[House Report 105-39]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     105-39
_______________________________________________________________________


 
               21ST CENTURY PATENT SYSTEM IMPROVEMENT ACT

_______________________________________________________________________


 March 20, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Coble, from the Committee on the Judiciary,  submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 400]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 400) to amend title 35, United States Code, with respect 
to patents, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``21st Century Patent System Improvement 
Act''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.

           TITLE I--PATENT AND TRADEMARK OFFICE MODERNIZATION

Sec. 101. Short title.

         Subtitle A--United States Patent and Trademark Office

Sec. 111. Establishment of Patent and Trademark Office as a Government 
corporation.
Sec. 112. Powers and duties.
Sec. 113. Organization and management.
Sec. 114. Management Advisory Board.
Sec. 115. Conforming amendments.
Sec. 116. Trademark Trial and Appeal Board.
Sec. 117. Board of Patent Appeals and Interferences.
Sec. 118. Suits by and against the Office.
Sec. 119. Annual report of Director.
Sec. 120. Suspension or exclusion from practice.
Sec. 121. Funding.
Sec. 122. Extension of surcharges on patent fees.
Sec. 123. Transfers.
Sec. 124. GAO study and report.

            Subtitle B--Effective Date; Technical Amendments

Sec. 131. Effective date.
Sec. 132. Technical and conforming amendments.

                  Subtitle C--Miscellaneous Provisions

Sec. 141. References.
Sec. 142. Exercise of authorities.
Sec. 143. Savings provisions.
Sec. 144. Transfer of assets.
Sec. 145. Delegation and assignment.
Sec. 146. Authority of Director of the Office of Management and Budget 
with respect to functions transferred.
Sec. 147. Certain vesting of functions considered transfers.
Sec. 148. Availability of existing funds.
Sec. 149. Definitions.

     TITLE II--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH 
      PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION

Sec. 201. Short title.
Sec. 202. Publication.
Sec. 203. Time for claiming benefit of earlier filing date.
Sec. 204. Provisional rights.
Sec. 205. Prior art effect of published applications.
Sec. 206. Cost recovery for publication.
Sec. 207. Conforming changes.
Sec. 208. Patent term extension authority.
Sec. 209. Further examination of patent applications.
Sec. 210. Last day of pendency of provisional application.
Sec. 211. Reporting requirement.
Sec. 212. Effective date.

TITLE III--PROTECTION FOR PRIOR DOMESTIC USERS OF PATENTED TECHNOLOGIES

Sec. 301. Short title.
Sec. 302. Defense to patent infringement based on prior domestic 
commercial or research use.
Sec. 303. Effective date and applicability.

           TITLE IV--ENHANCED PROTECTION OF INVENTORS' RIGHTS

Sec. 401. Short title.
Sec. 402. Invention development services.
Sec. 403. Technical and conforming amendment.
Sec. 404. Effective date.

               TITLE V--IMPROVED REEXAMINATION PROCEDURES

Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Effective date.

                  TITLE VI--MISCELLANEOUS IMPROVEMENTS

Sec. 601. Provisional applications.
Sec. 602. International applications.
Sec. 603. Plant patents.
Sec. 604. Electronic filing.
Sec. 605. Divisional applications.

           TITLE I--PATENT AND TRADEMARK OFFICE MODERNIZATION

SEC. 101. SHORT TITLE.

  This title may be cited as the ``Patent and Trademark Office 
Modernization Act''.

         Subtitle A--United States Patent and Trademark Office

SEC. 111. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A GOVERNMENT 
                    CORPORATION.

  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 a wholly owned Government corporation subject to 
chapter 91 of title 31, separate from any department of the United 
States, and shall be an agency of the United States under the policy 
direction of the Secretary of Commerce. For purposes of internal 
management, the United States Patent and Trademark Office shall be a 
corporate body not subject to direction or supervision by any 
department of the United States, except as otherwise provided in this 
title.
  ``(b) Offices.--The United States Patent and Trademark Office shall 
maintain its principal office in the metropolitan Washington, D.C. 
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 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. 112. 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, 
under the policy direction of the Secretary of Commerce--
          ``(1) shall be responsible for the granting and issuing of 
        patents and the registration of trademarks;
          ``(2) may conduct studies, programs, or exchanges of items or 
        services regarding domestic and international law of patents, 
        trademarks, and other matters, the administration of the 
        Office, or any function vested in the Office by law, including 
        programs to recognize, identify, assess, and forecast the 
        technology of patented inventions and their utility to 
        industry;
          ``(3)(A) may authorize or conduct studies and programs 
        cooperatively with foreign patent and trademark offices and 
        international organizations, in connection with patents, 
        trademarks, and other matters; 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 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; and
          ``(4) shall be responsible for disseminating to the public 
        information with respect to patents and trademarks.
The special payments under paragraph (3)(B) shall be in addition to any 
other payments or contributions to international organizations 
described in paragraph (3)(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.
  ``(b) Specific Powers.--The Office--
          ``(1) shall have perpetual succession;
          ``(2) shall adopt and use a corporate seal, which shall be 
        judicially noticed and with which letters patent, certificates 
        of trademark registrations, and papers issued by the Office 
        shall be authenticated;
          ``(3) may sue and be sued in its corporate name and be 
        represented by its own attorneys in all judicial and 
        administrative proceedings, subject to the provisions of 
        section 7;
          ``(4) may indemnify the Director, and other officers, 
        attorneys, agents, and employees (includingmembers of the 
Management Advisory Board established in section 5) of the Office for 
liabilities and expenses incurred within the scope of their employment;
          ``(5) may adopt, amend, and repeal bylaws, rules, 
        regulations, and determinations, which--
                  ``(A) shall govern the manner in which its business 
                will be conducted and the powers granted to it by law 
                will be exercised;
                  ``(B) shall be made after notice and opportunity for 
                full participation by interested public and private 
                parties;
                  ``(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; and
                  ``(E) 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;
          ``(6) 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;
          ``(7)(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 and 
        following), the Public Buildings Act (40 U.S.C. 601 and 
        following), and the Stewart B. McKinney Homeless Assistance Act 
        (42 U.S.C. 11301 and following); 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;
          ``(8) 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;
          ``(9) may obtain from the Administrator of General Services 
        such services as the Administrator is authorized to provide to 
        other agencies of the United States, on the same basis as those 
        services are provided to other agencies of the United States;
          ``(10) 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, government, or 
        international organization concerned, the services, records, 
        facilities, or personnel of any State or local government 
        agency or instrumentality or foreign government or 
        international organization to perform functions on its behalf;
          ``(11) may determine the character of and the necessity for 
        its obligations and expenditures and the manner in which they 
        shall be incurred, allowed, and paid, subject to the provisions 
        of this title and the Act of July 5, 1946 (commonly referred to 
        as the `Trademark Act of 1946');
          ``(12) 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, including for research and development and capital 
        investment, subject to the provisions of section 10101 of the 
        Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41 note);
          ``(13) shall have the priority of the United States with 
        respect to the payment of debts from bankrupt, insolvent, and 
        decedents' estates;
          ``(14) may accept monetary gifts or donations of services, or 
        of real, personal, or mixed property, in order to carry out the 
        functions of the Office;
          ``(15) may execute, in accordance with its bylaws, rules, and 
        regulations, all instruments necessary and appropriate in the 
        exercise of any of its powers; and
          ``(16) may provide for liability insurance and insurance 
        against any loss in connection with its property, other assets, 
        or operations either by contract or by self-insurance.
  ``(c) 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. 113. ORGANIZATION AND MANAGEMENT.

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

``Sec. 3. Officers and employees

  ``(a) Director.--
          ``(1) In general.--The management of the United States Patent 
        and Trademark Office shall be vested in a 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, by reason of professional background and 
        experience in patent or trademark law, is especially qualified 
        to manage the Office.
          ``(2) Duties.--
                  ``(A) In general.--The Director shall be responsible 
                for the management and direction of the Office, 
                including the issuance of patents and the registration 
                of trademarks, and shall perform these duties in a 
                fair, impartial, and equitable manner.
                  ``(B) Advising the president.--The Director shall 
                advise the President, through the Secretary of 
                Commerce, of all activities of the Office undertaken in 
                response to obligations of the United States under 
                treaties and executive agreements, or which relate to 
                cooperative programs with those authorities of foreign 
                governments that are responsible for granting patents 
                or registering trademarks. The Director shall also 
                recommend to the President, through the Secretary of 
                Commerce, changes in law or policy which may improve 
                the ability of United States citizens to secure and 
                enforce patent rights or trademark rights in the United 
                States or in foreign countries.
                  ``(C) Consulting with the management advisory 
                board.--The Director shall consult with the Management 
                Advisory Board established in section 5 on a regular 
                basis on matters relating to the operation of the 
                Office, and shall consult with the Advisory Board 
                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.
                  ``(D) Security clearances.--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.
          ``(3) Term.--The Director shall serve a term of 5 years, and 
        may continue to serve after the expiration of the Director's 
        term until a successor is appointed and assumes office. The 
        Director may be reappointed to subsequent terms.
          ``(4) Oath.--The Director shall, before taking office, take 
        an oath to discharge faithfully the duties of the Office.
          ``(5) Compensation.--The Director shall receive compensation 
        at the rate of pay in effect for level III of the Executive 
        Schedule under section 5314 of title 5 and, in addition, may 
        receive as a bonus, an amount which would raise the Director's 
        total compensation to not more than the equivalent of the level 
        of the rate of pay in effect for level Iof the Executive 
Schedule under section 5312 of title 5, based upon an evaluation by the 
Secretary of Commerce of the Director's performance as defined in an 
annual performance agreement between the Director and the Secretary. 
The annual performance agreement shall incorporate measurable goals as 
delineated in an annual performance plan agreed to by the Director and 
the Secretary.
          ``(6) 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.
          ``(7) Designee of director.--The Director shall designate an 
        officer of the 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.
  ``(b) Officers and Employees of the Office.--
          ``(1) Commissioners.--The Director shall appoint a 
        Commissioner for Patents and a Commissioner for Trademarks for 
        terms that shall expire on the date on which the Director's 
        term expires. The Commissioner for Patents shall be a person 
        with demonstrated experience in patent law and the Commissioner 
        for Trademarks shall be a person with demonstrated experience 
        in trademark law. The Commissioner for Patents and the 
        Commissioner for Trademarks shall be the principal policy and 
        management advisers to the Director on all aspects of the 
        activities of the Office that affect the administration of 
        patent and trademark operations, respectively.
          ``(2) 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 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.
  ``(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. Section 2302 of title 5 applies to the Office, 
notwithstanding subsection (a)(2)(B)(i) of such section.
  ``(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 Modernization 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 Modernization 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 
        Modernization 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 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.
          ``(3) Accumulated leave.--The amount of sick and annual leave 
        and compensatory time accumulated under title 5 before the 
        effective date described in paragraph (1), by those becoming 
        officers or employees of the Office pursuant to this 
        subsection, are obligations of the Office.
  ``(f) Transition Provisions.--
          ``(1) Interim appointment of director.--On or after the 
        effective date of the Patent and Trademark Office Modernization 
        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 Modernization Act may serve as the 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 Modernization Act may serve as the 
        Commissioner for Trademarks until the date on which a 
        Commissioner for Trademarks is appointed under subsection 
        (b).''.

 SEC. 114. MANAGEMENT ADVISORY BOARD.

  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 Management Advisory Board

  ``(a) Establishment of Management Advisory Board.--
          ``(1) Appointment.--The United States Patent and Trademark 
        Office shall have a Management Advisory Board (hereafter in 
        this title referred to as the `Advisory Board') of 12 members, 
        4 of whom shall be appointed by the President, 4 of whom shall 
        be appointed by the Speaker of the House of Representatives, 
        and 4 of whom shall be appointed by the majority leader of the 
        Senate. Not more than 3 of the 4 members appointed by each 
        appointing authority shall be members of the same political 
        party.
          ``(2) Terms.--Members of the Advisory Board shall be 
        appointed for a term of 4 years each, except that of the 
        members first appointed by each appointing authority, 1 shall 
        be for a term of 1 year, 1 shall be for a term of 2 years, and 
        1 shall be for a term of 3 years. No member may serve more than 
        1 term.
          ``(3) Chair.--The President shall designate the chair of the 
        Advisory Board, whose term as chair shall be for 3 years.
          ``(4) Timing of appointments.--Initial appointments to the 
        Advisory Board shall be made within 3 months after the 
        effective date of the Patent and Trademark Office Modernization 
        Act, and vacancies shall be filled within 3 months after they 
        occur.
          ``(5) Vacancies.--Vacancies shall be filled in the manner in 
        which the original appointment was made under this subsection. 
        Members appointed to fill a vacancy occurring before the 
        expiration of the term for which the member's predecessor was 
        appointed shall be appointed only for the remainder of that 
        term. A member may serve after the expiration of that member's 
        term until a successor is appointed.
          ``(6) Committees.--The Chair shall designate members of the 
        Advisory Board to serve on a committee on patent operations and 
        on a committee on trademark operations to perform the duties 
        set forth in subsection (e) as they relate specifically to the 
        Office's patent operations, and the Office's trademark 
        operations, respectively.
  ``(b) Basis for Appointments.--Members of the Advisory Board 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, and shall include individuals with substantial 
background and achievement in corporate finance and management.
  ``(c) Applicability of Certain Ethics Laws.--Members of the Advisory 
Board shall be special Government employees within the meaning of 
section 202 of title 18.
  ``(d) Meetings.--The Advisory Board shall meet at the call of the 
chair to consider an agenda set by the chair.
  ``(e) Duties.--The Advisory Board shall--
          ``(1) review the policies, goals, performance, budget, and 
        user fees of the United States Patent and Trademark Office, and 
        advise the Director on these matters; and
          ``(2) within 60 days after the end of each fiscal year, 
        prepare an annual report on the matters referred to in 
        paragraph (1), transmit the report to the President and the 
        Committees on the Judiciary of the Senate and the House of 
        Representatives, and publish the report in the Patent and 
        Trademark Office Official Gazette.
  ``(f) Compensation.--Members of the Advisory Board shall be 
compensated for each day (including travel time) during which they are 
attending meetings or conferences of the Advisory Board or otherwise 
engaged in the business of the Advisory Board, 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, and while 
away from their homes or regular places of business they may be allowed 
travel expenses, including per diem in lieu of subsistence, as 
authorized by section 5703 of title 5.
  ``(g) Access to Information.--Members of the Advisory Board 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.''.

SEC. 115. 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.

SEC. 116. 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. 117. BOARD OF PATENT APPEALS AND INTERFERENCES.

  Chapter 1 of title 35, United States Code, is amended by striking 
section 7 and 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. 118. SUITS BY AND AGAINST THE OFFICE.

  Chapter 1 of part I of title 35, United States Code, is amended by 
inserting after section 6 the following new section:

``Sec. 7. Suits by and against the Office

  ``(a) Actions Under United States Law.--Any civil action or 
proceeding to which the United States Patent and Trademark Office is a 
party is deemed to arise under the laws of the United States. The 
Federal courts shall have exclusive jurisdiction over all civil actions 
by or against the Office.
  ``(b) Representation by the Department of Justice.--The United States 
Patent and Trademark Office shall be deemed an agency of the United 
States for purposes of section 516 of title 28.
  ``(c) Prohibition on Attachment, Liens, Etc.--No attachment, 
garnishment, lien, or similar process, intermediate or final, in law or 
equity, may be issued against property of the Office.''.

SEC. 119. ANNUAL REPORT OF DIRECTOR.

  Section 14 of title 35, United States Code, is amended to read as 
follows:

``Sec. 14. 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, and other information relating 
to the Office. The report under this section shall also meet the 
requirements of section 9106 of title 31, to the extent that such 
requirements are not inconsistent with the preceding sentence. The 
report required under this section shall not be deemed to be the report 
of the United States Patent and Trademark Office under section 9106 of 
title 31, and the Director shall file a separate report under such 
section.''.

SEC. 120. 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. 121. FUNDING.

  Section 42 of title 35, United States Code, is amended to read as 
follows:

``Sec. 42. Patent and Trademark Office funding

  ``(a) Fees Payable to the Office.--All fees for services performed by 
or materials furnished by the United States Patent and Trademark Office 
shall be payable to the Office.
  ``(b) Use of Moneys.--Moneys from fees shall be available to the 
United States Patent and Trademark Office to carry out, to the extent 
provided in appropriations Acts, the functions of the Office. Moneys of 
the Office not otherwise used to carry out the functions of the Office 
shall be kept in cash on hand or on deposit, or invested in obligations 
of the United States or guaranteed by the United States, or in 
obligations or other instruments which are lawful investments for 
fiduciary, trust, or public funds. Fees available to the Office under 
this title shall be used for the processing of patent applications and 
for other services and materials relating to patents. Fees available to 
the Office under section 31 of the Act of July 5, 1946 (commonly 
referred to as the `Trademark Act of 1946'; 15 U.S.C. 1113), shall be 
used only for the processing of trademark registrations and for other 
services and materials relating to trademarks.
  ``(c) Borrowing Authority.--The United States Patent and Trademark 
Office is authorized to issue from time to time for purchase by the 
Secretary of the Treasury its debentures, bonds, notes, and other 
evidences of indebtedness (hereafter in this subsection referred to as 
`obligations') to assist in financing its activities. Borrowing under 
this subsection shall be subject to prior approval in appropriations 
Acts. Such borrowing shall not exceed amounts approved in 
appropriations Acts. Any borrowing under this subsection shall be 
repaid only from fees paid to the Office and surcharges appropriated by 
the Congress. Such obligations shall be redeemable at the optionof the 
Office before maturity in the manner stipulated in such obligations and 
shall have such maturity as is determined by the Office with the 
approval of the Secretary of the Treasury. Each such obligation issued 
to the Treasury shall bear interest at a rate not less than the current 
yield on outstanding marketable obligations of the United States of 
comparable maturity during the month preceding the issuance of the 
obligation as determined by the Secretary of the Treasury. The 
Secretary of the Treasury shall purchase any obligations of the Office 
issued under this subsection and for such purpose the Secretary of the 
Treasury is authorized to use as a public-debt transaction the proceeds 
of any securities issued under chapter 31 of title 31, and the purposes 
for which securities may be issued under that chapter are extended to 
include such purpose. Payment under this subsection of the purchase 
price of such obligations of the United States Patent and Trademark 
Office shall be treated as public debt transactions of the United 
States.''.

SEC. 122. EXTENSION OF SURCHARGES ON PATENT FEES.

  (a) In General.--Section 10101 of the Omnibus Budget Reconciliation 
Act of 1990 (35 U.S.C. 41 note) is amended to read as follows:

``SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.

  ``(a) Surcharges.--There shall be a surcharge on all fees authorized 
by subsections (a) and (b) of section 41 of title 35, United States 
Code, in order to ensure that the amounts specified in subsection (c) 
are collected.
  ``(b) Use of Surcharges.--Notwithstanding section 3302 of title 31, 
United States Code, all surcharges collected by the Patent and 
Trademark Office--
          ``(1) shall be credited to a separate account established in 
        the Treasury and ascribed to the activities of the United 
        States Patent and Trademark Office as offsetting collections,
          ``(2) shall be collected by and available to the United 
        States Patent and Trademark Office for all authorized 
        activities and operations of the Office, including all direct 
        and indirect costs of services provided by the office, and
          ``(3) shall remain available until expended.
  ``(c) Establishment of Surcharges.--The Director of the United States 
Patent and Trademark Office shall establish surcharges under subsection 
(a), subject to the provisions of section 553 of title 5, United States 
Code, in order to ensure that $119,000,000, but not more than 
$119,000,000, are collected in fiscal year 1999 and each fiscal year 
thereafter.
  ``(d) Appropriations Act Required.--Notwithstanding subsections (a) 
through (c), no fee established by subsection (a) shall be collected 
nor shall be available for spending without prior authorization in 
appropriations Acts.''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on October 1, 1998.

SEC. 123. TRANSFERS.

  (a) Transfer of Functions.--Except to the extent that such functions, 
powers, and duties relate to the direction of patent or trademark 
policy, there are transferred to, and vested in, the United States 
Patent and Trademark Office all functions, powers, and duties vested by 
law in the Secretary of Commerce or the Department of Commerce or in 
the officers or components in the Department of Commerce with respect 
to the authority to grant patents and register trademarks, and in the 
Patent and Trademark Office, as in effect on the day before the 
effective date of this title, and in the officers and components of 
such Office.
  (b) Transfer of Funds and Property.--The Secretary of Commerce shall 
transfer to the United States Patent and Trademark Office, on the 
effective date of this title, so much of the assets, liabilities, 
contracts, property, records, and unexpended and unobligated balances 
of appropriations, authorizations, allocations, and other funds 
employed, held, used, arising from, available to, or to be made 
available to the Department of Commerce, including funds set aside for 
accounts receivable, which are related to functions, powers, and duties 
which are vested in the Patent and Trademark Office by this title.

SEC. 124. GAO STUDY AND REPORT.

  The Comptroller General shall conduct a study of and, not later than 
the date that is 2 years after the effective date of this title, submit 
to the Committee on the Judiciary of the House of Representatives and 
the Committee on the Judiciary of the Senate a report on--
          (1) the operations of the Patent and Trademark Office as a 
        Government corporation; and
          (2) the feasibility and desirability of making the trademark 
        operations of the Patent and Trademark Office a separate 
        Government corporation or agency.

            Subtitle B--Effective Date; Technical Amendments

 SEC. 131. EFFECTIVE DATE.

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

SEC. 132. 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:

         ``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 Management Advisory Board.
``6.  Board of Patent Appeals and Interferences.
``7.  Suits by and against the Office.
``8.  Library.
``9.  Classification of patents.
``10. Certified copies of records.
``11. Publications.
``12. Exchange of copies of patents with foreign countries.
``13. Copies of patents for public libraries.
``14. Annual report to Congress.''.

          (5) Section 155 of title 35, United States Code, is amended 
        by striking ``Commissioner of Patents and Trademarks'' and 
        inserting ``Director''.
          (6) Section 155A(c) of title 35, United States Code, is 
        amended by striking ``Commissioner of Patents and Trademarks'' 
        and inserting ``Director''.
          (7) Section 302 of title 35, United States Code, is amended 
        by striking ``Commissioner of Patents'' and inserting 
        ``Director''.
          (8) Section 303(b) of title 35, United States Code, is 
        amended by striking ``Commissioner's'' and inserting 
        ``Director's''.
          (9) Title 35, United States Code, is amended by striking 
        ``Commissioner'' each place it appears and inserting 
        ``Director''.
          (10) Section 41(a)(8)(A) of title 35, United States Code, is 
        amended by striking ``On'' and inserting ``on''.
  (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 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 section 116 of this Act, 
        is amended by striking ``Commissioner'' each place it appears 
        and inserting ``Director''.
          (2) Section 9101(3) of title 31, United States Code, is 
        amended by adding at the end the following:
                  ``(R) the United States Patent and Trademark 
                Office.''.
          (3) Section 500(e) of title 5, United States Code, is amended 
        by striking ``Patent Office'' and inserting ``United States 
        Patent and Trademark Office''.
          (4) 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;''.
          (5) 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.''.
          (6) 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 Director of the United States Patent and 
                Trademark Office; and''.
          (7) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
        1511) is amended by striking ``(d) Patent and Trademark 
        Office;'' and redesignating subsections (a) through (g) as 
        paragraphs (1) through (6), respectively.
          (8) 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 ``Director of the United States Patent and 
                Trademark Office''.
          (9) 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 ``Director of the United States 
        Patent and Trademark Office''.
          (10) 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 ``Director of the United States 
        Patent and Trademark Office''.
          (11) 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''.
          (12) 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''.
          (13) 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 ``Director of the United States Patent 
        and Trademark Office''.
          (14) 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''.
          (15) 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 ``Director of 
                the United States Patent and Trademark Office''.
          (16) Section 1744 of title 28, United States Code is 
        amended--
                  (A) by striking ``Patent Office'' each place it 
                appears in the text and section heading and inserting 
                ``United States Patent and Trademark Office'';
                  (B) by striking ``Commissioner of Patents'' and 
                inserting ``Director of the United States Patent and 
                Trademark Office''; and
                  (C) by striking ``Commissioner'' and inserting 
                ``Director''.
          (17) Section 1745 of title 28, United States Code, is amended 
        by striking ``United States Patent Office'' and inserting 
        ``United States Patent and Trademark Office''.
          (18) Section 1928 of title 28, United States Code, is amended 
        by striking ``Patent Office'' and inserting ``United States 
        Patent and Trademark Office''.
          (19) 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 ``Director of the 
        United States Patent and Trademark Office''.
          (20) 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 ``Director of the United States 
        Patent and Trademark Office''.
          (21) 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 ``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''.
          (22) 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 
        ``Director of the United States Patent and Trademark Office''.
          (23) Section 1111 of title 44, United States Code, is amended 
        by striking ``the Commissioner of Patents,''.
          (24) Section 1114 of title 44, United States Code, is amended 
        by striking ``the Commissioner of Patents,''.
          (25) Section 1123 of title 44, United States Code, is amended 
        by striking ``the Patent Office,''.
          (26) 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.
          (27) 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 ``Director of the United States Patent 
        and Trademark Office''.
          (28) Section 11 of the Inspector General Act of 1978 (5 
        U.S.C. App.) is amended--
                  (A) in paragraph (1)--
                          (i) by striking ``and'' before ``the chief 
                        executive officer of the Resolution Trust 
                        Corporation;'';
                          (ii) by striking ``and'' before ``the 
                        Chairperson of the Federal Deposit Insurance 
                        Corporation;'';
                          (iii) by striking ``or'' before ``the 
                        Commissioner of Social Security,''; and
                          (iv) by inserting ``or the Director of the 
                        United States Patent and Trademark Office;'' 
                        after ``Social Security Administration;''; and
                  (B) in paragraph (2)--
                          (i) by striking ``or'' before ``the Veterans' 
                        Administration,''; and
                          (ii) by striking ``or the Social Security 
                        Administration'' and inserting ``the Social 
                        Security Administration, or the United States 
                        Patent and Trademark Office''.

                  Subtitle C--Miscellaneous Provisions

SEC. 141. 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 title--
          (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 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. 142. EXERCISE OF AUTHORITIES.

  Except as otherwise provided by law, a Federal official to whom a 
function is transferred by this title 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 title.

SEC. 143. 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 
        title, or any other Government official, or by a court of 
        competent jurisdiction, in the performance of any function that 
        is transferred by this title, 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 title 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 title before 
an office transferred by this title, 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 title 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 title had not been enacted.
  (c) Suits.--This title shall not affect suits commenced before the 
effective date of this title, 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 title 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 title, shall abate by reason of the enactment of this title.
  (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 title 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 title, any statutory requirements relating 
to notice, hearings, action upon the record, or administrative or 
judicial review that apply to any function transferred by this title 
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 title.

SEC. 144. TRANSFER OF ASSETS.

  Except as otherwise provided in this title, 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 title 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. 145. DELEGATION AND ASSIGNMENT.

  Except as otherwise expressly prohibited by law or otherwise provided 
in this title, an official to whom functions are transferred under this 
title (including the head of any office to which functions are 
transferred under this title) 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 title shall relieve the official to whom a function is 
transferred under this title of responsibility for the administration 
of the function.

SEC. 146. 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 title.
  (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 title, 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 title. The Director shall provide for the termination of the 
affairs of all entities terminated by this title and for such further 
measures and dispositions as may be necessary to effectuate the 
purposes of this title.

SEC. 147. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

  For purposes of this title, 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. 148. AVAILABILITY OF EXISTING FUNDS.

  Existing appropriations and funds available for the performance of 
functions, programs, and activities terminated pursuant to this title 
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.

SEC. 149. DEFINITIONS.

  For purposes of this title--
          (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.

     TITLE II--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH 
      PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION

SEC. 201. SHORT TITLE.

  This title may be cited as the ``Examining Procedure Improvements 
Act''.

SEC. 202. 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 applications for patents 
shall be 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 patent, except applications for design patents 
        filed under chapter 16 of this title and provisional 
        applications filed under section 111(b) of this title, 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 that is no longer 
        pending shall not be published.
          ``(B) An application that is subject to a secrecy order 
        pursuant to section 181 of this title shall not be published.
          ``(C)(i) Upon the request of the applicant at the time of 
        filing, the application shall not be published in accordance 
        with paragraph (1) until 3 months after the Director makes a 
        notification to the applicant under section 132 of this title.
          ``(ii) Applications filed pursuant to section 363 of this 
        title, applications asserting priority under section 119 or 
        365(a) of this title, and applications asserting the benefit of 
        an earlier application under section 120, 121, or 365(c) of 
        this title shall not be eligible for a request pursuant to this 
        subparagraph.
          ``(iii) In a request under this subparagraph, the applicant 
        shall certify that the invention disclosed in the application 
        was not and will not be the subject of an application filed in 
        a foreign country.
          ``(iv) The Director may establish appropriate procedures and 
        fees for making a request under this subparagraph.
          ``(D)(i) In a case in which an applicant, after making a 
        request under subparagraph (C)(i), determines to file an 
        application in a foreign country, the applicant shall notify 
        the Director promptly. The application shall then be published 
        in accordance with the provisions of paragraph (1).
          ``(ii) The Director may establish appropriate fees to cover 
        the costs of processing notifications under clause (i), 
        including the costs of any special handling of applications 
        resulting from the initial request under subparagraph (C)(i).
  ``(c) Pre-Issuance Opposition.--The provisions of this section shall 
not operate to create any new opportunity for pre-issuance opposition. 
The Director may establish appropriate procedures to ensure that this 
section does not create any new opportunity for pre-issuance 
opposition.''.

SEC. 203. 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, at 
such time during the pendency of the application as is required by the 
Director, that identifies the foreign application by specifying its 
application number, the country in or for which the application was 
filed, and the date of its filing.
  ``(2) The Director may consider the failure of the applicant to file 
a timely claim for priority as a waiver of any such claim, and may 
require the payment of a surcharge as a condition of accepting an 
untimely claim during the pendency of the application.
  ``(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 intellectual property authority in the foreign 
country 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.--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 is required by the Commissioner. 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 unavoidably late submissions of amendments under 
this section.''.

SEC. 204. 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 pursuant to section 122(b) of this title, or in the 
        case of an international application filed under the treaty 
        defined in section 351(a) of this title 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, where 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, 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 
        claimedin 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.--The right 
        under paragraph (1) to obtain a reasonable royalty based upon 
        the publication under the treaty defined in section 351(a) of 
        this title of an international application designating the 
        United States shall commence from the date that the Patent and 
        Trademark Office receives a copy of the publication under such 
        treaty of the international application, or, if the publication 
        under the treaty of the international application is in a 
        language other than English, from the date that the Patent and 
        Trademark Office receives a translation of the international 
        application in the English language. The Director may require 
        the applicant to provide a copy of the international 
        publication of the international application and a translation 
        thereof.''.

SEC. 205. 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 pursuant to 
        section 122(b) of this title, 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) of this title shall have the effect 
        under this subsection of a national application published under 
        section 122(b) of this title 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, or''.

SEC. 206. COST RECOVERY FOR PUBLICATION.

  The Director of the United States Patent and Trademark Office shall 
recover the cost of early publication required by the amendment made by 
section 202 by adjusting the filing, issue, and maintenance fees under 
title 35, United States Code, by charging a separate publication fee, 
or by any combination of these methods.

SEC. 207. CONFORMING CHANGES.

  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, as amended by section 132(a)(4) of this 
        Act, 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 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 paragraph by inserting ``by the 
                publication of an application or'' after ``disclosure 
                of an invention'';
                  (C) in the third 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 paragraph by inserting ``the 
                publication of an application or'' after ``and'' in the 
                first sentence.
          (8) Section 252 is amended in the first paragraph by 
        inserting ``substantially'' before ``identical'' each place it 
        appears.
          (9) Section 284 is amended by adding at the end of the second 
        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: Effect

  ``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) of title 35, United States Code, is 
        amended--
                  (A) by inserting ``(1)'' after ``(b)'';
                  (B) by striking ``from the date on which the patent 
                was granted'' and inserting ``after the date on which 
                the patent is granted and the applicant makes a prima 
                facie showing of prior invention''; and
                  (C) 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 a published application may be 
made in an application filed after the published application is 
published only if the claim is made prior to one year after the date on 
which the published application is published and the applicant of the 
later filed application makes a prime facie showing of prior 
invention.''.

SEC. 208. PATENT TERM EXTENSION AUTHORITY.

  Section 154(b) of title 35, United States Code, is amended to read as 
follows:
  ``(b) Term Extension.--
          ``(1) Basis for patent term extension.--
                  ``(A) Delay.--Subject to the limitations set forth in 
                paragraph (2), if the issue of an original patent is 
                delayed due to--
                          ``(i) a proceeding under section 135(a) of 
                        this title, including any appeal under section 
                        141, or any civil action under section 146, of 
                        this title,
                          ``(ii) the imposition of an order pursuant to 
                        section 181 of this title,
                          ``(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 pursuant to a decision in the review 
                        reversing an adverse determination of 
                        patentability, or
                          ``(iv) an unusual administrative delay by the 
                        Patent and Trademark Office in issuing the 
                        patent,
                the term of the patent shall be extended for the period 
                of delay.
                  ``(B) Administrative delay.--For purposes of 
                subparagraph (A)(iv), an unusual administrative delay 
                by the Patent and Trademark office is the failure to--
                          ``(i) make a notification of the rejection of 
                        any claim for a patent or any objection or 
                        argument under section 132 of this title or 
                        give or mail a written notice of allowance 
                        under section 151 of this title not later than 
                        14 months after the date on which the 
                        application was filed;
                          ``(ii) respond to a reply under section 132 
                        of this title or to an appeal taken under 
                        section 134 of this title not later than 4 
                        months after the date on which the reply was 
                        filed or the appeal was taken;
                          ``(iii) act on an application not later than 
                        4 months after the date of a decision by the 
                        Board of Patent Appeals and Interferences under 
                        section 134 or 135 of this title or a decision 
                        by a Federal court under section 141, 145, or 
                        146 of this title in a case in which allowable 
                        claims remain in an application;
                          ``(iv) issue a patent not later than 4 months 
                        after the date on which the issue fee was paid 
                        under section 151 of this title and all 
                        outstanding requirements were satisfied; or
                          ``(v) issue a patent within 3 years after the 
                        filing date of the application in the United 
                        States, if the applicant--
                                  ``(I) has not obtained further 
                                limited examination of the application 
                                under section 209 of the Examining 
                                Procedure Improvements Act;
                                  ``(II) has responded to all 
                                rejections, objections, arguments, or 
                                other requests of the Patent and 
                                Trademark Office within 3 months after 
                                the date on which they are made;
                                  ``(III) has not benefitted from an 
                                extension of patent term under clause 
                                (i), (ii) or (iii) of paragraph (1)(A);
                                  ``(IV) has not sought or obtained 
                                appellate review by the Board of Patent 
                                Appeals and Interferences or by a 
                                Federal Court other than in a case in 
                                which the patent was issued pursuant to 
                                a decision in the review reversing an 
                                adverse determination of patentability; 
                                and
                                  ``(V) has not requested any delay in 
                                the processing of the application by 
                                the Patent and Trademark Office.
          ``(2) Limitations.--(A) The total duration of any extensions 
        granted pursuant to either clause (iii) or (iv) of paragraph 
        (1)(A) or both such clauses shall not exceed 10 years. To the 
        extent that periodsof delay attributable to grounds specified 
in paragraph (1) overlap, the period of any extension granted under 
this subsection shall not exceed the actual number of days the issuance 
of the patent was delayed.
          ``(B) The period of extension of the term of a patent under 
        this subsection 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. 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 
        in order to ensure that applicants are appropriately 
        compensated for any delays by the Patent and Trademark Office 
        in excess of the time periods specified in paragraph (1)(B).
          ``(C) No patent the term of which has been disclaimed beyond 
        a specified date may be extended under this section beyond the 
        expiration date specified in the disclaimer.
          ``(3) Procedures.--The Director shall prescribe regulations 
        establishing procedures for the notification of patent term 
        extensions under this subsection and procedures for contesting 
        patent term extensions under this subsection.''.

SEC. 209. FURTHER EXAMINATION OF PATENT APPLICATIONS.

  The Director of the United States Patent and Trademark Office shall 
prescribe regulations to provide for the further limited reexamination 
of applications for patent. The Director may establish appropriate fees 
for such further limited reexamination and shall be authorized to 
provide a 50 percent reduction on such fees for small entities that 
qualify for reduced fees under section 41(h)(1) of title 35, United 
States Code.

SEC. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLICATION.

  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 
business day.''.

SEC. 211. REPORTING REQUIREMENT.

  The Director of the United States Patent and Trademark Office shall 
report to the Congress not later than April 1, 2001, and not later than 
April 1 of each year thereafter, regarding the impact of publication on 
the patent applications filed by an applicant who has been accorded the 
status of independent inventor under section 41(h) of title 35, United 
States Code. The report shall include information concerning the 
frequency and number of initial and continuing patent applications, 
pendency, interferences, reexaminations, rejection, abandonment rates, 
fees, other expenses, and other relevant information related to the 
prosecution of patent applications.

SEC. 212. EFFECTIVE DATE.

  (a) Sections 202 Through 207.--Sections 202 through 207, and the 
amendments made by such sections, shall take effect on April 1, 1998, 
and shall apply to all applications filed under section 111 of title 
35, United States Code, on or after that date, and all international 
applications designating the United States that are filed on or after 
that date.
  (b) Sections 208 Through 210.--The amendments made by sections 208 
through 210 shall take effect on the date of the 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 June 8, 1995.

TITLE III--PROTECTION FOR PRIOR DOMESTIC USERS OF PATENTED TECHNOLOGIES

SEC. 301. SHORT TITLE.

  This title may be cited as the ``Protection for Prior Domestic 
Commercial and Research Users of Patented Technologies Act''.

SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR DOMESTIC 
                    COMMERCIAL OR RESEARCH USE.

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

``Sec. 273. Prior domestic commercial or research use; defense to 
                    infringement

  ``(a) Definitions.--For purposes of this section--
          ``(1) the terms `commercially used', `commercially use', and 
        `commercial use' mean the use in the United States in commerce 
        or the use in the design, testing, or production in the United 
        States of a product or service which is used in commerce, 
        whether or not the subject matter at issue is accessible to or 
        otherwise known to the public;
          ``(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) if the use is limited to activity that 
        occurred within the laboratory or nonprofit entity or by 
        persons in privity with that laboratory or nonprofit entity 
        before the effective filing date of the application for patent 
        at issue, except that the use--
                  ``(A) may be asserted as a defense under this section 
                only by the laboratory or nonprofit entity; and
                  ``(B) may not be asserted as a defense with respect 
                to any subsequent use by any entity other than such 
                laboratory, nonprofit entity, or persons in privity;
          ``(3) the terms `used in commerce', and `use in commerce' 
        mean that there has been an actual sale or other arm's-length 
        commercial transfer of the subject matter at issue or that 
        there has been an actual sale or other arm's-length commercial 
        transfer of a product or service resulting from the use of the 
        subject matter at issue; 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) A person shall not be liable as 
an infringer under section 271 of this title with respect to any 
subject matter that would otherwise infringe one or more claims in the 
patent being asserted against such person, if such person had, acting 
in good faith, commercially used the subject matter before the 
effective filing date of such patent.
  ``(2) The sale or other disposition of the subject matter of a patent 
by a person entitled to assert a defense under this section with 
respect to that subject matter 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.
  ``(c) Limitations and Qualifications of Defense.--The defense to 
infringement under this section is subject to the following:
          ``(1) 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.
          ``(2) 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 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.
          ``(3) Effective and serious preparation.--With respect to 
        subject matter that cannot be commercialized without a 
        significant investment of time, money, and effort, a person 
        shall be deemed to have commercially used the subject matter 
        if--
                  ``(A) before the effective filing date of the patent, 
                the person actually reduced the subject matterto 
practice in the United States, completed a significant portion of the 
total investment necessary to commercially use the subject matter, and 
made an arm's-length commercial transaction in the United States in 
connection with the preparation to use the subject matter; and
                  ``(B) thereafter the person diligently completed the 
                remainder of the activities and investments necessary 
                to commercially use the subject matter, and promptly 
                began commercial use of the subject matter, even if 
                such activities were conducted after the effective 
                filing date of the patent.
          ``(4) Burden of proof.--A person asserting the defense under 
        this section shall have the burden of establishing the defense.
          ``(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 subsection (b) with respect to actions taken 
        after the date of such abandonment.
          ``(6) Personal defense.--The defense under this section may 
        only be asserted 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 in 
        connection with the good faith assignment or transfer of the 
        entire enterprise or line of business to which the defense 
        relates.
          ``(7) One-year limitation.--A person may not assert a defense 
        under this section unless the subject matter on which the 
        defense is based had been commercially used or actually reduced 
        to practice more than one year prior to the effective filing 
        date of the patent by the person asserting the defense or 
        someone in privity with that person.
  ``(d) 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's fees under section 285 of this title.
  ``(e) Invalidity.--A patent shall not be deemed to be invalid under 
section 102 or 103 of this title solely because a defense is 
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. Prior domestic commercial or research use; defense to 
infringement.''.

SEC. 303. EFFECTIVE DATE AND APPLICABILITY.

  This title and the amendments made by this title shall take effect on 
the date of the 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.

           TITLE IV--ENHANCED PROTECTION OF INVENTORS' RIGHTS

SEC. 401. SHORT TITLE.

  This title may be cited as the ``Enhanced Protection of Inventors' 
Rights Act''.

SEC. 402. INVENTION DEVELOPMENT SERVICES.

  Part I of title 35, United States Code, is amended by adding after 
chapter 4 the following new chapter:

              ``CHAPTER 5--INVENTION DEVELOPMENT SERVICES

``Sec.
``51. Definitions.
``52. Contracting requirements.
``53. Standard provisions for cover notice.
``54. Reports to customer required.
``55. Mandatory contract terms.
``56. Remedies.
``57. Records of complaints.
``58. Fraudulent representation by an invention developer.
``59. Rule of construction.

``Sec. 51. Definitions

  ``For purposes of this chapter--
          ``(1) the term `contract for invention development services' 
        means a contract by which an invention developer undertakes 
        invention development services for a customer;
          ``(2) the term `customer' means any person, firm, 
        partnership, corporation, or other entity who is solicited by, 
        seeks the services of, or 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 for, or on behalf of, a customer any act described 
        under paragraph (4), 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; or
                  ``(C) any person duly registered with, and in good 
                standing before, the United States Patent and Trademark 
                Office acting within the scope of that person's 
                registration to practice before the Patent and 
                Trademark Office; and
          ``(4) the term `invention development services' means, with 
        respect to an invention by a customer, any act involved in--
                  ``(A) evaluating the invention to determine its 
                protectability as some form of intellectual property, 
                other than evaluation by a person licensed by a State 
                to practice law who is acting solely within the scope 
                of that person's professional license;
                  ``(B) evaluating the invention to determine its 
                commercial potential by any person for purposes other 
                than providing venture capital; or
                  ``(C) marketing, brokering, licensing, selling, or 
                promoting the invention or a product or service in 
                which the invention is incorporated or used, except 
                that the display only of an invention at a trade show 
                or exhibit shall not be considered to be invention 
                development services.

``Sec. 52. Contracting requirements

  ``(a) In General.--(1) Every contract for invention development 
services shall be in writing and shall be subject to the provisions of 
this chapter. A copy of the signed written contract shall be given to 
the customer at the time the customer enters into the contract.
  ``(2) If a contract is entered into for the benefit of a third party, 
such party shall be considered a customer for purposes of this chapter.
  ``(b) Requirements of Invention Developer.--The invention developer 
shall--
          ``(1) state in a written document, at the time a customer 
        enters into a contract for invention development services, 
        whether the usual business practice of the invention developer 
        is to--
                  ``(A) seek more than 1 contract in connection with an 
                invention; or
                  ``(B) seek to perform services in connection with an 
                invention in 1 or more phases, with the performance of 
                each phase covered in 1 or more subsequent contracts; 
                and
          ``(2) supply to the customer a copy of the written document 
        together with a written summary of the usual business practices 
        of the invention developer, including--
                  ``(A) the usual business terms of contracts; and
                  ``(B) the approximate amount of the usual fees or 
                other consideration that may be required from the 
                customer for each of the services provided by the 
                developer.
  ``(c) Right of Customer To Cancel Contract.--(1) Notwithstanding any 
contractual provision to the contrary, a customer shall have the right 
to terminate a contract for invention development services by sending a 
written letter to the invention developer stating the customer's intent 
to cancel the contract. The letter of termination must be deposited 
with the United States Postal Service on or before 5 business days 
after the date upon which the customer or the invention developer 
executes the contract, whichever is later.
  ``(2) Delivery of a promissory note, check, bill of exchange, or 
negotiable instrument of any kind to the invention developer or to a 
third party for the benefit of the invention developer, without regard 
to the date or dates appearing in such instrument, shall be deemed 
payment received by the invention developer on the date received for 
purposes of this section.

``Sec. 53. Standard provisions for cover notice

  ``(a) Contents.--Every contract for invention development services 
shall have a conspicuous and legible cover sheet attached with the 
following notice imprinted in boldface type of not less than 12-point 
size:
          `` `YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO 
        TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER TO THE 
        COMPANY STATING YOUR INTENT TO CANCEL THIS CONTRACT. THE LETTER 
        OF TERMINATION MUST BE DEPOSITED WITH THE UNITED STATES POSTAL 
        SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS AFTER THE DATE ON 
        WHICH YOU OR THE COMPANY EXECUTE THE CONTRACT, WHICHEVER IS 
        LATER.
          `` `THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE INVENTION 
        DEVELOPER FOR COMMERCIAL POTENTIAL IN THE PAST FIVE (5) YEARS 
        IS __________. OF THAT NUMBER, __________ RECEIVED POSITIVE 
        EVALUATIONS AND __________ RECEIVED NEGATIVE EVALUATIONS.
          `` `IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO 
        THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE THE 
        RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR CONSENT 
        AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.
          `` `THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH 
        THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS IS 
        __________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS 
        INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF THIS 
        INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF MONEY IN EXCESS 
        OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION DEVELOPER 
        IS ______________.
          `` `THE OFFICERS OF THIS INVENTION DEVELOPER HAVE 
        COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN 
        (10) YEARS WITH THE FOLLOWING INVENTION DEVELOPMENT COMPANIES: 
        (LIST THE NAMES AND ADDRESSES OF ALL PREVIOUS INVENTION 
        DEVELOPMENT COMPANIES WITH WHICH THE PRINCIPAL OFFICERS HAVE 
        BEEN AFFILIATED AS OWNERS, AGENTS, OR EMPLOYEES). YOU ARE 
        ENCOURAGED TO CHECK WITH THE UNITED STATES PATENT AND TRADEMARK 
        OFFICE, THE FEDERAL TRADE COMMISSION, YOUR STATE ATTORNEY 
        GENERAL'S OFFICE, AND THE BETTER BUSINESS BUREAU FOR ANY 
        COMPLAINTS FILED AGAINST ANY OF THESE COMPANIES.
          `` `YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF YOUR 
        OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY PROCEEDING 
        WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED TO PRACTICE BEFORE 
        THE UNITED STATES PATENT AND TRADEMARK OFFICE, YOU COULD LOSE 
        ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR INVENTION.'.
  ``(b) Other Requirements for Cover Notice.--The cover notice shall 
contain the items required under subsection (a) and the name, primary 
office address, and local office address of the invention developer, 
and may contain no other matter.
  ``(c) Disclosure of Certain Customers Not Required.--The requirement 
in the notice set forth in subsection (a) to include the `TOTAL NUMBER 
OF CUSTOMERS WHO HAVE CONTRACTED WITH THE INVENTION DEVELOPER IN THE 
PAST FIVE (5) YEARS' need not include information with respect to 
customers who have purchased trade show services, research, 
advertising, or other nonmarketing services from the invention 
developer, nor with respect to customers who have defaulted in their 
payments to the invention developer.

