[House Report 106-464]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-464

======================================================================



 
  INTELLECTUAL PROPERTY AND COMMUNICATIONS OMNIBUS REFORM ACT OF 1999

                                _______
                                

                November 9, 1999.--Ordered to be printed

                                _______
                                

 Mr. Tauzin, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 1554]

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

               TITLE I--SATELLITE HOME VIEWER IMPROVEMENT

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

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

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

               TITLE III--TRADEMARK CYBERPIRACY PREVENTION

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

                      TITLE IV--INVENTOR PROTECTION

Sec. 4001. Short title.

                      Subtitle A--Inventors' Rights

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

              Subtitle B--Patent and Trademark Fee Fairness

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

                   Subtitle C--First Inventor Defense

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

                    Subtitle D--Patent Term Guarantee

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

Subtitle E--Domestic Publication of Patent Applications Published Abroad

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

        Subtitle F--Optional Inter Partes Reexamination Procedure

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

                 Subtitle G--Patent and Trademark Office

Sec. 4701. Short title.

          Chapter 1--United States Patent and Trademark Office

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

             Chapter 2--Effective Date; Technical Amendments

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

                   Chapter 3--Miscellaneous Provisions

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

               Subtitle H--Miscellaneous Patent Provisions

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

                    TITLE V--MISCELLANEOUS PROVISIONS

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

               TITLE I--SATELLITE HOME VIEWER IMPROVEMENT

SEC. 1001. SHORT TITLE.

