. Trade 
     Statutes].
     \25\ Trade-Related Aspects of Intellectual Property Rights 
     Agreement; i.e., that component of GATT which addresses 
     intellectual property rights among the signatory members.
---------------------------------------------------------------------------
       Section 4802 also adds subsection (f) to section 119 of the 
     Patent Act to provide for the right of priority in the United 
     States on the basis of an application for a plant breeder's 
     right first filed in a WTO member country or in a UPOV \26\ 
     Contracting Party. Many foreign countries provide only a sui 
     generis system of protection for plant varieties. Because 
     section 119 presently addresses only patents and inventors' 
     certificates, applicants from those countries are technically 
     unable to base a priority claim on a foreign application for 
     a plant breeder's right when seeking plant patent or utility 
     patent protection for a plant variety in this country.
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     \26\ International Convention for the Protection of New 
     Varieties of Plants. UPOV is administered by the World 
     Intellectual Property Organization (WIPO), which is charged 
     with the administration of, and activities concerning 
     revisions to, the international intellectual property 
     treaties. UPOV has 40 members, and guarantees plant breeders 
     national treatment and right of priority in other countries 
     that are members of the treaty, along with certain other 
     benefits. See M.A. Leaffer International Treaties on 
     Intellectual Property at 47 (BNA, 2d ed. 1997).
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       Subsection (g) is added to section 119 to define the terms 
     ``WTO member country'' and ``UPOV Contracting Party.''
     Sec. 4803. Certain limitations on remedies for patent 
         infringement not applicable
       Section 4803 amends section 287(c)(4) of the Patent Act, 
     which pertains to certain limitations on remedies for patent 
     infringement, to make it applicable only to applications 
     filed on or after September 30, 1996.
     Sec. 4804. Electronic filing and publications
       Section 4804 amends section 22 of the Patent Act to clarify 
     that the USPTO may receive, disseminate, and maintain 
     information in electronic form. Subsection (d)(2), however, 
     prohibits the Director from ceasing to maintain paper or 
     microform collections of U.S. patents, foreign patent 
     documents, and U.S. trademark registrations, except pursuant 
     to notice and opportunity for public comment and except the 
     Director shall first submit a report to Congress detailing 
     any such plan, including a description of the mechanisms in 
     place to ensure the integrity of such collections and the 
     data contained therein, as well as to ensure prompt public 
     access to the most current available information, and 
     certifying that the implementation of such plan will not 
     negatively impact the public.
       In addition, in the operation of its information 
     dissemination programs and as the sole source of patent data, 
     the USPTO should implement procedures that assure that bulk 
     patent data are provided in such a manner that subscribers 
     have the data in a manner that grants a sufficient amount of 
     time for such subscribers to make the data available through 
     their own systems at the same time the USPTO makes the data 
     publicly available through its own Internet system.
     Sec. 4805. Study and report on biologic deposits in support 
         of biotechnology patents
       Section 4805 charges the Comptroller General, in 
     consultation with the Director of the USPTO, with conducting 
     a study and submitting a report to Congress no later than six 
     months after the date of enactment on the potential risks to 
     the U.S. biotechnological industry regarding biological 
     deposits in support of biotechnology patents. The study shall 
     include: an examination of the risk of export and of 
     transfers to third parties of biological deposits, and the 
     risks posed by the 18-month publication requirement of 
     subtitle E; an analysis of comparative legal and regulatory 
     regimes; and any related recommendations. The USPTO is then 
     charged with considering these recommendations when drafting 
     regulations affecting biological deposits.
     Sec. 4806. Prior invention
       Section 4806 amends section 102(g) of the Patent Act to 
     make clear that an inventor who is involved in a USPTO 
     interference proceeding and establishes a date of invention 
     under section 104 is subject to the requirements of section 
     102(g), including the requirement that the invention was not 
     abandoned, suppressed, or concealed.