``Sec. 54. Reports to customer required

  ``With respect to every contract for invention development services, 
the invention developer shall deliver to the customer at the address 
specified in the contract, at least once every 3 months throughout the 
term of the contract, a written report that identifies the contract and 
includes--
          ``(1) a full, clear, and concise description of the services 
        performed to the date of the report and of the services yet to 
        be performed and names of all persons who it is known will 
        perform the services; and
          ``(2) the name and address of each person, firm, corporation, 
        or other entity to whom the subject matter of the contract has 
        been disclosed, the reason for each such disclosure, the nature 
        of the disclosure, and complete and accurate summaries of all 
        responses received as a result of those disclosures.

``Sec. 55. Mandatory contract terms

  ``(a) Mandatory Terms.--Each contract for invention development 
services shall include in boldface type of not less than 12-point 
size--
          ``(1) the terms and conditions of payment and contract 
        termination rights required under section 52;
          ``(2) a statement that the customer may avoid entering into 
        the contract by not making a payment to the invention 
        developer;
          ``(3) a full, clear, and concise description of the specific 
        acts or services that the invention developer undertakes to 
        perform for the customer;
          ``(4) a statement as to whether the invention developer 
        undertakes to construct, sell, or distribute one or more 
        prototypes, models, or devices embodying the invention of the 
        customer;
          ``(5) the full name and principal place of business of the 
        invention developer and the name and principal place of 
        business of any parent, subsidiary, agent, independent 
        contractor, and any affiliated company or person who it is 
        known will perform any of the services or acts that the 
        invention developer undertakes to perform for the customer;
          ``(6) if any oral or written representation of estimated or 
        projected customer earnings is given by the invention developer 
        (or any agent, employee, officer, director, partner, or 
        independent contractor of such invention developer), a 
        statement of that estimation or projection and a description of 
        the data upon which such representation is based;
          ``(7) the name and address of the custodian of all records 
        and correspondence relating to the contracted for invention 
        development services, and a statement that the invention 
        developer is required to maintain all records and 
        correspondence relating to performance of the invention 
        development services for such customer for a period of not less 
        than 2 years after expiration of the term of such contract; and
          ``(8) a statement setting forth a time schedule for 
        performance of the invention development services, including an 
        estimated date in which such performance is expected to be 
        completed.
  ``(b) Invention Developer as Fiduciary.--To the extent that the 
description of the specific acts or services affords discretion to the 
invention developer with respect to what specific acts or services 
shall be performed, the invention developer shall be deemed a 
fiduciary.
  ``(c) Availability of Information.--Records and correspondence 
described under subsection (a)(7) shall be made available after 7 days 
written notice to the customer or the representative of the customer to 
review and copy at a reasonable cost on the invention developer's 
premises during normal business hours.

``Sec. 56. Remedies

  ``(a) In General.--(1) Any contract for invention development 
services that does not comply with the applicable provisions of this 
chapter shall be voidable at the option of the customer.
  ``(2) Any contract for invention development services entered into in 
reliance upon any material false, fraudulent, or misleading 
information, representation, notice, or advertisement of the invention 
developer (or any agent, employee, officer, director, partner, or 
independent contractor of such invention developer) shall be voidable 
at the option of the customer.
  ``(3) Any waiver by the customer of any provision of this chapter 
shall be deemed contrary to public policy and shall be void and 
unenforceable.
  ``(4) Any contract for invention development services which provides 
for filing for and obtaining utility, design, or plant patent 
protection shall be voidable at the option of the customer unless the 
invention developer offers to perform or performs such act through a 
person duly registered to practice before, and in good standing with, 
the Patent and Trademark Office.
  ``(b) Civil Action.--(1) Any customer who is injured by a violation 
of this chapter by an invention developer or by any material false or 
fraudulent statement or representation, or any omission of material 
fact, by an invention developer (or any agent, employee, director, 
officer, partner, or independent contractor of such invention 
developer) or by failure of an invention developer to make all the 
disclosures required under this chapter, may recover in a civil action 
against the invention developer (or the officers, directors, or 
partners of such invention developer) in addition to reasonable costs 
and attorneys' fees, the greater of--
          ``(A) $5,000; or
          ``(B) the amount of actual damages sustained by the customer.
  ``(2) Notwithstanding paragraph (1), the court may increase damages 
to not more than 3 times the amount awarded.
  ``(c) Rebuttable Presumption of Injury.--For purposes of this 
section, substantial violation of any provision of this chapter by an 
invention developer or execution by the customer of a contract for 
invention development services in reliance on any material false or 
fraudulentstatements or representations or omissions of material fact 
shall establish a rebuttable presumption of injury.

``Sec. 57. Records of complaints

  ``(a) Release of Complaints.--The Director shall make all complaints 
received by the United States Patent and Trademark Office involving 
invention developers publicly available, together with any response of 
the invention developers.
  ``(b) Request for Complaints.--The Director may request complaints 
relating to invention development services from any Federal or State 
agency and include such complaints in the records maintained under 
subsection (a), together with any response of the invention developers.

``Sec. 58. Fraudulent representation by an invention developer

  ``Whoever, in providing invention development services, knowingly 
provides any false or misleading statement, representation, or omission 
of material fact to a customer or fails to make all the disclosures 
required under this chapter, shall be guilty of a misdemeanor and fined 
not more than $10,000 for each offense.

``Sec. 59. Rule of construction

  ``Except as expressly provided in this chapter, no provision of this 
chapter shall be construed to affect any obligation, right, or remedy 
provided under any other Federal or State law.''.

SEC. 403. TECHNICAL AND CONFORMING AMENDMENT.

  The table of chapters for part I of title 35, United States Code, is 
amended by adding after the item relating to chapter 4 the following:

``5. Invention Development Services.........................      51''.

SEC. 404. EFFECTIVE DATE.

  This title and the amendments made by this title shall take effect 60 
days after the date of the enactment of this Act.

               TITLE V--IMPROVED REEXAMINATION PROCEDURES

SEC. 501. SHORT TITLE.

  This title may be cited as the ``Improved Reexamination Procedures 
Act''.

SEC. 502. 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 
reexamination under section 302 of this title who is not the patent 
owner.''.

SEC. 503. REEXAMINATION PROCEDURES.

  (a) Request for Reexamination.--Section 302 of title 35, United 
States Code, is amended to read as follows:

``Sec. 302. Request for reexamination

  ``Any person at any time may file a request for reexamination by the 
Office of a patent on the basis of any prior art cited under the 
provisions of section 301 of this title or on the basis of the 
requirements of section 112 of this title other than the requirement to 
set forth the best mode of carrying out the invention. The request must 
be in writing, must include the identity of the real party in interest, 
and must be accompanied by payment of a reexamination fee established 
by the Director pursuant to the provisions of section 41 of this title. 
The request must set forth the pertinency and manner of applying cited 
prior art to every claim for which reexamination is requested or the 
manner in which the patent specification or claims fail to comply with 
the requirements of section 112 of this title. 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.''.
  (b) Determination of Issue by Director.--Section 303 of title 35, 
United States Code, is amended to read as follows:

``Sec. 303. Determination of issue by Director

  ``(a) Reexamination.--Not later than 3 months after the filing of a 
request for reexamination under the provisions of section 302 of this 
title, 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, at any time, the 
Director may determine whether a substantial new question of 
patentability is raised by any other patent or publication or by the 
failure of the patent specification or claims of a patent to comply 
with the requirements of section 112 of this title other than the best 
mode requirement described in section 302.
  ``(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 pursuant to 
subsection (a) shall be final and nonappealable. Upon a determination 
that no substantial new question of patentability has been raised, the 
Director may refund a portion of the reexamination fee required under 
section 302 of this title.''.
  (c) Reexamination Order by Director.--Section 304 of title 35, United 
States Code, is amended to read as follows:

``Sec. 304. Reexamination order by Director

  ``If, in a determination made under the provisions of section 303(a) 
of this title, 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 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 
reexamination conducted in accordance with section 305 of this 
title.''.
  (d) Conduct of Reexamination Proceedings.--Section 305 of title 35, 
United States Code, is amended to read as follows:

``Sec. 305. Conduct of reexamination proceedings

  ``(a) In General.--Subject to subsection (b), reexamination shall be 
conducted according to the procedures established for initial 
examination under the provisions of sections 132 and 133 of this title. 
In any 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 reexamination 
proceeding in which the order for reexamination is based upon a request 
by a third-party requester.
  ``(2) With the exception of the reexamination request, any document 
filed by either the patent owner or the third-party requester shall be 
served on the other party.
  ``(3) If the patent owner files a response to any action on the 
merits by the Patent and Trademark Office, the third-party requester 
shall have 1 opportunity to file written comments within a reasonable 
period not less than 1 month after the date of service of the patent 
owner's response. Written comments provided under this paragraph shall 
be limited to issues covered by action of the Patent and Trademark 
Office or the patent owner's response.
  ``(c) Special Dispatch.--Unless otherwise provided by the Director 
for good cause, all 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.''.
  (e) Appeal.--Section 306 of title 35, United States Code, is amended 
to read as follows:

``Sec. 306. Appeal

  ``(a) Patent Owner.--The patent owner involved in a reexamination 
proceeding under this chapter--
          ``(1) may appeal under the provisions of section 134 of this 
        title, and may appeal under the provisions of sections 141 
        through 144 of this title, 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 pursuant to subsection (b) of this section.
  ``(b) Third-Party Requester.--A third-party requester in a 
reexamination proceeding--
          ``(1) may appeal under the provisions of section 134 of this 
        title, and may appeal under the provisions of sections 141 
        through 144 of this title, with respect to any final decision 
        in the reexamination proceeding that is favorable 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 the patent owner 
        with respect to a decision in the reexamination proceeding, 
        subject to subsection (c) of this section.
  ``(c) Participation as Party.--(1) A third-party requester who, under 
the provisions of sections 141 through 144 of this title, files a 
notice of appeal, or who participates as a party to an appeal by the 
patent owner, with respect to a reexamination proceeding, is estopped 
from asserting at a later time, in any forum, the invalidity of any 
claim determined to be patentable on that appeal on any ground which 
the third-party requester raised or could have raised during the 
reexamination proceeding. 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 reexamination proceeding.
  ``(2) For purposes of paragraph (1), a third-party requester is 
deemed not to have participated as a party to an appeal by the patent 
owner unless, not later than 20 days after the patent owner has filed a 
notice of appeal, the third-party requester files notice with the 
Commissioner electing to participate.''.
  (f) Reexamination Prohibited.--(1) Chapter 30 of title 35, United 
States Code, is amended by adding at the end the following new section:

``Sec. 308. Reexamination prohibited

  ``(a) Order for Reexamination.--Notwithstanding any provision of this 
chapter, once an order for reexamination of a patent has been issued 
under section 304 of this title, neither the patent owner nor the 
third-party requester, if any, nor privies of either, may, unless 
authorized by the Director, file a subsequent request for reexamination 
of the patent until a certificate relating to that reexamination 
proceeding is issued and published under section 307 of this title.
  ``(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 a 
reexamination proceeding instituted by a third-party requester is 
favorable to the patentability or any original or proposed amended or 
new claim of the patent and such decision is not appealed by the third-
party requester under section 306(b), then neither that party nor its 
privies may thereafter request 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 reexamination proceeding. This 
subsection does not prevent the assertion of invalidity based on newly 
discovered prior art unavailable to the party or privies and the Office 
at the time of the civil action or reexamination proceeding, as the 
case may be.''.
  (2) The table of sections for chapter 30 of title 35, United States 
Code, is amended by adding at the end the following:

``308. Reexamination prohibited.''.

  (g) Report to Congress.--Within 4 years after the effective date of 
this title, the Director of the United States Patent and Trademark 
Office shall submit to the Congress a report evaluating whether the 
reexamination proceedings established under the amendments made by this 
title 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 title to remove such inequity.

SEC. 504. CONFORMING AMENDMENTS.

  (a) Board of Patent Appeals and Interferences.--The first sentence of 
section 6(b) of title 35, United States Code, as amended by section 117 
of this Act, is amended to read as follows: ``The Board of Patent 
Appeals and Interferences shall, on written appeal of an applicant, or 
a patent owner or a third-party requester ina reexamination proceeding, 
review adverse decisions of examiners upon applications for patents and 
decisions of examiners in reexamination proceedings, and shall 
determine priority and patentability of invention in interferences 
declared under section 135(a) of this title.''.
  (b) Patent Fees; Patent and Trademark 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 a reexamination proceeding, $1,250, unless the 
        petition is filed under section 133 or 151 of this title, in 
        which case the fee shall be $110.''.
  (c) Appeal to the Board of Patent 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 
primary examiner to the Board of Patent Appeals and Interferences, 
having once paid the fee for such appeal.
  ``(b) Patent Owner.--A patent owner in a reexamination proceeding may 
appeal from the final rejection of any claim by the primary examiner to 
the Board of Patent Appeals and Interferences, having once paid the fee 
for such appeal.
  ``(c) Third-Party.--A third-party requester may appeal to the Board 
of Patent Appeals and Interferences from the final decision of the 
primary examiner favorable to the patentability of any original or 
proposed amended or new claim of a patent, having once paid the fee for 
such appeal.''.
  (d) Appeal to Court of Appeals for the Federal Circuit.--Section 141 
of title 35, United States Code, is amended by amending the first 
sentence to read as follows: ``An applicant, a patent owner, or a 
third-party requester, dissatisfied with the final decision in an 
appeal to the Board of Patent Appeals and Interferences under section 
134 of this title, may appeal the decision to the United States Court 
of Appeals for the Federal Circuit.''.
  (e) Proceedings on Appeal.--Section 143 of title 35, United States 
Code, is amended by amending the third sentence to read as follows: 
``In ex parte and reexamination cases, the Director shall submit to the 
court in writing the grounds for the decision of the United States 
Patent and Trademark Office, addressing all the issues involved in the 
appeal.''.
  (f) 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. 505. EFFECTIVE DATE.

  This title and the amendments made by this title shall take effect on 
the date that is 6 months after the date of the enactment of this Act 
and shall apply to all reexamination requests filed on or after such 
date.

                  TITLE VI--MISCELLANEOUS IMPROVEMENTS

SEC. 601. 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). 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 thereafter.''.
  (b) Effective Date.--The amendment made by subsection (a) applies to 
any provisional application filed on or after June 8, 1995.

SEC. 602. INTERNATIONAL APPLICATIONS.

  Section 119 of title 35, United States Code, is amended--
          (1) in subsection (a), by inserting ``or in a WTO member 
        country,'' after ``or to citizens of the United States,''; and
          (2) by adding at the end the following new subsections:
  ``(f) Applications for Plant Breeder's Rights.--Applications for 
plant breeder's rights filed in a WTO member country (or in a UPOV 
Contracting Party) shall have the same 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) Definitions.--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. 603. PLANT PATENTS.

  (a) Tuber Propagated Plants.--Section 161 of title 35, United States 
Code, is amended by striking ``a tuber propagated plant or''.
  (b) Rights in Plant Patents.--The text of section 163 of title 35, 
United States Code, is amended to read as follows: ``In the case of a 
plant patent, the grant shall include the right to exclude others from 
asexually reproducing the plant, and from using, offering for sale, or 
selling the plant so reproduced, or any of its parts, throughout the 
United States, or from importing the plant so reproduced, or any parts 
thereof, into the United States.''.
  (c) Effective Date.--The amendment made by subsection (a) shall apply 
on the date of the enactment of this Act. The amendment made by 
subsection (b) shall apply to any plant patent issued on or after the 
date of the enactment of this Act.

SEC. 604. ELECTRONIC FILING.

  Section 22 of title 35, United States Code, is amended by striking 
``printed or typewritten'' and inserting ``printed, typewritten, or on 
an electronic medium''.

SEC. 605. DIVISIONAL APPLICATIONS.

  Section 121 of title 35, United States Code, is amended--
          (1) in the first sentence by striking ``If'' and inserting 
        ``(a) If''; and
          (2) by adding at the end the following new subsections:
  ``(b) In a case in which restriction is required on the ground that 
two or more independent and distinct inventions are claimed in an 
application, the applicant shall be entitled to submit an examination 
fee and request examination for each independent and distinct invention 
in excess of one. The examination fee shall be equal to the filing fee, 
including excess claims fees, that would have applied had the claims 
corresponding to the asserted independent and distinct inventions been 
presented in a separate application for patent. For each of the 
independent and distinct inventions in excess of one for which the 
applicant pays an examination fee within two months after the 
requirement for restriction, the Director shall cause an examination to 
be made and a notification of rejection or written notice of allowance 
provided to the applicant within the time period specified in section 
154(b)(1)(B)(i) of this title for the original application. Failure to 
meet this or any other time limit set forth in section 154(b)(1)(B) of 
this title shall be treated as an unusual administrative delay under 
section 154(b)(1)(A)(iv) of this title.
  ``(c) An applicant who requests reconsideration of a requirement for 
restriction under this section and submits examination fees pursuant to 
such requirement shall, if the requirement is determined to be 
improper, be entitled to a refund of any examination fees determined to 
have been paid pursuant to the requirement.''.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................    29
Background and Need for the Legislation..........................    30
Hearings.........................................................    38
Committee Consideration..........................................    40
Committee Oversight Findings.....................................    41
Committee on Government Reform and Oversight Findings............    41
New Budget Authority and Tax Expenditures........................    41
Congressional Budget Office Estimate.............................    41
Constitutional Authority Statement...............................    41
Section-by-Section Analysis and Discussion.......................    41
Changes in Existing Law..........................................    77

                          Purpose and Summary

     The United States is by far the world's largest producer 
of intellectual property, and this has greatly benefitted our 
balance of trade. This success is dependent upon a rational and 
sound policy of protecting intellectual property by encouraging 
the development of new inventions and processes.
    Despite this success, the U.S. patent system is not without 
its problems. Some dilatory patent applicants and plaintiffs' 
attorneys have developed ways to abuse the system and 
ultimately extort hundreds of millions of dollars from 
industries--costs that are ultimately passed on to American 
consumers. Another key problem is that the Patent and Trademark 
Office is bogged down in bureaucratic red tape. It cannot run 
at its peak efficiency. Many other nations have learned from 
our success--America no longer stands alone in its commitment 
to a strong system of patent protection for its inventors, 
small businesses, and industries. Consequently, it is more 
important now than ever that Congresses adopt certain reforms 
that will ensure that America maintains its position as the 
world leader in the production of intellectual property.
     H.R. 400 contains several titles addressing and solving 
major problems threatening our patent system. With the 
exception of the title containing miscellaneous provisions, 
each title consists of an independent bill that was the subject 
of comprehensive hearings in the Subcommittee on Courts and 
Intellectual Property over the last two Congresses. Each of 
these titles also reflects changes that were made in response 
to valuable comments submitted by expert witnesses, Members, 
independent inventors, small businesses, large corporations, 
universities and research institutions, industry organizations, 
patent law associations, and the Patent and Trademark Office.

                Background and Need for the Legislation

    The following is a breakdown and explanation of the 
background and need for each of the patent titles contained in 
H.R. 400:

          TITLE I.--PATENT AND TRADEMARK OFFICE MODERNIZATION

     Under Title I, the United States Patent and Trademark 
Office (``PTO''), currently a bureau within the Department of 
Commerce, would be established as an independent government 
agency, subject to the Government Corporation Act, under the 
policy direction of the Secretary of Commerce. These provisions 
separate the Office from any established department, creating a 
new agency of the United States, but maintain policy direction 
from the Executive Branch to ensure uniform goals in the area 
of intellectual property rights.
     The PTO is one of a few government entities which lends 
itself to being subject to the Government Corporation Act. It 
was recommended for government corporation status by the 
National Academy of Public Administration. It is funded 
completely by user fees. It can and should operate to serve 
most efficiently the public interest, including the interest of 
those who pay user fees to support it--patent and trademark 
applicants. Further, the Office performs a quasi-judicial 
function, which should be handled in an independent manner.
     Apart from policy, the work of the PTO, such as the 
processing and examination of applications, has always been 
independent, but the Department of Commerce has exercised 
control over its finances and its rulemarking procedures. An 
independently managed government corporation with the 
accountability measures provided in the Government Corporation 
Act, in H.R. 400 itself, through oversight by Congress and 
through congressionally approved fee usage and borrowing 
authority, will possess the operational flexibility and 
independence required to best serve the public and the 
innovators who have become an increasingly important aspect of 
our national economy. If the PTO is to operate in a 
businesslike manner to accomplish operational efficiency with 
integrity, it must have management, operational, and financial 
flexibility that it does not currently have.
     Title I establishes the Patent and Trademark Office as an 
independent wholly owned government corporation and transfers 
to it the duties carried out by the existing Office while 
maintaining the policy direction of the Secretary of Commerce. 
It establishes that the Office shall be managed by a Director 
who is appointed by the President, by and with the advice and 
consent of the Senate, for a term of five years. The length of 
the term should provide continuity and carry-over between 
presidential Administrations. Under this title, the President 
is required to nominate a Director who, ``by reason of 
professional background and experience in patent or trademark 
law, is especially qualified to manage the Office.''
    Title I caps the salaries of the Director, the Commissioner 
for Patents, the Commissioner for Trademarks (both of whom are 
appointed by the Director), and any other employees hired by 
the PTO. It further leaves to Congress the duty of setting 
filing fees which establish and control the budget of the PTO. 
The title further requires that an Inspector General be 
appointed under the provisions of the Inspector General Act.
     Title I provides that the new government agency would be 
able to purchase personal property based on an established 
bidding process without proceeding through the General Services 
Administration. Importantly, it frees the Office from any 
administratively or statutorily imposed limitations on 
positions or personnel so that it can hire as many examiners as 
are needed to serve its applicants effectively to the extent 
feasible in its budget. The title guarantees that PTO 
employees, as government employees, will retain full civil 
service protection, including federal health, life, and 
retirement benefits.
     The title further provides for a bipartisan Management 
Advisory Board, comprised of members of the private sector who 
represent users of the PTO. Under this title, the Board would 
be made up of 12 members: four to be appointed by the 
President, four to be appointed by the Speaker of the House, 
and four to be appointed by the Majority Leader of the Senate. 
The terms of the members of the Board would be for four years, 
and the terms would be staggered. The Chairman of the Board 
would be appointed by the President and would serve for three 
years. The Board shall review the policies, goals, performance, 
budget, and user fees of the PTO and advise the Commissioner. 
Its powers are limited to an advisory capacity only. The Board 
shall also prepare an annual report to the President and the 
Judiciary Committees of the House and the Senate, which will be 
published in the PTO Official Gazette.
     Title I maintains the Trademark Trial and Appeals Board 
which determines the rights of registration in every case, 
opposition to registration, or application to cancel the 
registration of a mark. It further maintains a Board of Patent 
Appeals and Interferences which shall, on written appeal of an 
applicant, review adverse decisions of patent examiners.
     Under the title, a relationship is established with the 
Justice department for assistance in the defense of lawsuits 
brought against the Office. The PTO will be required to report 
to Congress annually on budget and patent quality issues.
     The PTO is granted borrowing authority, subject to annual 
appropriations Acts, and is allowed to issue bonds for purchase 
by the Secretary of the Treasury. Any monies not otherwise used 
to carry on the duties of the PTO must be kept in cash on hand, 
in deposit, or invested in U.S. obligations or other lawful 
investments for public funds. The PTO cannot borrow money 
without explicit advance approval in appropriations acts and 
not without guaranteeing its payment from future user fee 
income. The PTO remains subject to the Chief Financial Officers 
Act and remains subject to review by the Comptroller General.
     Title I was written to reflect the concerns of employees 
of the PTO, expressed in hearing testimony. It will provide 
better service to America's creative community through a better 
work force under the oversight of the Government Corporation 
Act, Congress and the President with increased input by 
inventors and trademark applicants.
     Title I also responds to past practices and current 
proposals to divert up to $119 million from the PTO, which 
receives no taxpayer dollars, to other tax-funded areas of the 
government. Taxpayer support for the operations of the Office 
was eliminated in 1990 with the passage of the Omnibus Budget 
Reconciliation Act. The Act imposed a massive fee increase 
(referred to as a ``surcharge'') on America s inventors and 
industry in order to replace taxpayer support the Office was 
then receiving. The revenues generated by this surcharge, $119 
million, which constitute approximately 20% of the PTO s 
operating budget, are placed into a surcharge account. The PTO 
is required to request of the Appropriations Committees that 
they be allowed to use these surcharge revenues in this account 
to support the 20% of its operations these revenues represent. 
It was anticipated in 1990 that Congress would routinely grant 
the PTO permission to use the surcharge revenue since it was 
generated originally from fees paid by users of the patent and 
trademark systems to support the cost of those systems.
    Unfortunately, experience has shown us that the user fees 
paid into the surcharge account have become a target of 
opportunity to fund other, unrelated, taxpayer-funded 
government programs. The temptation to use the surcharge, and 
thus a significant portion of the operating budget of the PTO, 
has proven increasingly irresistible, to the detriment and 
sound functioning of our nation s patent and trademark systems. 
Beginning with the diversion of $8 million in 1992, Congress 
has increasingly redirected a larger share of the surcharge 
revenue, reaching a record level of $54 million in the current 
year. In total, over the past six fiscal years, more than $142 
million has been diverted from the PTO.
     This, of course, has had a debilitating impact on the 
Patent and Trademark Office. The effort to reclassify the 
patent search file to keep it current with developing 
technologies had to be eliminated. The efforts to provide 
technological training for patent examiners and to expose them 
to the latest developments in their fields has been reduced. 
The support of legal training for patent examiners has been cut 
50%. One of the most promising cost-saving steps contemplated 
by the PTO, allowing applicants to file their applications 
electronically, has been postponed indefinitely. Since the 
diversion of $54 million this year, the Office has been forced 
to reduce the hiring of patent examiners 50% at a time when 
patent application filings are increasing by nearly 10% 
annually. We cannot afford to allow this dismantling of our 
patent system to occur.
     This legislation is revenue neutral. It does not increase 
an expenditure of taxpayer revenues which would increase the 
deficit. It merely permits the PTO to use all of the patent and 
trademark fees it receives to examine patent and trademark 
applications, to grant patents, and to register trademarks. It 
does this by placing the fees generated by the surcharge 
mandated by the Omnibus Budget Reconciliation Act of 1990 into 
the same category as the other user fees paid by patent and 
trademark applicants. Specifically, it would characterize these 
fees as ``offsetting collections'' rather than ``offsetting 
receipts'' so that all of the fees collected could be used for 
the purposes for which they were paid. Allowing the PTO to have 
access to all of its funds will ensure that patents are issued 
more rapidly, adding to the term of the patent.
    The establishment of the PTO as a separate government 
agency under the Government Corporation Act is necessary to 
achieve cost-effective, quality examining operations which will 
best serve its users, and consequently, the public interest.

            Title II.--Term Extension and Patent Publication

     Title II will ensure that every diligent patent applicant 
is guaranteed at least a 17-year patent term under the current 
20 year from filing system. In most cases, applicants will gain 
term under its provisions.
Term Issues
     One of the key patent provisions in the TRIPS Agreement 
was the establishment of an international standard minimum term 
for patent protection. In accordance with the treaty, the 
United States is obliged to establish a minimum patent term of 
twenty years from the time the patent application was filed. 
Formerly, the U.S. provided only 17 years of protection from 
the time the patent was issued. Consequently, a change in the 
law was required to ensure compliance.
     In 1994, the Congress took a straightforward approach to 
complying with this obligation and simply adopted the 20 year 
from filing term, the minimum required by TRIPS. Since June 8, 
1995, that has been the standard to measure patent term in the 
United States. Obviously, any patent that is granted within 
three years will result in an increase in patent term for 
patent applicants. Under this new system, even based on 
historical data from a time when there was not the same 
incentive to expedite processing, the vast majority of patent 
applicants, nearly 90%, will experience a significant increase 
in patent term.
     Nevertheless, because the system changed from one based 
upon grant to one based upon filing, there was some concern 
that delays in the Patent Office would diminish some 
applicants' patent term through no fault of the applicants. 
This is addressed to some extent by present law, where the 20 
year patent term may be extended for a total of up to five 
years for delays in the issuance of a patent due to 
interferences, secrecy orders, or successful appeals to the 
Board of Patent Appeals and Interferences or the Federal 
courts.
     Title II provides that unusual administrative delays shall 
justify extended term compensation by introducing an objective 
time clock to interpret the unusual administrative delay 
standard. Under the objective time clock, the Patent Office is 
required to compensate automatically and fully any delays 
beyond a stated minimum. Under the provisions of Title II, 
every diligent patent applicant is ensured at least 17 years of 
patent term from the date of grant, and in most cases, a term 
closer to 18 years.
Publication Provisions
     All of the major patent systems throughout the world, with 
the exception of the United States, publish applications 18 
months from the earliest effective filing date. In an age where 
worldwide patent protection is becoming increasingly important, 
the current system places U.S. inventors at a clear 
disadvantage. For example, an invention that is the subject of 
a patent application in Japan will be published in the Japanese 
language after 18 months. Inventors reviewing the Japanese 
patent application disclosures will have the benefit of the 
early disclosure in Japan. This is especially beneficial to 
domestic inventors in Japan as they are able to obtain an early 
disclosure of the technology in the Japanese language. 
Meanwhile, in the United States, domestic inventors do not have 
the benefit of an English language publication of the 
technology disclosed in an application for a patent until the 
patent is actually issued. This situation provides foreign 
inventors a clear advantage relative to U.S. domestic 
inventors.
     The early publication provisions of Title II would provide 
American inventors with a prompt English-language publication 
of relatively current technology. There would be no need to 
await the grant of a patent to gain an understanding of the 
technology it contains. This will speed disclosure of foreign-
origin U.S. patent technology by at least 12 months. Further, 
technology contained in patent applications that never mature 
into patents would also be available. Our domestic inventors 
would be able to take advantage of this earlier access to 
English-language patent application technology and build upon 
it more rapidly than they are able to do in our current system. 
In this way, the Constitutional objective of ``promoting the 
progress of .  .  . [the] useful arts'' would be advanced.
     In addition, these provisions would promote more efficient 
use of limited research and development resources by preventing 
duplication of research, signaling promising areas of research, 
and indicating which research topics are being pursued by 
others. Further, with this law, inventors would be able to 
avoid the commitment of substantial resources to develop an 
invention based on an incomplete, erroneous assessment of its 
patentability.
     This legislation would also help to address the submarine 
patent problem that has long plagued the U.S. patent system. 
Submarine patents surface from applications that have been 
purposely delayed by the applicant and are pending in the PTO 
for many years. The belatedly granted patents often cause 
disruptions in the market place because competitors unknowingly 
regarded and adopted the later- patented technology as 
commonplace publicly available information. No disclosure has 
ever been made warning others not to develop the technology 
broadly included in a claim filed by a ``submariner''. Those 
competitors are often required to negotiate a license with the 
late-arriving patentee against a threat of a lawsuit which 
might shut down their operations. Early publication would 
provide the above competitors with the necessary information to 
make the requisite business decisions before entering a given 
field.
     In return for the disclosure that would be made by virtue 
of early publication, patentees would be given provisional 
rights to obtain compensation for any use of an invention 
disclosed in the patent application for the time period between 
publication, and grant. In conjunction with a 20-year patent 
term, provisional rights would give eventual patentees the 
opportunity to obtain at least 18\1/2\ years of patent rights 
(provisional rights from publication at 18 months until grant 
plus full rights upon grant) regardless of patent pendency. If 
a provisional patent application is filed, or if publication is 
requested earlier than the eighteenth month, an eventual 
patentee could obtain up to 19\1/2\ years or more of patent 
rights.
     Title II takes a significant additional step to protect 
those who may not want their application published. It proposes 
to amend title 35 to enable an independent inventor to defer 
publication until three months after an initial patentability 
determination by the PTO. To be eligible for this provision, an 
inventor must certify that he or she has not also filed the 
application in a foreign country (where it will inevitably be 
published within 18 months). Situations are extremely rare 
where an independent inventor who is actively seeking an early 
PTO action will not obtain at least one patentability 
determination (most will receive two) before three months prior 
to the 18 months of pendency of his/her application. However, 
this provision ensures that such an action will be received by 
qualified independent inventors in a timely manner. In this 
way, the independent inventor is given ample opportunity to 
withdraw his application and pursue the trade secret route when 
patentability is unlikely and the invention can be kept secret.
     The 20-year term and the 18-month publication provisions 
of Title II have the strong support of the current and previous 
presidential administrations and five of the past six living 
Commissioners of Patents and Trademarks. Title II also has the 
backing of key industry groups like the National Association of 
Manufacturers and the Biotechnology Industry Organization as 
well as every major intellectual property and bar association 
that has expressed an opinion on these topics.

                 Title III.--Prior Domestic User Rights

    Title III provides a defense of prior user rights against 
infringement of a patent to businesses, universities, and 
nonprofit research institutions. The defense typically arises 
when an original inventor, who decided not to patent a 
manufacturing process, or simply didn t consider patenting, 
uses the process as a trade secret in a commercial or 
university-related endeavor. The original inventor is later 
sued by a party, often a party outside the United States, who 
subsequently patented the process. While U.S. law permits the 
assertion of prior public use as a method of defeating a patent 
under our first-to-invent system, it does not recognize secret 
prior use as a defense to patent infringement.
     An inventor may develop a process without ever considering 
obtaining a patent, may not be able to afford obtaining a 
patent, or may choose for strategic or personal reasons to 
protect his process as a trade secret. One of the more famous 
trade secrets is the formula for Coca-Cola which has never been 
patented. While there is no federal trade secret law, there is 
state common law protection for trade secrets and many states 
have enacted statutes to protect trade secrets specifically or 
in unfair competition laws.
     Under current law, choosing to practice an invention as a 
trade secret has its risks because while prior public 
disclosure of an invention defeats a patent, an undisclosed 
invention which relies on trade secret protection may not. 
Title III would eliminate this risk by granting a prior 
commercial or university user, in effect, a defense against 
infringement suits for practicing the later patented invention. 
This personal defense does not extend to later developed 
products and processes that infringe upon the patent.
     Title III would allow an inventor to choose whether to 
patent an invention or use it as a trade secret by granting a 
personal defense against an infringement suit to any inventor 
who commercially used an invention at least one year before the 
filing date of a patent for the very same invention issued to 
another. This prior use defense leaves the patent intact for 
assertions against all others. This balance is designed to 
maintain incentives to patent new inventions without forcing 
inventors to seek patents on every trivial advancement.
     Under the current system, foreign patentees, who are 
treated the same as U.S. inventors under our patent laws, may 
obtain patents on processes or products protected by trade 
secret laws in the U.S. and sue the original U.S. inventors for 
infringement. However, U.S. inventors are not able to do the 
same abroad because most of our foreign trading partners have 
enacted prior user rights as a means of protecting their 
manufacturers.

                     Title IV.--Inventor Protection

    Title IV would create a new chapter 5 in title 35 of the 
United States Code, designed to curb the deceptive practices of 
certain invention marketing companies. Many of these companies 
operate under the following scenario. They advertise that 
inventors may call a toll-free number for an invention 
evaluation form, which they claim is used to provide expert 
analysis of the development possibilities of their inventions. 
The inventors return the form with descriptions of the 
inventions, which become the basis for contacts by salespeople 
at the marketing companies. The next step is a costly product 
research report which usually contains nothing more than 
boilerplate information stating merely that the invention may 
qualify for a design patent. Then the marketing companies 
attempt to convince the inventor to buy marketing services--
typically consisting of a mere mention in a few press releases 
and trade shows--at a cost of up to $10,000.
     This title aims to confront these problems by requiring 
that: (1) contracts between marketing companies and inventors 
contain standardized disclosures, including the number of 
applicants rejected by the companies, statistics on the profits 
actually earned by inventors, and contractual terms prescribing 
payment conditions and termination rights; and (2) marketing 
companies submit quarterly reports to their subscribing 
inventors.
     Remedies against companies for failing to comply include 
private civil actions for actual or $5,000 statutory damages, 
the possibility of treble damages, and costs and attorneys' 
fees. Criminal penalties of up to $10,000 are also provided.

                 Title V.--Patent Reexamination Reform

    In 1980, Congress enacted Public Law No. 96-517 to 
authorize the reexamination of U.S. patents in the Patent and 
Trademark Office. The reexamination provisions, set forth in 35 
U.S.C. Sec. Sec. 301-307, and the rules governing reexamination 
(37 CFR 1.501-1.570) became effective on July 1, 1981. The 
reexamination statute permits the patent owner or any other 
person to (1) cite to the Office patents or printed 
publications as prior art pertaining to the validity of an 
issued patent, and (2) request that the Office reexamine any 
claim of that patent on the basis of the cited prior art. 
Within three months of such a request or on his own initiative, 
the Director must determine whether a substantial new question 
of patentability is raised by the prior art cited to or 
discovered by him. If a substantial new question of 
patentability is found, the Director will issue an order 
granting the reexamination. The patent owner is then given two 
months to file a preliminary statement responding to the 
reexamination order. If the order follows a request by a third 
party to reexamine the patent, and the patent owner files a 
preliminary statement responding to the order, the third-party 
requester may, within two months, file a reply to the patent 
owner's preliminary statement. The claim or claims in question 
are then reexamined by the Office ``with special dispatch,'' 
but otherwise using essentially the same procedures applicable 
to the examination of patent applications.
    Reexamination proceedings, like the examination of patent 
applications, are ex parte in nature (i.e., they exclude 
participation by parties other than the Office and the patent 
owner). In such proceedings, the patent owner may file 
amendments to the specification, amend existing claims or 
present new claims, conduct interviews and take appeals from 
final adverse determinations of patentability by the Office. 
Reexamination concludes with the issuance of a reexamination 
certificate which cancels any claims found to be unpatentable, 
and confirms the patentability of claims determined to be 
patentable whether originally amended or newly submitted during 
the reexamination.
    Current reexamination procedures have been criticized as 
being biased against ``third-party'' requesters (i.e., a party 
other than the patent owner who requests reexamination). A 
third-party requester cannot participate in the reexamination 
proceeding beyond filing the initial request for reexamination. 
Some have claimed that the ex parte nature of prosecution 
following a reexamination order, while reducing the time and 
costs involved, provides the patent owner with an unfair 
advantage.
     Conclusions of the Office in reexamination proceedings are 
given considerable weight by a court in considering the 
validity of reexamined claims of a patent. This has led some to 
conclude that a third party's burden of proving invalidity in 
litigation will be more difficult to sustain than in instances 
where the patent was not involved in a reexamination. Many 
third parties are accordingly reluctant to request 
reexamination even when they possess relevant prior art. Thus, 
reexamination has not realized its full potential as an 
inexpensive and expeditious alternative to litigation.
     The reexamination system established in 1980 needs to be 
revised to make it a more effective and balanced procedure for 
reviewing patent validity. This legislation would introduce 
changes to the reexamination provisions to accomplish this 
objective.
     There are three main elements of the legislation. First, 
the legislation provides third parties with a greater 
opportunity to participate in reexamination proceedings while 
maintaining most of the features which make reexamination a 
desirable alternative to litigation in the federal courts 
(e.g., low cost, expedited procedure). Second, the legislation 
expands the basis and scope of reexamination to include review 
of compliance with all aspects of 35 U.S.C. Sec. 112, except 
the ``best mode'' requirement. Third, the proposed legislation 
requires that the real party in interest be identified and 
provides third-party requesters with certain appeal rights. 
Exercising some of these rights (e.g., filing of an appeal to 
the Federal Circuit), would be conditioned on the third-party 
requester accepting a statutory estoppel against subsequent 
review, either by the Office or by a federal court, of the 
issues that were or could have been raised in the reexamination 
proceeding. These limits, along with certain others introduced 
in the legislation, would ensure that reexamination proceedings 
could not be used to harass patent owners and would not be 
available where court action makes reexamination unnecessary.
     The proposed modifications would not unreasonably increase 
the cost, complexity or duration of reexamination proceedings, 
nor would they impose unreasonable burdens on the Office or 
patentees. Reexamination proceedings would continue to be based 
largely on the ex parte structure of regular examination. The 
issues considered during reexamination would continue to be 
those routinely considered by examiners in the course of 
regular examination procedures. Most importantly, however, 
these modifications would increase third-party use of the 
reexamination system as a meaningful, inexpensive and 
expeditious alternative to patent validity litigation, while 
preventing abuse of the reexamination process by limiting 
requests to one per claim.

               Title VI.--Miscellaneous Patent Provisions

     Title VI contains various technical, clarifying and 
conforming changes to our patent law that are not related to 
any of the five major titles of H.R. 400.

                                Hearings

     There have been seven days of hearings and 61 witnesses 
who have testified on the provisions of H.R. 400 in the 104th 
and 105th Congresses.
    The Committee's Subcommittee on Courts and Intellectual 
Property held two days of hearings on Title I of H.R. 400 on 
September 14, 1995, and March 8, 1996. Testimony was received 
from The Honorable Bruce A. Lehman, Assistant Secretary of 
Commerce and Commissioner of Patents and Trademarks, Patent and 
Trademark Office, U.S. Department of Commerce; Dr. Harold 
Seidman, Senior Fellow, and Alan Dean, Fellow, from the 
National Academy of Public Administration; Michael K. Kirk, 
Executive Director of the American Intellectual Property Law 
Association; Herbert C. Wamsley, Executive Director of the 
Intellectual Property Owners; Donald R. Dunner, Chair of the 
Section on Intellectual Property Law Section of the American 
Bar Association; The Honorable Dana Rohrabacher, 
Representative, California 45th District; The Honorable Duncan 
Hunter, Representative, California, 52nd District; Mr. Timothy 
Reardon, Congressional Liaison, Patent & Trademark Office 
Society; Mr. Robert M. Tobias, National President, National 
Treasury Employees Union; Mr. Ronald J. Stern, President, 
Patent Office Professional Association; Mr. Howard Friedman, 
President, The Trademark Society, National Treasury Employees 
Union, Chapter 245; and Ms. Catherine Simmons-Gill, President, 
International Trademark Association.
    The Committee's Subcommittee on Courts and Intellectual 
Property held two days of hearings on Title II and Title V of 
H.R. 400 on June 8, 1995 and November 1, 1995. Testimony was 
received from The Honorable Bruce A. Lehman, Assistant 
Secretary of Commerce and Commissioner of Patents and 
Trademarks, Patent and Trademark Office, U.S. Department of 
Commerce; Mr. Gary L. Griswold, Intellectual Property Owners; 
Mr. Michael Kirk, American Intellectual Property Law 
Association; Mr. Thomas E. Smith, American Bar Association, 
Section on Intellectual Property Law; Mr. Andrew Kimbrell, 
Director, International Center for Technology Assessment; Mr. 
Kenneth Addison, Oklahoma Inventors Congress; Dr. Raymond 
Damadian, President and Chairman, Fonar Corporation; The 
Honorable Dana Rohrabacher, Representative, California, 45th 
District; Mr. James L. Fergason, Inventor, Founder and 
President of Optical Shields, Incorporated, Menlo Park, 
California; Mr. Mark A. Lemley, Assistant Professor, School of 
Law, University of Texas at Austin; Mr. Thomas W. Buckman, 
Inventor, Vice President, Patents and Technology, Illinois Tool 
Works, Incorporated, Glenview, Illinois, representing the 
National Association of Manufacturers; Mr. William D. Budinger, 
Inventor, Chairman & Chief Executive Officer, Rodel, 
Incorporated, and Chair of the Technology and Innovation 
Section of the White House Conference on Small Business; Mr. 
Edward Stead, Vice President, General Counsel & Secretary, 
Apple Computer, Incorporated, testifying on behalf of the 
Information Technology Industry Council; Mr. Roger May, 
Assistant General Counsel, Ford Motor Company, Member of the 
Michigan Patent Law Association; Mr. Stephen Barram, Inventor, 
Chief Executive Officer, Integrated Services, Incorporated, 
Lake Oswego, Oregon; Dr. Raymond Damadian, Inventor, President 
and Chairman, Fonar, Incorporated, Inventor and Manufacturer of 
Magnetic Resonance Imaging (MRI); Mr. James Chandler, President 
of the National Intellectual Property Law Institute, 
Washington, D.C.; Dr. Robert Rines, Inventor, Founder, and 
former President of the Franklin Pierce Law Center; Ms. Diane 
L. Gardner, Patent Agent, Molecular Biosystems, Incorporated, 
and President of the Intellectual Property Law Society at 
Thomas Jefferson School of Law; Dr. Paul Crilly, Inventor, and 
Associate Professor of Electronic Engineering University of 
Tennessee, Knoxville; and Dr. David L. Hill, President, Patent 
Enforcement Fund, Incorporated, Southport, Connecticut.
    The Committee's Subcommittee on Courts and Intellectual 
Property held one day of hearings on Title III of H.R. 400 on 
October 26, 1995. Testimony was received from Mr. Dieter 
Hoinkes, Senior Counsel, Office of Legislative and 
International Affairs, Patent and Trademark Office, U.S. 
Department of Commerce; Mr. Karl Jorda, Professor, Franklin 
Pierce Law Center; Mr. Richard Schwaab, Adjunct Professor, 
George Mason Law School and Partner, Foley & Lardner; Mr. Gary 
L. Griswold, President of the Intellectual Property Owners; Mr. 
Robert A. Armitage, President, American Intellectual Property 
Law Association (AIPLA); and Mr. William D. Budinger, Chairman 
and Chief Executive Officer, Rodel, Incorporated.
     The Committee's Subcommittee on Courts and Intellectual 
Property held one day of hearings on Title IV of H.R. 400 on 
October 19, 1996. Testimony was received from G. Lee 
Skillington, Counsel, Office of Legislative and International 
Affairs, Patent and Trademark Office, United States Department 
of Commerce; Senator Joseph I. Lieberman, the sponsor of S. 
909, the Senate companion bill to H.R. 2419; Dr. William D. 
Noonan, Klarquist, Sparkman, Campbell, Leigh & Whinston; Mr. 
Donald R. Dunner, Chair, Section of Intellectual Property Law 
Section, American Bar Association; Mr. Michael Kirk, Executive 
Director, American Intellectual Property Law Association; and 
Mr. Robert Lougher, Inventors Awareness Group.
     The Committee's Subcommittee on Courts and Intellectual 
Property held one day of hearings on all of the provisions of 
H.R. 400 on February 26, 1997. Testimony was received by: The 
Honorable Sue W. Kelly, Member of Congress, 19th District of 
New York; The Honorable Duncan Hunter, Member of Congress, 52nd 
District of California; The Honorable Dana Rohrabacher, Member 
of Congress, 45th District of California; The Honorable Tom 
Campbell, Member of Congress, 15th District of California; The 
Honorable Bruce A. Lehman, Assistant Secretary of Commerce and 
Commissioner of Patents and Trademarks, Patent and Trademark 
Office, U.S. Department of Commerce; Mr. John R. Kirk, Chair, 
Section of Intellectual Property Law, American Bar Association; 
Mr. Michael K. Kirk, Executive Director, American Intellectual 
Property Law Association; Mr. Chuck Ludlam, Vice President for 
Government Relations; Biotechnology Industry Organization; Mr. 
Erwin Bud Berrier, President, Intellectual Property Owners; Ms. 
Mary Ann Alford, President, International Trademark 
Association; Mr. Alan F. Holmer, President, Pharmaceutical 
Research and Manufacturers of America; Mr. David L. Hill, 
Chairman, Advisory Board, Alliance for American Innovation; Mr. 
Harold C. Wegner, Professor, The George Washington University 
National Law Center; Mr. Stephen H. Barram, Chief Executive 
Officer, Integrated Services, Inc. andDelegate, White House 
Conference on Small Business; Ms. Maureen Gilman, Director of 
Legislation, National Treasury Employees Union; and Mr. Ronald 
J. Stern, President, Patent Office Professional Association.