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

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

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

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

    ``(a) Secondary Transmissions of Television Broadcast 
Stations by Satellite Carriers.--A secondary transmission of a 
performance or display of a work embodied in a primary 
transmission of a television broadcast station into the 
station's local market shall be subject to statutory licensing 
under this section if--
            ``(1) the secondary transmission is made by a 
        satellite carrier to the public;
            ``(2) with regard to secondary transmissions, the 
        satellite carrier is in compliance with the rules, 
        regulations, or authorizations of the Federal 
        Communications Commission governing the carriage of 
        television broadcast station signals; and
            ``(3) the satellite carrier makes a direct or 
        indirect charge for the secondary transmission to--
                    ``(A) each subscriber receiving the 
                secondary transmission; or
                    ``(B) a distributor that has contracted 
                with the satellite carrier for direct or 
                indirect delivery of the secondary transmission 
                to the public.
    ``(b) Reporting Requirements.--
            ``(1) Initial lists.--A satellite carrier that 
        makes secondary transmissions of a primary transmission 
        made by a network station under subsection (a) shall, 
        within 90 days after commencing such secondary 
        transmissions, submit to the network that owns or is 
        affiliated with the network station a list identifying 
        (by name in alphabetical order and street address, 
        including county and zip code) all subscribers to which 
        the satellite carrier makes secondary transmissions of 
        that primary transmission under subsection (a).
            ``(2) Subsequent lists.--After the list is 
        submitted under paragraph (1), the satellite carrier 
        shall, on the 15th of each month, submit to the network 
        a list identifying (by name in alphabetical order and 
        street address, including county and zip code) any 
        subscribers who have been added or dropped as 
        subscribers since the last submission under this 
        subsection.
            ``(3) Use of subscriber information.--Subscriber 
        information submitted by a satellite carrier under this 
        subsection may be used only for the purposes of 
        monitoring compliance by the satellite carrier with 
        this section.
            ``(4) Requirements of networks.--The submission 
        requirements of this subsection shall apply to a 
        satellite carrier only if the network to which the 
        submissions are to be made places on file with the 
        Register of Copyrights a document identifying the name 
        and address of the person to whom such submissions are 
        to be made. The Register of Copyrights shall maintain 
        for public inspection a file of all such documents.
    ``(c) No Royalty Fee Required.--A satellite carrier whose 
secondary transmissions are subject to statutory licensing 
under subsection (a) shall have no royalty obligation for such 
secondary transmissions.
    ``(d) Noncompliance With Reporting and Regulatory 
Requirements.--Notwithstanding subsection (a), the willful or 
repeated secondary transmission to the public by a satellite 
carrier into the local market of a television broadcast station 
of a primary transmission embodying a performance or display of 
a work made by that television broadcast station is actionable 
as an act of infringement under section 501, and is fully 
subject to the remedies provided under sections 502 through 506 
and 509, if the satellite carrier has not complied with the 
reporting requirements of subsection (b) or with the rules, 
regulations, and authorizations of the Federal Communications 
Commission concerning the carriage of television broadcast 
signals.
    ``(e) Willful Alterations.--Notwithstanding subsection (a), 
the secondary transmission to the public by a satellite carrier 
into the local market of a television broadcast station of a 
performance or display of a work embodied in a primary 
transmission made by that television broadcast station is 
actionable as an act of infringement under section 501, and is 
fully subject to the remedies provided by sections 502 through 
506 and sections 509 and 510, if the content of the particular 
program in which the performance or display is embodied, or any 
commercial advertising or station announcement transmitted by 
the primary transmitter during, or immediately before or after, 
the transmission of such program, is in any way willfully 
altered by the satellite carrier through changes, deletions, or 
additions, or is combined with programming from any other 
broadcast signal.
    ``(f) Violation of Territorial Restrictions on Statutory 
License for Television Broadcast Stations.--
            ``(1) Individual violations.--The willful or 
        repeated secondary transmission to the public by a 
        satellite carrier of a primary transmission embodying a 
        performance or display of a work made by a television 
        broadcast station to a subscriber who does not reside 
        in that station's local market, and is not subject to 
        statutory licensing under section 119 or a private 
        licensing agreement, is actionable as an act of 
        infringement under section 501 and is fully subject to 
        the remedies provided by sections 502 through 506 and 
        509, except that--
                    ``(A) no damages shall be awarded for such 
                act of infringement if the satellite carrier 
                took corrective action by promptly withdrawing 
                service from the ineligible subscriber; and
                    ``(B) any statutory damages shall not 
                exceed $5 for such subscriber for each month 
                during which the violation occurred.
            ``(2) Pattern of violations.--If a satellite 
        carrier engages in a willful or repeated pattern or 
        practice of secondarily transmitting to the public a 
        primary transmission embodying a performance or display 
        of a work made by a television broadcast station to 
        subscribers who do not reside in that station's local 
        market, and are not subject to statutory licensing 
        under section 119 or a private licensing agreement, 
        then in addition to the remedies under paragraph (1)--
                    ``(A) if the pattern or practice has been 
                carried out on a substantially nationwide 
                basis, the court--
                            ``(i) shall order a permanent 
                        injunction barring the secondary 
                        transmission by the satellite carrier 
                        of the primary transmissions of that 
                        television broadcast station (and if 