     Sec. 4807. Prior art exclusion for certain commonly assigned 
         patents
       Section 4807 amends section 103 of the Patent Act, which 
     sets forth patentability conditions related to the 
     nonobviousness of subject matter. Section 103(c) of the 
     current statute states that subject matter developed by 
     another person which qualifies as prior art only under 
     section 102(f) or (g) shall not preclude granting a patent on 
     an invention with only obvious differences where the subject 
     matter and claimed invention were, at the time the invention 
     was made, owned by the same person or subject to an 
     obligation of assignment to the same person. The bill amends 
     section 103(c) by adding a reference to section 102(e), which 
     currently bars the granting of a patent if the invention was 
     described in another patent granted on an application filed 
     before the applicant's date of invention. The effect of the 
     amendment is to allow an applicant to receive a patent when 
     an invention with only obvious differences from the 
     applicant's invention was described in a patent granted on an 
     application filed before the applicant's invention, provided 
     the inventions are commonly owned or subject to an obligation 
     of assignment to the same person.
     Sec. 4808. Exchange of copies of patents with foreign 
         countries
       Sec. 4808 amends section 12 of the Patent Act to prohibit 
     the Director of the USPTO from entering into an agreement to 
     exchange patent data with a foreign country that is not one 
     of our NAFTA \27\ or WTO trading partners, unless the 
     Secretary of Commerce explicitly authorizes such an exchange.
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     \27\ North American Free Trade Agreement, Pub. L. No. 103-
     182. The cornerstone of NAFTA is the phased-out elimination 
     of all tariffs on trade between the U.S., Canada, and Mexico. 
     Overview and Compilation of U.S. Trade Statutes 1999.
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                   TITLE V--MISCELLANEOUS PROVISIONS

     Section 5001. Commission on Online Child Protection
       Section 5001(a) provides that references contained in the 
     amendments made by this title are to section 1405 of the 
     Child Online Protection Act (47 U.S.C. 231 note).
       Section 5001(b) amends the membership of the Commission on 
     Online Child Protection to remove a requirement that a 
     specific number of representatives come from designated 
     sectors of private industry, as outlined in the Act. Section 
     5001(b) also provides

[[Page 29280]]

     that the members appointed to the Commission as of October 
     31, 1999, shall remain as members. Section 5001(b) also 
     prevents the members of the Commission from being paid for 
     their work on the Commission. This provision, however, does 
     not preclude members from being reimbursed for legitimate 
     costs associated with participating in the Commission (such 
     as travel expenses).
       Section 5001(c) extends the due date for the report of the 
     Commission by one year.
       Section 5001(d) establishes that the Commission's statutory 
     authority will expire either (1) 30 days after the submission 
     of the report required by the Act, or (2) November 30, 2000, 
     whichever is earlier.
       Section 5001(e) requires the Commission to commence its 
     first meeting no later than March 31, 2000. Section 5001(e) 
     also requires that the Commission elect, by a majority vote, 
     a chairperson of the Commission not later than 30 days after 
     holding its first meeting.
       Section 5001(f) establishes minimum rules for the 
     operations of the Commission, and also allows the Commission 
     to adopt other rules as it deems necessary.
     Section 5002. Privacy protection for donors to public 
         broadcasting entities
       This provision, which was added in Conference, protects the 
     privacy of donors to public broadcasting entities.
     Section 5003. Completion of biennial regulatory review
       Section 5003 provides that, within 180 days after the date 
     of enactment, the FCC will complete the biennial review 
     required by section 202(h) of the Telecommunications Act of 
     1996. The Conferees expect that if the Commission concludes 
     that it should retain any of the rules under the review 
     unchanged, the Commission shall issue a report that includes 
     a full justification of the basis for so finding.
     Section 5004. Broadcasting entities
       This provision, added in Conference, allows for a 
     remittance of copyright damages for public broadcasting 
     entities where they are not aware and have no reason to 
     believe that their activities constituted violations of 
     copyright law. This is currently the standard for nonprofit 
     libraries, archives and educational institutions.
     Section 5005. Technical amendments relating to vessel hull 
         design protection
       This section makes several amendments to chapter 13 of 
     title 17 relating to design protection for vessel hulls. The 
     sunset provision for chapter 13, enacted as part of the 
     Digital Millennium Copyright Act, is removed so that chapter 
     13 is now a permanent chapter of title 17. The timing and 
     number of joint studies to be done by the Copyright Office 
     and the Patent and Trademark Offices of the effectiveness of 
     chapter 13 are also amended by reducing the number of studies 
     from two to one, and requiring that the one study not be 
     submitted until November 1, 2003. Current law requires 
     delivery of two studies within the first two years of chapter 
     13, which is unnecessary and an insufficient amount of time 
     for the Copyright Office and the Patent and Trademark Office 
     to accurately measure and assess the effectiveness of design 
     protection within the marine industry.