                        Committee Consideration

    On March 5, 1997, the Subcommittee on Courts and 
Intellectual Property considered H.R. 400. Amendments offered 
by Mr. Coble, Chairman of the Subcommittee on Courts and 
Intellectual Property, to extend protection to universities and 
strengthen the guarantee of 17 years of patent term, were 
considered en bloc and adopted by voice vote, a quorum by 
present. The bill, as amended, was reported favorably to the 
full Committee on the Judiciary by voice vote, a quorum being 
present. On March 12, 1997, the Committee on the Judiciary 
considered H.R. 400. Mr. Coble offered amendments to Titles III 
and V to further extend protection to universities and research 
institutions which were considered en bloc. The amendments was 
adopted by voice vote, a quorum being present and the bill H.R. 
400, as amended, were ordered reported favorably by voice vote, 
a quorum being present, to the full House.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

     No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(C) of House Rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 400, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 18, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 400, the 21st 
Century Patent System Improvement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Rachel 
Forward, who can be reached at 226-2860.
            Sincerely,
                                                      James L. Blum    
                                     (For June E. O'Neill, Director).  
    Enclosure.

             H.R. 400--21st Century Patent Improvement Act

Summary
    H.R. 400 would establish the United States Patent and 
Trademark Office (PTO) as a government corporation and make a 
number of other changes in laws governing the issuance of 
patents and related procedures.
    CBO estimates that enacting H.R.400 would result in net 
discretionary spending by the PTO totaling about $33 million 
over the 1998-2002 period, assuming appropriation of the 
authorized amounts. Enacting H.R. 400 would result in a net 
decrease in direct spending of $15 million in fiscal year 1998 
and $112 million over the 1998-2002 period. Because the bill 
would affect direct spending in fiscal year 1998, pay-as-you-go 
procedures would apply.
    The legislation contains private-sector mandates, but CBO 
is uncertain whether the costs associated with the new mandates 
in the bill would exceed the $100 million threshold specified 
in the Unfunded Mandates Reform Act of 1995 (UMRA). The costs 
of private-sector mandates would exceed the threshold if the 
extension of current PTO surcharges is included, but the costs 
would be well below the $100 million threshold if only the 
added fees are counted. H.R. 400 contains no intergovernmental 
mandates as defined in UMRA and would not impose costs on 
state, local, or tribal governments.
    Title I would establish a wholly owned government 
corporation to replace the existing PTO, an agency within the 
Department of Commerce. The new government corporation would 
retain the same name and would be subject to the policy 
guidance of the Department of Commerce but would not be subject 
to supervision by any department. The bill would authorize the 
PTO to collect and spend a surcharge on existing patent and 
trademark fees beginning in fiscal year 1999, subject to prior 
approval in appropriations acts. Authority to collect such 
surcharges currently expires after fiscal year 1998.
    Title II would require the PTO to publish patent 
applications within 18 months of filing regardless of whether a 
patent has been granted and would authorize the PTO to charge a 
fee to cover the cost of early publication. Title V would 
modify current reexamination procedures to ease the 
restrictions on third parties requesting the PTO to reexamine 
the validity of an existing patent. The bill would require a 
fee to be submitted with each third-party request for a patent 
reexamination and would authorize the PTO to collect a fee from 
the patent owner if the owner does not respond in a timely 
manner to a request for information pertinent to the 
reexamination. H.R. 400 also would require the PTO and the 
General Accounting Office (GAO) to complete a number of studies 
for the Congress.
    H.R. 400 would make a number of other changes to patent law 
that would not significantly affect the federal budget. The 
bill would require invention marketing companies that evaluate 
the market potential of inventions to include standardized 
disclosures in contracts between the companies and the 
inventors. The bill also would allow an inventor who has used 
an invention at least one year before the invention is patented 
by another party to continue using the invention without 
infringing on the new patent.
Estimated Cost to the Federal Government
    The estimated budgetary impact of H.R. 400 for the PTO is 
shown in Table 1. Under current law, the PTO collects a number 
of user fees that are spent by the agency to the extent 
provided in advance in the appropriations acts. CBO assumes 
that over time the PTO would be authorized to spend all of the 
fees that the agency collects, except for the surcharge fees 
required to be collected through 1998 pursuant to the Omnibus 
Budget Reconciliation Act of 1990. Hence, our current law 
projections show the estimated authorization levels for fiscal 
years 1998 through 2002 net of the user fees estimated to be 
collected and spent by the agency.
    For the purposes of this estimate, CBO assumes that H.R. 
400 would be enacted by the end of fiscal year 1997. Outlays 
have been estimated on the basis of historical spending 
patterns for the PTO and information provided by the agency.

                                TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 400                                
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
Spending under current law:                                                                                     
  Estimated authorization level \1\.......................       61       61       61       61       61       61
  Estimated outlays.......................................       -2       24       18       14       10        5
Proposed changes:                                                                                               
  Estimated authorization level...........................        0       15       19       22       26       30
  Estimated outlays.......................................        0        5      -26        8       21       25
Spending under H.R. 400:                                                                                        
  Estimated authorization level \1\.......................       61       76       80       83       87       91
  Estimated outlays.......................................       -2       29       -8       22       31       30
                                                                                                                
                                           CHANGES TO DIRECT SPENDING                                           
                                                                                                                
Estimated budget authority................................        0      -15      -19      -22      -26      -30
Estimated outlays.........................................        0      -15      -19      -22      -26      -30
----------------------------------------------------------------------------------------------------------------

    \1\ The 1997 level is the amount appropriated for that year. The 
estimated authorization levels for 1998-2002 reflect CBO baseline 
estimates for the PTO, assuming no adjustment for inflation.

    The costs of this legislation fall within budget function 
370 (commerce and housing credit).
Basis of Estimate
    Establishing the Patent and Trademark Office as a wholly 
owned government corporation would result in a number of 
efficiencies and savings, primarily for procurement and 
administration, that CBO expects would be roughly offset by 
expenditures for new requirements in the bill and for salary 
increases.
    Table 2 shows the estimated fee collections under H.R. 400 
as compared to projected fee collections under current law. The 
bill would allow an extension of the surcharge on the patent 
and trademark fees that expires in fiscal year 1998, but would 
make both the collection of the surcharge fees and the spending 
from those collections subject to appropriations. That is, the 
bill would change those collections from offsetting receipts (a 
form of direct spending) to offsetting collections credited to 
appropriations (a form of discretionary spending). H.R. 400 
also would require the PTO to collect some additional user 
fees, which CBO estimates would total $112 million over five 
years.

                                          TABLE 2.--ESTIMATED PTO FEES                                          
                                [Outlays in millions of dollars, by fiscal year]                                
----------------------------------------------------------------------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
Fees under current law:                                                                                         
  Patent surcharge........................................     -115     -119        0        0        0        0
  Patent and trademark user fees..........................     -604     -664     -731     -804     -884     -973
Proposed changes:                                                                                               
  Patent surcharge \1\....................................        0        0     -119     -119     -119     -119
  Patent and trademark user fees \2\......................        0      -15      -19      -22      -26      -30
Fees under H.R. 400:                                                                                            
  Patent surcharge........................................     -115     -119     -119     -119     -119     -119
  Patent and trademark user fees..........................     -604     -679     -750     -826     -910    -1003
----------------------------------------------------------------------------------------------------------------

    Note: Fee collections are recorded as negative outlays.

    \1\ Would require appropriations action and would be available for 
spending.
    \2\ Would not require appropriations action.

          Spending Subject to Appropriation

    Under current law, the PTO cannot spend any user fees 
without prior approval in an appropriations act. Although H.R. 
400 would establish the PTO as a government corporation, the 
agency would still need to receive approval in appropriations 
acts to spend any of the user fees collected.
    H.R. 400 would authorize the PTO to impose surcharges on 
certain user fees in order to collect an additional $119 
million in fiscal year 1999 and in subsequent years. PTO would 
not be able to collect or spend the surcharge fees without 
prior approval in an appropriations act. CBO estimates that 
enacting H.R. 400 would result in increased surcharge 
collections of $476 million and additional discretionary 
spending from those collections of $418 million over the 1999-
2002 period, assuming appropriation of the full amount of the 
authorized surcharge fees.
    Enacting H.R. 400 would result in collections of additional 
user fees, which would be reflected as a net decrease in direct 
spending. The bill would authorize the agency to collect an 
estimated $112 million in publication and reexamination fees 
over the 1998-2002 period, and CBO assumes that the agency 
would be authorized in appropriations acts to spend these 
additional fees. Because CBO expects a lag between the time the 
PTO collects and spends the fees, we estimate that the agency 
would only spend $91 million of the fees over the 1998-2002 
period. This amount is included in Table 1 as spending subject 
to appropriation.
    H.R. 400 also would provide the PTO with the authority to 
issue bonds or other forms of indebtedness for purchase by the 
Treasury, subject to prior approval in appropriations acts. The 
General Services Administration (GSA) is currently soliciting 
proposals to lease an estimated 2 million square feet of office 
space to house the PTO for 20 years beginning in 2002 or 2003. 
Based on information from the GSA and PTO, the lease agreement 
will likely contain a clause that would allow the federal 
government to buy the buildings at several points during the 
course of the lease. CBO estimates that the PTO could issue 
$800 million worth of bonds for purchase by the Treasury and 
use the proceeds for the purchase of the buildings after their 
completion (probably no earlier than 2003), assuming 
appropriation of the necessary amounts.
    CBO estimates that enacting H.R. 400 would result in new 
discretionary spending of less than $500,000 in fiscal year 
1999 for GAO to conduct a study required by the bill, assuming 
the appropriation of the necessary amount.

          Direct Spending

    Enacting the bill would affect direct spending by 
increasing receipts from several types of fees.
    Publication Fees.--H.R. 400 would authorize the PTO to 
raise existing fees or establish a new fee to offset the cost 
of publishing the patent applications. Because the PTO would 
not be allowed to spend the additional fees without approval in 
appropriations acts, any collections would reduce direct 
spending. Based on information from the PTO, CBO estimates that 
the PTO would collect about $98 million in publication fees 
over the 1998-2002 period.
    Reexamination Fee.--H.R. 400 would ease restrictions on 
reexamination proceedings initiated by third parties, thus 
causing an increase in the number of proceedings. Based on 
information from the PTO, CBO estimates enacting H.R. 400 would 
nearly double the number of reexamination requests, resulting 
in additional fee collections of about $14 million over the 
1998-2002 period.
    Penalty Fee.--The bill would authorize the PTO to collect a 
new penalty fee if a patent owner does not respond to a request 
for information pertinent to the reexamination. CBO expects 
that any receipts from this new fee would not be significant.
Pay-As-You-Go Considerations
    Section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 sets up pay-as-you-go procedures for 
legislation affecting direct spending or receipts through 1998. 
CBO estimates that enacting H.R. 400 would decrease direct 
spending by about $15 million in fiscal year 1998 from the 
increased collections of publication and reexamination fees.
Estimated Impact on State, Local, and Tribal Governments
    H.R. 400 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act of 1995 (UMRA) and would 
not impose costs on state, local, or tribal governments.
Estimated Impact on the Private Sector
    H.R. 400 would impose new private-sector mandates by 
extending the surcharge on patent and trademark fees, by 
authorizing the PTO to raise or assess new fees for the 
services it provides, and by placing requirements on the 
invention development services industry. CBO has determined 
that the extension of existing fees, increases to existing 
fees, and the imposition of new fees by the PTO are mandates as 
defined in UMRA.
    First, the bill would impose a mandate by extending PTO's 
authority to collect a surcharge on patent and trademark fees. 
Under current law, patent and trademark surcharges by the PTO 
expire after fiscal year 1998. H.R. 400 would permanently 
extend the PTO's authority to collect $119 million in patent 
and trademark surcharges beginning in fiscal year 1999--the 
same amount as required for fiscal year 1998.
    Because of ambiguities in UMRA, CBO is uncertain whether 
extending surcharges would increase the direct costs of federal 
private-sector mandates. UMRA could be interpreted as requiring 
the estimate of direct costs of the mandate extension to be 
based on a comparison with current costs under the existing 
mandate. In that case, the direct costs of extending the 
surcharge would be close to zero. An alternative interpretation 
is that direct costs should be measured relative to current 
law, under which there would be no surcharges imposed after 
1998. The direct costs of the mandate under that approach would 
be $119 million in each of the first five years that the 
surcharge was effective.
    Second, H.R. 400 would impose private-sector mandates by 
authorizing the PTO to increase existing fees or to charge new 
fees to offset the cost of publishing patent applications. In 
addition, the bill would authorize the PTO to assess new 
penalty fees against a patent owner who does not respond to a 
request made under a reexamination proceeding. Direct costs 
would rise, on average, by about $20 million annually over the 
1998-2002 period as a result of the new fees.
    Third, new mandates would be imposed on providers of 
invention development services. H.R. 400 would require that 
every contract for invention development services between 
invention developers and their customers be in writing and 
contain specific language. In addition, the bill would place an 
enforceable duty on invention developers to produce and deliver 
reports containing specific information about the status of 
services provided to their customers at least every three 
months throughout the term of the contract. The aggregate 
additional costs imposed on providers of invention development 
services would not be significant because the new requirements 
are modest and the industry is small.
    Thus, CBO is uncertain whether the total direct costs of 
new private-sector mandates in H.R. 400 would exceed the $100 
million threshold in UMRA. If the collections from extending 
patent and trademark surcharges are excluded from direct costs, 
new mandates would impose, on average, $20 million in direct 
costs per year during the first five years that the mandates 
were effective. However, if such surcharges are counted, the 
direct costs of new private-sector mandates in H.R. 400 would 
total about $140 million per year starting in 1999.
    Estimated prepared by: Federal cost: Rachel Forward; impact 
on State, local, and tribal governments: Leo Lex; and impact on 
the private sector: Matthew Eyles.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                        Constitutional Authority

     Pursuant to Rule XI, clause 2(1)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, clause 8, section 8 of the 
Constitution.

               Section-by-Section Analysis and Discussion

Section 1.--Short Title

    This section entitles the Act as the ``21st Century Patent 
System Improvement Act.

Section 2.--Table of Contents

    This section sets forth the table of contents for the bill.

          TITLE I.--PATENT AND TRADEMARK OFFICE MODERNIZATION

Section 101.--Short Title

    This section entitles this title the ``Patent and Trademark 
Office Modernization Act.''

         SUBTITLE A.--UNITED STATES PATENT AND TRADEMARK OFFICE

Section 111.--Establishment of Patent and Trademark Office as a 
        Government Corporation

    This section amends section 1 of title 35, United States 
Code (35 U.S.C. Sec. 1) to establish the United States Patent 
and Trademark Office (hereinafter the PTO or the Office) as a 
wholly owned government corporation under chapter 91 of title 
31, United States Code (31 U.S.C. Sec. 9101 et seq.). The 
Office will continue to be under the policy direction of the 
Secretary of Commerce. As a body corporate and government 
agency, the Office will have the authority to direct its 
personnel, procurement, budget, and similar administrative 
functions in a manner consistent with the flexibilities 
required for businesslike operations, without supervision by 
any department unless expressly provided for in the Act, but 
subject to the specific oversight provisions contained in the 
Act. Establishing the PTO as a separate entity under the policy 
direction of the Secretary of Commerce permits the Office to 
establish its own rules, regulations, and other processes. It 
is anticipated that the Office will achieve savings and 
efficiencies from its status as a wholly owned government 
corporation separate from the rules and procedures of other 
departments and agencies of the United States Government, while 
allowing the Administration to achieve an integrated approach 
on patent and trademark policy and on general policies 
affecting jobs, trade and technology.
     Subsection (a) establishes the United States Patent and 
Trademark Office as a wholly-owned government corporation under 
the policy direction of the Secretary of Commerce on all 
matters within his purview such as international treaties and 
agreements concerning patents and trademarks, domestic patent 
and trademark legislation, and issues involving interagency 
coordination.
     Subsection (b) requires that the Office maintain its 
principal office in the Washington, D.C. metropolitan area for 
purposes of service of process and authorizes the Office to 
establish satellite offices elsewhere as well. Venue in civil 
actions to which the Office is subject is established in the 
district in which the principal office is located.

Section 112.--Powers and Duties

    This section amends section 2 of title 35, United States 
Code (35 U.S.C. Sec. 2) to provide the Office with the powers 
and authorities necessary to carry out its functions as a 
wholly owned government corporation.
    Subsection (a)(1) provides that the PTO, as a sovereign 
agency of the United States, will be responsible for the 
granting and issuing of patents and the registration of 
trademarks. These functions are transferred to the Office under 
Section 123 of the Act. Article I, Section 8, paragraph 8 of 
the Constitution of the United States gives to the Congress the 
power to promote the progress of science and the useful arts, 
by securing for limited times to authors and inventors the 
exclusive right to their respective writings and discoveries. 
The Constitution leaves to the discretion of the Congress the 
manner in which those rights are provided. Congress has 
authority under the Commerce Clause of the Constitution to 
provide a uniform trademark law for the United States and to 
designate a body responsible for maintaining a register for 
protected marks. The PTO, as a wholly owned government 
corporation, will be able to carry out the functions necessary 
for the granting and issuing of patents and the registration of 
trademarks more efficiently and cost effectively than would be 
the case if the Office were subject to the limitations placed 
on taxpayer-funded Departments and Agencies.
     Subsection (a)(2) authorizes the U.S. Patent and Trademark 
Office to conduct studies, programs and exchanges regarding the 
law of patents, trademarks and other matters. It allows, but 
does not require the PTO to conduct, independently, studies, 
programs and exchanges on patents, trademarks and other 
matters, such as copyrights, database protection and other 
related rights.
     Subsection (a)(3)(A) addresses the ability of the U.S. 
Patent and Trademark to conduct studies, programs and exchanges 
with international organizations. Recently, the Patent and 
Trademark Office has been selected by the Administration to 
represent the United States as a party to international treaty 
negotiations on intellectual property rights, including 
negotiations on the law of patents, trademarks and copyrights. 
The authorization contained in this subsection grants the 
Office the ability to continue to serve in this capacity, if 
chosen by the Administration to do so.
     Subsection (A)(3)(B) authorizes the Office to transfer up 
to $100,000 to the State Department, with the concurrence of 
the Secretary of State, for making payments to international 
intergovernmental organizations, such as the World Intellectual 
Property Organization, for studies and programs advancing 
international cooperation in connection with patents, 
trademarks, and other matters. The payments referred to may be 
in addition to other payments or contributions to these 
international intergovernmental organizations.
     Subsection (a)(4) makes the PTO responsible for 
disseminating to the public information about patents and 
trademarks. This is done currently though the Patent and 
Trademark Depository Library program, the sale of electronic 
data to information vendors, and the provision of public access 
through the World Wide Web (the commercial multimedia component 
of the Internet, or national and global information 
infrastructure), as well as through other programs for the 
public. It is expected that these programs would continue and 
others would be developed. In fulfilling the responsibility set 
out under Subsection (a)(4), the Office should pursue policies 
that most effectively, efficiently, and broadly disseminate 
patent and trademark information. In so doing, the Office 
should continue to balance PTO direct services with its program 
that provides bulk data in electronic form for a fee to any 
member of the public wishing to buy it. This PTO program has 
been one of the most successful in government in terms of 
broad, far-reaching, efficient and effective dissemination of 
information. With regard to direct services, the Office should 
continue the policy which provides, for a fee, onsite direct 
access to the Automated Patent System (APS) in the public 
search room and in the Patent and Trademark Depository 
Libraries; and the policy which provides, for no cost to the 
user, access via the Internet to bibliographic records of 
patents issued over the most recent 20 year period. The Office 
should continue the policy which provides bulk patent and 
trademark text and image data in electronic form, for a fee 
which is based on the cost of dissemination. A vigorous, 
competitive private sector patent information dissemination 
industry has emerged as a direct result of the Patent and 
Trademark Office's excellent bulk dissemination program. The 
PTO should proceed with caution before creating any direct-to-
end-user retail services because they could undercut the value 
of the bulk dissemination program and the value of the patent 
information products and services now sold.
     Subsection (b) identifies the specific powers granted the 
PTO to carry out its functions efficiently and in a cost-
effective manner.
     Subsection (b)(1) specifies that the Office shall have 
perpetual succession.
     Subsection (b)(2) authorizes the PTO to adopt and use a 
corporate seal that is to be judicially noticed. All letters 
patent, trademark registration certificates, and other official 
papers issued by the Office are to be authenticated with the 
seal.
     Subsection (b)(3) provides that the Office may sue and be 
sued in its own name. Wholly owned government corporations 
generally have ``sue and be sued'' status which is specific to 
the body corporate. The provisions regarding implementation of 
the Office's authority to sue and be sued are in section 7 of 
this title, which allows the Justice Department to represent 
the Office in lieu of the Office's own attorneys at the 
discretion of the Attorney General.
    Subsection (b)(4) authorizes the PTO to indemnify all 
officers, employees and agents of the Office, including the 
members of the Management Advisory Board, against liabilities 
and expenses incurred within the scope of their employment.
    Subsection (b)(5) authorizes the PTO to adopt, amend, and 
repeal any bylaws, rules, regulations, and determinations that 
govern the conduct of its business and the exercise of the 
powers granted to the Office by law. The adoption, amendment, 
and repeal of bylaws, rules, regulations, and determinations 
are to be made after notice and an opportunity for full 
participation by interested public and private parties. The 
purpose of any such adoption, amendment, or repeal should be to 
facilitate and expedite the processing of patent and trademark 
applications, particularly through the use of electronic media. 
The provisions of section 122 regarding the confidential 
treatment of patent applications are to be adhered to in any 
expedited processing. With regard to any bylaws, rules, 
regulations, and determination regarding the recognition and 
conduct of agents, attorneys, or other persons representing 
applicants or other parties before the Office (the bar of the 
PTO), the PTO is expressly authorized to require, before 
granting recognition to anyone who wishes to represent others 
before the Office, that party show that he or she is of good 
moral character and reputation and is qualified to render 
applicants and others valuable service, advice, and assistance 
in procedures before the Office. The power to recognize 
includes the power to revoke recognition once granted in 
accordance with the rules and regulations governing the conduct 
of those authorized to practice before the Office.
    Subsection (b)(6) gives the PTO broad authority to manage 
its own real and personal property, or any interests in 
property. The Office is authorized to acquire, construct, 
purchase, lease, hold, manage, operate, improve, alter, and 
renovate any real, personal, or mixed property or any interest 
in such property, that it considers necessary to carry out the 
responsibilities assigned to it.
    Subsection (b)(7) provides that the PTO may make purchases, 
contract for the construction, maintenance, or management and 
operations of facilities, and contract for supplies or services 
without regard to (1) the Federal Property and Administrative 
Services Act of 1949 (``FPAS'') (40 U.S.C. Sec. 471 and 
following), (2) the Public Buildings Act of 1949 (40 U.S.C. 
Sec. 601 and following), and (3) the Stewart B. McKinney 
Homeless Assistance Act (the McKinney Act) (42 U.S.C. 
Sec. Sec. 11301 and following). Subsections (b)(7)(A) and (B) 
provide the PTO with authorities to oversee its own 
acquisitions.
    The FPAS contains many detailed requirements that are not 
appropriate for the businesslike operations of a fee-funded 
government corporation and that often impose substantial 
administrative costs. For example, the photocomposition 
procurement for the Patent and Trademark Office took more than 
two and one-half years to complete, resulting in wasted Office 
resources, necessitating sole-source extensions, and revisions 
of requirements to keep pace with technology advances. The 
Office, as a nontaxpayer-funded, fee-funded government 
corporation, has a responsibility to minimize operating costs 
while assuring a fair and competitive process that reduces the 
overall cost of acquisitions. The PTO is expected to follow 
prudent business practices that achieve the objectives of FPAS, 
such as obtaining effective competition, ensuring that prices 
for supplies and services are fair and reasonable, and that 
delivery times are reasonable. The Office remains subject to 
the oversight provisions in the Act, as well as existing ethics 
in government Acts.
    The Public Buildings Act gives the Administrator of the 
General Services Administration (``GSA'') exclusive authority 
to acquire and manage office space for federal agencies. While 
this system may be justified for taxpayer-funded agencies, it 
is inappropriate and is not cost-effective when applied to 
nontaxpayer-funded government corporations which are created to 
operate intrinsically under businesslike principles. GSA may 
not always be able to respond to the PTO's needs in a timely 
manner. To ensure timely and cost-effective space acquisition 
and management, the Office must have authority to act on its 
own behalf in appropriate circumstances, subject to the 
provision contained in Subsection (c). In addition, GSA imposes 
surcharges upon agencies for the provision of its services. 
Funds used to pay these surcharges could be better used by the 
PTO in conducting its business. Mandatory, rather than 
discretionary, GSA authority conflicts with the Office's need 
to acquire its own space in a businesslike manner. This 
proposal is consistent with the current trend for GSA to be an 
asset management agency rather than a provider of services.
    The McKinney Act requires that real property being disposed 
of by a federal agency must be screened by the Department of 
Housing and Urban Development to determine whether the property 
may be used by agencies assisting the homeless. Because any 
real property that the PTO might acquire would be paid for with 
patent and trademark fees, rather than with taxpayer moneys, it 
is inappropriate to apply the McKinney Act to disposal of PTO 
property.
    Subsection (b)(7)(B) exempts the PTO from the requirements 
for printing and binding in sections 501-517 of title 44, 
United States Code (44 U.S.C. Sec. Sec. 501-517) and from the 
requirements of executive and judiciary printing and binding in 
sections 1101-1123 of title 44, United States Code (44 U.S.C. 
Sec. Sec. 1101-1123). There are instances when it may be more 
efficient for the Office to have access to alternative printing 
sources. For example, the Office is developing the capability 
to print trademark registration certificates directly from its 
automated computer systems, making it unnecessary to obtain 
outside printing services. Without the exemption, the Office 
would be unable to realize the cost savings associated with 
this and future plans for technological improvement.
     Subsection (b)(8) authorizes the PTO to use services, 
equipment, personnel and facilities of other United States 
departments, agencies, and instrumentalities with their consent 
and with reimbursement. The Office is also authorized to 
cooperate with other departments, agencies, and 
instrumentalities by allowing them the use of services, 
equipment, and facilities of the Office in a like manner.
     Subsection (b)(9) authorizes the PTO, if it deems it 
appropriate, to obtain services from the Administrator of 
General Services under the same conditions that those services 
are made available to other agencies of the United States.
     Subsection (b)(10) authorizes the PTO to use the services, 
records, facilities, or personnel of any State or local 
government agency or instrumentality, any foreign government, 
or any international organization, with their consent and that 
of the United States, to perform functions on its behalf.
     Subsection (b)(11) provides the PTO with the authority to 
determine the character of, and necessity for, its financial 
obligations and expenditures and the manner in which they are 
incurred, allowed, and paid, subject to statutes expressly 
applicable to wholly owned government corporations; title 35, 
United States Code; and the Act of July 5, 1946 (commonly 
referred to as the ``Trademark Act of 1946''). The PTO's use of 
its funds, therefore, would be subject only to the restrictions 
in its enabling law and in the relevant provisions of the 
Government Corporation Control Act and other laws specifically 
applicable to wholly owned government corporations. The 
Comptroller General no longer would certify the Office's 
obligations and expenditures. The Office would retain this 
authority. This method of operation is appropriate since the 
Office's funds derive from its own revenues and receipts, not 
from taxpayer funds.
     Subsection (b)(12) authorizes the PTO to retain and use of 
all of the revenues, receipts, and other monies that arise from 
activities of the Office for the operations of the Office, 
subject to oversight provisions of the Act, and the Government 
Corporation Control Act. Subsection (b)(12) clarifies that the 
Office's funding is derived principally from fees paid for the 
Office's services, which are set by Congress. Accordingly, 
Congress directly controls the budget of the PTO. Revenues are 
not derived from appropriated, general taxpayer funds. This 
statement recognizes current conditions of the Patent and 
Trademark Office. Since fiscal year 1993, the Office has relied 
upon user fees for all of its revenues. Except for restrictions 
on required surcharge fees under the provisions of section 
10101 of the Omnibus Budget Reconciliation Act of 1990 (35 
U.S.C. Sec. 41 note), all funding is available to the Office 
for the conduct of its affairs. The authority granted to the 
PTO in this charter is consistent with that prevailing prior to 
incorporation under this Act, excepting certain restrictions 
associated with the appropriation and apportionment processes. 
Exemption from the apportionment process affords flexibility to 
the PTO in the management of its financial resources to enhance 
operating efficiencies.
     Subsection (b)(13) gives the PTO the priority of the 
United States in connection with the payment of any debts from 
bankrupt, insolvent, and decedents estates.
     Subsection (b)(14) authorizes the PTO to accept gifts or 
donations of services and property. This provision mirrors 
those of 12 other Executive agencies and currently applies to 
the Patent and Trademark Office. The requirements of, and 
regulations establishing standards for ethical conduct for 
executive branch employees under Appendix 5 of title 5, United 
States Code, including those regarding the acceptance of gifts, 
will continue to apply to officers and employees of the PTO as 
will the provisions of Chapter 11 of Title 18 of the United 
States Code.
     Subsection (b)(15) authorizes the PTO to execute any legal 
instruments necessary and appropriate for the exercise of its 
powers and authorities. Such execution shall conform to the 
bylaws, rules and regulations established by the Office for the 
exercise of such powers and authorities.
     Subsection (b)(16) authorizes the PTO, either by contract 
or through self-insurance, to provide for liability insurance 
and insurance against loss in connection with any of its 
property, other assets, or operations.
     Under subsection (c), the provisions of the bill will not 
render null and void those pending request-for-proposal let or 
contract regarding the leasing of space to the PTO already 
approved by the General Services Administration.

Section 113.--Organization and Management

    This section amends section 3 of title 35, United States 
Code, substituting new language. Subsection (a)(1) vests the 
management of the PTO in a Director of Patents and Trademarks 
(the ``Director'') who is appointed by the President, by and 
with the advice and consent of the Senate. The Director must be 
a person who, by reason of knowledge of patent or trademark law 
and management experience, is specially qualified to manage the 
Office. While it is the intent of the Act that the PTO and the 
Director control the policies, practices and operation of the 
Office in accordance with Presidential and Congressional 
direction and expectations, it is also the intent of the Act 
that whomever the President appoints, that individual be 
uniquely qualified to manage a government corporation that 
performs the important and essential function of granting and 
issuing of patents and registering trademarks.
     Subsection (a)(2) establishes the duties of the Director 
to include the managing and directing of the PTO, which 
includes the granting and issuing of patents and the 
registration of trademarks. Those duties are to be performed in 
a fair, impartial and equitable manner. This responsibility 
includes the establishment of the organization of the Office, 
the number and types of its offices and the filling thereof, 
ensuring equitable term and other properties inherent in 
patents issued by the Office, and the definition of the duties 
assigned to employees and officers of the Office. The Director 
is charged with advising the President, through the Secretary 
of Commerce, regarding all activities the Office undertakes on 
treaties and executive agreements entered into by the United 
States or that are related to cooperative programs with 
authorities of foreign governments regarding the granting of 
patents and the registration of trademarks. In addition, the 
Director is to recommend to the President, through the 
Secretary of Commerce, any changes in the law or in policy that 
might improve U.S. citizens abilities to secure and enforce 
patent rights and trademark rights in the United States and 
abroad.
    On issues involving the operation of the Office, the 
Director is to consult with the Management Advisory Board (the 
``Advisory Board''), established in section 5 of title 35, 
United States Code (35 U.S.C. Sec. 5). The Director also shall 
consult with the Advisory Board before submitting budget 
proposals to the Office of Management and Budget, before 
changing patent or trademark regulations, and before proposing 
to Congress that it change patent and trademark user fees. The 
Management Advisory Board is advisory only. While it must be 
consulted for input to allow the Director to make informed 
decisions, it does not control any decisions to be made by the 
Director.
     A program for identifying national security positions and 
providing for appropriate security clearances must be 
established by the Director in consultation with the Director 
of the Office of Personnel Management.
     Subsection (a)(3) sets the Director's term at 5 years and 
whatever time thereafter is required for a successor to be 
appointed and confirmed and actually assume the office. The 
number of terms an individual may serve as Director is not 
limited. The 5-year term ensures the continuity of the 
management of the Office, and is intended to foster the 
selection of a non-political appointee who is qualified to 
manage the detailed operations of the Office and to look after 
the integrity of the examination process.
     Subsection (a)(4) requires that before assuming office, 
the Director take an oath to discharge faithfully the duties of 
the Director as the head of an agency of the United States.
    Subsection (a)(5) sets the Director s compensation at the 
rate of basic pay in effect for level III of the Executive 
Schedule under section 5314 of title 5, United States Code (5 
U.S.C. Sec. 5313).
     Subsection (a)(6) permits removal of the Director by the 
President.
     Subsection (a)(7) requires the Director to designate an 
officer of the PTO who will be vested with authority to act as 
Director in the event of absence or incapacity of the Director. 
This assures the continuity of management of the Office.
    Subsection (b) deals with the officers and employees of the 
PTO other than the Director. Subsection (b)(1) requires the 
Director to appoint a Commissioner for Patents and a 
Commissioner for Trademarks, whose terms are coextensive with 
the Director s term. Each person is to have had demonstrated 
experience in the field of law for which he or she will be 
responsible. The Commissioner for Patents and the Commissioner 
for Trademarks are to advise the Director on all activities of 
the Office that affect the administration of the section of the 
Office for which that Commissioner is responsible.
    Subsection (b)(2) requires the Director to appoint 
officers, employees (including attorneys) and agents whom the 
Director deems necessary to carry out the functions of the 
Office. Finally, the subsection authorizes the Director to 
define the authority and duties of the Office's officers and 
employees and to delegate the powers required to carry out 
those duties. Subsection (b)(2) also makes it clear that it is 
Congress s intent that no administrative or statutory 
limitations on the number of positions or the number of 
personnel are to apply to the PTO and that none of the 
positions or personnel of the Office are to be taken into 
account in applying any such limitation to other departments 
and agencies of the United States Government.
    Subsection (c) explicitly states that officers and 
employees of the PTO are subject to the provisions of Title 5 
of the U.S. Code relating to federal employees, including 
section 2302 of title 5. This means that the civil service 
protection guarantees for the federal workforce (title 5) will 
continue to apply to the PTO, and that PTO employees cannot be 
coerced to indulge in proscribed political activity as federal 
employees (section 2302).
    Subsection (d) provides for the continuation of all labor 
agreements that are in effect on the day before the effective 
date of the Act. Should any of the unions representing PTO 
employees not have a labor agreement in effect on that date, 
terms and conditions of employment shall continue unless and 
until changed by the Office or as otherwise set forth in the 
Act.
    Subsection (e)(1) provides that all officers and employees 
of the current Patent and Trademark Office will become officers 
and employees of the United States Patent and Trademark Office 
established in this Act on the effective date of the Act, 
without a break in service. In addition, Subsection (e)(2) sets 
forth the conditions under which certain individuals employed 
by the Department of Commerce shall be transferred to the 
Office on the effective date of the Act. Any amount of sick or 
annual leave and compensatory time accumulated under title 5, 
United States Code, before the effective date of the Act by 
employees covered in subsection (e)(3) will become obligations 
of the Office.
    Subsection (f)(1) requires the President, on or after 
enactment of the Act, to appoint an individual to serve as 
Director until the date on which a Director qualifies and is 
chosen under subsection (a). The President may make only one 
such appointment pursuant to subsection (f)(1).
    Subsections (f)(2)(A) and (B) permit the individual serving 
as the Assistant Commissioner for Patents on the day before the 
effective date of the Act to serve as the Commissioner for 
Patents until the date upon which a Commissioner for Patents is 
appointed under Subsection (b). Similarly, the individual 
serving as Assistant Commissioner for Trademarks on the day 
before the effective date of the Act may serve as the 
Commissioner for Trademarks until the date on which a 
Commissioner for Trademarks is appointed under subsection (b).

Section 114.--Management Advisory Board

    Section 114 adds a new section 5 to title 35, United States 
Code, to establish a Management Advisory Board for the PTO. 
Section (a)(1) specifies that the Board shall be comprised of 
twelve members. Four of the members are to be appointed by the 
President, four by the Speaker of the House of Representatives, 
and four by the Majority Leader of the Senate. No more than 
three of the four members appointed by each appointing 
authority may be members of the same political party.
    Subsection (a)(2) sets the term of the Advisory Board s 
members at four years and no member may serve more than a 
single term. During the first appointment, each of the 
appointing authorities shall appoint one member for a term of 
one year, one for a term of two years, one for a term of three 
years, and one for a full term of four years.
    Subsection (a)(3) requires that the President designate a 
member of the Advisory Board to serve as Chair for a term of 
three years.
     Subsection (a)(4) requires that the appointment of members 
to the Advisory Board be made within three months of the 
effective date of the Act. Vacancies must be filled within 
three months of their occurrence.
     Subsection (a)(5) specifies that vacancies on the Advisory 
Board are to be filled in the same way the original 
appointments were made. Those members appointed to fill a 
vacancy of a member who did not complete his or her term of 
appointment shall serve only for the remainder of that term. 
Members may continue to serve after their term expires until a 
successor is appointed.
    Subsection (a)(6) requires that the Chair designate members 
of the Advisory Board to serve on a committee concerned with 
patent operations and a committee concerned with trademark 
operations. The members of these committees are to be 
responsible for the duties identified in subsection (e) in 
connection with patent operations and trademark operations, 
respectively.
    Subsection (b) requires that those persons appointed to be 
members of the Advisory Board be citizens of the United States. 
The members are to be chosen so that they reflect the interests 
of diverse users of the PTO. Among those chosen as members of 
the Advisory Board are to be individuals who have substantial 
experience and achievement in corporate finance and in 
management.
    Subsection (c) makes the members of the Advisory Board 
special government employees within the meaning of section 202 
of title 18, United States Code (18 U.S.C. Sec. 202). Advisory 
Board members, therefore, will be subject to certain ethics 
laws governing representation of others before the United 
States during and following employment and participation in 
matters in which the party has a financial interest, as 
provided in sections 203, 205, 207, 208, and 209 of title 18.
    Subsection (d) authorizes the Chair to call meetings of the 
Advisory Board and to establish the agenda for the meeting.
    Subsection (e) requires the Advisory Board to review the 
policies, goals, performance, budget, and user fees of the PTO 
and to provide advice to the Director on these matters. In 
addition, the Advisory Board is required to submit an annual 
report on the matters which it reviews to the President and to 
the Committees on the Judiciary of the Senate and the House of 
Representatives within 60 days of the end of the fiscal year. A 
copy of that report must be published in the PTO's Official 
Gazette.
    Subsection (f) authorizes compensation for the members of 
the Advisory Board for each day (including travel time) during 
which they are attending meetings or conferences of the 
Advisory Board or are otherwise engaged in work on behalf of 
the Advisory Board. The rate of pay at which the members may be 
compensated 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. In addition, the subsection authorizes 
travel expenses, including per diem in lieu of subsistence for 
periods when the members must be away from their homes and 
regular places of business, as provided in section 5703 of 
title 5, United States Code.
    Subsection (g) requires the PTO to provide members of the 
Advisory Board with access to records and information in the 
Office, except for personnel or other privileged information 
and information concerning patent applications required to be 
kept in confidence by section 122.

Section 115.--Conforming Amendments

    Subsection (a) repeals section 6 of title 35, United States 
Code (35 U.S.C. Sec. 6), along with the heading for that 
section in the table of contents for Chapter 1 of title 35. The 
duties that were assigned the Director under section 6 are 
replaced by the provisions of Sections 112 and 113 of this Act.
    Section 31 of title 35, United States Code (35 U.S.C. 
Sec. 31) and the heading for that section in the table of 
contents for chapter 3 are also repealed. The authority for 
issuing regulations and rules governing the recognition and 
conduct of agents, attorneys, or other persons representing 
applicants and other parties before the Office are replaced by 
the provisions of Section 112(b) of this Act.

Section 116.--Trademark Trial and Appeal Board

     This section amends section 17 of the Act of July 5, 1946 
(commonly referred to as the Trademark Act of 1946'') (15 
U.S.C. Sec. 1067) to require, in subsection (a), that 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 direct that the matter be decided by 
a Trademark Trial and Appeal Board.
    Subsection (b) specifies that the Board will include the 
Director, the Commissioner for Patents, the Commissioner for 
Trademarks, and administrative trademark judges who have been 
appointed by the Director.

Section 117.--Board of Patent Appeals and Interferences

    This section amends section 7 of title 35, United States 
Code (35 U.S.C. Sec. 7) to provide for a Board of Patent 
Appeals and Interferences in the PTO, composed of the Director, 
the Commissioner for Patents, the Commissioner for Trademarks, 
and the administrative patent judges. The administrative patent 
judges are to have competent legal knowledge and scientific 
ability.
    Subsection (b) assigns to the Board of Patent Appeals and 
Interferences responsibility for reviewing written appeals from 
adverse decisions of examiners upon applications for patents 
and for determining priority and patentability of invention in 
interferences declared under section 135(a) of title 35, United 
States Code (35 U.S.C. Sec. 135(a)). The decisions are to be 
made by panels of the Board, composed of at least three 
members, designated by the Director. Subsection (b) also limits 
the authority to grant rehearings to the Board itself.

Section 118.--Suits by and Against the Office

     This section inserts a new section 7 to title 35, and 
provides for the renumbering of the existing sections.
    Subsection (a) of the new section 7 requires that any 
action against the PTO must arise under Federal law. 
Jurisdiction over civil actions by or against the Office is 
vested with the Federal courts.
    Pursuant to Subsection (b), the PTO is deemed an agency for 
the purposes of Section 516 of title 28. This means that, 
except as otherwise authorized by other law, the Department of 
Justice, under the direction of the Attorney General, is 
responsible for any conduct of litigation to which the PTO may 
be a party or in which it has an interest.
     Subsection (c) expressly prohibits certain legal 
processes, such as attachments, garnishment, liens, or similar 
processes from being issued against the PTO's property. This 
protection is currently available to the property of the United 
States under the Office's custody or control. This is necessary 
to protect Office property and prevent interference with the 
day-to-day operation of the patent and trademark examination 
systems. Although the Office has waived its sovereign immunity, 
that waiver is limited and should not be construed as allowing 
relief in any proceeding against the Office's property. This 
protection against interference with important governmental 
operations is customary for wholly owned government 
corporations.

Section 119.--Annual Report of Director

    This section amends renumbered section 14 of title 35, 
United States Code (35 U.S.C. Sec. 14) to require the Director 
to prepare and submit to the Congress an annual financial and 
management report using the requirements under section 9106 of 
title 31, United States Code (31 U.S.C.Sec. 9106). The required 
report to Congress should not be deemed to replace the report 
of the PTO required under Sec. 9106 and a second report will 
accordingly need to be filed by the Director.

Section 120.--Suspension or Exclusion from Practice

    This section amends section 32 of title 35, United States 
Code (35 U.S.C. Sec. 32) to authorize the Director to designate 
any attorney who is an officer or employee of the PTO to 
conduct any hearing in connection with any suspension or 
exclusion from practice before the Office.

Section 121.--Funding

    This section amends section 42 of title 35, United States 
Code (35 U.S.C. Sec. 42)(a) and provides that the Office be 
paid all fees collected for services performed or materials 
furnished.
    Section 42(b) provides that the PTO shall have the use of 
its moneys for the functions of the Office, subject to approval 
in appropriations acts, and that moneys not used to carry out 
the functions of the Office shall be kept as cash on hand or on 
deposit, invested in obligations of the United States or 
guaranteed by the United States, or in obligations or other 
instruments which are lawful investments for fiduciary, trust, 
or public funds. Specific language determines that fees 
available to the Director under title 35 shall be used for 
processing patent applications as well as other services and 
materials deemed necessary by the Office; fees available under 
the Trademark Act of 1946, 15 U.S.C. 1113, shall be used only 
and exclusively for the processing of trademark registration 
applications, services and materials.
    Section 42(c) provides that the Office may borrow from the 
Secretary of Treasury and that such borrowing will be treated 
as a public-debt transaction of the United States. All 
borrowing shall be subject to advance approval in 
appropriations Acts of the Congress and cannot exceed amounts 
in such Acts. Any borrowing under this subsection shall be 
repaid only from fees paid to the Office and surcharges 
appropriated by the Congress.

Section 122.--Extension of Surcharges in Patent Fees

    Section 122 prevents the diversion of user fees paid to the 
United States Patent and Trademark Office to other taxpayer-
funded agencies, without harming the budget, so that the PTO 
can continue to operate effectively for the benefit of those it 
serves.
    The Patent and Trademark Office is funded totally through 
the payment of application and user fees. Taxpayer support for 
the operations of the Office was eliminated in 1990 with the 
passage of the Omnibus Budget Reconciliation Act. The Act 
imposed a massive fee increase (referred to as a ``surcharge'') 
on America's inventors and industry in order to replace 
taxpayer support the Office was then receiving. The revenues 
generated by this surcharge, $119 million, which constitute 
approximately 20% of the PTO s operating budget, are placed 
into a surcharge account. The PTO is required to request of the 
Appropriations Committees that they be allowed to use these 
surcharge revenues in this account to support the 20% of its 
operations these revenues represent. It was anticipated in 1990 
that Congress would routinely grant the PTO permission to use 
the surcharge revenue since it was generated originally from 
fees paid by users of the patent and trademark systems to 
support the cost of those systems.
    The user fees paid into the surcharge account have become a 
target of opportunity to fund other, unrelated, taxpayer-funded 
government programs. The diversion of surcharge revenues, a 
significant portion of the operating budget of the PTO, has 
grown considerably over the past six years to the detriment and 
sound functioning of our nation s patent and trademark systems. 
Beginning with the diversion of $8 million in 1992, Congress 
has increasingly redirected a larger share of the surcharge 
revenue, reaching a record level of $54 million in the current 
year. In total, over the past six fiscal years, over $142 
million has been diverted from the PTO, which has had a 
debilitating impact on the Patent and Trademark Office.
    This section is revenue neutral. It does not increase an 
expenditure of taxpayer revenues which would increase the 
deficit. It would merely permit the PTO to use all of the 
patent and trademark fees it receives to examine patent and 
trademark applications, to grant patents and to register 
trademarks. It does this by placing the fees generated by the 
surcharge mandated by the Omnibus Budget Reconciliation Act of 
1990 into the same category as the other user fees paid by 
patent and trademark applicants. Specifically, it characterize 
these fees as ``offsetting collections'' rather than 
``offsetting receipts'' so that all of the fees collected could 
be used for the purposes for which they were paid.

Section 123.--Transfers

    Subsection (a) transfers the functions, powers, and duties 
of the Patent and Trademark Office and the Department of 
Commerce with respect to the granting and issuing of patents 
and the registration of trademarks to the United States Patent 
and Trademark Office. The purpose of this section is to assure 
that the Office has the legal authority to perform all of the 
Office's functions and execute the laws that apply to the PTO.
    Subsection (b) transfers to the PTO, on the effective date 
of the Act, all assets, liabilities, contracts, property, 
records, and unexpended and unobligated balances of 
appropriations, authorizations, allocations, and other funds 
and other items, employed, held, used, arising from, available 
to, or to be made available to the Department of Commerce, 
including any funds set aside for accounts receivable that are 
related to functions, powers, and duties that are vested in the 
PTO by this title.

           SUBTITLE B.--EFFECTIVE DATE; TECHNICAL AMENDMENTS

Section 131.--Effective Date

    This section makes the title and amendments made by it 
effective four months after the date of enactment of the Act.

Section 132.--Technical and Conforming Amendments

    Subsection (a) makes conforming amendments to headings and 
tables of contents in title 35, United States Code, reflecting 
the amendments.
     Subsection (b) makes conforming and technical changes to 
statutes made applicable and inapplicable to the PTO, including 
the Government Corporation Control Act and the Federal Property 
and Administrative Services Act of 1949.
    Subsection (b)(1) adds the PTO to the list of wholly owned 
government corporations. Several subsections change references 
to the ``Patent Office'' or the ``Patent and Trademark Office'' 
to the ``United States Patent and Trademark Office.'' Several 
references to the ``Commissioner of Patents'' in several 
statutes are changed to the ``Director of the U.S. Patent and 
Trademark Office.'' Subsection (b)(4) codifies the terms 
Administrative patent judge and Administrative trademark judge 
in lieu of examiner-in-chief and members of the Trademark Trial 
and Appeal Board. Subsection (b)(28) amends section 11 of the 
Inspector General Act of 1978 (5 U.S.C. App.), to include the 
PTO as a ``designated Federal entity,'' thereby authorizing the 
Commissioner to appoint the Inspector General of the Office.