                        such television broadcast station is a 
                        network station, all other television 
                        broadcast stations affiliated with such 
                        network); and
                            ``(ii) may order statutory damages 
                        not exceeding $250,000 for each 6-month 
                        period during which the pattern or 
                        practice was carried out; and
                    ``(B) if the pattern or practice has been 
                carried out on a local or regional basis with 
                respect to more than 1 television broadcast 
                station, the court--
                            ``(i) shall order a permanent 
                        injunction barring the secondary 
                        transmission in that locality or region 
                        by the satellite carrier of the primary 
                        transmissions of any television 
                        broadcast station; and
                            ``(ii) may order statutory damages 
                        not exceeding $250,000 for each 6-month 
                        period during which the pattern or 
                        practice was carried out.
    ``(g) Burden of Proof.--In any action brought under 
subsection (f), the satellite carrier shall have the burden of 
proving that its secondary transmission of a primary 
transmission by a television broadcast station is made only to 
subscribers located within that station's local market or 
subscribers being served in compliance with section 119 or a 
private licensing agreement.
    ``(h) Geographic Limitations on Secondary Transmissions.--
The statutory license created by this section shall apply to 
secondary transmissions to locations in the United States.
    ``(i) Exclusivity With Respect to Secondary Transmissions 
of Broadcast Stations by Satellite to Members of the Public.--
No provision of section 111 or any other law (other than this 
section and section 119) shall be construed to contain any 
authorization, exemption, or license through which secondary 
transmissions by satellite carriers of programming contained in 
a primary transmission made by a television broadcast station 
may be made without obtaining the consent of the copyright 
owner.
    ``(j) Definitions.--In this section--
            ``(1) Distributor.--The term `distributor' means an 
        entity which contracts to distribute secondary 
        transmissions from a satellite carrier and, either as a 
        single channel or in a package with other programming, 
        provides the secondary transmission either directly to 
        individual subscribers or indirectly through other 
        program distribution entities.
            ``(2) Local market.--
                    ``(A) In general.--The term `local market', 
                in the case of both commercial and 
                noncommercial television broadcast stations, 
                means the designated market area in which a 
                station is located, and--
                            ``(i) in the case of a commercial 
                        television broadcast station, all 
                        commercial television broadcast 
                        stations licensed to a community within 
                        the same designated market area are 
                        within the same local market; and
                            ``(ii) in the case of a 
                        noncommercial educational television 
                        broadcast station, the market includes 
                        any station that is licensed to a 
                        community within the same designated 
                        market area as the noncommercial 
                        educational television broadcast 
                        station.
                    ``(B) County of license.--In addition to 
                the area described in subparagraph (A), a 
                station's local market includes the county in 
                which the station's community of license is 
                located.
                    ``(C) Designated market area.--For purposes 
                of subparagraph (A), the term `designated 
                market area' means a designated market area, as 
                determined by Nielsen Media Research and 
                published in the 1999-2000 Nielsen Station 
                Index Directory and Nielsen Station Index 
                United States Television Household Estimates or 
                any successor publication.
            ``(3) Network station; satellite carrier; secondary 
        transmission.--The terms `network station', `satellite 
        carrier' and `secondary transmission' have the meanings 
        given such terms under section 119(d).
            ``(4) Subscriber.--The term `subscriber' means a 
        person who receives a secondary transmission service 
        from a satellite carrier and pays a fee for the 
        service, directly or indirectly, to the satellite 
        carrier or to a distributor.
            ``(5) Television broadcast station.--The term 
        `television broadcast station'--
                    ``(A) means an over-the-air, commercial or 
                noncommercial television broadcast station 
                licensed by the Federal Communications 
                Commission under subpart E of part 73 of title 
                47, Code of Federal Regulations, except that 
                such term does not include a low-power or 
                translator television station; and
                    ``(B) includes a television broadcast 
                station licensed by an appropriate governmental 
                authority of Canada or Mexico if the station 
                broadcasts primarily in the English language 
                and is a network station as defined in section 
                119(d)(2)(A).''.
    (b) Infringement of Copyright.--Section 501 of title 17, 
United States Code, is amended by adding at the end the 
following new subsection:
    ``(f)(1) With respect to any secondary transmission that is 
made by a satellite carrier of a performance or display of a 
workembodied in a primary transmission and is actionable as an 
act of infringement under section 122, a television broadcast station 
holding a copyright or other license to transmit or perform the same 
version of that work shall, for purposes of subsection (b) of this 
section, be treated as a legal or beneficial owner if such secondary 
transmission occurs within the local market of that station.
    ``(2) A television broadcast station may file a civil 
action against any satellite carrier that has refused to carry 
television broadcast signals, as required under section 
122(a)(2), to enforce that television broadcast station's 
rights under section 338(a) of the Communications Act of 
1934.''.
    (c) Technical and Conforming Amendments.--The table of 
sections for chapter 1 of title 17, United States Code, is 
amended by adding after the item relating to section 121 the 
following:

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

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

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

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

    Section 119(c) of title 17, United States Code, is amended 
by adding at the end the following new paragraph:
            ``(4) Reduction.--
                    ``(A) Superstation.--The rate of the 
                royalty fee in effect on January 1, 1998, 
                payable in each case under subsection 
                (b)(1)(B)(i) shall be reduced by 30 percent.
                    ``(B) Network and public broadcasting 
                satellite feed.--The rate of the royalty fee in 
                effect on January 1, 1998, payable under 
                subsection (b)(1)(B)(ii) shall be reduced by 45 
                percent.
            ``(5) Public broadcasting service as agent.--For 
        purposes of section 802, with respect to royalty fees 
        paid by satellite carriers for retransmitting the 
        Public Broadcasting Service satellite feed, the Public 
        Broadcasting Service shall be the agent for all public 
        television copyright claimants and all Public 
        Broadcasting Service member stations.''.

SEC. 1005. DISTANT SIGNAL ELIGIBILITY FOR CONSUMERS.

    (a) Unserved Household.--
            (1) In general.--Section 119(d) of title 17, United 
        States Code, is amended by striking paragraph (10) and 
        inserting the following:
            ``(10) Unserved household.--The term `unserved 
        household', with respect to a particular television 
        network, means a household that--
                    ``(A) cannot receive, through the use of a 
                conventional, stationary, outdoor rooftop 
                receiving antenna, an over-the-air signal of a 
                primary network station affiliated with that 
                network of Grade B intensity as defined by the 
                Federal Communications Commission under section 
                73.683(a) of title 47 of the Code of Federal 
                Regulations, as in effect on January 1, 1999;
                    ``(B) is subject to a waiver granted under 
                regulations established under section 339(c)(2) 
                of the Communications Act of 1934;
                    ``(C) is a subscriber to whom subsection 
                (e) applies;
                    ``(D) is a subscriber to whom subsection 
                (a)(11) applies; or
                    ``(E) is a subscriber to whom the exemption 
                under subsection (a)(2)(B)(iii) applies.''.
            (2) Conforming amendment.--Section 119(a)(2)(B) of 
        title 17, United States Code, is amended to read as 
        follows:
                    ``(B) Secondary transmissions to unserved 
                households.--
                            ``(i) In general.--The statutory 
                        license provided for in subparagraph 
                        (A) shall be limited to secondary 
                        transmissions of the signals of no more 
                        than 2 network stations in a single day 
                        for each television network to persons 
                        who reside in unserved households.
                            ``(ii) Accurate determinations of 
                        eligibility.--
                                    ``(I) Accurate predictive 
                                model.--In determining 
                                presumptively whether a person 
                                resides in an unserved 
                                household under subsection 
                                (d)(10)(A), a court shall rely 
                                on the Individual Location 
                                Longley-Rice model set forth by 
                                the Federal Communications 
                                Commission in Docket No. 98-
                                201, as that model may be 
                                amended by the Commission over 
                                time under section 339(c)(3) of 
                                the Communications Act of 1934 
                                to increase the accuracy of 
                                that model.
                                    ``(II) Accurate 
                                measurements.--For purposes of 
                                site measurements to determine 
                                whether a person resides in an 
                                unserved household under 
                                subsection (d)(10)(A), a court 
                                shall rely on section 339(c)(4) 
                                of the Communications Act of 
                                1934.
                            ``(iii) C-band exemption to 
                        unserved households.--
                                    ``(I) In general.--The 
                                limitations of clause (i) shall 
                                not apply to any secondary 
                                transmissions by C-band 
                                services of network stations 
                                that a subscriber to C-band 
                                service received before any 
                                termination of such secondary 
                                transmissions before October 
                                31, 1999.
                                    ``(II) Definition.--In this 
                                clause the term `C-band 
                                service' means a service that 
                                is licensed by the Federal 
                                Communications Commission and 
                                operates in the Fixed Satellite 
                                Service under part 25 of title 
                                47 of the Code of Federal 
                                Regulations.''.
    (b) Exception to Limitation on Secondary Transmissions.--
Section 119(a)(5) of title 17, United States Code, is amended 
by adding at the end the following:
                    ``(E) Exception.--The secondary 
                transmission by a satellite carrier of a 
                performance or display of a work embodied in a 
                primary transmission made by a network station 
                to subscribers who do not reside in unserved 
                households shall not be an act of infringement if--
                            ``(i) the station on May 1, 1991, 
                        was retransmitted by a satellite 
                        carrier and was not on that date owned 
                        or operated by or affiliated with a 
                        television network that offered 
                        interconnected program service on a 
                        regular basis for 15 or more hours per 