       The definition of a ``vessel'' in chapter 13 is amended to 
     provide that in addition to being able to navigate on or 
     through water, a vessel must be self-propelled and able to 
     steer, and must be designed to carry at least one passenger. 
     This clarifies Congress's intent not to allow design 
     protection for such craft as barges, toy and remote 
     controlled boas, inner tubes and surf boards.
     Section 5006. Informal rulemaking of copyright determination
       The Copyright Office has requested that Congress make a 
     technical correction to section 1201(a)(1)(C) of title 17 by 
     deleting the phrase ``on the record.'' The Copyright Office 
     believes that this correction is necessary to avoid any 
     misunderstanding regarding the intent of Congress that the 
     rulemaking proceeding which is to be conducted by the 
     Copyright Office under this provision shall be an informal, 
     rather than a formal, rulemaking proceeding. Accordingly, the 
     phrase ``on the record'' is deleted as a technical correction 
     to clarify the intent of Congress that the Copyright Office 
     shall conduct the rulemaking under section 1201(a)(1)(C) as 
     an informal rulemaking proceeding pursuant to section 553 of 
     Title 5. The intent is to permit interested persons an 
     opportunity to participate through the submission of written 
     statements, oral presentations at one or more of the public 
     hearings, and the submission of written responses to the 
     submissions or presentations of others.
     Section 5007. Service of process for surety corporations
       This section allows surety corporations, like other 
     corporations, to utilize approved state officials to receive 
     service of process in any legal proceeding as an alternative 
     to having a separate agent for service of process in each of 
     the 94 federal judicial districts.
     Section 5008. Low-power television
       Section 5009, which can be cited as the Community 
     Broadcasters Protection Act of 1999, will ensure that many 
     communities across the nation will continue to have access to 
     free, over-the-air low-power television (LPTV) stations, even 
     as full-service television stations proceed with their 
     conversion to digital format. In particular, Section 5009 
     requires the Federal Communications Commission (FCC) to 
     provide certain qualifying LPTV stations with ``primary'' 
     regulatory status, which in turn will enable these LPTV 
     stations to attract the financing that is necessary to 
     provide consumers with critical information and programming. 
     At the same time, recognizing the importance of, and the 
     engineering complexity in, the FCC's plan to convert full-
     service television stations to digital format, Section 5009 
     protects the ability of these stations to provide both 
     digital and analog service throughout their existing service 
     areas.
       The FCC began awarding licenses for low-power television 
     service in 1982. Low-power television service is a relatively 
     inexpensive and flexible means of delivering programming 
     tailored to the interests of viewers in small localized 
     areas. It also ensures that spectrum allocated for broadcast 
     television service is more efficiently used and promotes 
     opportunities for entering the television broadcast business.
       The FCC estimates that there are more than 2,000 licensed 
     and operational LPTV stations, about 1,500 of which are 
     operated in the continental United States by 700 different 
     licensees in nearly 750 towns and cities.\28\ LPTV stations 
     serve rural and urban communities alike, although about two-
     thirds of all LPTV stations serve rural communities. LPTV 
     stations in urban markets typically provide niche programming 
     (e.g., bilingual or non-English programming) to under-served 
     communities in large cities. In many rural markets, LPTV 
     stations are consumers' only source of local, over-the-air 
     programming. Owners of LPTV stations are diverse, including 
     high school and college student populations, churches and 
     religious groups, local governments, large and small 
     businesses, and even individual citizens.
---------------------------------------------------------------------------
     \28\ LPTV stations are distinct from so called 
     ``translators.'' Whereas LPTV stations typically offer 
     orginal programming, translators merely amplify or ``boost'' 
     a full-service television station's signal into rural and 
     mountainous regions adjacent to the station's market.
---------------------------------------------------------------------------
       From an engineering standpoint, the term ``low-power 
     television service'' means precisely what it implies, i.e., 
     broadcast television service that operates at a lower level 
     of power than full-service stations. Specifically, LPTV 
     stations radiate 3 kilowatts of power for stations operating 
     on the VHF band (i.e., channels 2 through 13), and 150 
     kilowatts of power for stations operating on the UHF band 
     (i.e., channels 14 through 69). By comparison, full-service 
     stations on VHF channels radiate up to 316 kilowatts of 
     power, and stations on UHF channels radiate up to 5,000 
     kilowatts of power. The reduced power levels that govern LPTV 
     stations mean these stations serve a much smaller geographic 
     region than do full-service stations. LPTV signals typically 
     extend to a range of approximately 12 to 15 miles, whereas 
     the originating signal of full-service stations often reach 
     households 60 or 80 miles away.