                 SUBTITLE C.--MISCELLANEOUS PROVISIONS

    Subtitle C contains several provisions which allow for the 
transfer of authority from the Patent and Trademark Office and 
the Department of Commerce to the United States Patent and 
Trademark Office established under this Act which are necessary 
for its operation as a sovereign agency of the United States, 
including references to the authority to operate, references in 
legal documents, continuance of suits and proceedings, 
administrative procedure and judicial review, transfer of 
assets, delegation and assignment, and the Office of Management 
and Budget's authority to oversee these transfers.

     Title II.--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH 
      PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION

Section 201.--Short Title

    This section provides a short title: ``Examining Procedure 
Improvements Act.''

Section 202.--Publication

    This section amends section 122 of chapter 11 of title 35. 
A new subsection (b), in subparagraph (1)(A), provides that 
applications for patents, except applications for design 
patents under Chapter 16 of title 35, provisional applications 
filed under section 111(b) of title 35 and the exceptions noted 
below, shall be published in accordance with procedures 
determined by the Director, as soon as possible after the 
passage of 18 months from the earliest filing date for which a 
benefit is sought by the applicant under title 35. This 
includes any claim to the right of priority in accordance with 
sections 119, 365(a) and 365(b) of title 35 and any benefit of 
an earlier filing date in accordance with sections 120, 121 and 
365(c) of title 35. An application that is filed more than 18 
months after the earliest filing date for which a benefit is 
sought will be subject to immediate publication. Applications, 
filed under the Patent Cooperation Treaty, that enter the 
national stage in the United States will also be subject to 
this publication requirement. The publication requirements of 
this subsection are not intended to alter the practice accorded 
to reissue applications. The exclusion of provisional 
applications filed under section 111(b) of title 35 from the 
publication requirement precludes the early publication of such 
applications prior to the abandonment, by operation of law if 
not converted to a non-provisional application (see Section 
601), of such applications twelve months after filing. At the 
request of an applicant, an application may be published 
earlier than passage of 18 months.
    Subparagraphs (1)(B) and (1)(C) of the new subsection (b) 
also provide that the Director shall determine what information 
is published and what information will be available after the 
publication at 18 months. Decisions on making information 
available between the date of publication and the date of issue 
are final and nonreviewable.
     Subsection (b)(2) provides certain exceptions to the 
publication requirement in subsection (b)(1). Subparagraph 
(b)(2)(A) provides that applications that are no longer pending 
will not be published. Subparagraph (b)(2)(B) provides that 
applications subject to secrecy orders pursuant to section 181 
of title 35 will not be published.
     Subparagraph (b)(2)(C) provides an exception for 
applicants who file only in the United States. Upon the request 
of an applicant at the time of filing, publication will not 
take place until 3 months after the Director makes a 
notification to the applicant under section 132 of title 35. 
This exception does not include applications filed pursuant to 
section 363 of title 35, applications asserting priority under 
sections 119 or 365(a) of title 35 or applications asserting 
the benefit of an earlier application under sections 120, 121, 
or 365(c) of title 35. Further, in a request for treatment 
under this subparagraph, an applicant must certify that the 
application was not and will not be the subject of an 
application filed in a foreign country. If an applicant wishes 
to withdraw his request to receive the exception provided in 
this paragraph because he later decides to file outside the 
United States, but before receiving a notification under 
Sec. 132, he may do so. The Director may establish appropriate 
procedures and fees for making a request in accordance with 
this subparagraph.
     Subsection (c) establishes that the provisions of this 
section shall not operate to create any new opportunity for 
pre-issuance opposition and that the Director may establish 
appropriate procedures to ensure that this section does not 
create any new opportunity for pre-issuance opposition that did 
not exist prior to the adoption of this section. The 
publication of applications at 18 months should not operate to 
allow third parties an opportunity to oppose an applicant's 
application. As under current law, the process of issuing a 
patent must be a process that involves only the applicant and 
the PTO.

Section 203.--Time for Claiming Benefit of Earlier Filing Date

     This section allows the Director to require the early 
submission of a priority claim under section 119 of title 35 or 
the early submission of an amendment containing a specific 
reference to an earlier filed application under section 120 of 
title 35.
     Section 119 of title 35 is amended, in subsection (b), by 
deleting time limits and adding a basis for establishing a 
waiver of claims for priority. Thus, the Director is authorized 
to promulgate rules establishing time periods during the 
pendency of an application within which a right to priority may 
be established. The failure of the applicant to file a timely 
claim for priority may be considered a waiver of any such 
claim, and the Director may require a certified copy of an 
original foreign application, specification or drawing and a 
translation in English if necessary.
     Section 120 of title 35 is similarly amended by allowing 
the Director to determine the time period during the pendency 
of an application within which an amendment containing a 
specific reference to an earlier filed application must be 
submitted. Additionally, the Commissioner may consider the 
failure to timely submit such an amendment as a waiver of any 
benefit under this section and to establish procedures, 
including the payment of a surcharge, to accept late 
submissions under this section.

Section 204.--Provisional Rights

    This section amends section 154 of title 35 by adding a new 
subsection (d), entitled ``PROVISIONAL RIGHTS.''
    Paragraph (d)(1) provides that a patent shall include the 
right to obtain a reasonable royalty from any person who makes, 
uses, offers for sale, sells, or imports in the United States 
the invention as claimed in the published patent application 
between the time it is published and the time the patent is 
issued. Subsection (d)(1) further requires that the alleged 
misappropriator must have had actual notice of the published 
patent application from the application owner who is alleging 
misappropriation and, where necessary, a translation of an 
international application into the English language.
     Subsection (d)(2) provides that the right to obtain a 
reasonable royalty under this section shall be available only 
if the invention claimed in the patent is substantially 
identical to the invention as claimed in the published patent 
application. That is, at least one infringed claim in the 
published patent application must be substantially identical to 
at least one claim in the patent in order to obtain a 
reasonable royalty under this section. The requirement for 
``substantial identity'' in this section is based, by analogy, 
upon the decisional law for establishing intervening rights 
under the reissue statute. In section 252 of title 35, the term 
``identical'' has, heretofore, been used without qualification, 
but the courts have interpreted that term to encompass claims 
that are ``substantially identical.'' Slimfold Mfg. Co., Inc. 
v. Kinkead Industries, Inc., 810 F.2d 1113, 1 USPQ2d 1563 (Fed. 
Cir. 1987). That standard has been adopted here for provisional 
rights and has now been explicitly codified in section 252 of 
title 35 by a conforming amendment. No change in the law of 
intervening rights is intended by that conforming amendment and 
it is intended that same standard be applied in the context of 
provisional rights.
     The ``invention as claimed in the published application'' 
is defined by the claims present in the patent application on 
the date of publication or as amended thereafter. The claims in 
the Patent and Trademark Office publication, as the nature, 
format, and content of that document is determined in 
accordance with the requirement of section 122(b) of title 35, 
do not necessarily limit the right to obtain a reasonable 
royalty under this section as the claims in the application may 
have been amended as of the date of publication or thereafter. 
In any event, proper notice of those claims upon which a claim 
for reasonable royalty is based must have been given during the 
period in which provisional rights are available.
     Subsection (d)(3) provides that the right to obtain a 
reasonable royalty shall be available only in an action brought 
within 6 years after a patent is issued and shall not be 
affected by the duration of the period beginning on the date of 
publication of an application and ending on the date a patent 
is issued. This provision is included to make clear that the 
time limitation on damages set forth in section 286 of title 35 
shall not affect the ability to recover a reasonable royalty 
for the entire period of time from publication until issue even 
though that period may, itself, exceed six years. However, the 
new subsection further provides that the right to obtain a 
reasonable royalty for that period, however long, shall be 
available only within six years of issue of the patent.
     Subsection (d)(4) provides that the right to obtain a 
reasonable royalty based upon the publication under the Patent 
Cooperation Treaty of an international application designating 
the United States shall commence from the date that the Patent 
and Trademark Office receives a copy of the international 
publication of the international application, or, if the 
publication under the treaty of the international application 
is in a language other than English, from the date that the PTO 
receives a translation of the international application in the 
English language. These requirements are in accord with the 
requirements in Article 29 of the Patent Cooperation Treaty 
that may be imposed by national law.

Section 205.--Prior Art Effect of Published Applications

     This section amends section 102 of title 35 to provide a 
prior art effect for applications published pursuant to new 
subsection 122(b) and international applications published 
under the Patent Cooperation Treaty and expands the prior art 
effect of patents based upon applications filed under the 
Patent Cooperation Treaty.
     To that end, subsection 102 (e) of title 35 is amended to 
include, as prior art, in paragraph (e)(1), inventions 
described in an application for patent, published pursuant to 
subsection 122(b) of title 35, by another filed in the United 
States before the invention thereof by the applicant for 
patent. The effective date as prior art for inventions 
described in application for patent which is only published 
pursuant to subsection 122(b) will be the date the application 
is actually filed in the United States, and not any filing date 
to which it might be entitled under the Paris Convention for 
the Protection of Industrial Property or the Patent Cooperation 
Treaty. Amended Subsection 102(e) also provides that an 
international application filed under the Patent Cooperation 
Treaty shall have the effect of a national application 
published under section 122(b) of title 35 only if the 
international application designates the United States and is 
published under Article 21(2)(a) of the Patent Cooperation 
Treaty in the English language. Amended subsection 102(e) of 
title 35 continues to include, as prior art, in paragraph 
(e)(2), inventions described in a patent granted on an 
application for patent by another filed in the United States 
before the invention by the applicant for patent, but deletes 
the language extending to a prior art effect to a patent 
granted on an international application filed by another under 
the Patent Cooperation Treaty. This is no longer necessary in 
view of the extension of a prior art effect to the underlying 
published application pursuant to paragraph (e)(1).

Section 206.--Cost Recovery for Publication

    The Director shall recover the cost of early publication by 
the amendment made in section 202 by adjusting the filing, 
issue, and maintenance fees under title 35, United States Code, 
by charging a separate publication fee, or by any combination 
of these methods.

Section 207.--Conforming Changes

    Sections 11 of title 35, United States Code, is amended by 
inserting ``and published applications for patents'' after 
``Patents.''
    Section 12 is amended in the section caption by inserting 
``and applications'' after ``patents'' and by inserting ``and 
published applications for patents'' after ``patents.''
    Section 13 is amended in the section caption by inserting 
``and applications'' after ``patents'' and by inserting ``and 
published applications for patents'' after ``patents.''
    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.''
    The table of sections for chapter 11 of title 35, United 
States Code, is amended in the item relating to section 122 by 
inserting ``; publication of patent applications'' after 
``applications.''
     The table of sections for chapter 14 of title 35, United 
States Code, is amended in the item relating to section 154 by 
inserting ``; provisional rights'' after ``patent.''
     Section 181 of title 35, United States Code, is amended in 
the first paragraph by inserting ``by the publication of an 
application or'' after ``disclosure'' and ``the publication of 
an application or'' after ``withhold.'' The second paragraph is 
amended by inserting ``by the publication of an application 
or'' after ``disclosure of an invention.'' The third paragraph 
is amended by inserting ``by the publication of the application 
or'' after ``disclosure of the invention.'' Further, the third 
paragraph is amended by inserting ``the publication of the 
application or'' after ``withhold.'' Still further, the fourth 
paragraph is amended by inserting ``the publication of an 
application or'' after ``and'' in the first sentence.
     Section 252 of title 35 is amended in the first 
undesignated paragraph by inserting ``substantially'' before 
``identical'' each place it appears. This change, referred to 
above in the discussion relating to provisional rights in 
Section 204, is not intended to change the law of intervening 
rights but rather is intended only to codify existing 
decisional law.
     Section 284 of title 35 is amended by adding at the end of 
the second paragraph the following: ``Increased damages under 
this paragraph shall not apply to provisional rights under 
section 154(d) of this title.'' This amendment has been made 
because the willfulness necessary for the award of increased 
damages cannot exist in the context of provisional rights 
because the fact of infringement cannot be determined until a 
patent has issued. That is, there can be no willful 
infringement in the period for which provisional rights may be 
available because ``infringement'' within that period can only 
be defined by the terms of the patented claims that are, of 
course, not available until a patent issues.
     Section 374 of title 35 is amended such that the 
publication under Patent Cooperation Treaty, 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) of this title, except as provided in section 102(e) and 
154(d) of title 35.

Section 208.--Patent Term Extension Authority

     Section 208 amends Sec. 154(b) of title 35 to provide 
patent term compensation for those diligent patent applicants 
who experience delays beyond their control in the process of 
getting their patents issued or who have not received a final 
decision within three years of filing. Section 154(b)(1)(A)(I) 
provides that a patent applicant will receive compensation for 
any time lost due to an interference proceeding under 
Sec. 135(a) of title 35. Section 154(b)(1)(A)(ii) provides that 
a patent applicant will receive compensation for any time lost 
due to the imposition of a secrecy order pursuant to Sec. 181 
of title 35. Section 154(b)(1)(A)(iii) provides that a patent 
applicant will receive compensation for any time lost due to 
appellate review by the Board of Patent Appeals and 
Interferences or by a federal court where the patent was issued 
pursuant to a decision in the review reversing an adverse 
determination of patentability. Section 154(b)(1)(A)(iv) 
provides that a patent applicant will receive compensation for 
any time lost due to an ``unusual administrative delay'' by the 
PTO in issuing the patent. Section 154(b)(1)(A)(v) provides 
that any time beyond three years from filing should be deemed 
to be unusual administrative delay, guaranteeing 17 years of 
patent term for applicants, as long as the applicant is 
diligent. Applicants may not purposely delay their application 
beyond three years by filing spurious appeals or using other 
dilatory tactics.
     ``Unusual administrative delay'' is strictly defined to 
impose an objective time clock on the PTO in issuing a patent. 
Any time the PTO takes in excess of the stated minimums is 
automatically and fully compensated. An unusual administrative 
delay is defined as the failure of the PTO to: (I) make a 
notification of the rejection of any claim for a patent or any 
objection or argument under section 132 of this or give or mail 
a written notice of allowance under section 151 of title 35 not 
later than fourteen months after the date on which the 
application was filed; (ii) respond to a reply under section 
132 of this title or to an appeal taken under section 134 of 
this title not later than four months after the date on which 
the reply was filed or the appeal was taken; (iii) act on an 
application not later than four months after the date of a 
decision by the Board of Patent Appeals and Interferences under 
sections 134 or 135 of this title or a decision by a Federal 
court under sections 141, 145, or 146 of this title where 
allowable claims remain in an application; (iv) issue a patent 
not later than four months after the date on which the issue 
fee was paid under section 151 of this title and all 
outstanding requirements were satisfied; or (v) issue a patent 
within three years after the filing date of the application in 
the United States if the applicant has not obtained further 
limited examination of the application under section 209 of the 
Examining Procedure Improvements Act, has responded to all 
rejections, objections, arguments, or other requests from the 
PTO within two months after they are made, has not benefitted 
from an extension of patent term, has not sought or obtained 
appellate review by the Board of Patent Appeals or by a Federal 
Court, or has not requested ant delay in the processing of the 
application by the Patent and Trademark Office.
     The constraint upon the PTO in section 154(b)(1)(B)(I), 
does not imply that a written notice of allowance under section 
151 of title 35 must be given or mailed not later than 14 
months after the date on which the application in issue was 
filed. Rather, this constraint could be satisfied if a 
notification of the rejection of any claim for a patent or any 
objection or argument under section 132 of title 35 is made not 
later than 14 months after the date on which the application in 
issue was filed.
    Section 154(b)(2)(A) provides that the total duration for 
extensions granted under subsections (I) and (ii) of 
Sec. 154(b)(1)(B) shall not be limited and that the total 
duration for extensions granted under subsections (iii) or (iv) 
or both shall not exceed ten years. Section 154(b)(2)(A) also 
provides that overlapping delays should not be double counted.
    Section 154(b)(2)(B) provides that extensions will not be 
granted where the patent applicant fails to take reasonable 
efforts to conclude prosecution of the application. The few 
applicants who engage in intentional or unjustifiable delay 
tactics will not be rewarded for such behavior. The PTO is 
required to prescribe the regulations necessary to carry out 
the mandate of this subsection. Section 154(b)(2)(C) provides 
that no patent the term of which has been disclaimed beyond a 
specified day may be extended under this section beyond the 
expiration date specified in the disclaimer. The ``reasonable 
efforts'' clause is an effort to avoid the submarine patent 
problem. The intent of the Committee is that only the most 
egregious and obvious delay tactics will go unrewarded by this 
provision.
    In prescribing regulations to carry out the provisions of 
this section, the PTO should ensure that in those cases where 
an appeal of an adverse determination of patentability is filed 
or an interference is declared, the extension to be granted for 
a successful appeal or for the interference proceeding should 
be equal to the time from filing or declaration until an 
applicant is notified of the conclusion of the proceeding. The 
regulations should also provide that a patent applicant who 
exercises reasonable efforts is eligible for one form or 
another of term compensation throughout the prosecution of the 
application. That is, there should be no time period where a 
diligent patent applicant may lose term for reasons beyond his 
or her control without an opportunity for compensation.
    The Committee has received comments regarding the 
provisions in section 154(b) of title 35 allowing for 
extensions of patent terms for successful appellate review. The 
Committee believes that the language contained in section 154, 
as well as the corresponding language incorporated into H.R. 
400, adequately establishes the basis to provide compensation 
when the issuance of a patent is delayed by virtue of an appeal 
which results in a reversal of an adverse determination of 
patentability.
    The language should not be viewed in a mechanistic way. 
Even though an application wins on some relevant issue, the 
Board of Patent Appeals and Interferences or the Court of 
Appeals for the Federal Circuit can ``affirm'' a rejection. In 
certain such cases, the applicant may be entitled to term 
extension. Only where an applicant does not prevail on any 
determination should no extension be provided for lost patent 
term.
    To ensure an equitable application of the provisions 
providing for term extension for delays due to appellate 
review, the Patent and Trademark Office should look carefully 
at the substance of each particular case and not arbitrarily 
deny any extension of term simply because an application was 
not immediately ready for patent grant following an action by 
the Board or the Court. For example, where the Court reversed 
the PTO s decision to not consider an affidavit to overcome a 
rejection and remanded the case to the PTO to consider the 
merits of the affidavit as in In re Alton, 37 U.S.P.Q 2d. 1577, 
the subsequent issuance of a patent based on the review of the 
affidavit would constitute a situation where patent term 
extension for the period of the review would be appropriate. 
Similarly, in a case where the Board reverses an examiner s 
rejection, but issues a new rejection which the applicant is 
able to overcome in subsequent prosecution by, for example, 
submission of a Rule 131 affidavit, the applicant should 
receive an extension equal to the period of appellate review.
    Another situation could be where the Board or the Court 
affirms a rejection on very narrow grounds that are 
subsequently overcome by a minor amendment which the applicant 
clearly would have known to submit had not it faced a broader 
and improper rejection by the examiner. In such a situation, 
the issuance of the patent can be said to have been a result of 
the reversal of the examiner s broad rejection. Finally, where 
the Office withdraws an appeal after it had been pending for a 
long time before the Board or the court on the basis that a 
minor amendment would obviate the original rejection and place 
the case in condition for allowance, an extension would equally 
be appropriate.
    In establishing rules to implement the provisions allowing 
for patent term extensions for successful appeals, 
interferences, secrecy orders, and unusual administrative 
delays, the PTO should make every effort to ensure the 
applicants whose patents are unfairly delayed receive 
appropriate extensions. At the same time, the Office should be 
ver watchful to ensure that its procedures do not admit of the 
manipulation which Congress intended to stop with the adoption 
of a term measured from filing.

Section 209.--Further Examination of Patent Applications

    This section mandates that the Director prescribe 
regulations to provide for the further limited reexamination of 
an application for patent and provides the Director the 
authority to establish appropriate fees for such further 
limited reexamination and to provide a 50 percent reduction on 
such fees for small entities that qualify for reduced fees 
under section 41(h)(1) of title 35. This section is intended to 
simplify the continued prosecution of patent applications after 
a final rejection has been entered, extending to all 
applications the transitional practice introduced in P.L. 103-
465, section 532(a)(2).

Section 210.--Last Day of Pendency of Provisional Application

    This section amends section 119(e) of title 35 by providing 
that 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 business day. This amendment is intended to address 
and resolve the so-called ``last day trap'' for provisional 
applications. Because the requirement for filing a non-
provisional application that claims priority of a provisional 
application under section 119(e) of title 35 relies upon both 
copendency and action taking, the remedy of section 21(b) of 
title 35 is not available for the filing of that non-
provisional application and an applicant may be confronted with 
this ``last day trap.'' This amendment resolves this problem.

Section 211.--Reporting Requirement

    Section 211 requires the PTO to report to Congress by April 
1, 2001, and every year thereafter, on the impact of that 
publication of applications has on independent inventors.

Section 212.--Effective Date

    Sections 202 through 207, and the amendments made by those 
sections, shall take effect on April 1, 1998, and shall apply 
to all applications filed under 35 U.S.C. Sec. 111 on or after 
that date and all applications complying with 35 U.S.C. 
Sec. 371 that resulted from international applications filed on 
or after that date. Sections 204 and 205 shall also apply to 
international applications designating the United States that 
are filed on or after April 1, 1998.
    Sections 208 through 210, and the amendments made by those 
sections, shall take effect on the date of enactment of the Act 
and, except for design patent applications filed under chapter 
16 of title 35, shall apply to any application filed on or 
after June 8, 1995.

      Title III.--Protection for Prior Domestic Users of Patented 
                              Technologies

    This title provides a defense to patent infringement based 
on prior use of a patented invention in certain circumstances. 
The bill clarifies the rights of a party who had used an 
invention (a ``prior user'') vis-a-vis a party that 
subsequently patents the invention. Under this title, a person, 
who prior to the effective filing date of a patent, has been 
commercially using the claimed invention or has made effective 
and serious preparation for commercial use of such an 
invention, will have a defense if that party is charged with 
patent infringement based on the prior use. The provisions of 
this title will permit the prior user to continue the use of 
the invention even though it is claimed in a subsequently 
granted patent.

Section 301.--Short Title

    This section provides that the title may be cited as the 
``Protection for Prior Domestic Commercial and Research Users 
of Patented Technologies Act.''

Section 302.--Defense to Patent Infringement Based on Prior 
        Domestic Commercial or Research Use

    This section adds a new section 273 to Chapter 28 of title 
35, United States Code, which establishes a defense to a claim 
of patent infringement where a person has ``commercially'' used 
or made serious preparations to use commercially an invention 
that later becomes the subject matter of a patent issued to 
another. Such commercial use or preparation for commercial use 
must have occurred at least one year prior to the earliest 
effective filing date to which the subject matter at issue is 
entitled.
    Subsection (a) of the newly added section 273 defines the 
terms ``commercially used,'' ``commercially use,'' and 
``commercial use'' to mean that the subject matter actually 
claimed in the subsequently granted patent has, in fact, been 
used in the United States in the design, testing, or production 
of a product or service that is used in commerce in the United 
States. Commercial use does not require that the invention 
itself be publicly disclosed or that it be in any way publicly 
accessible.
    The subsection defines commercial use to include regular 
use in laboratory research. This means regularly used in 
laboratory research in the United States, whether or not the 
subject matter at issue is accessible or known to the public. 
The subsection also defines ``used in commerce'' and ``use in 
commerce'' as meaning that an actual sale or other commercial 
transfer of the claimed invention has taken place or that an 
actual sale or other commercial transfer of a product or 
service resulting from the use of the invention has taken 
place. Determining whether an activity would constitute 
commercial use should be construed to include activities that 
individuals in a particular industry would consider commercial 
in nature. For example, sale of a software product that 
consists of a license authorizing the copying and use of a 
computer program and providing terms regarding proprietary 
information embedded in the program, in conjunction with a copy 
of the object code representing the compiled computer program 
on a computer readable medium, would be viewed as ``commercial 
use'' under subsection 273(a)(3).
     The ``effective filing date'' of a patent is defined in 
subparagraph 273(a)(4) as the actual filing date of the 
application in the United States or, if such an earlier filing 
date is claimed, the earlier filing date claimed, and to which 
the subject matter is entitled, under section 119, 120, or 365.
     Subsection (b) of Section 273 provides that a prior user 
of a patented invention will not be liable as an infringer 
under section 271 of title 35 if certain requirements are met. 
The prior user, acting in good faith, must have commercially 
used the invention, as defined by one or more claims of the 
patent being asserted against the prior user, in the United 
States or made effective and serious preparation for its 
commercial use prior to the effective filing date. It is 
important to recognize that the prior user right is a defense 
that can be asserted in response to a claim of infringement. 
The prior user right is not a license under the patent and, 
therefore, does not create an obligation to pay a royalty or 
other compensation to the patent holder.
     Subparagraph (b)(2) makes it clear that a party who 
purchases the subject matter claimed in a patent, or a product 
or service produced using the subject matter claimed in a 
patent from a person entitled to assert prior user rights in 
connection under this section, would not be liable to the 
patent owner for patent infringement any more than the party 
would be if he had purchased from the patent owner. One who has 
the right to assert a prior user defense would be able to sell 
the subject matter claimed in a patent or the product or 
service produced using that subject matter without liability to 
the patent owner for patent infringement. It follows that, if 
the prior user's activities were not infringing, the purchaser 
of the products or services resulting from those non-infringing 
activities would not be liable for using that which was 
purchased.
     Subsection (c)(1) of new Section 273 makes it clear that 
the prior user defense is not available to a person who derived 
the subject matter on which the defense is claimed from the 
patentee or from one in privity with the patentee. The prior 
user does not have to be a prior inventor in order to assert a 
defense based on prior use. Prior user rights may be claimed 
whether the party asserting the right conceived the invention 
or a third party conceived the invention, so long as the 
technology that is the basis of the prior use defense was not 
obtained directly or indirectly from the patentee.
    Subparagraph (c)(2) provides that the prior user defense 
does not have the effect of a general license under the patent. 
The right extends only to what was actually in commercial use 
by the prior user, or had been used by the prior user in the 
design, testing, or production in the United States of a 
product or service which is used in commerce. Variations in the 
quantity or volume of the prior use are protected by the right 
as are improvements in the claimed subject matter that do not 
infringe additional claimed subject matter of the patent. In 
other words, if the prior user must infringe additional claims 
of the patent in order to implement an improvement in the 
claimed subject matter, the prior user would not be able to 
rely on the defense provided in this section. To determine 
whether an alteration in the ``commercial use'' would infringe 
additional claims of a patent, one should first determine which 
claims of the patent would have been infringed by the original 
prior use but for the operation of section 273(b). If the prior 
user alters its activities after the filing date of the patent 
application in a way that would infringe claims other than 
those identified above, the prior user will be liable for 
patent infringement with respect to those additional claims.
     It is not the intent of the legislation to limit the prior 
use defense only to instances in which actual commercial use 
can be demonstrated. Under subsection (c)(3), the defense would 
also be available to a prior user who can prove that he or she 
has actually reduced the subsequently patented invention to 
practice, has made a significant investment or a substantial 
portion of the total investment necessary to use the subject 
matter, and has made a commercial transaction in the United 
States in connection with the preparation to use the subject 
matter. In addition, the person must have completed in diligent 
fashion the remainder of the activities and investments needed 
to commercially use the subject matter. These latter activities 
can have taken place after the effective filing date of the 
patent application so long as they are pursued diligently.
    Subsection (c)(4) makes it clear that the burden of proof 
is on the person asserting the defense. The prior user must 
provide evidence to establish each of the conditions precedent 
to the defense. To prove that the necessary investment has 
taken place, the party asserting the defense must show that 
substantial investment was made in equipment, testing, 
advertising, or other preparation for commercializing the 
invention. Documentation and commercialization plans must be 
sufficiently developed and in sufficient detail to prove the 
rights claimed. For example, in the pharmaceutical industry, 
evidence that a prospective new drug had been cleared for 
clinical trials prior to the effective filing date would be 
sufficient to show effective and serious preparation. In the 
chemical industry, effective and serious preparation would 
require evidence proving that a substantial investment had been 
made, for example, in reactors or process equipment designed to 
employ or manufacture the invention. Evidence of actions that 
amount merely to conceiving the invention, development of the 
invention on a laboratory, experimental, or reduction of an 
invention to practice, without evidence of subsequent efforts 
to use the invention commercially and to make the necessary 
investments to commercialize the invention, would not be 
adequate to satisfy the test for effective and serious 
preparation.
    Subsection (c)(5) provides that the defense of prior use is 
not available if a person has abandoned commercial use of the 
subject matter. Regardless of the degree of commercial use or 
serious and effective preparation which might have occurred at 
an earlier point in time, a defense based on prior user rights 
may not be invoked if such commercial use was in a state of 
abandonment, or abandoned after the effective filing date. If 
the prior use is abandoned after the effective filing date, it 
is the intent of this section that the prior user right shall 
be a defense to infringement for the time of commercial use 
between the effective filing date and abandonment. As the term 
is used in connection with this legislation, abandonment refers 
to cessation of use with no intent to resume. Certain 
activities, however, are naturally periodic or cyclical. 
Intervals of non-use between such periodic activities such as 
seasonal factors or reasonable intervals between contracts, 
shall not be considered abandonment so long as there is no 
positive corroborating evidence of abandonment.
     Subsection (c)(6) makes clear that the ability to assert a 
right of prior use is a personal right and cannot be licensed, 
assigned, or transferred to any other person except to the 
patentee, or as part of the assignment or transfer, in good 
faith, of the entire enterprise or business to which the 
defense relates. This subsection is intended to permit a 
business to continue to use the subject matter related to the 
defense in circumstances in which there has been a good faith 
transfer of the entire enterprise or business but to prohibit 
any attempt to sell or license the defense itself.
     Subsection (c)(7) provides that, to assert a defense of 
prior use, a person, or someone in privity with that person, 
must have been using the subject matter commercially or have 
reduced the subject matter to practice more than one year prior 
to the effective filing date of the patent.
     Subsection (d) is intended to ensure that the defense is 
raised only in circumstances in which its assertion is 
reasonable. The subsection requires that a court find the case 
exceptional and award attorney's fees under section 285 of 
title 35, United States Code, if the defense is pleaded by a 
person who is found to infringe a patent and who fails to show 
a reasonable basis for asserting the defense.
     Subsection (e) provides that a patent cannot be deemed to 
be invalid under section 102 or 103 of title 35 solely because 
a defense is established under section 273(b). Any 
determination under section 102 or 103 must be established 
separately, although evidence used to establish a defense of 
prior use could be used in connection with establishing 
invalidity under those sections.
    Subsection (b) of section 302 of the Act amends the table 
of sections at the beginning of chapter 28 of title 35 to add 
the heading for section 273, ``Prior domestic commercial or 
research use; defense to infringement.''

Section 303.--Effective Date and Applicability

    This section makes the amendments provided for in title III 
effective on the date of enactment of the Act. The section 
specifies, however, that the amendments shall not apply to any 
action for infringement pending on the date of enactment or to 
any subject matter for which an adjudication of infringement, 
including any consent judgment, was made before the date of 
enactment.

           TITLE IV.--ENHANCED PROTECTION OF INVENTORS RIGHTS

Section 401.--Short Title

    This section provides that the title may be cited as the 
``Enhanced Protection of Inventors' Rights Act.''

Section 402.--Invention Development Services

    This section adds a new chapter 5 to Part I of title 35, 
United States Code, consisting of sections 51 through 59. 
Invention development companies can be of great assistance to 
independent inventors providing a single source to evaluate an 
invention, assist in developing its technical potential, assist 
in obtaining protection for it, and assist in promoting it in 
order to license or sell it. 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 tool for independent inventors 
to use if they are the target of the predatory practices of 
unscrupulous invention development companies.
    New section 51 of title 35 defines the terms used in the 
chapter. The terms used in the chapter are defined broadly in 
order to ensure that organizations that would prey upon 
inventors cannot escape the reach of the chapter merely by 
using titles and business descriptions artfully. Subsection 
(3), however, 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 section 170(b)(1)(A) of the Internal Revenue 
Code of 1986; or any person registered and in good standing 
with the U.S. Patent and Trademark Office (PTO) who is acting 
within the scope of his or her registration to practice before 
the PTO.
    The Committee is in agreement that the exclusion provided 
for in Sec. 51(3)(c) does not totally exempt patent attorneys 
from regulation under the act. The exception provides that any 
person registered to practice before the Patent and Trademark 
Office is exempt from regulation when acting within the scope 
of that person's registration to practice before the Patent and 
Trademark Office. However, the Committee recognizes that patent 
attorneys may provide services which fall outside the scope of 
their registration to practice before the Patent and Trademark 
Office and within the definition of invention development 
services. Whenever a patent attorney engages in conduct 
described in Sec. 51(4)(B) and (C), he or she will be subject 
to the provisions of this act.
    Sec. 51(4) defines the term invention development services 
to mean, with respect to an invention by a customer, any act 
involved in evaluating the invention to determine its 
protectability as some form of intellectual property, other 
than evaluation by a person licensed by a state to practice law 
who is acting within the scope of the license; evaluating the 
invention to determine its commercial potential by any person 
for purposes other than providing venture capital; or 
marketing, brokering, licensing, selling, or promoting the 
invention or a product or service in which the invention is 
incorporated or used, except that the display only of an 
invention at a trade show or exhibit shall not be considered to 
be invention development services.
    New subsection 52(a) requires that contracts for invention 
development services be in writing and that a copy of the 
signed contract be provided to the customer at the time he or 
she enters into the contract. Even in the event the contract is 
entered into on behalf of a third party, that third party is to 
be treated as a customer and the provisions of the chapter 
apply.
    Subsection 52(b) requires invention developers to provide 
to customers at the time a contract is entered into a written 
document stating whether the developer customarily seeks more 
than one contract in connection with an invention and seeks to 
perform services in connection with an invention in 1 or more 
phases, using 1 or more contracts governing the performance at 
each phase. In addition, invention developers must provide the 
customer with a copy of the written contract together with a 
summary, in writing, describing the developer's usual business 
practices, including the customary terms in contracts and the 
approximate amount of the usual fees or other consideration 
that the customer will be charged for each service provided by 
the invention developer.
    Subsection 52(c) provides the customer with the right to 
terminate a contract for invention development services by 
sending a letter to the invention developer stating the 
customer's intent to cancel. This right may not be waived in 
the contract for invention development services. To execute the 
right to terminate, the customer must send the letter within 
five business days after both the customer and the invention 
developer execute the invention development contract. It is the 
intention of the Congress to give the customer a ``cooling 
off'' period in which the customer can effectively change his 
or her mind. The delivery of a promissory note, check, bill of 
exchange, or other negotiable instrument to the invention 
developer or a third party for the benefit of the invention 
developer is deemed payment received by the invention developer 
on the date received, even though the date or dates in such 
instruments differ from the date of receipt.
    New section 53(a) of title 35 requires that every contract 
for invention development services include a cover sheet with 
the notice included in the legislation in legible, bold-face 
type of not less than 12-point size, explaining the right of 
termination; giving information regarding the number of 
inventions evaluated by the invention developer and stating the 
number of those evaluated positively and the number negatively; 
advising the customer that assigning rights to the invention 
developer can allow sale or other disposal of the invention by 
the latter without sharing the profits; advising the customer 
of the number of customers who have contracted for services 
with the invention developer in the prior five years and how 
many of them have earned more than the cost of the services due 
to the performance of the invention developer; informing the 
customer of the invention development companies with which the 
invention developer's officer have been affiliated in the 
previous ten years to enable the customer to check out the 
reputations of these companies; and encouraging the customer to 
consult an attorney before entering in the contract and 
advising that rights can be lost by proceeding pro se before 
the PTO.
    Subsection 53(b) requires that the cover notice, in 
addition to the obligatory text, include the name, primary 
office address, and local office address of the invention 
developer. The subsection prohibits inclusion of other matter.
    Subsection 53(c) allows the invention developer to delete 
from the total number of customers who have contracted with the 
organization provided for in subsection 53(a) the customers who 
have purchased trade show services, research, advertising, or 
other non-marketing services from the invention developer. The 
invention developer also need not include those who have 
defaulted in their payments under invention development 
contracts.
    Subsection 54 of title 35 requires the invention developer 
to provide each customer who has contracted for invention 
development services a written report at least once every three 
months during the term of the contract. The report must 
describe fully, clearly, and concisely, the services performed 
by the invention developer on behalf of the customer during the 
report period and the services to be performed, giving the 
names of the persons who will perform those services. The 
report must include the name and address of each person, firm, 
corporation, or other entity to whom the invention that is the 
subject matter of the contract has been disclosed, the reason 
for the disclosure, and the nature of the disclosure. Where 
more than one person has been contacted in a particular 
corporation or entity, it will suffice to include the name and 
address of one of the people contacted and of the corporation 
or entity. Copies of all responses received as a result of the 
disclosure must be provided. The purpose of this section is to 
ensure that the customer is kept fully informed of the services 
being performed on his or her behalf and the results of those 
services so that the customer may take appropriate action if 
they are not receiving the service required under the contract.
    New subsection 55(a) requires that all contracts for 
invention development services include, in bold-face type of 
not less than 12-point type: the terms and conditions of 
payment and the contract termination rights required by section 
52; a statement making it clear that the contract is not 
executed until the customer makes a payment to the invention 
developer and, therefore, the customer can avoid executing the 
contract by not making such a payment; a complete, clear, and 
concise description of the specific acts and services that the 
invention developer is to perform for the customer; a clear 
statement indicating whether the invention developer is going 
to construct, sell, or distribute any prototypes, models, or 
devices embodying the customer's invention and, if so, how 
many; the full name and principal place of business developer 
and, to the extent known at the time the contract is entered 
into, the name and principal place of business of any parent, 
subsidiary, agent, independent contractor, and any affiliated 
company or person who will perform any service or act that the 
invention developer has undertaken to perform for the customer; 
a statement of any estimation or projection of customer 
earnings resulting from the invention that has been given 
orally or in writing by the invention developer or anyone on 
behalf of the invention developer, and a full description of 
the data on which that estimation or projection was based; the 
name and address of the organization or person who is to be the 
custodian of all the records and correspondence related to the 
contracted for invention development services and an 
unequivocal statement acknowledging that the invention 
developer is required to maintain all such records and 
correspondence for the customer for at least two years 
following the expiration of the invention development services 
contract; and a statement of the time schedule for performance 
of the invention development services with an estimated date by 
which the performance of services is expected to be completed. 
It is the intent of this legislation that the invention 
developer ensure that all material information be provided to 
the customer so that the customer can make an informed decision 
in entering into any contract for development services.
    Subsection 55(b) makes it clear that, if the invention 
developer has discretion regarding the nature of the specific 
acts and services the invention developer is to perform for the 
customer, as those acts and services are described in the 
contract, the invention developer will be deemed to be a 
fiduciary with all corresponding obligations with respect to 
the customer.
     Subsection 55(c) requires that, within 7 days of written 
notice to the invention developer or the custodian of records 
and correspondence identified in the contract for invention 
development services, such custodian must make available to the 
customer or the customer s representative for review and 
copying all records and correspondence related to the invention 
development contract. The review and copying shall take place 
on the invention developer s premises during normal business 
hours and any fees for copying shall be reasonable.
    Subsection 56(a) authorizes the customer to declare void 
any contract for invention development services that does not 
conform to the requirements of chapter 5 of Part I of title 35, 
United States Code. In addition, the subsection authorizes the 
customer to void any contract entered into in reliance on any 
false, fraudulent, or misleading information, representation, 
notice, or advertisement of the invention developer that is 
material where the contract provides for filing an application 
to obtain a utility, design, or plant patent. An exception 
exists where the contract makes it clear that the filing of 
such application will be done by an agent or attorney 
registered to practice before the PTO and such filing is, in 
fact, performed by such agent or attorney. Finally, subsection 
56(a) makes void and unenforceable any waiver by a customer of 
any provision required by chapter 4.
    Subsection 56(b) establishes a civil cause of action 
against any invention developer who injures a customer through 
a violation of any of the obligations of chapter 5 or through 
any false or fraudulent statement, representation, or omission 
of material fact by the invention developer, or any person 
acting on behalf of the invention developer, or through failure 
of the invention developer to make all the disclosures required 
under the chapter. In such a civil action, the customer may 
recover from the invention developer, or any officers, 
directors, or partners of such developer, reasonable costs, 
attorneys' fees, and the greater of $5000 or the amount of 
actual damages sustained by the customer. Subsection (b)(2) 
authorizes the court to increase damages in egregious cases to 
an amount not to exceed 3 times the amount awarded as statutory 
or actual damages.
    Subsection 56(c) establishes a rebuttable presumption of 
injury in the event of any substantial violation of chapter 5 
by an invention developer or of execution of an invention 
development services contract by a customer in reliance on any 
false or fraudulent statements, representations, or material 
omissions by the invention developer or any person acting on 
behalf of the invention developer.
    Subsection 57(a) requires the Director of the PTO to retain 
all complaints submitted to the PTO regarding invention 
developers, together with any responses by invention developers 
to those complaints, and to make such complaints and responses 
available to the public.
    Subsection 57(b) authorizes the Director to request from 
Federal and State agencies copies of any complaints relating to 
invention development services they have received and to 
include those complaints in the records maintained by the PTO 
regarding invention development services.
    Section 58 provides that making false or misleading 
statements or representations to a customer, omitting any 
material fact in a communication with a customer or failing to 
make all the disclosures required by chapter 5 is a misdemeanor 
and authorizes a fine of not more than $10,000 for each such 
offense.
    Section 59 makes it clear that the provisions of chapter 5 
are not to be construed to affect any other obligation, right, 
or remedy that is provided under any other Federal or State 
law.

Section 403.--Technical and Conforming Amendment

    This section amends the table of chapters of Part I of 
title 35, United States Code to add a heading for chapter 5.

Section 404.--Effective Date

    This section specifies that the title and the amendments 
made by it will be effective 60 days after the date of 
enactment of the Act.

              TITLE V.--IMPROVED REEXAMINATION PROCEDURES

Section 501.--Short Title

    This section provides a short title: ``Improved 
Reexamination Procedures Act.''

Section 502.--Definitions

    This section amends 35 U.S.C. Sec. 100 to add a definition 
for the term ``third- party requester''. A third-party 
requester is defined as a person requesting reexamination under 
35 U.S.C. Sec. 302 who is not the patent owner.

Section 503.--Reexamination Procedures

    This section amends the reexamination procedures set forth 
in chapter 302 of title 35, United States Code, to broaden the 
basis for, and scope of, reexamination to increase third-party 
requester participation in reexamination procedures and appeals 
and to preclude reexamination in certain circumstances.
    Subsection (a) amends 35 U.S.C. Sec. 302 to provide an 
additional basis for a patent owner or a third party to request 
reexamination. The additional basis is that a substantial new 
question of patentability exists for any claim of a patent due 
to a lack of compliance of that claim with the requirements of 
35 U.S.C. Sec. 112 except for the requirement to set forth the 
best mode of carrying out the invention. It also requires that 
the request identify the real party in interest.
    Subsection (b) amends each subsection of 35 U.S.C. 
Sec. 303. Subsection (b) amends 35 U.S.C. Sec. 303(a) to 
provide an additional basis for determining whether a 
substantial new question of patentability exists in Director-
initiated reexaminations, namely the failure of one or more 
claims of a patent to comply with the requirements of 35 U.S.C. 
Sec. 112 other than the best mode requirement. Reexamination of 
a new question of patentability may involve reconsideration of 
patents and publications considered during the original 
examination, the examination of a reissue patent or an earlier 
concluded prior reexamination. Such patents and publications 
may be considered alone or in combination with patents and 
publications not previously considered. Although a new question 
of patentability can be raised by the same patents and printed 
publications previously considered by the Office, a new 
question cannot be based solely on an issue that has already 
been decided by the Office.
    Subsection (b) amends 35 U.S.C. Sec. 303(b) by substituting 
the term third-party requester for the phrase person requesting 
reexamination. Subsection (b) amends 35 U.S.C. Sec. 303(c) by 
removing the phrase that no substantial new question of 
patentability has been raised from the first sentence of this 
subsection. This change clarifies that all determinations of 
the Director under subsection (a) (e.g., that a substantial new 
question of patentability has or has not been raised) are 
nonappealable. This amendment codifies existing case law which 
provides that a positive determination by the Director that a 
substantial new question of patentability has been raised is 
nonappealable. The phrase ``that no new question of 
patentability has been raised'' is added to the second sentence 
of this subsection to clarify that refunds may be made for 
negative determinations. Review of negative determinations 
should remain available for both patent owner requesters and 
third- party requesters by petition to the Director under 37 
C.F.R. Sec. 1.181, as currently provided for in 37 C.F.R. 
Sec. 1.515(c).
    Subsection (c) amends 35 U.S.C. Sec. 304 to provide that 
the initial PTO action on the merits of a reexamination may 
accompany the order granting the reexamination request. This 
amendment also deletes provisions that allow the patent owner 
to file a preliminary statement, which must be served on any 
third-party requester, and may allow the third-party requester 
to file a reply to the patent owner's statement. These changes 
are made in view of the procedure in subsection (d) of this 
Section.
    Subsection (d) amends the first sentence of 35 U.S.C. 
Sec. 305 by deleting the reference to the procedures of 35 
U.S.C. Sec. 304 relating to the patent owner statement and 
third-party requester reply, which are deleted by subsection 
(c) of this Section. Subsection (d) also amends 35 U.S.C. 
Sec. 305 to simplify the authority of a patent owner to amend 
the patent or any of its claims or to present new claims. The 
change permits a patent owner to amend an existing claim or to 
add a new claim for any reason once a reexamination proceeding 
has been established. The change does not alter the prohibition 
imposed by the third sentence of Sec. 305 against amendments or 
new claims that would enlarge the scope of the claims relative 
to the claims in the patent as originally issued. Subsection 
(d) then designates the existing provisions of 35 U.S.C. 
Sec. 305, so modified, as subsection 305(a). Reexamination of a 
new question of patentability may involve reconsideration of 
patents and publications considered during the original 
examination, the examination of a reissue patent, or an earlier 
concluded prior reexamination. Such patents and publications 
may be considered alone or in combination with patents and 
publications not previously considered. Although a new question 
of patentability can be raised by the same patents and printed 
publications previously considered by the Office, a new 
question cannot be based solely on an issue that has already 
been decided by the Office.
    Subsection (d) also amends 35 U.S.C. Sec. 305 to add a new 
subsection, Sec. 305(b), to address reexamination proceedings 
based on a request from a third-party requester. The new 
Sec. 305(b)(2) requires that any document filed by either the 
patent owner or a third-party requester be served on all other 
parties to the reexamination proceeding, with the exception of 
the request for reexamination. The new Sec. 305(b)(2) provides 
that a third-party requester may submit one set of written 
comments to the office in reply to a response by the patent 
owner to any Office action. The written reply must be limited 
to issues covered by the Office action or raised in the patent 
owner s response thereto. This subsection provides that the 
third party must submit the comments within a reasonable 
period, such period to be not less than one month from the date 
of service by the patent owner of its response to any Office 
action.
    Additionally, subsection (d) designates the last sentence 
of existing 35 U.S.C. Sec. 305 as 35 U.S.C. Sec. 305(c), and 
amends this sentence by providing an exception to the ``special 
dispatch'' requirement where so provided by the Director for 
good cause.
    While no statutory provision is added by this Act to 
address interviews conducted before the examiner during 
reexamination, it is intended that the Office, through 
rulemaking, will provide third-party requesters the right to 
participate in any examiner interview initiated by the patent 
owner or by the examiner, and that such interviews will be 
conducted under controlled conditions before the examiner and 
an additional, more senior, Office representative. The third 
party should not be permitted to initiate examiner interviews.
    Subsection (e) amends 35 U.S.C. Sec. 306 by designating the 
current provisions relating to appeal rights of the patent 
owner as subsection 306(a) and by making amendments thereto, 
and by adding two new subsections, 306(b) and 306(c), to 
provide third-party requesters with appeal rights and to create 
an estoppel effect, respectively.
    Subsection 306(a) provides the patent owner with a right to 
be a party to any appeal taken by a third-party requester 
pursuant to subsection 306(b). In addition, subsection 306(a) 
is amended to remove the availability of review under 35 U.S.C. 
Sec. 145, while maintaining the availability of review under 35 
U.S.C. Sec. 134 and 35 U.S.C. Sec. Sec. 141-144. By this 
amendment, patent owners dissatisfied with a decision of the 
Board of Patent Appeals and Interferences in a reexamination 
proceeding would no longer be permitted to file a civil action 
against the Director in the U.S. District Court for the 
District of Columbia, but could continue to appeal such 
decision to the U.S. Court of Appeals for the Federal Circuit.
     Subsection 306(b) provides third-party requesters with 
appeal rights that parallel those provided to patent owners. 
Under subsection 306(b), third-party requesters may appeal any 
final decision favorable to the patentability of any original 
or proposed amended or new claim of the patent under the 
provisions of 35 U.S.C. Sec. 134. They may also seek court 
review under 35 U.S.C. Sec. Sec. 141-144, and may be a party to 
any appeal taken by the patent owner, subject to the provisions 
of 35 U.S.C. Sec. 306(c).
    Subsection 306(c)(1) provides that a third-party requester 
who files an appeal or participates as a party to an appeal by 
the patent owner under the provisions of 35 U.S.C. 
Sec. Sec. 141-144, is estopped from later asserting, in any 
forum, the invalidity of any claim determined to be patentable 
on appeal on any ground which the third- party requester raised 
or could have raised during the reexamination proceedings, 
including the request for reexamination. Subsection 306(c)(2) 
provides that a third- party requester is deemed not to have 
participated as a party to an appeal by the patent owner 
unless, within twenty days after the patent owner has filed 
notice of appeal, the third-party requester files notice with 
the Director electing to participate.
    Subsection (f)(1) adds a new section, 35 U.S.C. Sec. 308, 
having two subsections, 308(a) and 308(b). This new section 
prohibits reexamination in two circumstances, notwithstanding 
any other reexamination provision. First, section 308(a) 
provides that, once an order for reexamination of a patent has 
been issued under section 35 U.S.C. Sec. 304, neither the 
patent owner nor a third-party requester may file a subsequent 
request for reexamination of the patent until a reexamination 
certificate is issued and published under section 35 U.S.C. 
Sec. 307, unless authorized by the Director.
    Second, Sec. 308(b) provides that once a judgment has been 
entered against a party to a civil action arising in whole or 
in part under 28 U.S.C. Sec. 1338 that the party has not 
sustained its burden of proving the invalidity of any patent 
claims in suit, then neither that party nor its privies may 
thereafter request reexamination of any such patent claim on 
the basis of issues which that party or its privies raised or 
could have raised in that action. A reexamination requested by 
such a party or by a party in privity with such a party on the 
basis of such issues may not be maintained by the Office. This 
provision avoids the potential for inconsistent treatment by 
the Office of patent claims in a reexamination after a final 
judicial determination of validity that the same patent claims 
are not valid. Sec. 308(b) applies to any action that could be 
brought under Sec. 1338 regardless of whether that section is 
formally cited in the complaint.
    Subsection (f)(2) amends the table of sections for chapter 
30 of title 35, United States Code, to add the section heading, 
``308. Reexamination Prohibited.'' for the new section added by 
subsection 503(f)(1) of this Act.
    Subsection (g) requires the Director to submit a report to 
Congress within four years after the effective date which 
evaluates whether the reexamination proceedings established 
under the amendments are inequitable to any parties, and if so, 
the report should contain recommendations to remove the 
inequities.