                        week to at least 25 affiliated 
                        television licensees in 10 or more 
                        States;
                            ``(ii) as of July 1, 1998, such 
                        station was retransmitted by a 
                        satellite carrier under the statutory 
                        license of this section; and
                            ``(iii) the station is not owned or 
                        operated by or affiliated with a 
                        television network that, as of January 
                        1, 1995, offered interconnected program 
                        service on a regular basis for 15 or 
                        more hours per week to at least 25 
                        affiliated television licensees in 10 
                        or more States.''.
    (c) Moratorium on Copyright Liability.--Section 119(e) of 
title 17, United States Code, is amended to read as follows:
    ``(e) Moratorium on Copyright Liability.--Until December 
31, 2004, a subscriber who does not receive a signal of grade A 
intensity (as defined in the regulations of the Federal 
Communications Commission under section 73.683(a) of title 47 
of the Code of Federal Regulations, as in effect on January 1, 
1999, or predicted by the Federal Communications Commission 
using the Individual Location Longley-Rice methodology 
described by the Federal Communications Commission in Docket 
98-201) of a local network television broadcast station shall 
remain eligible to receive signals of network stations 
affiliated with the same network, if that subscriber had 
satellite service of such network signal terminated after July 
11, 1998, and before October 31, 1999, as required by this 
section, or received such service on October 31, 1999.''.
    (d) Recreational Vehicle and Commercial Truck Exemption.--
Section 119(a) of title 17, United States Code, is amended by 
adding at the end the following:
            ``(11) Service to recreational vehicles and 
        commercial trucks.--
                    ``(A) Exemption.--
                            ``(i) In general.--For purposes of 
                        this subsection, and subject to clauses 
                        (ii) and (iii), the term `unserved 
                        household' shall include--
                                    ``(I) recreational vehicles 
                                as defined in regulations of 
                                the Secretary of Housing and 
                                Urban Development under section 
                                3282.8 of title 24 of the Code 
                                of Federal Regulations; and
                                    ``(II) commercial trucks 
                                that qualify as commercial 
                                motor vehicles under 
                                regulations of the Secretary of 
                                Transportation under section 
                                383.5 of title 49 of the Code 
                                of Federal Regulations.
                            ``(ii) Limitation.--Clause (i) 
                        shall apply only to a recreational 
                        vehicle or commercial truck if any 
                        satellite carrier that proposes to make 
                        a secondary transmission of a network 
                        station to the operator of such a 
                        recreational vehicle or commercial 
                        truck complies with the documentation 
                        requirements under subparagraphs (B) 
                        and (C).
                            ``(iii) Exclusion.--For purposes of 
                        this subparagraph, the terms 
                        `recreational vehicle' and `commercial 
                        truck' shall not include any fixed 
                        dwelling, whether a mobile home or 
                        otherwise.
                    ``(B) Documentation requirements.--A 
                recreational vehicle or commercial truck shall 
                be deemed to be an unserved household beginning 
                10 days after the relevant satellite carrier 
                provides to the network that owns or is 
                affiliated with the network station that will 
                be secondarily transmitted to the recreational 
                vehicle or commercial truck the following 
                documents:
                            ``(i) Declaration.--A signed 
                        declaration by the operator of the 
                        recreational vehicle or commercial 
                        truck that the satellite dish is 
                        permanently attached to the 
                        recreational vehicle or commercial 
                        truck, and will not be used to receive 
                        satellite programming at any fixed 
                        dwelling.
                            ``(ii) Registration.--In the case 
                        of a recreational vehicle, a copy of 
                        the current State vehicle registration 
                        for the recreational vehicle.
                            ``(iii) Registration and license.--
                        In the case of a commercial truck, a 
                        copy of--
                                    ``(I) the current State 
                                vehicle registration for the 
                                truck; and
                                    ``(II) a copy of a valid, 
                                current commercial driver's 
                                license, as defined in 
                                regulations of the Secretary of 
                                Transportation under section 
                                383 of title 49 of the Code of 
                                Federal Regulations, issued to 
                                the operator.
                    ``(C) Updated documentation requirements.--
                If a satellite carrier wishes to continue to 
                make secondary transmissions to a recreational 
                vehicle or commercial truck for more than a 2-
                year period, that carrier shall provide each 
                network, upon request, with updated 
                documentation in the form described under 
                subparagraph (B) during the 90 days before 
                expiration of that 2-year period.''.
    (e) Exception to Satellite Carrier Definition.--Section 
119(d)(6) of title 17, United States Code, is amended by 
inserting before the period ``, or provides a digital online 
communication service''.
    (f) Conforming Amendment.--Section 119(d)(11) of title 17, 
United States Code, is amended to read as follows:
            ``(11) Local market.--The term `local market' has 
        the meaning given such term under section 122(j).''.