       Compared to its rules for full-service television station 
     licensees, the FCC's rules for obtaining and operating an 
     LPTV license are minimal. But in return for ease of 
     licensing, LPTV stations must operate not only at reduced 
     power levels but also as ``secondary'' licensees. This means 
     LPTV stations are strictly prohibited from interfering with, 
     and must accept signal interference from, ``primary'' 
     licensees, such as full-service television stations. 
     Moreover, LPTV stations must yield at any point in time to 
     full-service stations that increase their power levels, as 
     well as to new full-service stations.
       The video programming marketplace is intensely competitive. 
     The three largest broadcast networks that once dominated the 
     market now face competition from several emerging broadcast 
     and cable networks, cable systems, satellite television 
     operators, wireless cable, and even the Internet. Low-power 
     television plays a valuable, albeit modest, role in this 
     market because it is capable of providing locally-originated 
     programming to rural and urban communities that have either 
     no access to local programming, or an over-abundance of 
     national programming.
       Low-power television's future, however, is uncertain. To 
     begin with, LPTV's secondary regulatory status means a 
     licensee can be summarily displaced by a full-service station 
     that seeks to expand its own service area, or by a new full-
     service station seeking to enter the same market. This cloud 
     of regulatory uncertainty necessarily affects the ability of 
     LPTV stations to raise capital over the long-term, 
     irrespective of an LPTV station's popularity among consumers.
       The FCC's plan to convert full-service stations to digital 
     substantially complicates LPTV stations' already uncertain 
     future. In its digital television (DTV) proceeding, the FCC 
     adopted a table of allotments for DTV service that provided a 
     second channel for each existing full-service station to use 
     for DTV service in making the transition from the existing 
     analog technology to the new DTV technology. These second 
     channels were provided to broadcasters on a temporary basis. 
     At the end of the DTV transition,

[[Page 29281]]

     which is currently scheduled for December 31, 2006, they must 
     relinquish one of their two channels.
       In assigning DTV channels, the FCC maintained the secondary 
     status of LPTV stations (as well as translators). In order to 
     provide all full-service television stations with a second 
     channel, the FCC was compelled to establish DTV allotments 
     that will displace a number of LPTV stations, particularly in 
     the larger urban market areas where the available spectrum is 
     most congested.
       The FCC's plan also provides for the recovery of a portion 
     of the existing broadcast television spectrum so that it can 
     be reallocated to new uses. Specifically, the FCC provided 
     for immediate recovery of broadcast channels 60 through 69, 
     and for recovery of broadcast channels 52 through 59 at the 
     end of the DTV transition. As further required by Congress 
     under the Balanced Budget Act of 1997, \29\ the FCC has 
     completed the reallocation of broadcast channels 60 through 
     69. Existing analog stations, including LPTV stations and a 
     few DTV stations, are permitted to operate on these channels 
     during the DTV transition. But at the end of the transition, 
     all analog broadcast TV stations will have to cease 
     operation, and the DTV stations on broadcast channels 52 
     through 69 will be relocated to new channels in the DTV core 
     spectrum. As a result, the FCC estimates that the DTV 
     transition will require about 35 to 45 percent of all LPTV 
     stations to either change their operation or cease operation. 
     Indeed, some full-service stations have already ``bumped'' 
     several LPTV stations a number of times, at substantial cost 
     to the LPTV station, with no guarantee that the LPTV station 
     will be permitted to remain on its new channel in the long 
     term.
---------------------------------------------------------------------------
     \29\ See 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
       The conferees, therefore, seek to provide some regulatory 
     certainty for low-power television service. The conferees 
     recognize that, because of emerging DTV service, not all LPTV 
     stations can be guaranteed a certain future. Moreover, it is 
     not clear that all LPTV stations should be given such a 
     guarantee in light of the fact that many existing LPTV 
     stations provide little or no original programming service.