Section 504.--Conforming Amendments

     Subsection (a) amends 35 U.S.C. Sec. 6(b) to authorize the 
Board to review decisions of examiners upon written appeal of a 
patent owner or a third-party requester in reexamination 
proceedings.
     Subsection (b) amends 35 U.S.C. Sec. 41(a)(7) to provide 
the authority for the Director to accept the filing of an 
unintentionally delayed response by the patent owner in a 
reexamination proceeding and for charging a fee for such 
filing.
    Subsection (c) amends 35 U.S.C. Sec. 134 to provide for 
review of examiner decisions by the Board in reexamination 
proceedings upon written appeal by a patent owner or by a 
third-party requester. Specifically, subsection (b) amends 35 
U.S.C. Sec. 134 by designating the existing provisions as 
subsection 134(a) and by adding two new subsections, designated 
as subsections 134(b) and 134(c). Subsection 134(b) permits a 
patent owner in a reexamination proceeding to appeal to the 
Board from the final rejection of any claim by the primary 
examiner, having once paid the fee for such appeal. Subsection 
134(c) permits third-party requesters to appeal to the Board 
from the final decision of the primary examiner favorable to 
the patentability of any original or proposed amended or new 
claim of a patent, having once paid the fee for such appeal.
    Subsection (d) amends 35 U.S.C. Sec. 141 to permit patent 
owners and third-party requesters dissatisfied with the final 
decision in an appeal under 35 U.S.C. Sec. 134 to appeal to the 
Court of Appeals for the Federal Circuit.
     Subsection (e) amends 35 U.S.C. Sec. 143 to require the 
Director to make submissions to the court in reexamination 
cases, as well as in ex parte cases. Currently, this section 
only requires such submissions in ex parte cases. This 
amendment would require the Director to make submissions to the 
court in reexamination cases even when they are not ex parte, 
but rather involve a third-party requester.
     Subsection (f) amends 35 U.S.C. Sec. 145 to conform to the 
amendments made to 35 U.S.C. Sec. 134. Specifically, this 
section amends Sec. 145 to provide that appeals under Sec. 145 
may only be initiated by patent applicants, and not by a patent 
owner or a third-party requester who is a participant in a 
reexamination proceeding.

Section 505.--Effective Date

    This section provides that this title and the amendments 
made by this title shall take effect six months after the date 
of enactment of this Act, and that they shall apply only to 
those reexamination requests that are filed on or after that 
date.

                 TITLE VI.--MISCELLANEOUS IMPROVEMENTS

Section 601.--Provisional Applications

    This section amends section 111(b)(5) of title 35 to 
enhance the attractiveness of filing provisional applications 
by providing a basis for converting provisional applications to 
non-provisional applications. A basis for converting non-
provisional applications to provisional applications is already 
provided. This enhancement is provided in subsection 111(b)(5) 
by providing that 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) of section 111. Further, the amendment provides 
that 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 
thereafter. Accordingly, a provisional application could be 
converted to a non-provisional application, be subjected to 
examination and, depending upon the outcome of the examination 
process, ultimately lead to the issue of a patent. This 
amendment would be effective upon enactment and would apply to 
provisional applications filed on or after June 8, 1995.

Section 602.--International Applications

    Section 119(a) has been amended to permit persons, who 
filed an application for patent first in a WTO 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. 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, however, some WTO member countries 
are not yet members of the Paris Convention, and as developing 
countries are permitted periods of up to 10 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.
    In subsection (b), the term ``foreign intellectual property 
authority'' has been substituted for ``patent office of the 
foreign country'' to clarify that regional patent offices are 
included, as well as international organizations acting as 
receiving offices under the Patent Cooperation Treaty.
    Subsection (f) has been added to section 119 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 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 protection for a plant variety in this 
country.
     Subsection (g) has been added to section 119 to define the 
terms ``WTO member country'' and ``UPOV Contracting Party.''

Section 603.--Plant Patents

    Subsection (a) of Section 603 allows for the patenting of 
tuber propagated plants.
    Subsection (b) of Section 603 corrects a flaw in the 
wording of 35 U.S.C. Sec. 163 to clarify that a plant patent 
includes the right to exclude others from using, offering for 
sale, selling, or importing both the entire plant and any of 
its parts.

Section 604.--Electronic Filing

     Section 604 amends Sec. 22 of title 35 to make it clear 
that the PTO can receive information in an electronic format.

Section 605.--Divisional Applications

     This section designates the existing text of section 121 
of title 35 as subsection (a) and adds subsections (b) and (c), 
to permit an applicant who is subject to a restriction 
requirement to have the Director examine more than one 
independent and distinct invention in the application. A 
request to examine more than one invention in an application is 
an alternative to filing a divisional application for each 
invention in excess of one as permitted in existing section 121 
of title 35.
    Subsection (b) specifies that a request to examine more 
than one invention in an application must be accompanied by an 
examination fee equal to the filing fees that would have 
applied if the invention had been presented in separate 
applications. Subsection (b) requires the Patent and Trademark 
Office to meet the time limits set forth in section 
154(b)(1)(B) of title 35 for each of the inventions for which 
the applicant pays the examination fee within two months after 
the requirement for restriction. Failure to meet the time 
limits will be treated as an unusual administrative delay and 
the term of the patent will be extended for the period of the 
delay. Where at the request of an applicant under subsection 
(b) the Patent and Trademark Office examines more than one 
invention in an application, it may issue a separate patent for 
each invention determined to be patentable. Subsection (c) 
specifies that the applicant is entitled to a refund of 
examination fees if a requirement for restriction is determined 
to be improper.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                      TITLE 35, UNITED STATES CODE

Part                                                                Sec.
      Patent and Trademark Office.....................................1]
      United States Patent and Trademark Office........................1
          * * * * * * *

                 [PART I--PATENT AND TRADEMARK OFFICE]

           PART I--UNITED STATES PATENT AND TRADEMARK OFFICE

Chap.                                                               Sec.
[1. Establishment, Officers, Functions............................    1]
1. Establishment, Officers and Employees, Functions...............     1
     * * * * * * *
5. Invention Development Services.................................    51
     * * * * * * *

             [CHAPTER 1--ESTABLISHMENT, OFFICERS, FUNCTIONS

[Sec.
[1. Establishment.
[2. Seal.
[3. Officers and employees.
[4. Restrictions on officers and employees as to interest in patents.
[6. Duties of Commissioner.
[7. Board of Patent Appeals and Interferences.
[8. Library.
[9. Classification of patents.
[11. Publications.
[10. Certified copies of records.
[12. Exchange of copies of patents with foreign countries.
[13. Copies of patents for public libraries.
[14. Annual report to Congress.]

      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 Management Advisory Board.
6.  Board of Patent Appeals and Interferences.
7.  Suits by and against the Office.
8.  Library.
9.  Classification of patents.
10. Certified copies of records.
11. Publications.
12. Exchange of copies of patents and applications with foreign 
          countries.
13. Copies of patents and applications for public libraries.
14. Annual report to Congress.

[Sec. 1. Establishment

  [The Patent and Trademark Office shall continue as an office 
in the Department of Commerce, where records, books, drawings, 
specifications, and other papers and things pertaining to 
patents and to trademark registrations shall be kept and 
preserved, except as otherwise provided by law.

[Sec. 2. Seal

  [The Patent and Trademark Office shall have a seal with which 
letters patent, certificates of trade-mark registrations, and 
papers issued from the Office shall be authenticated.

[Sec. 3. Officers and employees

  [(a) There shall be in the Patent and Trademark Office a 
Commissioner of Patents and Trademarks, a Deputy Commissioner, 
two Assistant Commissioners, and examiners-in-chief appointed 
under section 7 of this title. The Deputy Commissioner, or, in 
the event of a vacancy in that office, the Assistant 
Commissioner senior in date of appointment shall fill the 
office of Commissioner during a vacancy in that office until 
the Commissioner is appointed and takes office. The 
Commissioner of Patents and Trademarks, the Deputy 
Commissioner, and the Assistant Commissioners shall be 
appointed by the President, by and with the advice and consent 
of the Senate. The Secretary of Commerce, upon the nomination 
of the Commissioner, in accordance with law shall appoint all 
other officers and employees.
  [(b) The Secretary of Commerce may vest in himself the 
functions of the Patent and Trademark Office and its officers 
and employees specified in this title and may from time to time 
authorize their performance by any other officer or employee.
  [(c) The Secretary of Commerce is authorized to fix the per 
annum rate of basic compensation of each examiner-in-chief in 
the Patent and Trademark Office at not in excess of the maximum 
scheduled rate provided for positions in grade 17 of the 
General Schedule of the Classification Act of 1949, as amended.
  [(d) The Commissioner of Patents and Trademarks shall be an 
Assistant Secretary of Commerce and shall receive compensation 
at the rate prescribed by law for Assistant Secretaries of 
Commerce.
  [(e) The members of the Trademark Trial and Appeal Board of 
the Patent and Trademark Office shall each be paid at a rate 
not to exceed the maximum rate of basic pay payable for GS-16 
of the General Schedule under section 5332 of title 5.]

Sec. 1. Establishment

  (a) Establishment.--The United States Patent and Trademark 
Office is established as a wholly owned Government corporation 
subject to chapter 91 of title 31, separate from any department 
of the United States, and shall be an agency of the United 
States under the policy direction of the Secretary of Commerce. 
For purposes of internal management, the United States Patent 
and Trademark Office shall be a corporate body not subject to 
direction or supervision by any department of the United 
States, except as otherwise provided in this title.
  (b) Offices.--The United States Patent and Trademark Office 
shall maintain its principal office in the metropolitan 
Washington, D.C. 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 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. 2. Powers and duties

  (a) In General.--The United States Patent and Trademark 
Office, under the policy direction of the Secretary of 
Commerce--
          (1) shall be responsible for the granting and issuing 
        of patents and the registration of trademarks;
          (2) may conduct studies, programs, or exchanges of 
        items or services regarding domestic and international 
        law of patents, trademarks, and other matters, the 
        administration of the Office, or any function vested in 
        the Office by law, including programs to recognize, 
        identify, assess, and forecast the technology of 
        patented inventions and their utility to industry;
          (3)(A) may authorize or conduct studies and programs 
        cooperatively with foreign patent and trademark offices 
        and international organizations, in connection with 
        patents, trademarks, and other matters; 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 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; and
          (4) shall be responsible for disseminating to the 
        public information with respect to patents and 
        trademarks.
The special payments under paragraph (3)(B) shall be in 
addition to any other payments or contributions to 
international organizations described in paragraph (3)(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.
  (b) Specific Powers.--The Office--
          (1) shall have perpetual succession;
          (2) shall adopt and use a corporate seal, which shall 
        be judicially noticed and with which letters patent, 
        certificates of trademark registrations, and papers 
        issued by the Office shall be authenticated;
          (3) may sue and be sued in its corporate name and be 
        represented by its own attorneys in all judicial and 
        administrative proceedings, subject to the provisions 
        of section 7;
          (4) may indemnify the Director, and other officers, 
        attorneys, agents, and employees (including members of 
        the Management Advisory Board established in section 5) 
        of the Office for liabilities and expenses incurred 
        within the scope of their employment;
          (5) may adopt, amend, and repeal bylaws, rules, 
        regulations, and determinations, which--
                  (A) shall govern the manner in which its 
                business will be conducted and the powers 
                granted to it by law will be exercised;
                  (B) shall be made after notice and 
                opportunity for full participation by 
                interested public and private parties;
                  (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; and
                  (E) 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;
          (6) 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;
          (7)(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 and following), the Public Buildings Act (40 
        U.S.C. 601 and following), and the Stewart B. McKinney 
        Homeless Assistance Act (42 U.S.C. 11301 and 
        following); 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;
          (8) 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;
          (9) may obtain from the Administrator of General 
        Services such services as the Administrator is 
        authorized to provide to other agencies of the United 
        States, on the same basis as those services are 
        provided to other agencies of the United States;
          (10) 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, government, or international organization 
        concerned, the services, records, facilities, or 
        personnel of any State or local government agency or 
        instrumentality or foreign government or international 
        organization to perform functions on its behalf;
          (11) may determine the character of and the necessity 
        for its obligations and expenditures and the manner in 
        which they shall be incurred, allowed, and paid, 
        subject to the provisions of this title and the Act of 
        July 5, 1946 (commonly referred to as the ``Trademark 
        Act of 1946'');
          (12) 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, including for 
        research and development and capital investment, 
        subject to the provisions of section 10101 of the 
        Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41 
        note);
          (13) shall have the priority of the United States 
        with respect to the payment of debts from bankrupt, 
        insolvent, and decedents' estates;
          (14) may accept monetary gifts or donations of 
        services, or of real, personal, or mixed property, in 
        order to carry out the functions of the Office;
          (15) may execute, in accordance with its bylaws, 
        rules, and regulations, all instruments necessary and 
        appropriate in the exercise of any of its powers; and
          (16) may provide for liability insurance and 
        insurance against any loss in connection with its 
        property, other assets, or operations either by 
        contract or by self-insurance.
  (c) 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. 3. Officers and employees

  (a) Director.--
          (1) In general.--The management of the United States 
        Patent and Trademark Office shall be vested in a 
        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, by reason of professional background and 
        experience in patent or trademark law, is especially 
        qualified to manage the Office.
          (2) Duties.--
                  (A) In general.--The Director shall be 
                responsible for the management and direction of 
                the Office, including the issuance of patents 
                and the registration of trademarks, and shall 
                perform these duties in a fair, impartial, and 
                equitable manner.
                  (B) Advising the president.--The Director 
                shall advise the President, through the 
                Secretary of Commerce, of all activities of the 
                Office undertaken in response to obligations of 
                the United States under treaties and executive 
                agreements, or which relate to cooperative 
                programs with those authorities of foreign 
                governments that are responsible for granting 
                patents or registering trademarks. The Director 
                shall also recommend to the President, through 
                the Secretary of Commerce, changes in law or 
                policy which may improve the ability of United 
                States citizens to secure and enforce patent 
                rights or trademark rights in the United States 
                or in foreign countries.
                  (C) Consulting with the management advisory 
                board.--The Director shall consult with the 
                Management Advisory Board established in 
                section 5 on a regular basis on matters 
                relating to the operation of the Office, and 
                shall consult with the Advisory Board 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.
                  (D) Security clearances.--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.
          (3) Term.--The Director shall serve a term of 5 
        years, and may continue to serve after the expiration 
        of the Director's term until a successor is appointed 
        and assumes office. The Director may be reappointed to 
        subsequent terms.
          (4) Oath.--The Director shall, before taking office, 
        take an oath to discharge faithfully the duties of the 
        Office.
          (5) Compensation.--The Director shall receive 
        compensation at the rate of pay in effect for level III 
        of the Executive Schedule under section 5314 of title 5 
        and, in addition, may receive as a bonus, an amount 
        which would raise the Director's total compensation to 
        not more than the equivalent of the level of the rate 
        of pay in effect for level I of the Executive Schedule 
        under section 5312 of title 5, based upon an evaluation 
        by the Secretary of Commerce of the Director's 
        performance as defined in an annual performance 
        agreement between the Director and the Secretary. The 
        annual performance agreement shall incorporate 
        measurable goals as delineated in an annual performance 
        plan agreed to by the Director and the Secretary.
          (6) 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.
          (7) Designee of director.--The Director shall 
        designate an officer of the 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.
  (b) Officers and Employees of the Office.--
          (1) Commissioners.--The Director shall appoint a 
        Commissioner for Patents and a Commissioner for 
        Trademarks for terms that shall expire on the date on 
        which the Director's term expires. The Commissioner for 
        Patents shall be a person with demonstrated experience 
        in patent law and the Commissioner for Trademarks shall 
        be a person with demonstrated experience in trademark 
        law. The Commissioner for Patents and the Commissioner 
        for Trademarks shall be the principal policy and 
        management advisers to the Director on all aspects of 
        the activities of the Office that affect the 
        administration of patent and trademark operations, 
        respectively.
          (2) 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 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.
  (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. Section 2302 of title 5 
applies to the Office, notwithstanding subsection (a)(2)(B)(i) 
of such section.
  (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 
Modernization 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 Modernization 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 Modernization 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 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.
          (3) Accumulated leave.--The amount of sick and annual 
        leave and compensatory time accumulated under title 5 
        before the effective date described in paragraph (1), 
        by those becoming officers or employees of the Office 
        pursuant to this subsection, are obligations of the 
        Office.
  (f) Transition Provisions.--
          (1) Interim appointment of director.--On or after the 
        effective date of the Patent and Trademark Office 
        Modernization 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 Modernization Act may serve 
        as the 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 
        Modernization Act may serve as the Commissioner for 
        Trademarks until the date on which a Commissioner for 
        Trademarks is appointed under subsection (b).
          * * * * * * *

Sec. 5. Patent and Trademark Office Management Advisory Board

  (a) Establishment of Management Advisory Board.--
          (1) Appointment.--The United States Patent and 
        Trademark Office shall have a Management Advisory Board 
        (hereafter in this title referred to as the ``Advisory 
        Board'') of 12 members, 4 of whom shall be appointed by 
        the President, 4 of whom shall be appointed by the 
        Speaker of the House of Representatives, and 4 of whom 
        shall be appointed by the majority leader of the 
        Senate. Not more than 3 of the 4 members appointed by 
        each appointing authority shall be members of the same 
        political party.
          (2) Terms.--Members of the Advisory Board shall be 
        appointed for a term of 4 years each, except that of 
        the members first appointed by each appointing 
        authority, 1 shall be for a term of 1 year, 1 shall be 
        for a term of 2 years, and 1 shall be for a term of 3 
        years. No member may serve more than 1 term.
          (3) Chair.--The President shall designate the chair 
        of the Advisory Board, whose term as chair shall be for 
        3 years.
          (4) Timing of appointments.--Initial appointments to 
        the Advisory Board shall be made within 3 months after 
        the effective date of the Patent and Trademark Office 
        Modernization Act, and vacancies shall be filled within 
        3 months after they occur.
          (5) Vacancies.--Vacancies shall be filled in the 
        manner in which the original appointment was made under 
        this subsection. Members appointed to fill a vacancy 
        occurring before the expiration of the term for which 
        the member's predecessor was appointed shall be 
        appointed only for the remainder of that term. A member 
        may serve after the expiration of that member's term 
        until a successor is appointed.
          (6) Committees.--The Chair shall designate members of 
        the Advisory Board to serve on a committee on patent 
        operations and on a committee on trademark operations 
        to perform the duties set forth in subsection (e) as 
        they relate specifically to the Office's patent 
        operations, and the Office's trademark operations, 
        respectively.
  (b) Basis for Appointments.--Members of the Advisory Board 
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, and shall include 
individuals with substantial background and achievement in 
corporate finance and management.
  (c) Applicability of Certain Ethics Laws.--Members of the 
Advisory Board shall be special Government employees within the 
meaning of section 202 of title 18.
  (d) Meetings.--The Advisory Board shall meet at the call of 
the chair to consider an agenda set by the chair.
  (e) Duties.--The Advisory Board shall--
          (1) review the policies, goals, performance, budget, 
        and user fees of the United States Patent and Trademark 
        Office, and advise the Director on these matters; and
          (2) within 60 days after the end of each fiscal year, 
        prepare an annual report on the matters referred to in 
        paragraph (1), transmit the report to the President and 
        the Committees on the Judiciary of the Senate and the 
        House of Representatives, and publish the report in the 
        Patent and Trademark Office Official Gazette.
  (f) Compensation.--Members of the Advisory Board shall be 
compensated for each day (including travel time) during which 
they are attending meetings or conferences of the Advisory 
Board or otherwise engaged in the business of the Advisory 
Board, 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, and while away from 
their homes or regular places of business they may be allowed 
travel expenses, including per diem in lieu of subsistence, as 
authorized by section 5703 of title 5.
  (g) Access to Information.--Members of the Advisory Board 
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.

[Sec. 6. Duties of Commissioner

  [(a) The Commissioner, under the direction of the Secretary 
of Commerce, shall superintend or perform all duties required 
by law respecting the granting and issuing of patents and the 
registration of trademarks; shall have the authority to carry 
on studies, programs, or exchanges of items or services 
regarding domestic and international patent and trademark law 
or the administration of the Patent and Trademark Office, 
including programs to recognize, identify, assess and forecast 
the technology of patented inventions and their utility to 
industry; and shall have charge of property belonging to the 
Patent and Trademark Office. He may, subject to the approval of 
the Secretary of Commerce, establish regulations, not 
inconsistent with law, for the conduct of proceedings in the 
Patent and Trademark Office.
  [(b) The Commissioner, under the direction of the Secretary 
of Commerce, may, in coordination with the Department of State, 
carry on programs and studies cooperatively with foreign patent 
offices and international intergovernmental organizations, or 
may authorize such programs and studies to be carried on, in 
connection with the performance of duties stated in subsection 
(a) of this section.
  [(c) The Commissioner, under the direction of the Secretary 
of Commerce, may, with the concurrence of the Secretary of 
State, transfer funds appropriated to the Patent and Trademark 
Office, not to exceed $100,000 in any year, to the Department 
of State for the purpose of making special payments to 
international intergovernmental organizations for studies and 
programs for advancing international cooperation concerning 
patents, trademarks, and related matters. These special 
payments may be in addition to any other payments or 
contributions to the international organization and shall not 
be subject to any limitations imposed by law on the amounts of 
such other payments or contributions by the Government of the 
United States.

[Sec. 7. Board of Patent Appeals and Interferences

  [(a) The examiners-in-chief shall be persons of competent 
legal knowledge and scientific ability, who shall be appointed 
to the competitive service. The Commissioner, the Deputy 
Commissioner, the Assistant Commissioners, and the examiners-
in-chief shall constitute the Board of Patent Appeals and 
Interferences.
  [(b) 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) of this title. Each appeal and 
interference shall be heard by at least three members of the 
Board of Patent Appeals and Interferences, who shall be 
designated by the Commissioner. Only the Board of Patent 
Appeals and Interferences has the authority to grant 
rehearings.
  [(c) Whenever the Commissioner considers it necessary, in 
order to keep current the work of the Board of Patent Appeals 
and Interferences, the Commissioner may designate any patent 
examiner of the primary examiner grade or higher, having the 
requisite ability, to serve as examiner-in-chief for periods 
not exceeding six months each. An examiner so designated shall 
be qualified to act as a member of the Board of Patent Appeals 
and Interferences. Not more than one of the members of the 
Board of Patent Appeals and Interferences hearing an appeal or 
determining an interference may be an examiner so designated. 
The Secretary of Commerce is authorized to fix the pay of each 
designated examiner-in-chief in the Patent and Trademark Office 
at not to exceed the maximum rate of basic pay payable for 
grade GS-16 of the General Schedule under section 5332 of title 
5. The rate of basic pay of each individual designated 
examiner-in-chief shall be adjusted, at the close of the period 
for which that individual was designated to act as examiner-in-
chief, to the rate of basic pay which that individual would 
have been receiving at the close of such period if such 
designation had not been made.]

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). \1\ 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.
---------------------------------------------------------------------------
    \1\ Effective 6 months after the date of the enactment of this Act 
the first sentence of section 6(b) will be amended to read as follows: 
``The Board of Patent Appeals and Interferences shall, on written 
appeal of an applicant, or a patent owner or a third-party requester in 
a reexamination proceeding, review adverse decisions of examiners upon 
applications for patents and decisions of examiners in reexamination 
proceedings, and shall determine priority and patentability of 
invention in interferences declared under section 135(a) of this 
title.''.
---------------------------------------------------------------------------

Sec. 7. Suits by and against the Office

  (a) Actions Under United States Law.--Any civil action or 
proceeding to which the United States Patent and Trademark 
Office is a party is deemed to arise under the laws of the 
United States. The Federal courts shall have exclusive 
jurisdiction over all civil actions by or against the Office.
  (b) Representation by the Department of Justice.--The United 
States Patent and Trademark Office shall be deemed an agency of 
the United States for purposes of section 516 of title 28.
  (c) Prohibition on Attachment, Liens, Etc.--No attachment, 
garnishment, lien, or similar process, intermediate or final, 
in law or equity, may be issued against property of the Office.

Sec. 8. Library

  The [Commissioner] Director shall maintain a library of 
scientific and other works and periodicals, both foreign and 
domestic, in the Patent and Trademark Office to aid the 
officers in the discharge of their duties.

Sec. 9. Classification of patents

  The [Commissioner] Director may revise and maintain the 
classification by subject matter of United States letters 
patent, and such other patents and printed publications as may 
be necessary or practicable, for the purpose of determining 
with readiness and accuracy the novelty of inventions for which 
applications for patent are filed.

Sec. 10. Certified copies of records

  The [Commissioner] Director may furnish certified copies of 
specifications and drawings of patents issued by the Patent and 
Trademark Office, and of other records available either to the 
public or to the person applying therefor.

Sec. 11. Publications

  (a) The [Commissioner] Director may print, or cause to be 
printed, the following:
  1. Patents and published applications for patents, including 
specifications and drawings, together with copies of the same. 
The Patent and Trademark Office may print the headings of the 
drawings for patents for the purpose of photolithography.
          * * * * * * *
  (b) The [Commissioner] Director may exchange any of the 
publications specified in items 3, 4, 5, and 6 of subsection 
(a) of this section for publications desirable for the use of 
the Patent and Trademark Office.

Sec. 12. Exchange of copies of patents and applications with foreign 
                    countries

  The [Commissioner] Director may exchange copies of 
specifications and drawings of United States patents and 
published applications for patents for those of foreign 
countries.

Sec. 13. Copies of patents and applications for public libraries

  The [Commissioner] Director may supply printed copies of 
specifications and drawings of patents and published 
applications for patents to public libraries in the United 
States which shall maintain such copies for the use of the 
public, at the rate for each year's issue established for this 
purpose in section 41(d) of this title.

[Sec. 14. Annual report to Congress

  [The Commissioner shall report to Congress annually the 
moneys received and expended, statistics concerning the work of 
the Office, and other information relating to the Office as may 
be useful to the Congress or the public.]

Sec. 14. 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, and 
other information relating to the Office. The report under this 
section shall also meet the requirements of section 9106 of 
title 31, to the extent that such requirements are not 
inconsistent with the preceding sentence. The report required 
under this section shall not be deemed to be the report of the 
United States Patent and Trademark Office under section 9106 of 
title 31, and the Director shall file a separate report under 
such section.

       CHAPTER 2--PROCEEDINGS IN THE PATENT AND TRADEMARK OFFICE

          * * * * * * *

Sec. 21. Filing date and day for taking action

  (a) The [Commissioner] Director may by rule prescribe that 
any paper or fee required to be filed in the Patent and 
Trademark Office will be considered filed in the Office on the 
date on which it was deposited with the United States Postal 
Service or would have been deposited with the United States 
Postal Service but for postal service interruptions or 
emergencies designated by the [Commissioner] Director.
          * * * * * * *

Sec. 22. Printing of papers filed

  The [Commissioner] Director may require papers filed in the 
Patent and Trademark Office to be [printed or typewritten] 
printed, typewritten, or on an electronic medium.

Sec. 23. Testimony in Patent and Trademark Office cases

  The [Commissioner] Director may establish rules for taking 
affidavits and depositions required in cases in the Patent and 
Trademark Office. Any officer authorized by law to take 
depositions to be used in the courts of the United States, or 
of the State where he resides, may take such affidavits and 
depositions.
          * * * * * * *

Sec. 25. Declaration in lieu of oath

  (a) The [Commissioner] Director may by rule prescribe that 
any document to be filed in the Patent and Trademark Office and 
which is required by any law, rule, or other regulation to be 
under oath may be subscribed to by a written declaration in 
such form as the [Commissioner] Director may prescribe, such 
declaration to be in lieu of the oath otherwise required.
          * * * * * * *

Sec. 26. Effect of defective execution

  Any document to be filed in the Patent and Trademark Office 
and which is required by any law, rule, or other regulation to 
be executed in a specified manner may be provisionally accepted 
by the [Commissioner] Director despite a defective execution, 
provided a properly executed document is submitted within such 
time as may be prescribed.

         CHAPTER 3--PRACTICE BEFORE PATENT AND TRADEMARK OFFICE

Sec.
[31.  Regulations for agents and attorneys.]
     * * * * * * *

[Sec. 31. Regulations for agents and attorneys

  [The Commissioner, subject to the approval of the Secretary 
of Commerce, may prescribe regulations governing the 
recognition and conduct of agents, attorneys, or other persons 
representing applicants or other parties before the Patent and 
Trademark 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.]

Sec. 32. Suspension or exclusion from practice

  The [Commissioner] Director may, after notice and opportunity 
for a hearing, suspend or exclude, either generally or in any 
particular case, from further practice before the Patent and 
Trademark Office, any person, agent, or attorney shown to be 
incompetent or disreputable, or guilty of gross misconduct, or 
who does not comply with the regulations established under 
section 31 of this title, or who shall, by word, circular, 
letter, or advertising, with intent to defraud in any manner, 
deceive, mislead, or threaten any applicant or prospective 
applicant, or other person having immediate or prospective 
business before the Office. The reasons for any such suspension 
or exclusion shall be duly recorded. 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. The United States 
District Court for the District of Columbia, under such 
conditions and upon such proceedings as it by its rules 
determines, may review the action of the [Commissioner] 
Director upon the petition of the person so refused recognition 
or so suspended or excluded.

            CHAPTER 4--PATENT FEES; FUNDING; SEARCH SYSTEMS

          * * * * * * *

Sec. 41. Patent fees; patent and trademark search systems

  (a) The [Commissioner] Director shall charge the following 
fees:
          (1) * * *
          * * * * * * *
          [(7) On filing each petition for the revival of an 
        unintentionally abandoned application for a patent or 
        for the unintentionally delayed payment of the fee for 
        issuing each patent, $820, unless the petition is filed 
        under section 133 or 151 of this title, in which case 
        the fee shall be $78.]
          (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 a reexamination 
        proceeding, $1,250, unless the petition is filed under 
        section 133 or 151 of this title, in which case the fee 
        shall be $110.
          (8) For petitions for 1-month extensions of time to 
        take actions required by the [Commissioner] Director in 
        an application--
                  (A) [On] on filing a first petition, $78;
                  (B) on filing a second petition, $172; and
                  (C) on filing a third petition or subsequent 
                petition, $340.
          * * * * * * *
For the purpose of computing fees, a multiple dependent claim 
as referred to in section 112 of this title or any claim 
depending therefrom shall be considered as separate dependent 
claims in accordance with the number of claims to which 
reference is made. Errors in payment of the additional fees may 
be rectified in accordance with regulations of the 
[Commissioner] Director.
  (b) The [Commissioner] Director shall charge the following 
fees for maintaining in force all patents based on applications 
filed on or after December 12, 1980:
          (1) 3 years and 6 months after grant, $650.
          (2) 7 years and 6 months after grant, $1,310.
          (3) 11 years and 6 months after grant, $1,980.
Unless payment of the applicable maintenance fee is received in 
the Patent and Trademark Office on or before the date the fee 
is due or within a grace period of six months thereafter, the 
patent will expire as of the end of such grace period. The 
[Commissioner] Director may require the payment of a surcharge 
as a condition of accepting within such six-month grace period 
the late payment of an applicable maintenance fee. No fee will 
be established for maintaining a design or plant patent in 
force.
  (c)(1) The [Commissioner] Director may accept the payment of 
any maintenance fee required by subsection (b) of this section 
which is made within twenty-four months after the six-month 
grace period if the delay is shown to the satisfaction of the 
[Commissioner] Director to have been unintentional, or at any 
time after the six-month grace period if the delay is shown to 
the satisfaction of the [Commissioner] Director to have been 
unavoidable. The [Commissioner] Director may require the 
payment of a surcharge as a condition of accepting payment of 
any maintenance fee after the six-month grace period. If the 
[Commissioner] Director accepts payment of a maintenance fee 
after the six-month grace period, the patent shall be 
considered as not having expired at the end of the grace 
period.
          * * * * * * *
  (d) The [Commissioner] Director shall establish fees for all 
other processing, services, or materials relating to patents 
not specified in this section to recover the estimated average 
cost to the Office of such processing, services, or materials, 
except that the [Commissioner] Director shall charge the 
following fees for the following services:
          (1) For recording a document affecting title, $40 per 
        property.
          (2) For each photocopy, $.25 per page.
          (3) For each black and white copy of a patent, $3.
The yearly fee for providing a library specified in section 13 
of this title with uncertified printed copies of the 
specifications and drawings for all patents in that year shall 
be $50.
  (e) The [Commissioner] Director may waive the payment of any 
fee for any service or material related to patents in 
connection with an occasional or incidental request made by a 
department or agency of the Government, or any officer thereof. 
The [Commissioner] Director may provide any applicant issued a 
notice under section 132 of this title with a copy of the 
specifications and drawings for all patents referred to in that 
notice without charge.
  (f) The fees established in subsections (a) and (b) of this 
section may be adjusted by the [Commissioner] Director on 
October 1, 1992, and every year thereafter, to reflect any 
fluctuations occurring during the previous 12 months in the 
Consumer Price Index, as determined by the Secretary of Labor. 
Changes of less than 1 per centum may be ignored.
  (g) No fee established by the [Commissioner] Director under 
this section shall take effect until at least 30 days after 
notice of the fee has been published in the Federal Register 
and in the Official Gazette of the Patent and Trademark Office.
  (h)(1) Fees charged under subsection (a) or (b) shall be 
reduced by 50 percent with respect to their application to any 
small business concern as defined under section 3 of the Small 
Business Act, and to any independent inventor or nonprofit 
organization as defined in regulations issued by the 
[Commissioner] Director of Patents and Trademarks.
  (2) With respect to its application to any entity described 
in paragraph (1), any surcharge or fee charged under subsection 
(c) or (d) shall not be higher than the surcharge or fee 
required of any other entity under the same or substantially 
similar circumstances.
  (i)(1) The [Commissioner] Director shall maintain, for use by 
the public, paper or microform collections of United States 
patents, foreign patent documents, and United States trademark 
registrations arranged to permit search for and retrieval of 
information. The [Commissioner] Director may not impose fees 
directly for the use of such collections, or for the use of the 
public patent or trademark search rooms or libraries.
  (2) The [Commissioner] Director shall provide for the full 
deployment of the automated search systems of the Patent and 
Trademark Office so that such systems are available for use by 
the public, and shall assure full access by the public to, and 
dissemination of, patent and trademark information, using a 
variety of automated methods, including electronic bulletin 
boards and remote access by users to mass storage and retrieval 
systems.
  (3) The [Commissioner] Director may establish reasonable fees 
for access by the public to the automated search systems of the 
Patent and Trademark Office. If such fees are established, a 
limited amount of free access shall be made available to users 
of the systems for purposes of education and training. The 
[Commissioner] Director may waive the payment by an individual 
of fees authorized by this subsection upon a showing of need or 
hardship, and if such a waiver is in the public interest.
  (4) The [Commissioner] Director shall submit to the Congress 
an annual report on the automated search systems of the Patent 
and Trademark Office and the access by the public to such 
systems. The [Commissioner] Director shall also publish such 
report in the Federal Register. The [Commissioner] Director 
shall provide an opportunity for the submission of comments by 
interested persons on each such report.

[Sec. 42. Patent and Trademark Office funding

  [(a) All fees for services performed by or materials 
furnished by the Patent and Trademark Office will be payable to 
the Commissioner.
  [(b) All fees paid to the Commissioner and all appropriations 
for defraying the costs of the activities of the Patent and 
Trademark Office will be credited to the Patent and Trademark 
Office Appropriation Account in the Treasury of the United 
States.
  [(c) Revenues from fees shall be available to the 
Commissioner to carry out, to the extent provided in 
appropriation Acts, the activities of the Patent and Trademark 
Office. Fees available to the Commissioner under section 31 of 
the Trademark Act of 1946 may be used only for the processing 
of trademark registrations and for other activities, services, 
and materials relating to trademarks and to cover a 
proportionate share of the administrative costs of the Patent 
and Trademark Office.
  [(d) The Commissioner may refund any fee paid by mistake or 
any amount paid in excess of that required.
  [(e) The Secretary of Commerce shall, on the day each year on 
which the President submits the annual budget to the Congress, 
provide to the Committees on the Judiciary of the Senate and 
the House of Representatives--
          [(1) a list of patent and trademark fee collections 
        by the Patent and Trademark Office during the preceding 
        fiscal year;
          [(2) a list of activities of the Patent and Trademark 
        Office during the preceding fiscal year which were 
        supported by patent fee expenditures, trademark fee 
        expenditures, and appropriations;
          [(3) budget plans for significant programs, projects, 
        and activities of the Office, including out-year 
        funding estimates;
          [(4) any proposed disposition of surplus fees by the 
        Office; and
          [(5) such other information as the committees 
        consider necessary.]

Sec. 42. Patent and Trademark Office funding

  (a) Fees Payable to the Office.--All fees for services 
performed by or materials furnished by the United States Patent 
and Trademark Office shall be payable to the Office.
  (b) Use of Moneys.--Moneys from fees shall be available to 
the United States Patent and Trademark Office to carry out, to 
the extent provided in appropriations Acts, the functions of 
the Office. Moneys of the Office not otherwise used to carry 
out the functions of the Office shall be kept in cash on hand 
or on deposit, or invested in obligations of the United States 
or guaranteed by the United States, or in obligations or other 
instruments which are lawful investments for fiduciary, trust, 
or public funds. Fees available to the Office under this title 
shall be used for the processing of patent applications and for 
other services and materials relating to patents. Fees 
available to the Office under section 31 of the Act of July 5, 
1946 (commonly referred to as the ``Trademark Act of 1946''; 15 
U.S.C. 1113), shall be used only for the processing of 
trademark registrations and for other services and materials 
relating to trademarks.
  (c) Borrowing Authority.--The United States Patent and 
Trademark Office is authorized to issue from time to time for 
purchase by the Secretary of the Treasury its debentures, 
bonds, notes, and other evidences of indebtedness (hereafter in 
this subsection referred to as ``obligations'') to assist in 
financing its activities. Borrowing under this subsection shall 
be subject to prior approval in appropriations Acts. Such 
borrowing shall not exceed amounts approved in appropriations 
Acts. Any borrowing under this subsection shall be repaid only 
from fees paid to the Office and surcharges appropriated by the 
Congress. Such obligations shall be redeemable at the option of 
the Office before maturity in the manner stipulated in such 
obligations and shall have such maturity as is determined by 
the Office with the approval of the Secretary of the Treasury. 
Each such obligation issued to the Treasury shall bear interest 
at a rate not less than the current yield on outstanding 
marketable obligations of the United States of comparable 
maturity during the month preceding the issuance of the 
obligation as determined by the Secretary of the Treasury. The 
Secretary of the Treasury shall purchase any obligations of the 
Office issued under this subsection and for such purpose the 
Secretary of the Treasury is authorized to use as a public-debt 
transaction the proceeds of any securities issued under chapter 
31 of title 31, and the purposes for which securities may be 
issued under that chapter are extended to include such purpose. 
Payment under this subsection of the purchase price of such 
obligations of the United States Patent and Trademark Office 
shall be treated as public debt transactions of the United 
States.

               CHAPTER 5--INVENTION DEVELOPMENT SERVICES

Sec.
51. Definitions.
52. Contracting requirements.
53. Standard provisions for cover notice.
54. Reports to customer required.
55. Mandatory contract terms.
56. Remedies.
57. Records of complaints.
58. Fraudulent representation by an invention developer.
59. Rule of construction.

Sec. 51. Definitions

  For purposes of this chapter--
          (1) the term ``contract for invention development 
        services'' means a contract by which an invention 
        developer undertakes invention development services for 
        a customer;
          (2) the term ``customer'' means any person, firm, 
        partnership, corporation, or other entity who is 
        solicited by, seeks the services of, or 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 for, or on behalf of, a 
        customer any act described under paragraph (4), 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; or
                  (C) any person duly registered with, and in 
                good standing before, the United States Patent 
                and Trademark Office acting within the scope of 
                that person's registration to practice before 
                the Patent and Trademark Office; and
          (4) the term ``invention development services'' 
        means, with respect to an invention by a customer, any 
        act involved in--
                  (A) evaluating the invention to determine its 
                protectability as some form of intellectual 
                property, other than evaluation by a person 
                licensed by a State to practice law who is 
                acting solely within the scope of that person's 
                professional license;
                  (B) evaluating the invention to determine its 
                commercial potential by any person for purposes 
                other than providing venture capital; or
                  (C) marketing, brokering, licensing, selling, 
                or promoting the invention or a product or 
                service in which the invention is incorporated 
                or used, except that the display only of an 
                invention at a trade show or exhibit shall not 
                be considered to be invention development 
                services.

Sec. 52. Contracting requirements

  (a) In General.--(1) Every contract for invention development 
services shall be in writing and shall be subject to the 
provisions of this chapter. A copy of the signed written 
contract shall be given to the customer at the time the 
customer enters into the contract.
  (2) If a contract is entered into for the benefit of a third 
party, such party shall be considered a customer for purposes 
of this chapter.
  (b) Requirements of Invention Developer.--The invention 
developer shall--
          (1) state in a written document, at the time a 
        customer enters into a contract for invention 
        development services, whether the usual business 
        practice of the invention developer is to--
                  (A) seek more than 1 contract in connection 
                with an invention; or
                  (B) seek to perform services in connection 
                with an invention in 1 or more phases, with the 
                performance of each phase covered in 1 or more 
                subsequent contracts; and
          (2) supply to the customer a copy of the written 
        document together with a written summary of the usual 
        business practices of the invention developer, 
        including--
                  (A) the usual business terms of contracts; 
                and
                  (B) the approximate amount of the usual fees 
                or other consideration that may be required 
                from the customer for each of the services 
                provided by the developer.
  (c) Right of Customer To Cancel Contract.--(1) 
Notwithstanding any contractual provision to the contrary, a 
customer shall have the right to terminate a contract for 
invention development services by sending a written letter to 
the invention developer stating the customer's intent to cancel 
the contract. The letter of termination must be deposited with 
the United States Postal Service on or before 5 business days 
after the date upon which the customer or the invention 
developer executes the contract, whichever is later.
  (2) Delivery of a promissory note, check, bill of exchange, 
or negotiable instrument of any kind to the invention developer 
or to a third party for the benefit of the invention developer, 
without regard to the date or dates appearing in such 
instrument, shall be deemed payment received by the invention 
developer on the date received for purposes of this section.

Sec. 53. Standard provisions for cover notice

  (a) Contents.--Every contract for invention development 
services shall have a conspicuous and legible cover sheet 
attached with the following notice imprinted in boldface type 
of not less than 12-point size:
          ``YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO 
        TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER 
        TO THE COMPANY STATING YOUR INTENT TO CANCEL THIS 
        CONTRACT. THE LETTER OF TERMINATION MUST BE DEPOSITED 
        WITH THE UNITED STATES POSTAL SERVICE ON OR BEFORE FIVE 
        (5) BUSINESS DAYS AFTER THE DATE ON WHICH YOU OR THE 
        COMPANY EXECUTE THE CONTRACT, WHICHEVER IS LATER.
          ``THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE 
        INVENTION DEVELOPER FOR COMMERCIAL POTENTIAL IN THE 
        PAST FIVE (5) YEARS IS __________. OF THAT NUMBER, 
        __________ RECEIVED POSITIVE EVALUATIONS AND __________ 
        RECEIVED NEGATIVE EVALUATIONS.
          ``IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE 
        INVENTION TO THE INVENTION DEVELOPER, THE INVENTION 
        DEVELOPER MAY HAVE THE RIGHT TO SELL OR DISPOSE OF THE 
        INVENTION WITHOUT YOUR CONSENT AND MAY NOT HAVE TO 
        SHARE THE PROFITS WITH YOU.
          ``THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED 
        WITH THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS 
        IS __________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY 
        THIS INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF 
        THIS INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF 
        MONEY IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO 
        THIS INVENTION DEVELOPER IS ______________.
          ``THE OFFICERS OF THIS INVENTION DEVELOPER HAVE 
        COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE 
        LAST TEN (10) YEARS WITH THE FOLLOWING INVENTION 
        DEVELOPMENT COMPANIES: (LIST THE NAMES AND ADDRESSES OF 
        ALL PREVIOUS INVENTION DEVELOPMENT COMPANIES WITH WHICH 
        THE PRINCIPAL OFFICERS HAVE BEEN AFFILIATED AS OWNERS, 
        AGENTS, OR EMPLOYEES). YOU ARE ENCOURAGED TO CHECK WITH 
        THE UNITED STATES PATENT AND TRADEMARK OFFICE, THE 
        FEDERAL TRADE COMMISSION, YOUR STATE ATTORNEY GENERAL'S 
        OFFICE, AND THE BETTER BUSINESS BUREAU FOR ANY 
        COMPLAINTS FILED AGAINST ANY OF THESE COMPANIES.
          ``YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF 
        YOUR OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY 
        PROCEEDING WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED 
        TO PRACTICE BEFORE THE UNITED STATES PATENT AND 
        TRADEMARK OFFICE, YOU COULD LOSE ANY RIGHTS YOU MIGHT 
        HAVE IN YOUR IDEA OR INVENTION.''.
  (b) Other Requirements for Cover Notice.--The cover notice 
shall contain the items required under subsection (a) and the 
name, primary office address, and local office address of the 
invention developer, and may contain no other matter.
  (c) Disclosure of Certain Customers Not Required.--The 
requirement in the notice set forth in subsection (a) to 
include the ``TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED 
WITH THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS'' need 
not include information with respect to customers who have 
purchased trade show services, research, advertising, or other 
nonmarketing services from the invention developer, nor with 
respect to customers who have defaulted in their payments to 
the invention developer.

Sec. 54. Reports to customer required

  With respect to every contract for invention development 
services, the invention developer shall deliver to the customer 
at the address specified in the contract, at least once every 3 
months throughout the term of the contract, a written report 
that identifies the contract and includes--
          (1) a full, clear, and concise description of the 
        services performed to the date of the report and of the 
        services yet to be performed and names of all persons 
        who it is known will perform the services; and
          (2) the name and address of each person, firm, 
        corporation, or other entity to whom the subject matter 
        of the contract has been disclosed, the reason for each 
        such disclosure, the nature of the disclosure, and 
        complete and accurate summaries of all responses 
        received as a result of those disclosures.

Sec. 55. Mandatory contract terms

  (a) Mandatory Terms.--Each contract for invention development 
services shall include in boldface type of not less than 12-
point size--
          (1) the terms and conditions of payment and contract 
        termination rights required under section 52;
          (2) a statement that the customer may avoid entering 
        into the contract by not making a payment to the 
        invention developer;
          (3) a full, clear, and concise description of the 
        specific acts or services that the invention developer 
        undertakes to perform for the customer;
          (4) a statement as to whether the invention developer 
        undertakes to construct, sell, or distribute one or 
        more prototypes, models, or devices embodying the 
        invention of the customer;
          (5) the full name and principal place of business of 
        the invention developer and the name and principal 
        place of business of any parent, subsidiary, agent, 
        independent contractor, and any affiliated company or 
        person who it is known will perform any of the services 
        or acts that the invention developer undertakes to 
        perform for the customer;
          (6) if any oral or written representation of 
        estimated or projected customer earnings is given by 
        the invention developer (or any agent, employee, 
        officer, director, partner, or independent contractor 
        of such invention developer), a statement of that 
        estimation or projection and a description of the data 
        upon which such representation is based;
          (7) the name and address of the custodian of all 
        records and correspondence relating to the contracted 
        for invention development services, and a statement 
        that the invention developer is required to maintain 
        all records and correspondence relating to performance 
        of the invention development services for such customer 
        for a period of not less than 2 years after expiration 
        of the term of such contract; and
          (8) a statement setting forth a time schedule for 
        performance of the invention development services, 
        including an estimated date in which such performance 
        is expected to be completed.
  (b) Invention Developer as Fiduciary.--To the extent that the 
description of the specific acts or services affords discretion 
to the invention developer with respect to what specific acts 
or services shall be performed, the invention developer shall 
be deemed a fiduciary.
  (c) Availability of Information.--Records and correspondence 
described under subsection (a)(7) shall be made available after 
7 days written notice to the customer or the representative of 
the customer to review and copy at a reasonable cost on the 
invention developer's premises during normal business hours.

Sec. 56. Remedies

  (a) In General.--(1) Any contract for invention development 
services that does not comply with the applicable provisions of 
this chapter shall be voidable at the option of the customer.
  (2) Any contract for invention development services entered 
into in reliance upon any material false, fraudulent, or 
misleading information, representation, notice, or 
advertisement of the invention developer (or any agent, 
employee, officer, director, partner, or independent contractor 
of such invention developer) shall be voidable at the option of 
the customer.
  (3) Any waiver by the customer of any provision of this 
chapter shall be deemed contrary to public policy and shall be 
void and unenforceable.
  (4) Any contract for invention development services which 
provides for filing for and obtaining utility, design, or plant 
patent protection shall be voidable at the option of the 
customer unless the invention developer offers to perform or 
performs such act through a person duly registered to practice 
before, and in good standing with, the Patent and Trademark 
Office.
  (b) Civil Action.--(1) Any customer who is injured by a 
violation of this chapter by an invention developer or by any 
material false or fraudulent statement or representation, or 
any omission of material fact, by an invention developer (or 
any agent, employee, director, officer, partner, or independent 
contractor of such invention developer) or by failure of an 
invention developer to make all the disclosures required under 
this chapter, may recover in a civil action against the 
invention developer (or the officers, directors, or partners of 
such invention developer) in addition to reasonable costs and 
attorneys' fees, the greater of--
          (A) $5,000; or
          (B) the amount of actual damages sustained by the 
        customer.
  (2) Notwithstanding paragraph (1), the court may increase 
damages to not more than 3 times the amount awarded.
  (c) Rebuttable Presumption of Injury.--For purposes of this 
section, substantial violation of any provision of this chapter 
by an invention developer or execution by the customer of a 
contract for invention development services in reliance on any 
material false or fraudulentstatements or representations or 
omissions of material fact shall establish a rebuttable presumption of 
injury.

Sec. 57. Records of complaints

  (a) Release of Complaints.--The Director shall make all 
complaints received by the United States Patent and Trademark 
Office involving invention developers publicly available, 
together with any response of the invention developers.
  (b) Request for Complaints.--The Director may request 
complaints relating to invention development services from any 
Federal or State agency and include such complaints in the 
records maintained under subsection (a), together with any 
response of the invention developers.

Sec. 58. Fraudulent representation by an invention developer

  Whoever, in providing invention development services, 
knowingly provides any false or misleading statement, 
representation, or omission of material fact to a customer or 
fails to make all the disclosures required under this chapter, 
shall be guilty of a misdemeanor and fined not more than 
$10,000 for each offense.

Sec. 59. Rule of construction

  Except as expressly provided in this chapter, no provision of 
this chapter shall be construed to affect any obligation, 
right, or remedy provided under any other Federal or State law.

       PART II--PATENTABILITY OF INVENTIONS AND GRANT OF PATENTS

          * * * * * * *

                CHAPTER 10--PATENTABILITY OF INVENTIONS

          * * * * * * *

Sec. 100. Definitions

  When used in this title unless the context otherwise 
indicates--
  (a) * * *
          * * * * * * *
  (e) The term ``third-party requester'' means a person 
requesting reexamination under section 302 of this title who is 
not the patent owner.
          * * * * * * *

Sec. 102. Conditions for patentability; novelty and loss of right to 
                    patent

  A person shall be entitled to a patent unless--
  (a) * * *
          * * * * * * *
  [(e) the invention was described in a patent granted on an 
application for patent by another filed in the United States 
before the invention thereof by the applicant for patent, or on 
an international application by another who has fulfilled the 
requirements of paragraphs (1), (2), and (4) of section 371(c) 
of this title before the invention thereof by the applicant for 
patent, or]
  (e) the invention was described in--
          (1) an application for patent, published pursuant to 
        section 122(b) of this title, 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) of this 
        title shall have the effect under this subsection of a 
        national application published under section 122(b) of 
        this title 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, or
          * * * * * * *

                   CHAPTER 11--APPLICATION FOR PATENT

Sec.
111.  Application.
     * * * * * * *
122.  Confidential status of applications; publication of patent 
          applications.

Sec. 111. Application

  (a) In General.--
          (1) Written application.--An application for patent 
        shall be made, or authorized to be made, by the 
        inventor, except as otherwise provided in this title, 
        in writing to the [Commissioner] Director.
          * * * * * * *
          (4) Failure to submit.--Upon failure to submit the 
        fee and oath within such prescribed period, the 
        application shall be regarded as abandoned, unless it 
        is shown to the satisfaction of the [Commissioner] 
        Director that the delay in submitting the fee and oath 
        was unavoidable or unintentional. The filing date of an 
        application shall be the date on which the 
        specification and any required drawing are received in 
        the Patent and Trademark Office.
  (b) Provisional Application.--
          (1) Authorization.--A provisional application for 
        patent shall be made or authorized to be made by the 
        inventor, except as otherwise provided in this title, 
        in writing to the [Commissioner] Director. Such 
        application shall include--
                  (A) a specification as prescribed by the 
                first paragraph of section 112 of this title; 
                and
                  (B) a drawing as prescribed by section 113 of 
                this title.
          * * * * * * *
          (3) Fee.--(A) The application must be accompanied by 
        the fee required by law.
          (B) The fee may be submitted after the specification 
        and any required drawing are submitted, within such 
        period and under such conditions, including the payment 
        of a surcharge, as may be prescribed by the 
        [Commissioner] Director.
          (C) Upon failure to submit the fee within such 
        prescribed period, the application shall be regarded as 
        abandoned, unless it is shown to the satisfaction of 
        the [Commissioner] Director that the delay in 
        submitting the fee was unavoidable or unintentional.
          * * * * * * *
          [(5) Abandonment.--The provisional application shall 
        be regarded as abandoned 12 months after the filing 
        date of such application and shall not be subject to 
        revival thereafter.]
          (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). 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 
        thereafter.
          (6) Other basis for provisional application.--Subject 
        to all the conditions in this subsection and section 
        119(e) of this title, and as prescribed by the 
        [Commissioner] Director, an application for patent 
        filed under subsection (a) may be treated as a 
        provisional application for patent.
          * * * * * * *

Sec. 113. Drawings

  The applicant shall furnish a drawing where necessary for the 
understanding of the subject matter sought to be patented. When 
the nature of such subject matter admits of illustration by a 
drawing and the applicant has not furnished such a drawing, the 
[Commissioner] Director may require its submission within a 
time period of not less than two months from the sending of a 
notice thereof. Drawings submitted after the filing date of the 
application may not be used (i) to overcome any insufficiency 
of the specification due to lack of an enabling disclosure or 
otherwise inadequate disclosure therein, or (ii) to supplement 
the original disclosure thereof for the purpose of 
interpretation of the scope of any claim.

Sec. 114. Models, specimens

  The [Commissioner] Director may require the applicant to 
furnish a model of convenient size to exhibit advantageously 
the several parts of his invention.
  When the invention relates to a composition of matter, the 
[Commissioner] Director may require the applicant to furnish 
specimens or ingredients for the purpose of inspection or 
experiment.
          * * * * * * *

Sec. 116. Inventors

          * * * * * * *
  If a joint inventor refuses to join in an application for 
patent or cannot be found or reached after diligent effort, the 
application may be made by the other inventor on behalf of 
himself and the omitted inventor. The [Commissioner] Director, 
on proof of the pertinent facts and after such notice to the 
omitted inventor as he prescribes, may grant a patent to the 
inventor making the application, subject to the same rights 
which the omitted inventor would have had if he had been 
joined. The omitted inventor may subsequently join in the 
application.
  Whenever through error a person is named in an application 
for patent as the inventor, or through error an inventor is not 
named in an application, and such error arose without any 
deceptive intention on his part, the [Commissioner] Director 
may permit the application to be amended accordingly, under 
such terms as he prescribes.
          * * * * * * *

Sec. 118. Filing by other than inventor

  Whenever an inventor refuses to execute an application for 
patent, or cannot be found or reached after diligent effort, a 
person to whom the inventor has assigned or agreed in writing 
to assign the invention or who otherwise shows sufficient 
proprietary interest in the matter justifying such action, may 
make application for patent on behalf of and as agent for the 
inventor on proof of the pertinent facts and a showing that 
such action is necessary to preserve the rights of the parties 
or to prevent irreparable damage; and the [Commissioner] 
Director may grant a patent to such inventor upon such notice 
to him as the [Commissioner] Director deems sufficient, and on 
compliance with such regulations as he prescribes.

Sec. 119. Benefit of earlier filing date; right of priority

  (a) An application for patent for an invention filed in this 
country by any person who has, or whose legal representatives 
or assigns have, previously regularly filed an application for 
a patent for the same invention in a foreign country which 
affords similar privileges in the case of applications filed in 
the United States or to citizens of the United States, or in a 
WTO member country, shall have the same effect as the same 
application would have if filed in this country on the date on 
which the application for patent for the same invention was 
first filed in such foreign country, if the application in this 
country is filed within twelve months from the earliest date on 
which such foreign application was filed; but no patent shall 
be granted on any application for patent for an invention which 
had been patented or described in a printed publication in any 
country more than one year before the date of the actual filing 
of the application in this country, or which had been in public 
use or on sale in this country more than one year prior to such 
filing.
  [(b) No application for patent shall be entitled to this 
right of priority unless a claim therefor and a certified copy 
of the original foreign application, specification and drawings 
upon which it is based are filed in the Patent and Trademark 
Office before the patent is granted, or at such time during the 
pendency of the application as required by the Commissioner not 
earlier than six months after the filing of the application in 
this country. Such certification shall be made by the patent 
office of the foreign country in which filed and show the date 
of the application and of the filing of the specification and 
other papers. The Commissioner may require a translation of the 
papers filed if not in the English language and such other 
information as he deems necessary.]
  (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, at such time during the pendency of the 
application as is required by the Director, that identifies the 
foreign application by specifying its application number, the 
country in or for which the application was filed, and the date 
of its filing.
  (2) The Director may consider the failure of the applicant to 
file a timely claim for priority as a waiver of any such claim, 
and may require the payment of a surcharge as a condition of 
accepting an untimely claim during the pendency of the 
application.
  (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 intellectual property 
authority in the foreign country in which the foreign 
application was filed and show the date of the application and 
of the filing of the specification and other papers.
          * * * * * * *
  (e)(1) * * *
          * * * * * * *
  (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 business day.
  (f) Applications for Plant Breeder's Rights.--Applications 
for plant breeder's rights filed in a WTO member country (or in 
a UPOV Contracting Party) shall have the same 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) Definitions.--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. 120. Benefit of earlier filing date in the United States

  An application for patent for an invention disclosed in the 
manner provided by the first paragraph of section 112 of this 
title in an application previously filed in the United States, 
or as provided by section 363 of this title, which is filed by 
an inventor or inventors named in the previously filed 
application shall have the same effect, as to such invention, 
as though filed on the date of the prior application, if filed 
before the patenting or abandonment of or termination of 
proceedings on the first application or on an application 
similarly entitled to the benefit of the filing date of the 
first application and if it contains or is amended to contain a 
specific reference to the earlier filed application. 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 is required by the Commissioner. 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 unavoidably late submissions 
of amendments under this section.

Sec. 121. Divisional applications

  (a) If two or more independent and distinct inventions are 
claimed in one application, the [Commissioner] Director may 
require the application to be restricted to one of the 
inventions. If the other invention is made the subject of a 
divisional application which complies with the requirements of 
section 120 of this title it shall be entitled to the benefit 
of the filing date of the original application. A patent 
issuing on an application with respect to which a requirement 
for restriction under this section has been made, or on an 
application filed as a result of such a requirement, shall not 
be used as a reference either in the Patent and Trademark 
Office or in the courts against a divisional application or 
against the original application or any patent issued on either 
of them, if the divisional application is filed before the 
issuance of the patent on the other application. If a 
divisional application is directed solely to subject matter 
described and claimed in the original application as filed, the 
[Commissioner] Director may dispense with signing and execution 
by the inventor. The validity of a patent shall not be 
questioned for failure of the [Commissioner] Director to 
require the application to be restricted to one invention.
  (b) In a case in which restriction is required on the ground 
that two or more independent and distinct inventions are 
claimed in an application, the applicant shall be entitled to 
submit an examination fee and request examination for each 
independent and distinct invention in excess of one. The 
examination fee shall be equal to the filing fee, including 
excess claims fees, that would have applied had the claims 
corresponding to the asserted independent and distinct 
inventions been presented in a separate application for patent. 
For each of the independent and distinct inventions in excess 
of one for which the applicant pays an examination fee within 
two months after the requirement for restriction, the Director 
shall cause an examination to be made and a notification of 
rejection or written notice of allowance provided to the 
applicant within the time period specified in section 
154(b)(1)(B)(i) of this title for the original application. 
Failure to meet this or any other time limit set forth in 
section 154(b)(1)(B) of this title shall be treated as an 
unusual administrative delay under section 154(b)(1)(A)(iv) of 
this title.
  (c) An applicant who requests reconsideration of a 
requirement for restriction under this section and submits 
examination fees pursuant to such requirement shall, if the 
requirement is determined to be improper, be entitled to a 
refund of any examination fees determined to have been paid 
pursuant to the requirement.

[Sec. 122. Confidential status of applications

  [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 any Act of Congress or 
in such special circumstances as may be determined by the 
Commissioner.]

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 
applications for patents shall be 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 patent, except applications for design 
        patents filed under chapter 16 of this title and 
        provisional applications filed under section 111(b) of 
        this title, 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 that is no longer 
        pending shall not be published.
          (B) An application that is subject to a secrecy order 
        pursuant to section 181 of this title shall not be 
        published.
          (C)(i) Upon the request of the applicant at the time 
        of filing, the application shall not be published in 
        accordance with paragraph (1) until 3 months after the 
        Director makes a notification to the applicant under 
        section 132 of this title.
          (ii) Applications filed pursuant to section 363 of 
        this title, applications asserting priority under 
        section 119 or 365(a) of this title, and applications 
        asserting the benefit of an earlier application under 
        section 120, 121, or 365(c) of this title shall not be 
        eligible for a request pursuant to this subparagraph.
          (iii) In a request under this subparagraph, the 
        applicant shall certify that the invention disclosed in 
        the application was not and will not be the subject of 
        an application filed in a foreign country.
          (iv) The Director may establish appropriate 
        procedures and fees for making a request under this 
        subparagraph.
          (D)(i) In a case in which an applicant, after making 
        a request under subparagraph (C)(i), determines to file 
        an application in a foreign country, the applicant 
        shall notify the Director promptly. The application 
        shall then be published in accordance with the 
        provisions of paragraph (1).
          (ii) The Director may establish appropriate fees to 
        cover the costs of processing notifications under 
        clause (i), including the costs of any special handling 
        of applications resulting from the initial request 
        under subparagraph (C)(i).
  (c) Pre-Issuance Opposition.--The provisions of this section 
shall not operate to create any new opportunity for pre-
issuance opposition. The Director may establish appropriate 
procedures to ensure that this section does not create any new 
opportunity for pre-issuance opposition.

                 CHAPTER 12--EXAMINATION OF APPLICATION

Sec. 131. Examination of application

  The [Commissioner] Director shall cause an examination to be 
made of the application and the alleged new invention; and if 
on such examination it appears that the applicant is entitled 
to a patent under the law, the [Commissioner] Director shall 
issue a patent therefor.

Sec. 132. Notice of rejection; reexamination

  Whenever, on examination, any claim for a patent is rejected, 
or any objection or requirement made, the [Commissioner] 
Director shall notify the applicant thereof, stating the 
reasons for such rejection, or objection or requirement, 
together with such information and references as may be useful 
in judging of the propriety of continuing the prosecution of 
his application; and if after receiving such notice, the 
applicant persists in his claim for a patent, with or without 
amendment, the application shall be reexamined. No amendment 
shall introduce new matter into the disclosure of the 
invention.

Sec. 133. Time for prosecuting application

  Upon failure of the applicant to prosecute the application 
within six months after any action therein, of which notice has 
been given or mailed to the applicant, or within such shorter 
time, not less than thirty days, as fixed by the [Commissioner] 
Director in such action, the application shall be regarded as 
abandoned by the parties thereto, unless it be shown to the 
satisfaction of the [Commissioner] Director that such delay was 
unavoidable.

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

  [An applicant for a patent, any of whose claims has been 
twice rejected, may appeal from the decision of the primary 
examiner to the Board of Patent Appeals and Interferences, 
having once paid the fee for such appeal.]

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 primary examiner to the Board of Patent Appeals 
and Interferences, having once paid the fee for such appeal.
  (b) Patent Owner.--A patent owner in a reexamination 
proceeding may appeal from the final rejection of any claim by 
the primary examiner to the Board of Patent Appeals and 
Interferences, having once paid the fee for such appeal.
  (c) Third-Party.--A third-party requester may appeal to the 
Board of Patent Appeals and Interferences from the final 
decision of the primary examiner favorable to the patentability 
of any original or proposed amended or new claim of a patent, 
having once paid the fee for such appeal.

Sec. 135. Interferences

  (a) Whenever an application is made for a patent which, in 
the opinion of the [Commissioner] Director, would interfere 
with any pending application, or with any unexpired patent, an 
interference may be declared and the [Commissioner] Director 
shall give notice of such declaration to the applicants, or 
applicant and patentee, as the case may be. The Board of Patent 
Appeals and Interferences shall determine questions of priority 
of the inventions and may determine questions of patentability. 
Any final decision, if adverse to the claim of an applicant, 
shall constitute the final refusal by the Patent and Trademark 
Office of the claims involved, and the [Commissioner] Director 
may issue a patent to the applicant who is adjudged the prior 
inventor. A final judgment adverse to a patentee from which no 
appeal or other review has been or can be taken or had shall 
constitute cancellation of the claims involved in the patent, 
and notice of such cancellation shall be endorsed on copies of 
the patent distributed after such cancellation by the Patent 
and Trademark Office.
  (b)(1) A claim which is the same as, or for the same or 
substantially the same subject matter as, a claim of an issued 
patent may not be made in any application unless such a claim 
is made prior to one year [from the date on which the patent 
was granted] after the date on which the patent is granted and 
the applicant makes a prima facie showing of prior invention.
  (2) A claim which is the same as, or for the same or 
substantially the same subject matter as, a claim of a 
published application may be made in an application filed after 
the published application is published only if the claim is 
made prior to one year after the date on which the published 
application is published and the applicant of the later filed 
application makes a prime facie showing of prior invention.
  (c) Any agreement or understanding between parties to an 
interference, including any collateral agreements referred to 
therein, made in connection with or in contemplation of the 
termination of the interference, shall be in writing and a true 
copy thereof filed in the Patent and Trademark Office before 
the termination of the interference as between the said parties 
to the agreement or understanding. If any party filing the same 
so requests, the copy shall be kept separate from the file of 
the interference, and made available only to Government 
agencies on written request, or to any person on a showing of 
good cause. Failure to file the copy of such agreement or 
understanding shall render permanently unenforceable such 
agreement or understanding and any patent of such parties 
involved in the interference or any patent subsequently issued 
on any application of such parties so involved. The 
[Commissioner] Director may, however, on a showing of good 
cause for failure to file within the time prescribed, permit 
the filing of the agreement or understanding during the six-
month period subsequent to the termination of the interference 
as between the parties to the agreement or understanding.
  The [Commissioner] Director shall give notice to the parties 
or their attorneys of record, a reasonable time prior to said 
termination, of the filing requirement of this section. If the 
[Commissioner] Director gives such notice at a later time, 
irrespective of the right to file such agreement or 
understanding within the six-month period on a showing of good 
cause, the parties may file such agreement or understanding 
within sixty days of the receipt of such notice.
  Any discretionary action of the [Commissioner] Director under 
this subsection shall be reviewable under section 10 of the 
Administrative Procedure Act.
  (d) Parties to a patent interference, within such time as may 
be specified by the [Commissioner] Director by regulation, may 
determine such contest or any aspect thereof by arbitration. 
Such arbitration shall be governed by the provisions of title 9 
to the extent such title is not inconsistent with this section. 
The parties shall give notice of any arbitration award to the 
[Commissioner] Director, and such award shall, as between the 
parties to the arbitration, be dispositive of the issues to 
which it relates. The arbitration award shall be unenforceable 
until such notice is given. Nothing in this subsection shall 
preclude the [Commissioner] Director from determining 
patentability of the invention involved in the interference.

      CHAPTER 13--REVIEW OF PATENT AND TRADEMARK OFFICE DECISIONS

Sec. 141. Appeal to Court of Appeals for the Federal Circuit

  [An applicant dissatisfied with the decision in an appeal to 
the Board of Patent Appeals and Interferences under section 134 
of this title may appeal the decision to the United States 
Court of Appeals for the Federal Circuit.] An applicant, a 
patent owner, or a third-party requester, dissatisfied with the 
final decision in an appeal to the Board of Patent Appeals and 
Interferences under section 134 of this title, may appeal the 
decision to the United States Court of Appeals for the Federal 
Circuit. By filing such an appeal the applicant waives his or 
her right to proceed under section 145 of this title. A party 
to an interference dissatisfied with the decision of the Board 
of Patent Appeals and Interferences on the interference may 
appeal the decision to the United States Court of Appeals for 
the Federal Circuit, but such appeal shall be dismissed if any 
adverse party to such interference, within twenty days after 
the appellant has filed notice of appeal in accordance with 
section 142 of this title, files notice with the [Commissioner] 
Director that the party elects to have all further proceedings 
conducted as provided in section 146 of this title. If the 
appellant does not, within thirty days after the filing of such 
notice by the adverse party, file a civil action under section 
146, the decision appealed from shall govern the further 
proceedings in the case.

Sec. 142. Notice of appeal

  When an appeal is taken to the United States Court of Appeals 
for the Federal Circuit, the appellant shall file in the Patent 
and Trademark Office a written notice of appeal directed to the 
[Commissioner] Director, within such time after the date of the 
decision from which the appeal is taken as the [Commissioner] 
Director prescribes, but in no case less than 60 days after 
that date.

Sec. 143. Proceedings on appeal

  With respect to an appeal described in section 142 of this 
title, the [Commissioner] Director shall transmit to the United 
States Court of Appeals for the Federal Circuit a certified 
list of the documents comprising the record in the Patent and 
Trademark Office. The court may request that the [Commissioner] 
Director forward the original or certified copies of such 
documents during pendency of the appeal. [In an ex parte case, 
the Commissioner 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.] In ex parte 
and reexamination cases, the Director shall submit to the court 
in writing the grounds for the decision of the United States 
Patent and Trademark Office, addressing all the issues involved 
in the appeal. The court shall, before hearing an appeal, give 
notice of the time and place of the hearing to the 
[Commissioner] Director and the parties in the appeal.

Sec. 144. Decision on appeal

  The United States Court of Appeals for the Federal Circuit 
shall review the decision from which an appeal is taken on the 
record before the Patent and Trademark Office. Upon its 
determination the court shall issue to the [Commissioner] 
Director its mandate and opinion, which shall be entered of 
record in the Patent and Trademark Office and shall govern the 
further proceedings in the case.

Sec. 145. Civil action to obtain patent

  An applicant dissatisfied with the decision of the Board of 
Patent Appeals and Interferences in an appeal under section 
134(a) of this title may, unless appeal has been taken to the 
United States Court of Appeals for the Federal Circuit, have 
remedy by civil action against the [Commissioner] Director in 
the United States District Court for the District of Columbia 
if commenced within such time after such decision, not less 
than sixty days, as the [Commissioner] Director appoints. The 
court may adjudge that such applicant is entitled to receive a 
patent for his invention, as specified in any of his claims 
involved in the decision of the Board of Patent Appeals and 
Interferences, as the facts in the case may appear and such 
adjudication shall authorize the [Commissioner] Director to 
issue such patent on compliance with the requirements of law. 
All the expenses of the proceedings shall be paid by the 
applicant.

Sec. 146. Civil action in case of interference

  Any party to an interference dissatisfied with the decision 
of the Board of Patent Appeals and Interferences on the 
interference, may have remedy by civil action, if commenced 
within such time after such decision, not less than sixty days, 
as the [Commissioner] Director appoints or as provided in 
section 141 of this title, unless he has appealed to the United 
States Court of Appeals for the Federal Circuit, and such 
appeal is pending or has been decided. In such suits the record 
in the Patent and Trademark Office shall be admitted on motion 
of either party upon the terms and conditions as to costs, 
expenses, and the further cross-examination of the witnesses as 
the court imposes, without prejudice to the right of the 
parties to take further testimony. The testimony and exhibits 
of the record in the Patent and Trademark Office when admitted 
shall have the same effect as if originally taken and produced 
in the suit.
  Such suit may be instituted against the party in interest as 
shown by the records of the Patent and Trademark Office at the 
time of the decision complained of, but any party in interest 
may become a party to the action. If there be adverse parties 
residing in a plurality of districts not embraced within the 
same state, or an adverse party residing in a foreign country, 
the United States District Court for the District of Columbia 
shall have jurisdiction and may issue summons against the 
adverse parties directed to the marshal of any district in 
which any adverse party resides. Summons against adverse 
parties residing in foreign countries may be served by 
publication or otherwise as the court directs. The 
[Commissioner] Director shall not be a necessary party but he 
shall be notified of the filing of the suit by the clerk of the 
court in which it is filed and shall have the right to 
intervene. Judgment of the court in favor of the right of an 
applicant to a patent shall authorize the [Commissioner] 
Director to issue such patent on the filing in the Patent and 
Trademark Office of a certified copy of the judgment and on 
compliance with the requirements of law.

                      CHAPTER 14--ISSUE OF PATENT

Sec.
151.  Issue of patent.
     * * * * * * *
154.  Contents and term of patent; provisional rights.
     * * * * * * *

Sec. 151. Issue of patent

          * * * * * * *
  If any payment required by this section is not timely made, 
but is submitted with the fee for delayed payment and the delay 
in payment is shown to have been unavoidable, it may be 
accepted by the [Commissioner] Director as though no 
abandonment or lapse had ever occurred.
          * * * * * * *

Sec. 153. How issued

  Patents shall be issued in the name of the United States of 
America, under the seal of the Patent and Trademark Office, and 
shall be signed by the [Commissioner] Director or have his 
signature placed thereon and attested by an officer of the 
Patent and Trademark Office designated by the [Commissioner] 
Director, and shall be recorded in the Patent and Trademark 
Office.

Sec. 154. Contents and term of patent; provisional rights

  (a) * * *
  [(b) Term Extension.--
          [(1) Interference delay or secrecy orders.--If the 
        issue of an original patent is delayed due to a 
        proceeding under section 135(a) of this title, or 
        because the application for patent is placed under an 
        order pursuant to section 181 of this title, the term 
        of the patent shall be extended for the period of 
        delay, but in no case more than 5 years.
          [(2) Extension for appellate review.--If the issue of 
        a patent is delayed due to appellate review by the 
        Board of Patent Appeals and Interferences or by a 
        Federal court and the patent is issued pursuant to a 
        decision in the review reversing an adverse 
        determination of patentability, the term of the patent 
        shall be extended for a period of time but in no case 
        more than 5 years. A patent shall not be eligible for 
        extension under this paragraph if it is subject to a 
        terminal disclaimer due to the issue of another patent 
        claiming subject matter that is not patentably distinct 
        from that under appellate review.
          [(3) Limitations.--The period of extension referred 
        to in paragraph (2)--
                  [(A) shall include any period beginning on 
                the date on which an appeal is filed under 
                section 134 or 141 of this title, or on which 
                an action is commenced under section 145 of 
                this title, and ending on the date of a final 
                decision in favor of the applicant;
                  [(B) shall be reduced by any time 
                attributable to appellate review before the 
                expiration of 3 years from the filing date of 
                the application for patent; and
                  [(C) shall be reduced for the period of time 
                during which the applicant for patent did not 
                act with due diligence, as determined by the 
                Commissioner.
          [(4) Length of extension.--The total duration of all 
        extensions of a patent under this subsection shall not 
        exceed 5 years.]
  (b) Term Extension.--
          (1) Basis for patent term extension.--
                  (A) Delay.--Subject to the limitations set 
                forth in paragraph (2), if the issue of an 
                original patent is delayed due to--
                          (i) a proceeding under section 135(a) 
                        of this title, including any appeal 
                        under section 141, or any civil action 
                        under section 146, of this title,
                          (ii) the imposition of an order 
                        pursuant to section 181 of this title,
                          (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 pursuant to a 
                        decision in the review reversing an 
                        adverse determination of patentability, 
                        or
                          (iv) an unusual administrative delay 
                        by the Patent and Trademark Office in 
                        issuing the patent,
                the term of the patent shall be extended for 
                the period of delay.
                  (B) Administrative delay.--For purposes of 
                subparagraph (A)(iv), an unusual administrative 
                delay by the Patent and Trademark office is the 
                failure to--
                          (i) make a notification of the 
                        rejection of any claim for a patent or 
                        any objection or argument under section 
                        132 of this title or give or mail a 
                        written notice of allowance under 
                        section 151 of this title not later 
                        than 14 months after the date on which 
                        the application was filed;
                          (ii) respond to a reply under section 
                        132 of this title or to an appeal taken 
                        under section 134 of this title not 
                        later than 4 months after the date on 
                        which the reply was filed or the appeal 
                        was taken;
                          (iii) act on an application not later 
                        than 4 months after the date of a 
                        decision by the Board of Patent Appeals 
                        and Interferences under section 134 or 
                        135 of this title or a decision by a 
                        Federal court under section 141, 145, 
                        or 146 of this title in a case in which 
                        allowable claims remain in an 
                        application;
                          (iv) issue a patent not later than 4 
                        months after the date on which the 
                        issue fee was paid under section 151 of 
                        this title and all outstanding 
                        requirements were satisfied; or
                          (v) issue a patent within 3 years 
                        after the filing date of the 
                        application in the United States, if 
                        the applicant--
                                  (I) has not obtained further 
                                limited examination of the 
                                application under section 209 
                                of the Examining Procedure 
                                Improvements Act;
                                  (II) has responded to all 
                                rejections, objections, 
                                arguments, or other requests of 
                                the Patent and Trademark Office 
                                within 3 months after the date 
                                on which they are made;
                                  (III) has not benefitted from 
                                an extension of patent term 
                                under clause (i), (ii) or (iii) 
                                of paragraph (1)(A);
                                  (IV) has not sought or 
                                obtained appellate review by 
                                the Board of Patent Appeals and 
                                Interferences or by a Federal 
                                Court other than in a case in 
                                which the patent was issued 
                                pursuant to a decision in the 
                                review reversing an adverse 
                                determination of patentability; 
                                and
                                  (V) has not requested any 
                                delay in the processing of the 
                                application by the Patent and 
                                Trademark Office.
          (2) Limitations.--(A) The total duration of any 
        extensions granted pursuant to either clause (iii) or 
        (iv) of paragraph (1)(A) or both such clauses shall not 
        exceed 10 years. To the extent that periods of delay 
        attributable to grounds specified in paragraph (1) 
        overlap, the period of any extension granted under this 
        subsection shall not exceed the actual number of days 
        the issuance of the patent was delayed.
          (B) The period of extension of the term of a patent 
        under this subsection 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. 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 in order to ensure that 
        applicants are appropriately compensated for any delays 
        by the Patent and Trademark Office in excess of the 
        time periods specified in paragraph (1)(B).
          (C) No patent the term of which has been disclaimed 
        beyond a specified date may be extended under this 
        section beyond the expiration date specified in the 
        disclaimer.
          (3) Procedures.--The Director shall prescribe 
        regulations establishing procedures for the 
        notification of patent term extensions under this 
        subsection and procedures for contesting patent term 
        extensions under this 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 pursuant to section 122(b) 
        of this title, or in the case of an international 
        application filed under the treaty defined in section 
        351(a) of this title 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, where 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, 
                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.--The 
        right under paragraph (1) to obtain a reasonable 
        royalty based upon the publication under the treaty 
        defined in section 351(a) of this title of an 
        international application designating the United States 
        shall commence from the date that the Patent and 
        Trademark Office receives a copy of the publication 
        under such treaty of the international application, or, 
        if the publication under the treaty of the 
        international application is in a language other than 
        English, from the date that the Patent and Trademark 
        Office receives a translation of the international 
        application in the English language. The Director may 
        require the applicant to provide a copy of the 
        international publication of the international 
        application and a translation thereof.

Sec. 155. Patent term extension

  Notwithstanding the provisions of section 154, the term of a 
patent which encompasses within its scope a composition of 
matter or a process for using such composition shall be 
extended if such composition or process has been subjected to a 
regulatory review by the Federal Food and Drug Administration 
pursuant to the Federal Food, Drug, and Cosmetic Act leading to 
the publication of regulation permitting the interstate 
distribution and sale of such composition or process and for 
which there has thereafter been a stay of regulation of 
approval imposed pursuant to section 409 of the Federal Food, 
Drug, and Cosmetic Act which stay was in effect on January 1, 
1981, by a length of time to be measured from the date such 
stay of regulation of approval was imposed until such 
proceedings are finally resolved and commercial marketing 
permitted. The patentee, his heirs, successors or assigns shall 
notify the [Commissioner of Patents and Trademarks] Director 
within ninety days of the date of enactment of this section or 
the date the stay of regulation of approval has been removed, 
whichever is later, of the number of the patent to be extended 
and the date the stay was imposed and the date commercial 
marketing was permitted. On receipt of such notice, the 
[Commissioner] Director shall promptly issue to the owner of 
record of the patent a certificate of extension, under seal, 
stating the fact and length of the extension and identifying 
the composition of matter or process for using such composition 
to which such extension is applicable. Such certificate shall 
be recorded in the official file of each patent extended and 
such certificate shall be considered as part of the original 
patent, and an appropriate notice shall be published in the 
Official Gazette of the Patent and Trademark Office.

Sec. 155A. Patent term restoration

  (a) * * *
          * * * * * * *
  (c) The patentee of any patent described in subsection (a) of 
this section shall, within ninety days after the date of 
enactment of this section, notify the [Commissioner of Patents 
and Trademarks] Director of the number of any patent so 
extended. On receipt of such notice, the [Commissioner] 
Director shall confirm such extension by placing a notice 
thereof in the official file of such patent and publishing an 
appropriate notice of such extension in the Official Gazette of 
the Patent and Trademark Office.

Sec. 156. Extension of patent term

  (a) * * *
          * * * * * * *
  (d)(1) To obtain an extension of the term of a patent under 
this section, the owner of record of the patent or its agent 
shall submit an application to the [Commissioner] Director. 
Except as provided in paragraph (5), such an application may 
only be submitted within the sixty-day period beginning on the 
date the product received permission under the provision of law 
under which the applicable regulatory review period occurred 
for commercial marketing or use. The application shall 
contain--
          (A) * * *
          * * * * * * *
          (C) information to enable the [Commissioner] Director 
        to determine under subsections (a) and (b) the 
        eligibility of a patent for extension and the rights 
        that will be derived from the extension and information 
        to enable the [Commissioner] Director and the Secretary 
        of Health and Human Services or the Secretary of 
        Agriculture to determine the period of the extension 
        under subsection (g);
          * * * * * * *
          (E) such patent or other information as the 
        [Commissioner] Director may require.
  (2)(A) Within 60 days of the submittal of an application for 
extension of the term of a patent under paragraph (1), the 
[Commissioner] Director shall notify--
          (i) * * *
          * * * * * * *
of the extension application and shall submit to the Secretary 
who is so notified a copy of the application. Not later than 30 
days after the receipt of an application from the 
[Commissioner] Director, the Secretary receiving the 
application shall review the dates contained in the application 
pursuant to paragraph (1)(C) and determine the applicable 
regulatory review period, shall notify the [Commissioner] 
Director of the determination, and shall publish in the Federal 
Register a notice of such determination.
  (B)(i) If a petition is submitted to the Secretary making the 
determination under subparagraph (A), not later than 180 days 
after the publication of the determination under subparagraph 
(A), upon which it may reasonably be determined that the 
applicant did not act with due diligence during the applicable 
regulatory review period, the Secretary making the 
determination shall, in accordance with regulations promulgated 
by such Secretary, determine if the applicant acted with due 
diligence during the applicable regulatory review period. The 
Secretary making the determination shall make such 
determination not later than 90 days after the receipt of such 
a petition. For a drug product, device, or additive subject to 
the Federal Food, Drug, and Cosmetic Act or the Public Health 
Service Act, the Secretary may not delegate the authority to 
make the determination prescribed by this clause to an office 
below the Office of the [Commissioner] Director of Food and 
Drugs. For a product subject to the Virus-Serum-Toxin Act, the 
Secretary of Agriculture may not delegate the authority to make 
the determination prescribed by this clause to an office below 
the office of the Assistant Secretary for Marketing and 
Inspection Services.
  (ii) The Secretary making a determination under clause (i) 
shall notify the [Commissioner] Director of the determination 
and shall publish in the Federal Register a notice of such 
determination together with the factual and legal basis for 
such determination. Any interested person may request, within 
the 60-day period beginning on the publication of a 
determination, the Secretary making the determination to hold 
an informal hearing on the determination. If such a request is 
made within such period, such Secretary shall hold such hearing 
not later than 30 days after the date of the request, or at the 
request of the person making the request, not later than 60 
days after such date. The Secretary who is holding the hearing 
shall provide notice of the hearing to the owner of the patent 
involved and to any interested person and provide the owner and 
any interested person an opportunity to participate in the 
hearing. Within 30 days after the completion of the hearing, 
such Secretary shall affirm or revise the determination which 
was the subject of the hearing and shall notify the 
[Commissioner] Director of any revision of the determination 
and shall publish any such revision in the Federal Register.
          * * * * * * *
  (4) An application for the extension of the term of a patent 
is subject to the disclosure requirements prescribed by the 
[Commissioner] Director.
  (5)(A) If the owner of record of the patent or its agent 
reasonably expects that the applicable regulatory review period 
described in paragraph (1)(B)(ii), (2)(B)(ii), (3)(B)(ii), 
(4)(B)(ii), or (5)(B)(ii) of subsection (g) that began for a 
product that is the subject of such patent may extend beyond 
the expiration of the patent term in effect, the owner or its 
agent may submit an application to the [Commissioner] Director 
for an interim extension during the period beginning 6 months, 
and ending 15 days, before such term is due to expire. The 
application shall contain--
          (i) * * *
          * * * * * * *
          (iii) information to enable the [Commissioner] 
        Director to determine under subsection (a)(1), (2), and 
        (3) the eligibility of a patent for extension;
          * * * * * * *
          (v) such patent or other information as the 
        [Commissioner] Director may require.
  (B) If the [Commissioner] Director determines that, except 
for permission to market or use the product commercially, the 
patent would be eligible for an extension of the patent term 
under this section, the [Commissioner] Director shall publish 
in the Federal Register a notice of such determination, 
including the identity of the product under regulatory review, 
and shall issue to the applicant a certificate of interim 
extension for a period of not more than 1 year.
          * * * * * * *
  (E) Any interim extension granted under this paragraph shall 
terminate at the end of the 60-day period beginning on the date 
on which the product involved receives permission for 
commercial marketing or use, except that, if within that 60-day 
period the applicant notifies the [Commissioner] Director of 
such permission and submits any additional information under 
paragraph (1) of this subsection not previously contained in 
the application for interim extension, the patent shall be 
further extended, in accordance with the provisions of this 
section--
          (i) * * *
          * * * * * * *
  (F) The rights derived from any patent the term of which is 
extended under this paragraph shall, during the period of 
interim extension--
          (i) * * *
          * * * * * * *
          (iii) in the case of a patent which claims a method 
        of manufacturing a product, be limited to the method of 
        manufacturing as used to make the product then under 
        regulatory review.
  (e)(1) A determination that a patent is eligible for 
extension may be made by the [Commissioner] Director solely on 
the basis of the representations contained in the application 
for the extension. If the [Commissioner] Director determines 
that a patent is eligible for extension under subsection (a) 
and that the requirements of paragraphs (1) through (4) of 
subsection (d) have been complied with, the [Commissioner] 
Director shall issue to the applicant for the extension of the 
term of the patent a certificate of extension, under seal, for 
the period prescribed by subsection (c). Such certificate shall 
be recorded in the official file of the patent and shall be 
considered as part of the original patent.
  (2) If the term of a patent for which an application has been 
submitted under subsection (d)(1) would expire before a 
certificate of extension is issued or denied under paragraph 
(1) respecting the application, the [Commissioner] Director 
shall extend, until such determination is made, the term of the 
patent for periods of up to one year if he determines that the 
patent is eligible for extension.
          * * * * * * *
  (h) The [Commissioner] Director may establish such fees as 
the [Commissioner] Director determines appropriate to cover the 
costs to the Office of receiving and acting upon applications 
under this section.

Sec. 157. Statutory invention registration

  (a) Notwithstanding any other provision of this title, the 
[Commissioner] Director is authorized to publish a statutory 
invention registration containing the specification and 
drawings of a regularly filed application for a patent without 
examination if the applicant--
          (1) meets the requirements of section 112 of this 
        title;
          (2) has complied with the requirements for printing, 
        as set forth in regulations of the [Commissioner] 
        Director;
          (3) waives the right to receive a patent on the 
        invention within such period as may be prescribed by 
        the [Commissioner] Director; and
          (4) pays application, publication, and other 
        processing fees established by the [Commissioner] 
        Director.
If an interference is declared with respect to such an 
application, a statutory invention registration may not be 
published unless the issue of priority of invention is finally 
determined in favor of the applicant.
          * * * * * * *
  (c) A statutory invention registration published pursuant to 
this section shall have all of the attributes specified for 
patents in this title except those specified in section 183 and 
sections 271 through 289 of this title. A statutory invention 
registration shall not have any of the attributes specified for 
patents in any other provision of law other than this title. A 
statutory invention registration published pursuant to this 
section shall give appropriate notice to the public, pursuant 
to regulations which the [Commissioner] Director shall issue, 
of the preceding provisions of this subsection. The invention 
with respect to which a statutory invention certificate is 
published is not a patented invention for purposes of section 
292 of this title.
          * * * * * * *

                       CHAPTER 15--PLANT PATENTS

          * * * * * * *

Sec. 161. Patents for plants

  Whoever invents or discovers and asexually reproduces any 
distinct and new variety of plant, including cultivated sports, 
mutants, hybrids, and newly found seedlings, other than [a 
tuber propagated plant or] a plant found in an uncultivated 
state, may obtain a patent therefor, subject to the conditions 
and requirements of this title.
  The provisions of this title relating to patents for 
inventions shall apply to patents for plants, except as 
otherwise provided.
          * * * * * * *

Sec. 163. Grant

  [In the case of a plant patent the grant shall be of the 
right to exclude others from asexually reproducing the plant or 
selling or using the plant so reproduced.] In the case of a 
plant patent, the grant shall include the right to exclude 
others from asexually reproducing the plant, and from using, 
offering for sale, or selling the plant so reproduced, or any 
of its parts, throughout the United States, or from importing 
the plant so reproduced, or any parts thereof, into the United 
States.