       Instead, the conferees seek to buttress the commercial 
     viability of those LPTV stations which can demonstrate that 
     they provide valuable programming to their communities. The 
     House Committee on Commerce's record in considering this 
     legislation reflects that there are a significant number of 
     LPTV stations which broadcast programming--including locally 
     originated programming--for a substantial portion of each 
     day. From the consumers' perspective, these stations provide 
     video programming that is functionally equivalent to the 
     programming they view on full-service stations, as well as 
     national and local cable networks. Consequently, these 
     stations should be afforded roughly similar regulatory 
     status. Section 5009, the Community Broadcasters Protection 
     Act of 1999, will achieve that objective, and at the same 
     time, protect the transition to digital.
       Section 5009(a) provides that the short title of this 
     section is the ``Community Broadcasters Protection Act of 
     1999.''
       Section 5009(b) describes the Congress' findings on the 
     importance of low-power television service. The Congress 
     finds that LPTV stations have operated in a manner beneficial 
     to the public, and in many instances, provide worthwhile and 
     diverse services to communities that lack access to over-the-
     air programming. The Congress also finds, however, that LPTV 
     stations' secondary regulatory status effectively blocks 
     access to capital.
       Section 5009(c) amends section 336 of the Communications 
     Act of 1934 \30\ to require the FCC to create a new ``Class 
     A'' license for certain qualifying LPTV stations. New 
     paragraph (1)(A) in particular directs the FCC to prescribe 
     rules within 120 days of enactment for the establishment of a 
     new Class A television license that will be available to 
     qualifying LPTV stations. The FCC's rules must ensure that a 
     Class A licensee receives the same license terms and renewal 
     standards as any full-service licensee, and that each Class A 
     licensee is accorded primary regulatory status. Subparagraph 
     (B) further requires the FCC, within 30 days of enactment, to 
     send to each existing LPTV licensee a notice that describes 
     the requirements for Class A designation. Within 60 days of 
     enactment (or within 30 days of the FCC's notice), LPTV 
     stations intending to seek Class A designation must submit a 
     certification of eligibility to the FCC. Absent a material 
     deficiency in an LPTV station's certification materials, the 
     FCC is required under subparagraph (B) to grant a 
     certification of eligibility.
---------------------------------------------------------------------------
     \30\ 47 U.S.C. Sec. 336.
---------------------------------------------------------------------------
       Subparagraph (C) permits an LPTV station, within 30 days of 
     the issuance of the rules required under subparagraph (A), to 
     submit an application for Class A designation. The FCC must 
     award a Class A license to a qualifying LPTV station within 
     30 days of receiving such application. Subparagraph (D) 
     mandates that the FCC must act to preserve the signal 
     contours of an LPTV station pending the final resolution of 
     its application for a Class A license. In the event technical 
     problems arise that require an engineering solution to a 
     full-service station's allotted parameters or channel 
     assignment in the DTV table of allotments, subparagraph (D) 
     requires the FCC to make the necessary modifications to 
     ensure that such full-service station can replicate or 
     maximize its service area, as provided for in the FCC's 
     rules.
       With regard to maximization, a full-service digital 
     television station must file an application for maximization 
     or a notice of intent to seek such maximization by December 
     31, 1999, file a bona fide application for maximization by 
     May 1, 2000, and also comply with all applicable FCC rules 
     regarding the construction of digital television facilities. 
     The term ``maximization'' is defined in paragraph 31 of the 
     FCC's Sixth Report and Order as the process by which stations 
     increase their service areas by operating with additional 
     power or higher antennae than specified in the FCC's digital 
     television table of allotments. Subparagraph (E) requires 
     that a station must reduce the protected contour of its 
     digital television service area in accordance with any 
     modifications requested in future change applications. This 
     provision is intended to ensure that stations indeed utilize 
     the full amount of maximized spectrum for which they 
     originally apply by the aforementioned deadlines.
       Paragraph (2) lists the criteria an LPTV station must meet 
     to qualify for a Class A license. Specifically, the LPTV 
     station must: during the 90 days preceding the date of 
     enactment, broadcast a minimum of 18 hours per day--including 
     at least 3 hours per week of locally-originated programming--
     and also be in compliance with the FCC's rules on low-power 
     television service; and from and after the date of its 
     application for a Class A license, be in compliance with the 
     FCC's rules for full-service television stations. In the 
     alternative, the FCC may qualify an LPTV station as a Class A 
     licensee if it determines that such qualification would serve 
     the public interest, convenience, and necessity or for other 
     reasons determined by the FCC.
       Paragraph (3) provides that no LPTV station authorized as 
     of the date of enactment may be disqualified for a Class A 
     license based on common ownership with any other medium of 
     mass communication.
       Paragraph (4) makes clear that the FCC is not required to 
     issue Class A LPTV stations (or translators) an additional 
     license for advanced television services. The FCC, however, 
     must accept applications for such services, provided the 
     station will not cause interference to any other broadcast 
     facility applied for, protected, permitted or authorized on 
     the date of the filing of the application for advanced 
     television services. Either the new license for advanced 
     services or the original license must be forfeited at the end 
     of the DTV transition. The licensee may elect to convert to 
     advanced television services on its analog channel, but is 
     not required to convert to digital format until the end of 
     the DTV transition.
       Paragraph (5) clarifies that nothing in new subsection 
     336(f) preempts, or otherwise affects, section 337 of the 
     Communications Act of 1934.\31\
---------------------------------------------------------------------------
     \31\ 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
       Paragraph (6) precludes the FCC from granting Class A 
     licenses to LPTV stations operating between 698 megahertz 
     (MHz) and 806 MHz (i.e., television broadcast channels 52 
     through 69). However, the FCC shall provide to LPTV stations 
     assigned to, and temporarily operating on, those channels the 
     opportunity to qualify for a Class A license. If a qualifying 
     LPTV station is ultimately assigned a channel within the band 
     of frequencies that will eventually comprise the ``core 
     spectrum'' (i.e., television broadcast channels 2 through 
     51), then the FCC is required to issue a Class A license 
     simultaneously. However, the FCC may not grant a Class A 
     license to an LPTV station operating on a channel within the 
     core spectrum that the FCC will identify within 180 days of 
     enactment.
       Finally, paragraph (7) provides that the FCC may not grant 
     a Class A license (or a modification thereto) unless the 
     requesting LPTV station demonstrates that it will not 
     interfere with one of three types of radio-based services. 
     First, under subparagraph (A), the LPTV station must show 
     that it will not interfere with: (i) the predicted Grade B 
     contour of any station transmitting in analog format; or (ii) 
     the digital television service areas provided in the DTV 
     table of allotments; or the digital television areas 
     explicitly protected (as opposed to those areas that may be 
     permitted) in the Commission's digital television 
     regulations; or the digital television service areas of 
     stations subsequently granted by the FCC prior to the filing 
     of a Class A application; or lastly, stations seeking to 
     maximize power under the FCC's rules (provided such stations 
     are in compliance with the notification requirements under 
     paragraph (1)).
       Second, under subparagraph (B), the LPTV station must show 
     that it will not interfere with any licensed, authorized or 
     pending LPTV station or translator. And third, under 
     subparagraph (C), the LPTV station must show that it will not 
     interfere with other services (e.g., land mobile services) 
     that also

[[Page 29282]]

     operate on television broadcast channels 14 through 20.
       Finally, paragraph (8) establishes priority for those LPTVs 
     that are displaced by an application filed under this 
     section, in that these LPTVs have priority over other LPTVs 
     in the assignment of available channels.

     From the Committee on Commerce, for consideration of the 
     House bill and the Senate amendment, and modifications 
     committee to conference:
     Tom Bliley,
     Billy Tauzin,
     Michael G. Oxley,
     John D. Dingell,
     Edward J. Markey,
     Provided that Mr. Boucher is appointed in lieu of Mr. Markey 
     for consideration of secs. 712(b)(1), 712(b)(2), and 
     712(c)(1) of the Communications Act of 1934 as added by sec. 
     104 of the House bill.
     Rick Boucher,
     From the Committee on the Judiciary, for consideration of the 
     House bill and the Senate amendment, and modifications 
     committee to conference:
     Henry Hyde,
     Howard Coble,
     Bob Goodlatte,
     John Conyers,
     Howard L. Berman,
                                Managers on the Part of the House.

     From the Committee on the Judiciary:
     Orrin Hatch,
     Strom Thurmond,
     Mike DeWine,
     Patrick Leahy,
     Herb Kohl,
     From the Committee on Commerce, Science, and Transportation:
     Ted Stevens,
     Fritz Hollings,
     Managers on the Part of the Senate.

                          ____________________