Sec. 164. Assistance of Department of Agriculture

  The President may by Executive order direct the Secretary of 
Agriculture, in accordance with the requests of the 
[Commissioner] Director, for the purpose of carrying into 
effect the provisions of this title with respect to plants (1) 
to furnish available information of the Department of 
Agriculture, (2) to conduct through the appropriate bureau or 
division of the Department research upon special problems, or 
(3) to detail to the [Commissioner] Director officers and 
employees of the Department.
          * * * * * * *

 CHAPTER 17--SECRECY OF CERTAIN INVENTIONS AND FILING APPLICATIONS IN 
                            FOREIGN COUNTRY

          * * * * * * *

Sec. 181. Secrecy of certain inventions and withholding of patent

  Whenever publication or disclosure by the publication of an 
application or by the grant of a patent on an invention in 
which the Government has a property interest might, in the 
opinion of the head of the interested Government agency, be 
detrimental to the national security, the [Commissioner] 
Director upon being so notified shall order that the invention 
be kept secret and shall withhold the publication of the 
application or the grant of a patent therefor under the 
conditions set forth hereinafter.
  Whenever the publication or disclosure of an invention by the 
publication of an application or by the granting of a patent, 
in which the Government does not have a property interest, 
might, in the opinion of the [Commissioner] Director, be 
detrimental to the national security, he shall make the 
application for patent in which such invention is disclosed 
available for inspection to the Atomic Energy Commission, the 
Secretary of Defense, and the chief officer of any other 
department or agency of the Government designated by the 
President as a defense agency of the United States.
  Each individual to whom the application is disclosed shall 
sign a dated acknowledgment thereof, which acknowledgment shall 
be entered in the file of the application. If, in the opinion 
of the Atomic Energy Commission, the Secretary of a Defense 
Department, or the chief officer of another department or 
agency so designated, the publication or disclosure of the 
invention by the publication of the application or by the 
granting of a patent therefor would be detrimental to the 
national security, the Atomic Energy Commission, the Secretary 
of a Defense Department, or such other chief officer shall 
notify the [Commissioner] Director and the [Commissioner] 
Director shall order that the invention be kept secret and 
shall withhold the publication of the application or the grant 
of a patent for such period as the national interest requires, 
and notify the applicant thereof. Upon proper showing by the 
head of the department or agency who caused the secrecy order 
to be issued that the examination of the application might 
jeopardize the national interest, the [Commissioner] Director 
shall thereupon maintain the application in a sealed condition 
and notify the applicant thereof. The owner of an application 
which has been placed under a secrecy order shall have a right 
to appeal from the order to the Secretary of Commerce under 
rules prescribed by him.
  An invention shall not be ordered kept secret and the 
publication of an application or the grant of a patent withheld 
for a period of more than one year. The [Commissioner] Director 
shall renew the order at the end thereof, or at the end of any 
renewal period, for additional periods of one year upon 
notification by the head of the department or the chief officer 
of the agency who caused the order to be issued that an 
affirmative determination has been made that the national 
interest continues so to require. An order in effect, or 
issued, during a time when the United States is at war, shall 
remain in effect for the duration of hostilities and one year 
following cessation of hostilities. An order in effect, or 
issued, during a national emergency declared by the President 
shall remain in effect for the duration of the national 
emergency and six months thereafter. The [Commissioner] 
Director may rescind any order upon notification by the heads 
of the departments and the chief officers of the agencies who 
caused the order to be issued that the publication or 
disclosure of the invention is no longer deemed detrimental to 
the national security.

Sec. 182. Abandonment of invention for unauthorized disclosure

  The invention disclosed in an application for patent subject 
to an order made pursuant to section 181 of this title may be 
held abandoned upon its being established by the [Commissioner] 
Director that in violation of said order the invention has been 
published or disclosed or that an application for a patent 
therefor has been filed in a foreign country by the inventor, 
his successors, assigns, or legal representatives, or anyone in 
privity with him or them, without the consent of the 
[Commissioner] Director. The abandonment shall be held to have 
occurred as of the time of violation. The consent of the 
[Commissioner] Director shall not be given without the 
concurrence of the heads of the departments and the chief 
officers of the agencies who caused the order to be issued. A 
holding of abandonment shall constitute forfeiture by the 
applicant, his successors, assigns, or legal representatives, 
or anyone in privity with him or them, of all claims against 
the United States based upon such invention.
          * * * * * * *

           PART III--PATENTS AND PROTECTION OF PATENT RIGHTS

          * * * * * * *

            CHAPTER 25--AMENDMENT AND CORRECTION OF PATENTS

          * * * * * * *

Sec. 251. Reissue of defective patents

  Whenever any patent is, through error without any deceptive 
intention, deemed wholly or partly inoperative or invalid, by 
reason of a defective specification or drawing, or by reason of 
the patentee claiming more or less than he had a right to claim 
in the patent, the [Commissioner] Director shall, on the 
surrender of such patent and the payment of the fee required by 
law, reissue the patent for the invention disclosed in the 
original patent, and in accordance with a new and amended 
application, for the unexpired part of the term of the original 
patent. No new matter shall be introduced into the application 
for reissue.
  The [Commissioner] Director may issue several reissued 
patents for distinct and separate parts of the thing patented, 
upon demand of the applicant, and upon payment of the required 
fee for a reissue for each of such reissued patents.
          * * * * * * *

Sec. 252. Effect of reissue

  The surrender of the original patent shall take effect upon 
the issue of the reissued patent, and every reissued patent 
shall have the same effect and operation in law, on the trial 
of actions for causes thereafter arising, as if the same had 
been originally granted in such amended form, but in so far as 
the claims of the original and reissued patents are 
substantially identical, such surrender shall not affect any 
action then pending nor abate any cause of action then 
existing, and the reissued patent, to the extent that its 
claims are substantially identical with the original patent, 
shall constitute a continuation thereof and have effect 
continuously from the date of the original patent.
          * * * * * * *

Sec. 254. Certificate of correction of Patent and Trademark Office 
                    mistake

  Whenever a mistake in a patent, incurred through the fault of 
the Patent and Trademark Office, is clearly disclosed by the 
records of the Office, the [Commissioner] Director may issue a 
certificate of correction stating the fact and nature of such 
mistake, under seal, without charge, to be recorded in the 
records of patents. A printed copy thereof shall be attached to 
each printed copy of the patent, and such certificate shall be 
considered as part of the original patent. Every such patent, 
together with such certificate, shall have the same effect and 
operation in law on the trial of actions for causes thereafter 
arising as if the same had been originally issued in such 
corrected form. The [Commissioner] Director may issue a 
corrected patent without charge in lieu of and with like effect 
as a certificate of correction.

Sec. 255. Certificate of correction of applicant's mistake

  Whenever a mistake of a clerical or typographical nature, or 
of minor character, which was not the fault of the Patent and 
Trademark Office, appears in a patent and a showing has been 
made that such mistake occurred in good faith, the 
[Commissioner] Director may, upon payment of the required fee, 
issue a certificate of correction, if the correction does not 
involve such changes in the patent as would constitute new 
matter or would require re-examination. Such patent, together 
with the certificate, shall have the same effect and operation 
in law on the trial of actions for causes thereafter arising as 
if the same had been originally issued in such corrected form.

Sec. 256. Correction of named inventor

  Whenever through error a person is named in an issued patent 
as the inventor, or through error an inventor is not named in 
an issued patent and such error arose without any deceptive 
intention on his part, the [Commissioner] Director may, on 
application of all the parties and assignees, with proof of the 
facts and such other requirements as may be imposed, issued a 
certificate correcting such error.
  The error of omitting inventors or naming persons who are not 
inventors shall not invalidate the patent in which such error 
occurred if it can be corrected as provided in this section. 
The court before which such matter is called in question may 
order correction of the patent on notice and hearing of all 
parties concerned and the [Commissioner] Director shall issue a 
certificate accordingly.
          * * * * * * *

              CHAPTER 27--GOVERNMENT INTERESTS IN PATENTS

          * * * * * * *

Sec. 267. Time for taking action in Government applications

  Notwithstanding the provisions of sections 133 and 151 of 
this title, the [Commissioner] Director may extend the time for 
taking any action to three years, when an application has 
become the property of the United States and the head of the 
appropriate department or agency of the Government has 
certified to the [Commissioner] Director that the invention 
disclosed therein is important to the armament or defense of 
the United States.

                  CHAPTER 28--INFRINGEMENT OF PATENTS

Sec.
271.  Infringement of patent.
272.  Temporary presence in the United States.
273.  Prior domestic commercial or research use; defense to 
          infringement.
     * * * * * * *

Sec. 273. Prior domestic commercial or research use; defense to 
                    infringement

  (a) Definitions.--For purposes of this section--
          (1) the terms ``commercially used'', ``commercially 
        use'', and ``commercial use'' mean the use in the 
        United States in commerce or the use in the design, 
        testing, or production in the United States of a 
        product or service which is used in commerce, whether 
        or not the subject matter at issue is accessible to or 
        otherwise known to the public;
          (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) if 
        the use is limited to activity that occurred within the 
        laboratory or nonprofit entity or by persons in privity 
        with that laboratory or nonprofit entity before the 
        effective filing date of the application for patent at 
        issue, except that the use--
                  (A) may be asserted as a defense under this 
                section only by the laboratory or nonprofit 
                entity; and
                  (B) may not be asserted as a defense with 
                respect to any subsequent use by any entity 
                other than such laboratory, nonprofit entity, 
                or persons in privity;
          (3) the terms ``used in commerce'', and ``use in 
        commerce'' mean that there has been an actual sale or 
        other arm's-length commercial transfer of the subject 
        matter at issue or that there has been an actual sale 
        or other arm's-length commercial transfer of a product 
        or service resulting from the use of the subject matter 
        at issue; 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) A person shall not be 
liable as an infringer under section 271 of this title with 
respect to any subject matter that would otherwise infringe one 
or more claims in the patent being asserted against such 
person, if such person had, acting in good faith, commercially 
used the subject matter before the effective filing date of 
such patent.
  (2) The sale or other disposition of the subject matter of a 
patent by a person entitled to assert a defense under this 
section with respect to that subject matter 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.
  (c) Limitations and Qualifications of Defense.--The defense 
to infringement under this section is subject to the following:
          (1) 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.
          (2) 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 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.
          (3) Effective and serious preparation.--With respect 
        to subject matter that cannot be commercialized without 
        a significant investment of time, money, and effort, a 
        person shall be deemed to have commercially used the 
        subject matter if--
                  (A) before the effective filing date of the 
                patent, the person actually reduced the subject 
                matter to practice in the United States, 
                completed a significant portion of the total 
                investment necessary to commercially use the 
                subject matter, and made an arm's-length 
                commercial transaction in the United States in 
                connection with the preparation to use the 
                subject matter; and
                  (B) thereafter the person diligently 
                completed the remainder of the activities and 
                investments necessary to commercially use the 
                subject matter, and promptly began commercial 
                use of the subject matter, even if such 
                activities were conducted after the effective 
                filing date of the patent.
          (4) Burden of proof.--A person asserting the defense 
        under this section shall have the burden of 
        establishing the defense.
          (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 subsection 
        (b) with respect to actions taken after the date of 
        such abandonment.
          (6) Personal defense.--The defense under this section 
        may only be asserted 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 in connection with 
        the good faith assignment or transfer of the entire 
        enterprise or line of business to which the defense 
        relates.
          (7) One-year limitation.--A person may not assert a 
        defense under this section unless the subject matter on 
        which the defense is based had been commercially used 
        or actually reduced to practice more than one year 
        prior to the effective filing date of the patent by the 
        person asserting the defense or someone in privity with 
        that person.
  (d) 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's fees under section 285 of this title.
  (e) Invalidity.--A patent shall not be deemed to be invalid 
under section 102 or 103 of this title solely because a defense 
is established under this section.

   CHAPTER 29--REMEDIES FOR INFRINGEMENT OF PATENT, AND OTHER ACTIONS

          * * * * * * *

Sec. 282. Presumption of validity; defenses

          * * * * * * *
  In actions involving the validity or infringement of a patent 
the party asserting invalidity or noninfringement shall give 
notice in the pleadings or otherwise in writing to the adverse 
party at least thirty days before the trial, of the country, 
number, date, and name of the patentee of any patent, the 
title, date, and page numbers of any publication to be relied 
upon as anticipation of the patent in suit or, except in 
actions in the United States Court of Federal Claims, as 
showing the state of the art, and the name and address of any 
person who may be relied upon as the prior inventor or as 
having prior knowledge of or as having previously used or 
offered for sale the invention of the patent in suit. In the 
absence of such notice proof of the said matters may not be 
made at the trial except on such terms as the court requires. 
Invalidity of the extension of a patent term or any portion 
thereof under section 156 of this title because of the material 
failure--
          (1) by the applicant for the extension, or
          (2) by the [Commissioner] Director,
to comply with the requirements of such section shall be a 
defense in any action involving the infringement of a patent 
during the period of the extension of its term and shall be 
pleaded. A due diligence determination under section 156(d)(2) 
is not subject to review in such an action.
          * * * * * * *

Sec. 284. Damages

          * * * * * * *
  When the damages are not found by a jury, the court shall 
assess them. In either event the court may increase the damages 
up to three times the amount found or assessed. Increased 
damages under this paragraph shall not apply to provisional 
rights under section 154(d) of this title.
          * * * * * * *

Sec. 290. Notice of patent suits

  The clerks of the courts of the United States, within one 
month after the filing of an action under this title shall give 
notice thereof in writing to the [Commissioner] Director, 
setting forth so far as known the names and addresses of the 
parties, name of the inventor, and the designating number of 
the patent upon which the action has been brought. If any other 
patent is subsequently included in the action he shall give 
like notice thereof. Within one month after the decision is 
rendered or a judgment issued the clerk of the court shall give 
notice thereof to the [Commissioner] Director. The 
[Commissioner] Director shall, on receipt of such notices, 
enter the same in the file of such patent.
          * * * * * * *

 CHAPTER 30--PRIOR ART CITATIONS TO OFFICE AND REEXAMINATION OF PATENTS

Sec.
301.  Citation of prior art.
302.  Request for reexamination.
303.  Determination of issue by [Commissioner] Director.
304.  Reexamination order by [Commissioner] Director.
     * * * * * * *
308.  Reexamination prohibited.
          * * * * * * *

Sec. 302. Request for reexamination

  Any person at any time may file a request for reexamination 
by the Office of any claim of a patent on the basis of any 
prior art cited under the provisions of section 301 of this 
title. The request must be in writing and must be accompanied 
by payment of a reexamination fee established by the 
[Commissioner of Patents] Director pursuant to the provisions 
of section 41 of this title. The request must set forth the 
pertinency and manner of applying cited prior art to every 
claim for which reexamination is requested. Unless the 
requesting person is the owner of the patent, the 
[Commissioner] Director promptly will send a copy of the 
request to the owner of record of the patent.

Sec. 303. Determination of issue by [Commissioner] Director

  (a) Within three months following the filing of a request for 
reexamination under the provisions of section 302 of this 
title, the [Commissioner] Director will 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 his own initiative, and any time, the [Commissioner] 
Director may determine whether a substantial new question of 
patentability is raised by patents and publications discovered 
by him or cited under the provisions of section 301 of this 
title.
  (b) A record of the [Commissioner's] Director's determination 
under subsection (a) of this section will be placed in the 
official file of the patent, and a copy promptly will be given 
or mailed to the owner of record of the patent and to the 
person requesting reexamination, if any.
  (c) A determination by the [Commissioner] Director pursuant 
to subsection (a) of this section that no substantial new 
question of patentability has been raised will be final and 
nonappealable. Upon such a determination, the [Commissioner] 
Director may refund a portion of the reexamination fee required 
under section 302 of this title.
          * * * * * * *

Sec. 307. Certificate of patentability, unpatentability, and claim 
                    cancellation

  (a) In a reexamination proceeding under this chapter, when 
the time for appeal has expired or any appeal proceeding has 
terminated, the [Commissioner] Director will 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.
          * * * * * * *
=======================================================================


  Note.--The amendments made to the following sections shall 
take effect on the date that is 6 months after the date of 
enactment of this Act and shall apply to all reexamination 
requests filed on or after such date:

[Sec. 302. Request for reexamination

  [Any person at any time may file a request for reexamination 
by the Office of any claim of a patent on the basis of any 
prior art cited under the provisions of section 301 of this 
title. The request must be in writing and must be accompanied 
by payment of a reexamination fee established by the 
Commissioner of Patents pursuant to the provisions of section 
41 of this title. The request must set forth the pertinency and 
manner of applying cited prior art to every claim for which 
reexamination is requested. Unless the requesting person is the 
owner of the patent, the Commissioner promptly will send a copy 
of the request to the owner of record of the patent.

[Sec. 303. Determination of issue by Commissioner

  [(a) Within three months following the filing of a request 
for reexamination under the provisions of section 302 of this 
title, the Commissioner will 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 his 
own initiative, and any time, the Commissioner may determine 
whether a substantial new question of patentability is raised 
by patents and publications discovered by him or cited under 
the provisions of section 301 of this title.
  [(b) A record of the Commissioner's determination under 
subsection (a) of this section will be placed in the official 
file of the patent, and a copy promptly will be given or mailed 
to the owner of record of the patent and to the person 
requesting reexamination, if any.
  [(c) A determination by the Commissioner pursuant to 
subsection (a) of this section that no substantial new question 
of patentability has been raised will be final and 
nonappealable. Upon such a determination, the Commissioner may 
refund a portion of the reexamination fee required under 
section 302 of this title.

[Sec. 304. Reexamination order by Commissioner

  [If, in a determination made under the provisions of 
subsection 303(a) of this title, the Commissioner finds that a 
substantial new question of patentability affecting any claim 
of a patent is raised, the determination will include an order 
for reexamination of the patent for resolution of the question. 
The patent owner will be given a reasonable period, not less 
than two months from the date a copy of the determination is 
given or mailed to him, within which he may file a statement on 
such question, including any amendment to his patent and new 
claim or claims he may wish to propose, for consideration in 
the reexamination. If the patent owner files such a statement, 
he promptly will serve a copy of it on the person who has 
requested reexamination under the provisions of section 302 of 
this title. Within a period of two months from the date of 
service, that person may file and have considered in the 
reexamination a reply to any statement filed by the patent 
owner. That person promptly will serve on the patent owner a 
copy of any reply filed.

[Sec. 305. Conduct of reexamination proceedings

  [After the times for filing the statement and reply provided 
for by section 304 of this title have expired, reexamination 
will be conducted according to the procedures established for 
initial examination under the provisions of sections 132 and 
133 of this title. In any reexamination proceeding under this 
chapter, the patent owner will be permitted to propose any 
amendment to his patent and a new claim or claims thereto, in 
order to distinguish the invention as claimed from the prior 
art cited under the provisions of section 301 of this title, or 
in response to a decision adverse to the patentability of a 
claim of a patent. No proposed amended or new claim enlarging 
the scope of a claim of the patent will be permitted in a 
reexamination proceeding under this chapter. All reexamination 
proceedings under this section, including any appeal to the 
Board of Patent Appeals and Interferences, will be conducted 
with special dispatch within the Office.

[Sec. 306. Appeal

  [The patent owner involved in a reexamination proceeding 
under this chapter may appeal under the provisions of section 
134 of this title, and may seek court review under the 
provisions of sections 141 to 145 of this title, with respect 
to any decision adverse to the patentability of any original or 
proposed amended or new claim of the patent.]

Sec. 302. Request for reexamination

  Any person at any time may file a request for reexamination 
by the Office of a patent on the basis of any prior art cited 
under the provisions of section 301 of this title or on the 
basis of the requirements of section 112 of this title other 
than the requirement to set forth the best mode of carrying out 
the invention. The request must be in writing, must include the 
identity of the real party in interest, and must be accompanied 
by payment of a reexamination fee established by the Director 
pursuant to the provisions of section 41 of this title. The 
request must set forth the pertinency and manner of applying 
cited prior art to every claim for which reexamination is 
requested or the manner in which the patent specification or 
claims fail to comply with the requirements of section 112 of 
this title. 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. 303. Determination of issue by Director

  (a) Reexamination.--Not later than 3 months after the filing 
of a request for reexamination under the provisions of section 
302 of this title, 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, at any time, the Director may 
determine whether a substantial new question of patentability 
is raised by any other patent or publication or by the failure 
of the patent specification or claims of a patent to comply 
with the requirements of section 112 of this title other than 
the best mode requirement described in section 302.
  (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 pursuant 
to subsection (a) shall be final and nonappealable. Upon a 
determination that no substantial new question of patentability 
has been raised, the Director may refund a portion of the 
reexamination fee required under section 302 of this title.

Sec. 304. Reexamination order by Director

  If, in a determination made under the provisions of section 
303(a) of this title, 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 
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 reexamination 
conducted in accordance with section 305 of this title.

Sec. 305. Conduct of reexamination proceedings

  (a) In General.--Subject to subsection (b), reexamination 
shall be conducted according to the procedures established for 
initial examination under the provisions of sections 132 and 
133 of this title. In any 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 
reexamination proceeding in which the order for reexamination 
is based upon a request by a third-party requester.
  (2) With the exception of the reexamination request, any 
document filed by either the patent owner or the third-party 
requester shall be served on the other party.
  (3) If the patent owner files a response to any action on the 
merits by the Patent and Trademark Office, the third-party 
requester shall have 1 opportunity to file written comments 
within a reasonable period not less than 1 month after the date 
of service of the patent owner's response. Written comments 
provided under this paragraph shall be limited to issues 
covered by action of the Patent and Trademark Office or the 
patent owner's response.
  (c) Special Dispatch.--Unless otherwise provided by the 
Director for good cause, all 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. 306. Appeal

  (a) Patent Owner.--The patent owner involved in a 
reexamination proceeding under this chapter--
          (1) may appeal under the provisions of section 134 of 
        this title, and may appeal under the provisions of 
        sections 141 through 144 of this title, 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 pursuant to subsection (b) of this 
        section.
  (b) Third-Party Requester.--A third-party requester in a 
reexamination proceeding--
          (1) may appeal under the provisions of section 134 of 
        this title, and may appeal under the provisions of 
        sections 141 through 144 of this title, with respect to 
        any final decision in the reexamination proceeding that 
        is favorable 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 the patent 
        owner with respect to a decision in the reexamination 
        proceeding, subject to subsection (c) of this section.
  (c) Participation as Party.--(1) A third-party requester who, 
under the provisions of sections 141 through 144 of this title, 
files a notice of appeal, or who participates as a party to an 
appeal by the patent owner, with respect to a reexamination 
proceeding, is estopped from asserting at a later time, in any 
forum, the invalidity of any claim determined to be patentable 
on that appeal on any ground which the third-party requester 
raised or could have raised during the reexamination 
proceeding. 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 reexamination proceeding.
  (2) For purposes of paragraph (1), a third-party requester is 
deemed not to have participated as a party to an appeal by the 
patent owner unless, not later than 20 days after the patent 
owner has filed a notice of appeal, the third-party requester 
files notice with the Commissioner electing to participate.
          * * * * * * *

Sec. 308. Reexamination prohibited

  (a) Order for Reexamination.--Notwithstanding any provision 
of this chapter, once an order for reexamination of a patent 
has been issued under section 304 of this title, neither the 
patent owner nor the third-party requester, if any, nor privies 
of either, may, unless authorized by the Director, file a 
subsequent request for reexamination of the patent until a 
certificate relating to that reexamination proceeding is issued 
and published under section 307 of this title.
  (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 a reexamination proceeding 
instituted by a third-party requester is favorable to the 
patentability or any original or proposed amended or new claim 
of the patent and such decision is not appealed by the third-
party requester under section 306(b), then neither that party 
nor its privies may thereafter request 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 
reexamination proceeding. This subsection does not prevent the 
assertion of invalidity based on newly discovered prior art 
unavailable to the party or privies and the Office at the time 
of the civil action or reexamination proceeding, as the case 
may be.
=======================================================================


                   PART IV--PATENT COOPERATION TREATY

          * * * * * * *

                        CHAPTER 35--DEFINITIONS

          * * * * * * *

Sec. 351. Definitions

  When used in this part unless the context otherwise 
indicates--
  (a) The term ``treaty'' means the Patent Co-operation Treaty 
done at Washington, on June 19, 1970.
  (b) The term ``Regulations'', when capitalized, means the 
Regulations under the treaty, done at Washington on the same 
date as the treaty. The term ``regulations'', when not 
capitalized, means the regulations established by the 
[Commissioner] Director under this title.
          * * * * * * *

                    CHAPTER 36--INTERNATIONAL STAGE

Sec. 361. Receiving Office

  (a) * * *
          * * * * * * *
  (d) The international fee, and the transmittal and search 
fees prescribed under section 376(a) of this part, shall either 
be paid on filing of an international application or within 
such later time as may be fixed by the [Commissioner] Director.

Sec. 362. International Searching Authority and International 
                    Preliminary Examining Authority

  (a) * * *
  (b) The handling fee, preliminary examination fee, and any 
additional fees due for international preliminary examination 
shall be paid within such time as may be fixed by the 
[Commissioner] Director.
          * * * * * * *

Sec. 364. International stage: Procedure

  (a) * * *
  (b) An applicant's failure to act within prescribed time 
limits in connection with requirements pertaining to a pending 
international application may be excused upon a showing 
satisfactory to the [Commissioner] Director of unavoidable 
delay, to the extent not precluded by the treaty and the 
Regulations, and provided the conditions imposed by the treaty 
and the Regulations regarding the excuse of such failure to act 
are complied with.

Sec. 365. Right of priority; benefit of the filing date of a prior 
                    application

  (a) * * *
          * * * * * * *
  (c) In accordance with the conditions and requirements of 
section 120 of this title, an international application 
designating the United States shall be entitled to the benefit 
of the filing date of a prior national application or a prior 
international application designating the United States, and a 
national application shall be entitled to the benefit of the 
filing date of a prior international application designating 
the United States. If any claim for the benefit of an earlier 
filing date is based on a prior international application which 
designated but did not originate in the United States, the 
[Commissioner] Director may require the filing in the Patent 
and Trademark Office of a certified copy of such application 
together with a translation thereof into the English language, 
if it was filed in another language.
          * * * * * * *

Sec. 367. Actions of other authorities: Review

  (a) Where a Receiving Office other than the Patent and 
Trademark Office has refused to accord an international filing 
date to an international application designating the United 
States or where it has held such application to be withdrawn 
either generally or as to the United States, the applicant may 
request review of the matter by the [Commissioner] Director, on 
compliance with the requirements of and within the time limits 
specified by the treaty and the Regulations. Such review may 
result in a determination that such application be considered 
as pending in the national stage.
          * * * * * * *

                       CHAPTER 37--NATIONAL STAGE

          * * * * * * *

Sec. 371. National stage: Commencement

  (a) * * *
          * * * * * * *
  (d) The requirements with respect to the national fee 
referred to in subsection (c)(1), the translation referred to 
in subsection (c)(2), and the oath or declaration referred to 
in subsection (c)(4) of this section shall be complied with by 
the date of the commencement of the national stage or by such 
later time as may be fixed by the [Commissioner] Director. The 
copy of the international application referred to in subsection 
(c)(2) shall be submitted by the date of the commencement of 
the national stage. Failure to comply with these requirements 
shall be regarded as abandonment of the application by the 
parties thereof, unless it be shown to the satisfaction of the 
[Commissioner] Director that such failure to comply was 
unavoidable. The payment of a surcharge may be required as a 
condition of accepting the national fee referred to in 
subsection (c)(1) or the oath or declaration referred to in 
subsection (c)(4) of this section if these requirements are not 
met by the date of the commencement of the national stage. The 
requirements of subsection (c)(3) of this section shall be 
complied with by the date of the commencement of the national 
stage, and failure to do so shall be regarded as a cancellation 
of the amendments to the claims in the international 
application made under article 19 of the treaty. The 
requirement of subsection (c)(5) shall be complied with at such 
time as may be fixed by the [Commissioner] Director and failure 
to do so shall be regarded as cancellation of the amendments 
made under article 34(2)(b) of the treaty
          * * * * * * *

Sec. 372. National stage: Requirements and procedure

  (a) * * *
  (b) In case of international applications designating but not 
originating in, the United States--
          (1) the [Commissioner] Director may cause to be 
        reexamined questions relating to form and contents of 
        the application in accordance with the requirements of 
        the treaty and the Regulations;
          (2) the [Commissioner] Director may cause the 
        question of unity of invention to be reexamined under 
        section 121 of this title, within the scope of the 
        requirements of the treaty and the Regulations; and
          (3) the [Commissioner] Director may require a 
        verification of the translation of the international 
        application or any other document pertaining to the 
        application if the application or other document was 
        filed in a language other than English.
          * * * * * * *

[Sec. 374. Publication of international application: Effect

  [The publication under the treaty of an international 
application shall confer no rights and shall have no effect 
under this title other than that of a printed publication.]

Sec. 374. Publication of international application: Effect

  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.

Sec. 375. Patent issued on international application: Effect

  (a) A patent may be issued by the [Commissioner] Director 
based on an international application designating the United 
States, in accordance with the provisions of this title. 
Subject to section 102(e) of this title, such patent shall have 
the force and effect of a patent issued on a national 
application filed under the provisions of chapter 11 of this 
title.
          * * * * * * *

Sec. 376. Fees

  (a) The required payment of the international fee and the 
handling fee, which amounts are specified in the Regulations, 
shall be paid in United States currency. The Patent and 
Trademark Office shall charge a national fee as provided in 
section 41(a), and may also charge the following fees:
          (1) * * *
          * * * * * * *
          (5) Such other fees as established by the 
        [Commissioner] Director.
  (b) The amounts of fees specified in subsection (a) of this 
section, except the international fee and the handling fee, 
shall be prescribed by the [Commissioner] Director. He may 
refund any sum paid by mistake or in excess of the fees so 
specified, or if required under the treaty and the Regulations. 
The [Commissioner] Director may also refund any part of the 
search fee, the national fee, the preliminary examination fee, 
and any additional fees, where he determines such refund to be 
warranted.
          * * * * * * *
                              ----------                              


                          ACT OF JULY 5, 1946

          (Commonly Referred to as the Trademark Act of 1946)

          * * * * * * *

                    TITLE I--THE PRINCIPAL REGISTER

  Section 1. (a) * * *
          (1) * * *
                  (A) a written application, in such form as 
                may be prescribed by the [Commissioner] 
                Director, verified by the applicant, or by a 
                member of the firm or an officer of the 
                corporation or association applying, specifying 
                applicant's domicile and citizenship, the date 
                of applicant's first use of the mark, the date 
                of applicant's first use of the mark in 
                commerce, the goods in connection with which 
                the mark is used and the mode or manner in 
                which the mark is used in connection with such 
                goods, and including a statement to the effect 
                that the person making the verification 
                believes himself, or the firm, corporation, or 
                association in whose behalf he makes the 
                verification, to be the owner of the mark 
                sought to be registered, that the mark is in 
                use in commerce, and that no other person, 
                firm, corporation, or association, to the best 
                of his knowledge and belief, has the right to 
                use such mark in commerce either in the 
                identical form thereof or in such near 
                resemblance thereto as to be likely, when used 
                on or in connection with the goods of such 
                other person, to cause confusion, or to cause 
                mistake, or to deceive: Provided, That in the 
                case of every application claiming concurrent 
                use the applicant shall state exceptions to his 
                claim of exclusive use in which he shall 
                specify, to the extent of his knowledge, any 
                concurrent use by others, the goods in 
                connection with which and the areas in which 
                each concurrent use exists, the periods of each 
                use, and the goods and area for which the 
                applicant desires registration;
          * * * * * * *
                  (C) such number of specimens or facsimiles of 
                the mark as used as may be required by the 
                [Commissioner] Director.
          (2) * * *
          (3) By complying with such rules or regulations, not 
        inconsistent with law, as may be prescribed by the 
        [Commissioner] Director.
  (b) * * *
          (1) * * *
                  (A) a written application, in such form as 
                may be prescribed by the [Commissioner] 
                Director, verified by the applicant, or by a 
                member of the firm or an officer of the 
                corporation or association applying, specifying 
                applicant's domicile and citizenship, 
                applicant's bona fide intention to use the mark 
                in commerce, the goods on or in connection with 
                which the applicant has a bona fide intention 
                to use the mark and the mode or manner in which 
                the mark is intended to be used on or in 
                connection with such goods, including a 
                statement to the effect that the person making 
                the verification believes himself or herself, 
                or the firm, corporation, or association in 
                whose behalf he or she makes the verification, 
                to be entitled to use the mark in commerce, and 
                that no other person, firm, corporation, or 
                association, to the best of his or her 
                knowledge and belief, has the right to use such 
                mark in commerce either in the identical form 
                of the mark or in such near resemblance to the 
                mark as to be likely, when used on or in 
                connection with the goods of such other person, 
                to cause confusion, or to cause mistake, or to 
                deceive; however, except for applications filed 
                pursuant to section 44, no mark shall be 
                registered until the applicant has met the 
                requirements of subsection (d) of this section; 
                and
                  (B) * * *
          (2) * * *
          (3) By complying with such rules or regulations, not 
        inconsistent with law, as may be prescribed by the 
        [Commissioner] Director.
          * * * * * * *
  (d)(1) Within six months after the date on which the notice 
of allowance with respect to a mark is issued under section 
13(b)(2) to an applicant under subsection (b) of this section, 
the applicant shall file in the Patent and Trademark Office, 
together with such number of specimens or facsimiles of the 
mark as used in commerce as may be required by the 
[Commissioner] Director and payment of the prescribed fee, a 
verified statement that the mark is in use in commerce and 
specifying the date of the applicant's first use of the mark in 
commerce, those goods or services specified in the notice of 
allowance on or in connection with which the mark is used in 
commerce, and the mode or manner in which the mark is used on 
or in connection with such goods or services. Subject to 
examination and acceptance of the statement of use, the mark 
shall be registered in the Patent and Trademark Office, a 
certificate of registration shall be issued for those goods or 
services recited in the statement of use for which the mark is 
entitled to registration, and notice of registration shall be 
published in the Official Gazette of the Patent and Trademark 
Office. Such examination may include an examination of the 
factors set forth in subsections (a) through (e) of section 2. 
The notice of registration shall specify the goods or services 
for which the mark is registered.
  (2) The [Commissioner] Director shall extend, for one 
additional 6-month period, the time for filing the statement of 
use under paragraph (1), upon written request of the applicant 
before the expiration of the 6-month period provided in 
paragraph (1). In addition to an extension under the preceding 
sentence, the [Commissioner] Director may, upon a showing of 
good cause by the applicant, further extend the time for filing 
the statement of use under paragraph (1) for periods 
aggregating not more than 24 months, pursuant to written 
request of the applicant made before the expiration of the last 
extension granted under this paragraph. Any request for an 
extension under this paragraph shall be accompanied by a 
verified statement that the applicant has a continued bona fide 
intention to use the mark in commerce and specifying those 
goods or services identified in the notice of allowance on or 
in connection with which the applicant has a continued bona 
fide intention to use the mark in commerce. Any request for an 
extension under this paragraph shall be accompanied by payment 
of the prescribed fee. The [Commissioner] Director shall issue 
regulations setting forth guidelines for determining what 
constitutes good cause for purposes of this paragraph.
  (3) The [Commissioner] Director shall notify any applicant 
who files a statement of use of the acceptance or refusal 
thereof and, if the statement of use is refused, the reasons 
for the refusal. An applicant may amend the statement of use.
          * * * * * * *
  (e) If the applicant is not domiciled in the United State he 
shall designate by a written document filed in the Patent and 
Trademark Office the name and address of some person resident 
in the United States on whom may be served notices or process 
in proceedings affecting the mark. Such notices or process may 
be served upon the person so designated by leaving with him or 
mailing to him a copy thereof at the address specified in the 
last designation so filed. If the person so designated cannot 
be found at the address given in the last designation, such 
notice or process may be served upon the [Commissioner] 
Director.
              marks registrable on the principal register
  Sec. 2. * * *
          * * * * * * *
  (d) Consists of or comprises a mark which so resembles a mark 
registered in the Patent and Trademark Office, or a mark or 
trade name previously used in the United States by another and 
not abandoned, as to be likely, when used on or in connection 
with the goods of the applicant, to cause confusion, or to 
cause mistake, or to deceive: Provided, That if the 
[Commissioner] Director determines that confusion, mistake, or 
deception is not likely to result from the continued use by 
more than one person of the same or similar marks under 
conditions and limitations as to the mode or place of use of 
the marks or the goods on or in connection with which such 
marks are used, concurrent registrations may be issued to such 
persons when they have become entitled to use such marks as a 
result of their concurrent lawful use in commerce prior to (1) 
the earliest of the filing dates of the applications pending or 
of any registration issued under this Act; (2) July 5, 1947, in 
the case of registrations previously issued under the Act of 
March 3, 1881, or February 20, 1905, and continuing in full 
force and effect on that date; or (3) July 5, 1947, in the case 
of applications filed under the Act of February 20, 1905, and 
registered after July 5, 1947. Use prior to the filing date of 
any pending application or a registration shall not be required 
when the owner of such application or registration consents to 
the grant of a concurrent registration to the applicant. 
Concurrent registrations may also be issued by the 
[Commissioner] Director when a court of competent jurisdiction 
has finally determined that more than one person is entitled to 
use the same or similar marks in commerce. In issuing 
concurrent registrations, the [Commissioner] Director shall 
prescribe conditions and limitations as to the mode or place of 
use of the mark or the goods on or in connection with which 
such mark is registered to the respective persons.
          * * * * * * *
  (f) Except as expressly excluded in paragraphs (a), (b), (c), 
(d), and (e)(3) of this section, nothing herein shall prevent 
the registration of a mark used by the applicant which has 
become distinctive of the applicant's goods in commerce. The 
[Commissioner] Director may accept as prima facie evidence that 
the mark has become distinctive, as used on or in connection 
with the applicant's goods in commerce, proof of substantially 
exclusive and continuous use thereof as a mark by the applicant 
in commerce for the five years before the date on which the 
claim of distinctiveness is made. Nothing in this section shall 
prevent the registration of a mark which, when used on or in 
connection with the goods of the applicant, is primarily 
geographically deceptively misdescriptive of them, and which 
became distinctive of the applicant's goods in commerce before 
the date of the enactment of the North American Free Trade 
Agreement Implementation Act.
          * * * * * * *
  Sec. 6. (a) The [Commissioner] Director may require the 
applicant to disclaim an unregistrable component of a mark 
otherwise registrable. An applicant may voluntarily disclaim a 
component of a mark sought to be registered.
          * * * * * * *
                              certificates
  Sec. 7. (a) Certificates of registration of marks registered 
upon the principal register shall be issued in the name of the 
United States of America, under the seal of the Patent and 
Trademark Office, and shall be signed by the [Commissioner] 
Director or have his signature placed thereon, and a record 
thereof shall be kept in the Patent Office.. The registration 
shall reproduce the mark, and state that the mark is registered 
on the principal register under this Act, the date of the first 
use of the mark, the date of the first use of the mark in 
commerce, the particular goods or services for which it is 
registered, the number and date of the registration, the term 
thereof, the date on which the application for registration was 
received in the Patent and Trademark Office, and any conditions 
and limitations that may be imposed in the registration.
          * * * * * * *
  (d) A certificate of registration of a mark may be issued to 
the assignee of the applicant, but the assignment must first be 
recorded in the Patent and Trademark Office. In case of change 
of ownership the [Commissioner] Director shall, at the request 
of the owner and upon a proper showing and the payment of the 
prescribed fee, issue to such assignee a new certificate of 
registration of the said mark in the name of such assignee, and 
for the unexpired part of the original period.
  (e) Upon application of the registrant the [Commissioner] 
Director may permit any registration to be surrendered for 
cancellation, and upon cancellation appropriate entry shall be 
made in the records of the Patent and Trademark Office. Upon 
application of the registrant and payment of the prescribed 
fee, the [Commissioner] Director for good cause may permit any 
registration to be amended or to be disclaimed in part: 
Provided, That the amendment or disclaimer does not alter 
materially the character of the mark. Appropriate entry shall 
be made in the records of the Patent and Trademark Office and 
upon the certificate of registration or, if said certificate is 
lost or destroyed, upon a certified copy thereof.
  (f) Copies of any records, books, papers, or drawings 
belonging to the Patent and Trademark Office relating to marks, 
and, copies of registrations, when authenticated by the seal of 
the Patent and Trademark Office and certified by the 
[Commissioner] Director, or in his name by an employee of the 
Office duly designated by the [Commissioner] Director, shall be 
evidence in all cases wherein the originals would be evidence; 
and any person making application therefore and paying the 
prescribed fee shall have such copies.
  (g) Whenever a material mistake in a registration, incurred 
through the fault of the Patent and Trademark Office, is 
clearly disclosed by the records of the Office a certificate 
stating the fact and nature of such mistake shall be issued 
without charge and recorded and a printed copy thereof shall be 
attached to each printed copy of the registration and such 
corrected registration shall thereafter have the same effect as 
if the same had been originally issued in such corrected form, 
or in the discretion of the [Commissioner] Director a new 
certificate of registration may be issued without charge. All 
certificates of correction heretofore issued in accordance with 
the rules of the Patent and Trademark Office and the 
registrations to which they are attached shall have the same 
force and effect as if such certificates and their issue had 
been specifically authorized by statute.
  (h) Whenever a mistake has been made in a registration and a 
showing has been made that such mistake occurred in good faith 
through the fault of the applicant, the [Commissioner] Director 
is authorized to issue a certificate of correction or, in his 
discretion, a new certificate upon the payment of the 
prescribed fee: Provided, That the correction does not involve 
such changes in the registration as to require republication of 
the mark.
                                duration
  Sec. 8. (a) Each certificate of registration shall remain in 
force for ten years: Provided, That the registration of any 
mark under the provisions of this Act shall be canceled by the 
[Commissioner] Director at the end of six years following its 
date, unless within one year next preceding the expiration of 
such six years the registrant shall file in the Patent and 
Trademark Office an affidavit setting forth those goods or 
services recited in the registration on or in connection with 
which the mark is in use in commerce and attaching to the 
affidavit a specimen or facsimile showing current use of the 
mark, or showing that any nonuse is due to special 
circumstances which excuse such nonuse and is not due to any 
intention to abandon the mark. Special notice of the 
requirement for such affidavit shall be attached to each 
certificate of registration.
  (b) Any registration published under the provisions of 
subsection (c) of section 12 of this Act shall be canceled by 
the [Commissioner] Director at the end of six years after the 
date of such publication unless within one year next preceding 
the expiration of such six years the registrant shall file in 
the Patent and Trademark Office an affidavit showing that said 
mark is in use in commerce or showing that its nonuse is due to 
special circumstances which excuse such nonuse and is not due 
to any intention to abandon the mark.
  (c) The [Commissioner] Director shall notify any registrant 
who files either of the above-prescribed affidavits of his 
acceptance or refusal thereof and, if a refusal, the reasons 
therefore.
  Sec. 9. (a) * * *
  (b) If the [Commissioner] Director refuses to renew the 
registration, he shall notify the registrant of his refusal and 
the reasons therefor.
          * * * * * * *
                              publication
  Sec. 12. (a) Upon the filing of an application for 
registration and payment of the prescribed fee, the 
[Commissioner] Director shall refer the application to the 
examiner in charge of the registration of marks, who shall 
cause an examination to be made and, if on such examination it 
shall appear that the applicant is entitled to registration, or 
would be entitled to registration upon the acceptance of the 
statement of use required by section 1(d) of this Act, the 
[Commissioner] Director shall cause the mark to be published in 
the Official Gazette of the Patent and Trademark Office: 
Provided, That in the case of an applicant claiming concurrent 
use, or in the case of an application to be placed in an 
interference as provided for in section 16 of this Act, the 
mark, if otherwise registrable, may be published subject to the 
determination of the rights of the parties to such proceedings.
  (b) If the applicant is found not entitled to registration, 
the examiner shall advise the applicant thereof and of the 
reasons therefor. The applicant shall have a period of six 
months in which to reply or amend his application, which shall 
then be reexamined. This procedure may be repeated until (1) 
the examiner finally refuses registration of the mark or (2) 
the applicant fails for a period of six months to reply or 
amend or appeal, whereupon the application shall be deemed to 
have been abandoned, unless it can be shown to the satisfaction 
of the [Commissioner] Director that the delay in responding was 
unavoidable, whereupon such time may be extended.
  (c) A registrant of a mark registered under the provisions of 
the Act of March 3, 1881, or the Act of February 20, 1905, may, 
at any time prior to the expiration of the registration 
thereof, upon the payment of the prescribed fee file with the 
[Commissioner] Director an affidavit setting forth those goods 
stated in the registration on which said mark is in use in 
commerce and that the registrant claims the benefits of this 
Act for said mark. The [Commissioner] Director shall publish 
notice thereof with a reproduction of said mark in the Official 
Gazette, and notify the registrant of such publication and of 
the requirement for the affidavit of use or nonuse as provided 
for in subsection (b) of section 8 of this Act. Marks published 
under this subsection shall not be subject to the provisions of 
section 13 of this Act.
                               opposition
  Sec. 13. (a) Any person who believes that he would be damaged 
by the registration of a mark upon the principal register may, 
upon payment of the prescribed fee, file an opposition in the 
Patent and Trademark Office, stating the grounds therefor, 
within thirty days after the publication under subsection (a) 
of section 12 of this Act of the mark sought to be registered. 
Upon written request prior to the expiration of the thirty-day 
period, the time for filing opposition shall be extended for an 
additional thirty days, and further extensions of time for 
filing opposition may be granted by the [Commissioner] Director 
for good cause when requested prior to the expiration of an 
extension. The Commissioner shall notify the applicant of each 
extension of the time for filing opposition. An opposition may 
be amended under such conditions as may be prescribed by the 
[Commissioner] Director.
          * * * * * * *

  Sec. 15. Except on a ground for which application to cancel 
may be filed at any time under paragraphs (3) and (5) of 
section 14 of this Act, and except to the extent, if any, to 
which the use of a mark registered on the principal register 
infringes a valid right acquired under the law of any State or 
Territory by use of a mark or trade name continuing from a date 
prior to the date of registration under this Act of such 
registered mark, the right of the registrant to use such 
registered mark in commerce for the goods or services on or in 
connection with which such registered mark has been in 
continuous use for five consecutive years subsequent to the 
date of such registration and is still in use in commerce, 
shall be incontestable: Provided, That--
          (1) * * *
          * * * * * * *
          (3) an affidavit is filed with the [Commissioner] 
        Director within one year after the expiration of any 
        such five-year period setting forth those goods or 
        services stated in the registration on or in connection 
        with which such mark has been in continuous use for 
        such five consecutive years and is still in use in 
        commerce, and the other matters specified in paragraphs 
        (1) and (2) of this section; and
          (4) no incontestable right shall be acquired in a 
        mark which is the generic name for the goods or 
        services or a portion thereof, for which it is 
        registered.
  Subject to the conditions above specified in this section, 
the incontestable right with reference to a mark registered 
under this Act shall apply to a mark registered under the Act 
of March 3, 1881, or the Act of February 20, 1905, upon the 
filing of the required affidavit with the [Commissioner] 
Director within one year after the expiration of any period of 
five consecutive years after the date of publication of a mark 
under the provisions of subsection (c) of section 12 of this 
Act.
  The [Commissioner] Director shall notify any registrant who 
files the above-prescribed affidavit of the filing thereof.
                              interference
  Sec. 16. Upon petition showing extraordinary circumstances, 
the [Commissioner] Director may declare that an interference 
exists when application is made for the registration of a mark 
which so resembles a mark previously registered by another, or 
for the registration of which another has previously made 
application, as to be likely when used on or in connection with 
the goods or services of the applicant to cause confusion or 
mistake or to deceive. No interference shall be declared 
between an application and the registration of a mark the right 
to the use of which has become incontestable.
  [Sec. 17. 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 
Commissioner shall give notice to all parties and shall direct 
a Trademark Trial and Appeal Boards, to determine and decide 
the respective rights of registration.
  [The Trademark Trail and Appeal Board shall include the 
Commissioner, the Deputy Commissioner, the Assistant 
Commissioners, and members appointed by the Commissioner. 
Employees of the Patent and Trademark Office and other persons, 
all of whom shall be competent in trademark law, shall be 
eligible for appointment as members. Each case shall be heard 
by at least three members of the Board, the members hearing 
such case to be designated by the Commissioner.]
  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. 18. In such proceedings the [Commissioner] Director may 
refuse to register the opposed mark, may cancel the 
registration, in whole or in part, may modify the application 
or registration by limiting the goods or services specified 
therein, may otherwise restrict or rectify with respect to the 
register the registration of a registered mark, may refuse to 
register any or all of several interfering marks, or may 
register the mark or marks for the person or persons entitled 
thereto, as the rights of the parties hereunder may be 
established in the proceedings; Provided, That in the case of 
the registration of any mark based on concurrent use, the 
[Commissioner] Director shall determine and fix the conditions 
and limitations provided for in subsection (d) of section 2 of 
this Act. However, no final judgment shall be entered in favor 
of an applicant under section 1(b) before the mark is 
registered, if such applicant cannot prevail without 
establishing constructive use pursuant to section 7(c).
          * * * * * * *
  Sec. 21. (a)(1) An applicant for registration of a mark, 
party to an interference proceeding, party to an opposition 
proceeding, party to an application to register as a lawful 
concurrent user, party to a cancellation proceeding, a 
registrant who has filed an affidavit as provided in section 8, 
or an applicant for renewal, who is dissatisfied with the 
decision of the [Commissioner] Director or Trademark Trail and 
Appeal Board, may appeal to the United States Court of Appeals 
for the Federal Circuit thereby waiving his right to proceed 
under subsection (b) of this section: Provided, That such 
appeal shall be dismissed if any adverse party to the 
proceeding, other than the [Commissioner] Director, shall, 
within twenty days after the appellant has filed notice of 
appeal according to paragraph (2) of this subsection, files 
notice with the [Commissioner] Director that he elects to have 
all further proceedings conducted as provided in subsection (b) 
of this section. Thereupon the appellant shall have thirty days 
thereafter within which to file a civil action under subsection 
(b) of this section, in default of which the decision appealed 
from shall govern the further proceedings in the case.
  (2) When an appeal is taken to the United States Court of 
Appeals for the Federal Circuit, the appellant shall file in 
the Patent and Trademark Office a written notice of appeal 
directed to the [Commissioner] Director, within such time after 
the date of the decision from which the appeal is taken as the 
[Commissioner] Director prescribes, but in no case less than 60 
days after that date.
  (3) The [Commissioner] Director shall transmit to the United 
States Court of Appeals for the Federal Circuit a certified 
list of the documents comprising the record in the Patent and 
Trademark Office. The court may request that the [Commissioner] 
Director forward the original or certified copies of such 
documents during pendency of the appeal. In an ex parte case, 
the [Commissioner] Director shall submit to that court a brief 
explaining the grounds for the decision of the Patent and 
Trademark Office, addressing all the issues involved in the 
appeal. The court shall, before hearing an appeal give notice 
of the time and place of the hearing to the [Commissioner] 
Director and the parties in the appeal.
  (4) The United States Court of Appeals for the Federal 
Circuit shall review the decision from which the appeal is 
taken on the record before the Patent and Trademark Office. 
Upon its determination the court shall issue its mandate and 
opinion to the [Commissioner] Director, which shall be entered 
of record in the Patent and Trademark Office and shall govern 
the further proceedings in the case. However, no final judgment 
shall be entered in favor of an applicant under section 1(b) 
before the mark is registered, if such applicant cannot prevail 
without establishing constructive use pursuant to section 7(c).
  (b)(1) Whenever a person authorized by subsection (a) of this 
section to appeal to the United States Court of Appeals for the 
Federal Circuit is dissatisfied with the decision of the 
[Commissioner] Director or Trademark Trail and Appeal Board, 
said person may, unless appeal has been taken to said United 
States Court of Appeals for the Federal Circuit, have remedy by 
a civil action if commenced within such time after such 
decision, not less than sixty days, as the [Commissioner] 
Director appoints or as provided in subsection (a) of this 
section. The court may adjudge that an applicant is entitled to 
a registration upon the application involved, that a 
registration involved should be canceled, or such other matter 
as the issues in the proceeding require, as the facts in the 
case may appear. Such adjudication shall authorize the 
[Commissioner] Director to take any necessary action, upon 
compliance with the requirements of law. However, no final 
judgment shall be entered in favor of an applicant under 
section 1(b) before the mark is registered, if such applicant 
cannot prevail without establishing constructive use pursuant 
to section 7(c).
  (2) The [Commissioner] Director shall not be made a party to 
an inter partes proceeding under this subsection, but he shall 
be notified of the filing of the complaint by the clerk of the 
court in which it is filed and shall have the right to 
intervene in the action.
  (3) In any case where there is no adverse party, a copy of 
the complaint shall be served on the [Commissioner] Director, 
and, unless the court finds the expenses to be unreasonable, 
all the expenses of the proceeding shall be paid by the party 
bringing the case, whether the final decision is in favor of 
such party or not. In suits brought hereunder, the record in 
the Patent and Trademark Office shall be admitted on motion of 
any party, upon such terms and conditions as to costs, 
expenses, and the further cross-examination of the witnesses as 
the court imposes, without prejudice to the right of any party 
to take further testimony. The testimony and exhibits of the 
record in the Patent and Trademark Office, when admitted, shall 
have the same effect as if originally taken and produced in the 
suit.
          * * * * * * *

                  TITLE II--THE SUPPLEMENTAL REGISTER

  Sec. 23. (a) In addition to the principal register, the 
[Commissioner] Director shall keep a continuation of the 
register provided in paragraph (b) of section 1 of the Act of 
March 19, 1920, entitled ``An Act to give effect to certain 
provisions of the convention for the protection of trade-marks 
and commercial names, made and signed in the city of Buenos 
Aires, in the Argentine Republic, August 20, 1910, and for 
other purposes'', to be called the supplemental register. All 
marks capable of distinguishing applicant's goods or services 
and not registrable on the principal register herein provided, 
except those declared to be unregistrable under subsections 
(a), (b), (c), (d), and (e)(3) of section 2 of this Act, which 
are in lawful use in commerce by the owner thereof, on or in 
connection with any goods or services may be registered on the 
supplemental register upon the payment of the prescribed fee 
and compliance with the provisions of subsections (a) and (e) 
of section 1 so far as they are applicable. Nothing in this 
section shall prevent the registration on the supplemental 
register of a mark, capable of distinguishing the applicant's 
goods or services and not registrable on the principal register 
under this Act, that is declared to be unregistrable under 
section 2(e)(3), if such mark has been in lawful use in 
commerce by the owner thereof, on or in connection with any 
goods or services, since before the date of the enactment of 
the North American Free Trade Agreement Implementation Act.
  (b) Upon the filing of an application for registration on the 
supplemental register and payment of the prescribed fee the 
[Commissioner] Director shall refer the application to the 
examiner in charge of the registration of marks, who shall 
cause an examination to be made and if on such examination it 
shall appear that the applicant is entitled to registration, 
the registration shall be granted. If the applicant is found 
not entitled to registration the provisions of subsection (b) 
of section 12 of this Act shall apply.
          * * * * * * *
                              cancellation
  Sec. 24. Marks for the supplemental register shall not be 
published for or be subject to opposition, but shall be 
published on registration in the Official Gazette of the Patent 
and Trademark Office. Whenever any person believes that he is 
or will be damaged by the registration of a mark on this 
register he may at any time, upon payment of the prescribed fee 
and the filing of a petition stating the ground therefor, apply 
to the [Commissioner] Director to cancel such registration. The 
[Commissioner] Director shall refer such application to the 
Trademark Trail and Appeal Board, which shall give notice 
thereof to the registrant. If it is found after a hearing 
before the Board which that the registrant is not entitled to 
registration, or that the mark has been abandoned, the 
registration shall be canceled by the [Commissioner] Director. 
However, no final judgment shall be entered in favor of an 
applicant under section (1)(b) before the mark is registered, 
if such applicant cannot prevail without establishing 
constructive use pursuant to section 7(c).
          * * * * * * *

                        TITLE IV--CLASSIFICATION

  Sec. 30. The [Commissioner] Director may establish a 
classification of goods and services, for convenience of Patent 
and Trademark Office administration, but not to limit or extend 
the applicant's or registrant's rights. The applicant may apply 
to register a mark for any or all of the goods or services on 
or in connection with which he or she is using or has a bona 
fide intention to use the mark in commerce: Provided, That if 
the [Commissioner] Director by regulation permits the filing of 
an application for the registration of a mark for goods or 
services which fall within a plurality of classes, a fee 
equaling the sum of the fees for filing an application in each 
class shall be paid, and the [Commissioner] Director may issue 
a single certificate of registration for such mark.

                       TITLE V--FEES AND CHARGES

Sec. 31. Fees

  (a) The [Commissioner] Director will establish fees for the 
filing and processing of an application for the registration of 
a trademark or other mark and for all other services performed 
by and materials furnished by the Patent and Trademark Office 
related to trademarks and other marks. However, no fee for the 
filing or processing of an application for the registration of 
a trademark or other mark or for the renewal or assignment of a 
trademark or other mark will be adjusted more than once every 
three years. No fee established under this section will take 
effect prior to sixty days following notice in the Federal 
Register.
  (b) The [Commissioner] Director may waive the payment of any 
fee for any service or material related to trademarks or other 
marks in connection with an occasional request made by a 
department or agency of the Government, or any officer thereof. 
The Indian Arts and Crafts Board will not be charged any fee to 
register Government trademarks of genuineness and quality for 
Indian products or for products of particular Indian tribes and 
groups.
          * * * * * * *
  Sec. 34. (a) * * *
          * * * * * * *
  (c) It shall be the duty of the clerks of such courts within 
one month after the filing of any action, suit, or proceeding 
involving a mark registered under the provisions of this Act to 
give notice thereof in writing to the [Commissioner] Director 
setting forth in order so far as known the names and addresses 
of the litigants and the designating number or numbers of the 
registration or registrations upon which the action, suit, or 
proceeding has been brought, and in the event any other 
registration be subsequently included in the action, suit, or 
proceeding by amendment, answer, or other pleading, the clerk 
shall give like notice thereof to the [Commissioner] Director, 
and within one month after the judgment is entered or an appeal 
is taken the clerk of the court shall give notice thereof to 
the [Commissioner] Director, and it shall be the duty of the 
[Commissioner] Director on receipt of such notice forthwith to 
endorse the same upon the file wrapper of the said registration 
or registrations and to incorporate the same as a part of the 
contents of said file wrapper.
          * * * * * * *
  Sec. 37. In any action involving a registered mark the court 
may determine the right to registration, order the cancellation 
of registrations, in whole or in part, restore canceled 
registrations, and otherwise rectify the register with respect 
to the registrations of any party to the action. Decrees and 
orders shall be certified by the court to the [Commissioner] 
Director, who shall make appropriate entry upon the records of 
the Patent and Trademark Office, and shall be controlled 
thereby.
          * * * * * * *
  Sec. 41. The [Commissioner] Director shall make rules and 
regulations, not inconsistent with law, for the conduct of 
proceedings in the Patent and Trademark Office under this Act.
          * * * * * * *

                  TITLE VIX--INTERNATIONAL CONVENTIONS

          * * * * * * *
  Sec. 44. (a) The [Commissioner] Director shall keep a 
register of all marks communicated to him by the international 
bureaus provided for by the conventions for the protection of 
industrial property, trade-marks, trade and commercial names, 
and the repression of unfair competition to which the United 
States is or may become a party, and upon the payment of the 
fees required by such conventions and the fees required in this 
Act may place the marks so communicated upon such register. 
This register shall show a facsimile of the mark or trade or 
commercial name; the name, citizenship, and address of the 
registrant; the number, date, and place of the first 
registration of the mark, including the date on which 
application for such registration was filed and granted and the 
term of such registration; a list of goods or services to which 
the mark is applied as shown by the registration in the country 
of origin, and such other data as may be useful concerning the 
mark. This register shall be a continuation of the register 
provided in section 1(a) of the Act of March 19, 1920.
          * * * * * * *

                 TITLE X--CONSTRUCTION AND DEFINITIONS

  Sec. 45. In the construction of this Act, unless the contrary 
is plainly apparent from the context--
  The United States includes and embraces all territory which 
is under its jurisdiction and control.
  The word ``commerce'' means all commerce which may lawfully 
be regulated by Congress.
          * * * * * * *
  [The term ``Commissioner'' means the Commissioner of Patents 
and Trademarks.] The term ``Director'' means the Director of 
the United States Patent and Trademark Office.
          * * * * * * *

                   TITLE XI--REPEAL OF PREVIOUS ACTS

          * * * * * * *
  Sec. 47. (a) * * *
  (b) In any case in which an appeal is pending before the 
United States Court of Customs and Patent Appeals or any United 
States Circuit Court of Appeals or the United States Court of 
Appeals for the District of Columbia or the United States 
Supreme Court at the effective date of this Act, the court, if 
it be of the opinion that the provisions of this Act are 
applicable to the subject matter of the appeal, may apply such 
provision or may remand the case to the [Commissioner] Director 
or to the district court for the taking of additional evidence 
or a new trail or for reconsideration of the decision on the 
record as made, as the appellate court may deem proper.
          * * * * * * *
                              ----------                              


     SECTION 10101 OF THE OMNIBUS BUDGET RECONCILIATION ACT OF1990

[SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.
  [(a) Surcharges.--There shall be a surcharge, during fiscal 
years 1991 through 1998, on all fees authorized by subsections 
(a) and (b) of section 41 of title 35, United States Code, in 
order to ensure that the amounts specified in subsection (c) 
are collected.
  [(b) Use of Surcharges.--Notwithstanding section 3302 of 
title 31, United States Code, beginning in fiscal year 1991, 
all surcharges collected by the Patent and Trademark Office--
          [(1) in fiscal year 1991--
                  [(A) shall be credited to a separate account 
                established in the Treasury and ascribed to the 
                Patent and Trademark Office activities in the 
                Department of Commerce as offsetting receipts, 
                and
                  [(B) of these surcharges, $91,000,000 shall 
                be available only to the Patent and Trademark 
                Office, to the extent provided in appropriation 
                Acts, and the additional surcharge receipts, 
                totalling $18,807,000, shall be available only 
                to the Patent and Trademark Office without 
                appropriation, for all authorized activities 
                and operations of the office, including all 
                direct and indirect costs of services provided 
                by the office,
          [(2) in fiscal years 1992 through 1998--
                  [(A) shall be credited to a separate account 
                established in the Treasury and ascribed to the 
                Patent and Trademark Office activities in the 
                Department of Commerce as offsetting receipts, 
                and
                  [(B) shall be available only to the Patent 
                and Trademark Office, to the extent provided in 
                appropriation Acts, for all authorized 
                activities and operations of the office, 
                including all direct and indirect costs of 
                services provided by the office, and
          [(3) shall remain available until expended.
  [(c) Establishment of Surcharges.--In fiscal years 1991 
through 1998, the Commissioner of Patents and Trademarks shall 
establish surcharges under subsection (a), subject to the 
provisions of section 553 of title 5, United States Code, in 
order to ensure that the following amounts, but not more than 
the following amounts, of patent and trademark user fees are 
collected:
          [(1) $109,807,000 in fiscal year 1991.
          [(2) $95,000,000 in fiscal year 1992.
          [(3) $99,000,000 in fiscal year 1993.
          [(4) $103,000,000 in fiscal year 1994.
          [(5) $107,000,000 in fiscal year 1995.
          [(6) $111,000,000 in fiscal year 1996.
          [(7) $115,000,000 in fiscal year 1997.
          [(8) $119,000,000 in fiscal year 1998.
  [(d) Repeal.--Section 105(a) of Public Law 100-703 (102 Stat. 
4675) is repealed.
  [(e) Report on Fees.--The Commissioner of Patents and 
Trademarks shall study the structure of all fees collected by 
the Patent and Trademark Office and, not later than May 1, 
1991, shall submit to the Congress a report on all fees to be 
collected by the office in fiscal years 1992 through 1995. The 
report shall include a proposed schedule of fees that would 
distribute the surcharges provided by subsection (a) among all 
fees collected by the office, and recommendations for any 
statutory changes that may be necessary to implement the 
proposals contained in the report.]

SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.

  (a) Surcharges.--There shall be a surcharge on all fees 
authorized by subsections (a) and (b) of section 41 of title 
35, United States Code, in order to ensure that the amounts 
specified in subsection (c) are collected.
  (b) Use of Surcharges.--Notwithstanding section 3302 of title 
31, United States Code, all surcharges collected by the Patent 
and Trademark Office--
          (1) shall be credited to a separate account 
        established in the Treasury and ascribed to the 
        activities of the United States Patent and Trademark 
        Office as offsetting collections,
          (2) shall be collected by and available to the United 
        States Patent and Trademark Office for all authorized 
        activities and operations of the Office, including all 
        direct and indirect costs of services provided by the 
        office, and
          (3) shall remain available until expended.
  (c) Establishment of Surcharges.--The Director of the United 
States Patent and Trademark Office shall establish surcharges 
under subsection (a), subject to the provisions of section 553 
of title 5, United States Code, in order to ensure that 
$119,000,000, but not more than $119,000,000, are collected in 
fiscal year 1999 and each fiscal year thereafter.
  (d) Appropriations Act Required.--Notwithstanding subsections 
(a) through (c), no fee established by subsection (a) shall be 
collected nor shall be available for spending without prior 
authorization in appropriations Acts.
                              ----------                              


              SECTION 9101 OF TITLE 31, UNITED STATES CODE

Sec. 9101. Definitions

  In this chapter--
          (1) * * *
          * * * * * * *
          (3) ``wholly owned Government corporation'' means--
                  (A) * * *
          * * * * * * *
                  (R) the United States Patent and Trademark 
                Office.
                              ----------                              


                      TITLE 5, UNITED STATES CODE

          * * * * * * *

                     PART I--THE AGENCIES GENERALLY

          * * * * * * *

                  CHAPTER 5--ADMINISTRATIVE PROCEDURE

          * * * * * * *

                    SUBCHAPTER I--GENERAL PROVISIONS

Sec. 500. Administrative practice; general provisions

  (a)  * * *
          * * * * * * *
  (e) Subsections (b)-(d) of this section do not apply to 
practice before the [Patent Office] United States Patent and 
Trademark Office with respect to patent matters that continue 
to be covered by chapter 3 (sections 31-33) of title 35.
          * * * * * * *

                          PART III--EMPLOYEES

          * * * * * * *

                     Subpart D--Pay and Allowances

          * * * * * * *

                       CHAPTER 51--CLASSIFICATION

          * * * * * * *

Sec. 5102. Definitions; application

  (a)  * * *
          * * * * * * *
  (c) This chapter does not apply to--
          (2)  * * *
          * * * * * * *
          [(23) examiners-in-chief and designated examiners-in-
        chief in the Patent and Trademark Office, Department of 
        Commerce;]
          (23) administrative patent judges and designated 
        administrative patent judges in the United States 
        Patent and Trademark Office;
          * * * * * * *

                   CHAPTER 53--PAY RATES AND SYSTEMS

          * * * * * * *

              SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

          * * * * * * *

Sec. 5316. Positions at level V

  Level V of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Administrator, Bonneville Power Administration, 
        Department of the Interior.
          Administrator of the National Capital Transportation 
        Agency.
          Associate Administrators of the Small Business 
        Administration (4).
          * * * * * * *
          [Commissioner of Patents, Department of Commerce.]
          * * * * * * *
          [Deputy Commissioner of Patents and Trademarks.
          [Assistant Commissioner for Patents.
          [Assistant Commissioner for Trademarks.]
          Commissioner, Administration on Children, Youth, and 
        Families.
          Director, Bureau of Transportation Statistics.
          * * * * * * *
                              ----------                              


                  SECTION 9 OF THE SMALL BUSINESS ACT

  Sec. 9. (a) * * *
          * * * * * * *
  (p) STTR Policy Directive.--
          (1) Issuance.--The Administrator shall issue a policy 
        directive for the general conduct of the STTR programs 
        within the Federal Government. Such policy directive 
        shall be issued after consultation with--
                  (A) * * *
                  [(B) the Commissioner of Patents and 
                Trademarks; and]
                  (B) the Director of the United States Patent 
                and Trademark Office; and
          * * * * * * *
                              ----------                              


                        ACT OF FEBRUARY 14, 1903

 CHAP. 552.--An Act To establish the Department of Commerce and Labor.

          * * * * * * *

                         bureaus in department

  Sec. 12. The following named bureaus, administrations, 
services, offices, and programs of the public service, an all 
that pertains thereto, shall be under the jurisdiction and 
subject to the control of the Secretary of Commerce:
  [(a)] (1) National Oceanic and Atmospheric Administration;
  [(b)] (2) United States Travel and Tourism Administration;
  [(c)] (3) National Institute of Standards and Technology;
  [(d) Patent and Trademark Office;]
  [(e)] (4) Bureau of the Census;
  [(f)] (5) United States Flre Administration; and
  [(g)] (6) such other bureaus or other organizational units as 
the Secretary of Commerce may from time to time establish in 
accordance with law.
                              ----------                              


        SECTION 19 OF THE TENNESSEE VALLEY AUTHORITY ACT OF 1933

  Sec. 19. The Corporation, as an instrumentality and agency of 
the Government of the United States for the purpose of 
executing its constitutional powers, shall have access to the 
[Patent Office of the United States] United States Patent and 
Trademark Office for the purpose of studying, ascertaining, and 
copying all methods, formula, and scientific information (not 
including access to pending applications for patents) necessary 
to enable the Corporation to use and employ the most 
efficacious and economical process for the production of fixed 
nitrogen, or any essential ingredient of fertilizer, or any 
method of improving and cheapening the production of 
hydroelectric power, and any owner of a patent whose patent 
rights may have been thus in any way copied, used, infringed, 
or employed by the exercise of this authority by the 
Corporation shall have as the exclusive remedy a cause of 
action against the Corporation to be instituted and prosecuted 
on the equity side of the appropriate district court of the 
United States, for the recovery of reasonable compensation for 
such infringement. The [Commissioner of Patents] Director of 
the United States Patent and Trademark Office shall furnish to 
the Corporation, at its request and without payment of fees, 
copies of documents on file in his office: Provided, That the 
benefits of this section shall not apply to any art, machine, 
method of manufacture, or composition of matter, discovered or 
invented by such employee during the time of his employment or 
service with the Corporation or with the Government of the 
United States.
                              ----------                              


                           TRADE ACT OF 1974

                TITLE I--NEGOTIATING AND OTHER AUTHORITY

          * * * * * * *

 CHAPTER 8--IDENTIFICATION OF MARKET BARRIERS AND CERTAIN UNFAIR TRADE 
                                ACTIONS

          * * * * * * *

SEC. 182. IDENTIFICATION OF COUNTRIES THAT DENY ADEQUATE PROTECTION, OR 
                    MARKET ACCESS, FOR INTELLECTUAL PROPERTY RIGHTS.

  (a) * * *
          * * * * * * *
  (b) Special Rules for Identifications.--
          (1) * * *
          * * * * * * *
          (2) In identifying priority foreign countries under 
        subsection (a)(2), the Trade Representative shall--
                  (A) consult with the Register of Copyrights, 
                the [Commissioner of Patents and Trademarks] 
                Director of the United States Patent and 
                Trademark Office, other appropriate officers of 
                the Federal Government, and
          * * * * * * *

             TITLE III--RELIEF FROM UNFAIR TRADE PRACTICES

 CHAPTER 1--ENFORCEMENT OF UNITED STATES RIGHTS UNDER TRADE AGREEMENTS 
            AND RESPONSE TO CERTAIN FOREIGN TRADE PRACTICES

          * * * * * * *

SEC. 302. INITIATION OF INVESTIGATIONS.

    (a) * * *
          * * * * * * *
    (b) Initiation of Investigation by Means Other Than 
Petition.--
          (1) * * *
          (2)(A) * * *
          * * * * * * *
          (D) The Trade Representative shall, from time to 
        time, consult with the Register of Copyrights, the 
        [Commissioner of Patents and Trademarks] Director of 
        the United States Patent and Trademark Office, and 
        other appropriate officers of the Federal Government, 
        during any investigation initiated under this chapter 
        by reason of subparagraph (A).
          * * * * * * *
                              ----------                              


                         ACT OF APRIL 12, 1892

[No. 8.] Joint resolution to encourage the establishment and endowment 
  of institutions of learning at the national capital by defining the 
policy of the Government with reference to the use of its literary and 
                  scientific collections by students.

  Whereas, large collections illustrative of the various arts 
and sciences and facilitating literary and scientific research 
have been accumulated by the action of Congress through a 
series of years at the national capital; and
  Whereas it was the original purpose of the Government thereby 
to promote research and the diffusion of knowledge, and is now 
the settled policy and present practice of those charged with 
the care of these collections specially to encourage students 
who devote their time to the investigation and study of any 
branch of knowledge by allowing to them all proper use thereof; 
and
  Whereas it is represented that the enumeration of these 
facilities and the formal statement of this policy will 
encourage the establishment and endowment of institutions of 
learning at the seat of Government, and promote the work of 
education by attracting students to avail themselves of the 
advantages aforesaid under the direction of competent 
instructors: Therefore,
  Resolved by the Senate and House of Representatives of the 
United States of America, in Congress assembled, That the 
facilities for research and illustration in the following and 
any other Governmental collections now existing or hereafter to 
be established in the city of Washington for the promotion of 
knowledge shall be accessible, under such rules and 
restrictions as the officers in charge of each collection may 
prescribe, subject to such authority as is now or may hereafter 
be permitted by law, to the scientific investigators and to 
students of any institution of higher education now 
incorporated or hereafter to be incorporated under the laws of 
Congress or of the District of Columbia, to wit:
  One. Of the Library of Congress.
  Two. Of the National Museum.
  Three. Of the [Patent Office] United States Patent and 
Trademark Office.
          * * * * * * *
                              ----------                              


                  FEDERAL FOOD, DRUG, AND COSMETIC ACT

          * * * * * * *

                      CHAPTER V--DRUGS AND DEVICES

                    Subchapter A--Drugs and Devices

          * * * * * * *

                               new drugs

  Sec. 505. (a)  * * *
          * * * * * * *
  (m) For purposes of this section, the term ``patent'' means a 
patent issued by the [Patent and Trademark Office of the 
Department of Commerce] United States Patent and Trademark 
Office.
          * * * * * * *

                            new animal drugs

  Sec. 512. (a)  * * *
          * * * * * * *
  (o) For purposes of this section, the term ``patent'' means a 
patent issued by the [Patent and Trademark Office of the 
Department of Commerce] United States Patent and Trademark 
Office.
          * * * * * * *

                     CHAPTER VII--GENERAL AUTHORITY

            Subchapter A--General Administrative Provisions

          * * * * * * *

                    examinations and investigations

  Sec. 702. (a) * * *
          * * * * * * *
  (d) The Secretary is authorized and directed, upon request 
from the [Commissioner of Patents] Director of the United 
States Patent and Trademark Office, to furnish full and 
complete information with respect to such questions relating to 
drugs as the Commissioner may submit concerning any patent 
application. The Secretary is further authorized, upon receipt 
of any such request, to conduct or cause to be conducted, such 
research as may be required.
          * * * * * * *
                              ----------                              


         SECTION 105 OF THE FEDERAL ALCOHOL ADMINISTRATION ACT

               unfair competition and unlawful practices

  Sec. 105. (a)  * * *
          * * * * * * *
  (e) Labeling.--To sell or ship or deliver for sale or 
shipment, or otherwise introduce in interstate or foreign 
commerce, or to receive therein, or to remove from customs 
custody for consumption, any distilled spirits, wine, or malt 
beverages in bottles, unless such products are bottled, 
packaged, and labeled in conformity with such regulations, to 
be prescribed by the Administrator, with respect to packaging, 
marking, branding, and labeling and size and fill of container 
(1) as will prohibit deception of the consumer with respect to 
such products or the quantity thereof and as will prohibit, 
irrespective of falsity, such statements relating to age, 
manufacturing processes, analyses, guarantees, and scientific 
or irrelevant matters as the Adminstrator finds to be likely to 
mislead the consumer; (2) as will provide the consumer with 
adequate information as to the identity and quality of the 
products, the alcoholic content thereof (except that statements 
of, or statements likely to be considered as statements of, 
alcoholic content of malt beverages are prohibited unless 
required by State law and except that, in case of wines, 
statements of alcoholic content shall be required only for 
wines containing more than 14 per centum of alcohol by volume), 
the net contents of the package, and the manufacturer or 
bottler or importer of the product; (3) as will require an 
accurate statement, in the case of distilled spirits (other 
than cordials, liqueurs, and specialties) produced by blending 
or rectification, if neutral spirits have been used in the 
production thereof, informing the consumer of the percentage of 
neutral spirits so used and of the name of the commodity from 
which such neutral spirits have been distilled, or in case of 
neutral spirits or of gin produced by a process of continuous 
distillation, the name of the commodity from which distilled; 
(4) as will prohibit statements on the label that are 
disparaging of a competitor's products or are false, 
misleading, obscene, or indecent; and (5) as will prevent 
deception of the consumer by use of a trade or brand name that 
is the name of any living individual of public prominence, or 
existing private or public organization, or is a name that is 
in simulation or is an abbreviation thereof, and as will 
prevent the use of a graphic, pictorial, or emblematic 
representation of any such individual or organization, if the 
use of such name or representation is likely falsely to lead 
the consumer to believe that the product has been indorsed, 
made, or used by, or produced for, or under the supervision of, 
or in accordance with the specifications of, such individual or 
organization: Provided, That this clause shall not apply to the 
use of the name of any person engaged in business as a 
distiller, brewer, rectifier, blender, or other producer, or as 
an importer, wholesaler, retailer, bottler, or warehouseman, of 
distilled spirits, wine, or malt beverages, nor to the use by 
any person of a trade or brand name used by him or his 
predecessor in interest prior to the date of enactment of this 
Act; including regulations requiring, at time of release from 
customs custody, certificates issued by foreign governments 
covering origin, age, and identity of imported products: 
Provided further, That nothing herein nor any decision, ruling, 
or regulation of any Department of the Government shall deny 
the right of any person to use any trade name or brand of 
foreign origin not presently effectively registered in the 
[United States Patent Office] United States Patent and 
Trademark Office which has been used by such person or 
predecessors in the United States for a period of at least five 
years last past, if the use of such name or brand is qualified 
by the name of the locality in the United States in which the 
product is produced, and, in the case of the use of such name 
or brand on any label or in any advertisement, if such 
qualification is as conspicuous as such name or brand.
          * * * * * * *
                              ----------                              


                      TITLE 28, UNITED STATES CODE

          * * * * * * *

                    PART IV--JURISDICTION AND VENUE

          * * * * * * *

                     CHAPTER 83--COURTS OF APPEALS

          * * * * * * *

Sec. 1295. Jurisdiction of the United States Court of Appeals for the 
                    Federal Circuit

  (a) The United States Court of Appeals for the Federal 
Circuit shall have exclusive jurisdiction--
          (1) * * *
          * * * * * * *
          (4) of an appeal from a decision of--
                  (A) the Board of Patent Appeals and 
                Interferences of the United States Patent and 
                Trademark Office with respect to patent 
                applications and interferences, at the instance 
                of an applicant for a patent or any party to a 
                patent interference, and any such appeal shall 
                waive the right of such applicant or party to 
                proceed under section 145 or 146 of title 35;
                  (B) the [Commissioner of Patents and 
                Trademarks] Director of the United States 
                Patent and Trademark Office or the Trademark 
                Trial and Appeal Board with respect to 
                applications for registration of marks and 
                other proceedings as provided in section 21 of 
                the Trademark Act of 1946 (15 U.S.C. 1071); or
          * * * * * * *

                           PART V--PROCEDURE

          * * * * * * *

                   CHAPTER 115--EVIDENCE; DOCUMENTARY

          * * * * * * *

Sec. 1744. Copies of [Patent Office] United States Patent and Trademark 
                    Office documents, generally

  Copies of letters patent or of any records, books, papers, or 
drawings belonging to the [Patent Office] United States Patent 
and Trademark Office and relating to patents, authenticated 
under the seal of the [Patent Office] United States Patent and 
Trademark Office and certified by the [Commissioner of Patents] 
Director of the United States Patent and Trademark Office, or 
by another officer of the [Patent Office] United States Patent 
and Trademark Office authorized to do so by the [Commissioner] 
Director, shall be admissible in evidence with the same effect 
as the originals.
  Any person making application and paying the required fee may 
obtain such certified copies.

Sec. 1745. Copies of foreign patent documents

  Copies of the specifications and drawings of foreign letters 
patent, or applications for foreign letters patent, and copies 
of excerpts of the official journals and other official 
publications of foreign patent offices belonging to the [United 
States Patent Office] United States Patent and Trademark 
Office, certified in the manner provided by section 1744 of 
this title are prima facie evidence of their contents and of 
the dates indicated on their face.
          * * * * * * *

                      CHAPTER 123--FEES AND COSTS

          * * * * * * *

Sec. 1928. Patent infringement action; disclaimer not filed

  Whenever a judgment is rendered for the plaintiff in any 
patent infringement action involving a part of a patent and it 
appears that the patentee, in his specifications, claimed to 
be, but was not, the original and first inventor or discoverer 
of any material or substantial part of the thing patented, no 
costs shall be included in such judgment, unless the proper 
disclaimer has been filed in the [Patent Office] United States 
Patent and Trademark Office prior to the commencement of the 
action.
          * * * * * * *
                              ----------                              


                       ATOMIC ENERGY ACT OF 1954

                         TITLE I--ATOMIC ENERGY

          * * * * * * *

                   CHAPTER 13. PATENTS AND INVENTIONS

  Sec. 151. Inventions Relating to Atomic Weapons, and Filing 
of Reports.--
  a. * * *
          * * * * * * *
  c. Any person who has made or hereafter makes any invention 
or discovery useful in the production or utilization of special 
nuclear material or atomic energy, shall file with the 
Commission a report containing a complete description thereof 
unless such invention or discovery is described in an 
application for a patent filed with the [Commissioner of 
Patents] Director of the United States Patent and Trademark 
Office by such person within the time required for the filing 
of such report. The report covering any such invention or 
discovery shall be filed on or before the one hundred and 
eightieth day after such person first discovers or first has 
reason to believe that such invention or discovery is useful in 
such production or utilization.
  d. The [Commissioner of Patents] Director of the United 
States Patent and Trademark Office shall notify the Commission 
of all applications for patents heretofore or hereafter filed 
which, in his opinion, disclose inventions or discoveries 
required to be reported under subsection 151 c., and shall 
provide the Commission access to all such applications.
          * * * * * * *
  Sec. 152. Inventions Made or Conceived During Commission 
Contracts.--Any invention or discovery, useful in the 
production or utilization of special nuclear material or atomic 
energy, made or conceived in the course of or under any 
contract, subcontract, or arrangement entered into with or for 
the benefit of the Commission, regardless of whether the 
contract, subcontract, or arrangement involved the expenditure 
of funds by the Commission, shall be vested in, and be the 
property of, the Commission, except that the Commission may 
waive its claim to any such invention or discovery under such 
circumstances as the Commission may deem appropriate, 
consistent with the policy of this section. No patent for any 
invention or discovery, useful in the production or utilization 
of special nuclear material or atomic energy, shall be issued 
unless the applicant files with the application, or within 
thirty days after request therefor by the [Commissioner of 
Patents] Director of the United States Patent and Trademark 
Office (unless the Commission advises the [Commissioner of 
Patents] Director of the United States Patent and Trademark 
Office that its rights have been determined and that 
accordingly no statement is necessary) a statement under oath 
setting forth the full facts surrounding the making or 
conception of the invention or discovery described in the 
application and whether the invention or discovery was made or 
conceived in the course of or under any contract, subcontract, 
or arrangement entered into with or for the benefit of the 
Commission, regardless of whether the contract, subcontract, or 
arrangement involved the expenditure of funds by the 
Commission. The [Commissioner of Patents] Director of the 
United States Patent and Trademark Office shall as soon as the 
application is otherwise in condition for allowance forward 
copies of the application and the statement to the Commission.
  The [Commissioner of Patents] Director of the United States 
Patent and Trademark Office may proceed with the application 
and issue the patent to the applicant (if the invention or 
discovery is otherwise patentable) unless the Commission, 
within 90 days after receipt of copies of the application and 
statement, directs the [Commissioner of Patents] Director of 
the United States Patent and Trademark Office to issue the 
patent to the Commission (if the invention or discovery is 
otherwise patentable) to be held by the Commission as the agent 
of and on behalf of the United States.
  If the Commission files such a direction with the 
[Commissioner of Patents] Director of the United States Patent 
and Trademark Office, and if the applicant's statement claims, 
and the applicant still believes, that the invention or 
discovery was not made or conceived in the course of or under 
any contract, subcontract or arrangement entered into with or 
for the benefit of the Commission entitling the Commission to 
the title to the application or the patent the applicant may, 
within 30 days after notification of the filing of such a 
direction, request a hearing before the Board of Patent Appeals 
and Interferences. The Board shall have the power to hear and 
determine whether the Commission was entitled to the direction 
filed with the [Commissioner of Patents] Director of the United 
States Patent and Trademark Office. The Board shall follow the 
rules and procedures established for interference cases and an 
appeal may be taken by either the applicant or the Commission 
from the final order of the Board to the United States Court of 
Appeals for the Federal Circuit in accordance with the 
procedures governing the appeals from the Board of Patent 
Appeals and Interferences.
  If the statement filed by the applicant should thereafter be 
found to contain false material statements any notification by 
the Commission that it has no objections to the issuance of a 
patent to the applicant shall not be deemed in any respect to 
constitute a waiver of the provisions of this section or of any 
applicable civil or criminal statute, and the Commission may 
have the title to the patent transferred to the Commission on 
the records of the [Commissioner of Patents] Director of the 
United States Patent and Trademark Office in accordance with 
the provisions of this section. A determination of rights by 
the Commission pursuant to a contractual provision or other 
arrangement prior to the request of the [Commissioner of 
Patents] Director of the United States Patent and Trademark 
Office for the statement, shall be final in the absence of 
false material statements or nondisclosure of material facts by 
the applicant.
          * * * * * * *
                              ----------                              


     SECTION 305 OF THE NATIONAL AERONAUTICS AND SPACE ACT OF 1958

                     property rights in inventions

  Sec. 305. (a)  * * *
          * * * * * * *
  (c) No patent may be issued to any applicant other than the 
Administrator for any invention which appears to the 
[Commissioner of Patents] Director of the United States Patent 
and Trademark Office (hereafter in this section referred to as 
the ``Director'', to have significant utility in the conduct of 
aeronautical and space activities unless the applicant files 
with the [Commissioner] Director, with the application or 
within thirty days after request therefor by the [Commissioner] 
Director, a written statement executed under oath setting forth 
the full facts concerning the circumstances under which such 
invention was made and stating the relationship (if any) of 
such invention to the performance of any work under any 
contract of the Administration. Copies of each such statement 
and the application to which it relates shall be transmitted 
forthwith by the [Commissioner] Director to the Administrator.
          * * * * * * *
                              ----------                              


 SECTION 12 OF THE SOLAR HEATING AND COOLING DEMONSTRATION ACT OF 1974

dissemination of information and other actions to promote practical use 
               of solar heating and cooling technologies

  Sec. 12. (a) The Secretary shall take all possible steps to 
assure that full and complete information with respect to the 
demonstrations and other activities conducted under this Act is 
made available to Federal, State, and local authorities, the 
building industry and related segments of the economy, the 
scientific and technical community, and the public at large, 
both during and after the close of the programs under this Act, 
with the objective of promoting and facilitating to the maximum 
extent feasible the early and widespread practical use of solar 
energy for the heating and cooling of buildings throughout the 
United States. In accordance with regulations prescribed under 
section 16 such information shall be disseminated on a 
coordinated basis by the Secretary, the Administrator, the 
Director of the National Bureau of Standards, the Director, the 
[Commissioner of the Patent Office] Director of the United 
States Patent and Trademark Office, and other appropriate 
Federal offices and agencies.
          * * * * * * *
                              ----------                              


                      TITLE 44, UNITED STATES CODE

          * * * * * * *

        CHAPTER 11--EXECUTIVE AND JUDICIARY PRINTING AND BINDING

          * * * * * * *

Sec. 1111. Annual reports: time for furnishing manuscript and proofs to 
                    Public Printer

  The appropriations made for printing and binding may not be 
used for an annual report or the accompanying documents unless 
the manuscript and proof is furnished to the Public Printer in 
the following manner:
          manuscript of the documents accompanying annual 
        reports on or before February 1, each year;
          manuscript of the annual report on or before February 
        15, each year;
          complete revised proofs of the accompanying documents 
        on March 1, each year, and of the annual reports on 
        March 10, each year.
  Annual reports and accompanying documents shall be printed, 
made public, and available for distribution not later than 
within the first five days after the assembling of each regular 
session of Congress.
  This section does not apply to the annual reports of the 
Smithsonian Institution, [the Commissioner of Patents,] the 
Comptroller of the Currency, or the Secretary of the Treasury.
          * * * * * * *

Sec. 1114. Annual reports: number of copies for Congress

  One thousand copies of the annual reports of the departments 
to Congress shall be printed for the Senate, and two thousand 
for the House of Representatives.
  The usual number only of the reports of the Chief of 
Engineers of the Army, [the Commissioner of Patents,] the 
Commissioner of Internal Revenue, the report of the Chief 
Signal Officer of the Department of the Army, and the Chief of 
Ordnance shall be printed.
          * * * * * * *

Sec. 1123. Binding materials; bookbinding for libraries

  Binding for the departments of the Government shall be done 
in plain sheep or cloth, except that record and account books 
may be bound in Russia leather, sheep fleshers, and skivers, 
when authorized by the head of a department. The libraries of 
the several departments, the Library of Congress, the libraries 
of the Surgeon General's Office, [the Patent Office,] and the 
Naval Observatory may have books for the exclusive use of these 
libraries bound in half Turkey, or material no more expensive.
          * * * * * * *

              CHAPTER 13--PARTICULAR REPORTS AND DOCUMENTS

Sec.
1301.  Agriculture, Department of: report of Secretary.
     * * * * * * *
[1337.  Patent Office: publications authorized to be printed.
[1338.  Patent Office: limitations and conditions concerning printing 
          and lithographing.]
     * * * * * * *

[Sec. 1337. Patent Office: publications authorized to be printed

  [The Commissioner of Patents, upon the requisition of the 
Secretary of Commerce may cause to be printed:
  [1. Patents issued.--The patents for inventions and designs 
issued by the Patent Office, including grants, specifications, 
and drawings, together with copies of them, and of patents 
already issued, in the number needed for the business of the 
office.
  [2. Trade-marks and labels.--The certificates of trade-marks 
and labels registered in the Patent Office, including 
descriptions and drawings, together with copies of them, and of 
trade-marks and labels previously registered, in the numbers 
needed for the business of the office.
  [3. Official Gazette.--The Official Gazette of the United 
States Patent Office in numbers sufficient to supply all who 
subscribe for it at $5 a year; also for exchange for other 
scientific publications desirable for the use of the Patent 
Office; also to supply one copy to each Senator and 
Representative in Congress; with one hundred additional copies, 
together with weekly, monthly, and annual indexes. The ``usual 
number'' of the Official Gazette may not be printed.
  [4. Report of Commissioner of Patents.--The annual report of 
the Commissioner of Patents, not exceeding five hundred in 
number, for distribution by him; the annual report of the 
Commissioner of Patents to Congress, without the list of 
patents, not exceeding one thousand five hundred in number, for 
distribution by him; and the annual report of the Commissioner 
of Patents to Congress, with the list of patents, five hundred 
copies for sale by him, if needed, and in addition the ``usual 
number'' only shall be printed.
  [5. Rules of practice, laws, etc.--Pamphlet copies of the 
rules of practice, and of the patent laws, and pamphlet copies 
of the laws and rules relating to trade-marks and labels, and 
circulars relating to the business of the office, all in 
numbers as needed for the business of the office. The ``usual 
number'' may not be printed.
  [6. Decisions of Commissioner and courts.--Annual volumes of 
the decisions of the Commissioner of Patents and of the United 
States courts in patent cases, not exceeding one thousand five 
hundred in number, of which the usual number shall be printed, 
and for this purpose a copy of each shall be transmitted to 
Congress promptly when prepared.
  [7. Indexes.--Indexes to patents relating to electricity, and 
indexes to foreign patents, in the numbers needed for the 
business of the office. The ``usual number'' may not be 
printed.

[Sec. 1338. Patent Office: limitations and conditions concerning 
                    printing and lithographing

  [Printing for the Patent Office making use of lithography or 
photo-lithography, together with the plates, shall be 
contracted for and performed under the direction of the 
Commissioner of Patents, under limitations and conditions 
prescribed by the Joint Committee on Printing, and other 
printing for the Patent Office shall be done by the Public 
Printer under limitations and conditions prescribed by the 
Joint Committee on Printing. The entire work may be done at the 
Government Printing Office when in the judgment of the Joint 
Committee on Printing it is to the interest of the Government.]
          * * * * * * *
                              ----------                              


              SECTION 10 OF THE TRADING WITH THE ENEMY ACT

  Sec. 10. That nothing contained in this Act shall be held to 
make unlawful any of the following Acts:
  (a) * * *
          * * * * * * *
  (i) Whenever the publication of an invention by the granting 
of a patent may in the opinion of the President, be detrimental 
to the public safety or defense, or may assist the enemy or 
endanger the successful prosecution of the war, he may order 
that the invention be kept secret and withhold the grant of a 
patent until the end of the war: Provided, That the invention 
disclosed in the application for said patent may be held 
abandoned upon it being established before or by the 
[Commissioner of Patents] Director of the United States Patent 
and Trademark Office that, in violation of said order, said 
invention has been published or that an application for a 
patent therefor has been filed in any other country, by the 
inventor or his assigns or. legal representatives, without the 
consent or approval of the commissioner or under a license of 
the President.
  When an applicant whose patent is withheld as herein provided 
and who faithfully obeys the order of the President above 
referred to shall tender his invention to the Government of the 
United States for its use, he shall, if he ultimately receives 
a patent, have the right to sue for compensation in the United 
States Claims Court, such right to compensation to begin from 
the date of the use of the invention by the Government.
                              ----------                              


            SECTION 11 OT THE INSPECTOR GENERAL ACT OF 1978

                              definitions

  Sec. 11. As used in this Act--
          (1) the term ``head of the establishment'' means the 
        Secretary of Agriculture, Commerce, Defense, Education, 
        Energy, Health and Human Services, Housing and Urban 
        Development, the Interior, Labor, State, 
        Transportation, or the Treasury; the Attorney General; 
        the Administrator of the Agency for International 
        Development, Environmental Protection, General 
        Services, National Aeronautics and Space, or Small 
        Business, or Veterans' Affairs; the Director of the 
        Federal Emergency Management Agency, the Office of 
        Personnel Management or the United States Information 
        Agency; the Chairman of the Nuclear Regulatory 
        Commission or the Railroad Retirement Board; the 
        Chairperson of the Thrift Depositor Protection 
        Oversight Board; the Chief Executive Officer of the 
        Corporation for National and Community Service; the 
        Administrator of the Community Development Financial 
        Institutions Fund; [and] the chief executive officer of 
        the Resolution Trust Corporation; [and] the Chairperson 
        of the Federal Deposit Insurance Corporation; [or] the 
        Commissioner of Social Security, Social Security 
        Administration; or the Director of the United States 
        Patent and Trademark Office as the case may be;
          (2) the term ``establishment'' means the Department 
        of Agriculture, Commerce, Defense, Education, Energy, 
        Health and Human Services, Housing and Urban 
        Development, the Interior, Justice, Labor, State, 
        Transportation, or the Treasury; the Agency for 
        International Development, the Community Development 
        Financial Institutions Fund, the Environmental 
        Protection Agency, the Federal Emergency Management 
        Agency, the General Services Administration, the 
        National Aeronautics and Space Administration, the 
        Nuclear Regulatory Commission, the Office of Personnel 
        Management, the Railroad Retirement Board, the 
        Resolution Trust Corporation, the Federal Deposit 
        Insurance Corporation, the Small Business 
        Administration, the United States Information Agency, 
        the Corporation for National and Community Service, 
        [or] the Veterans' Administration, [or the Social 
        Security Administration] the Social Security 
        Administration, or the United States Patent and 
        Trademark Office; as the case may be;
          * * * * * * *

                                