SEC. 1006. PUBLIC BROADCASTING SERVICE SATELLITE FEED.

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

SEC. 1007. APPLICATION OF FEDERAL COMMUNICATIONS COMMISSION 
                    REGULATIONS.

    Section 119(a) of title 17, United States Code, is 
amended--
            (1) in paragraph (1), by inserting ``with regard to 
        secondary transmissions the satellite carrier is in 
        compliance with the rules, regulations, or 
        authorizations of the Federal Communications Commission 
        governing the carriage of television broadcast station 
        signals,'' after ``satellite carrier to the public for 
        private home viewing,'';
            (2) in paragraph (2), by inserting ``with regard to 
        secondary transmissions the satellite carrier is in 
        compliance with the rules, regulations, or 
        authorizations of the Federal Communications Commission 
        governing the carriage of television broadcast station 
        signals,'' after ``satellite carrier to the public for 
        private home viewing,''; and
            (3) by adding at the end of such subsection (as 
        amended by section 1005(e) of this Act) the following 
        new paragraph:
            ``(12) Statutory license contingent on compliance 
        with fcc rules and remedial steps.--Notwithstanding any 
        other provision of this section, the willful or 
        repeated secondary transmission to the public by a 
        satellite carrier of a primary transmission embodying a 
        performance or display of a work made by a broadcast 
        station licensed by the Federal Communications 
        Commission is actionable as an act of infringement 
        under section 501, and is fully subject to the remedies 
        provided by sections 502 through 506 and 509, if, at 
        the time of such transmission, the satellite carrier is 
        not in compliance with the rules, regulations, and 
        authorizations of the Federal Communications Commission 
        concerning the carriage of television broadcast station 
        signals.''.

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

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

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

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

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

    ``(a) Provisions Relating to Carriage of Distant Signals.--
            ``(1) Carriage permitted.--
                    ``(A) In general.--Subject to section 119 
                of title 17, United States Code, any satellite 
                carrier shall be permitted to provide the 
                signals of no more than 2 network stations in a 
                single day for each television network to any 
                household not located within the local markets 
                of those network stations.
                    ``(B) Additional service.--In addition to 
                signals provided under subparagraph (A), any 
                satellite carrier may also provide service 
                under the statutory license of section 122 of 
                title 17, United States Code, to the local 
                market within which such household is located. 
                The service provided under section 122 of such 
                title may be in addition to the 2 signals 
                provided under section 119 of such title.
            ``(2) Penalty for violation.--Any satellite carrier 
        that knowingly and willfully provides the signals of 
        television stations to subscribers in violation of this 
        subsection shall be liable for a forfeiture penalty 
        under section 503 in the amount of $50,000 for each 
        violation or each day of a continuing violation.
    ``(b) Extension of Network Nonduplication, Syndicated 
Exclusivity, and Sports Blackout to Satellite Retransmission.--
            ``(1) Extension of protections.--Within 45 days 
        after the date of enactment of the Satellite Home 
        Viewer Improvement Act of 1999, the Commission shall 
        commence a single rulemaking proceeding to establish 
        regulations that--
                    ``(A) apply network nonduplication 
                protection (47 C.F.R. 76.92) syndicated 
                exclusivity protection (47 C.F.R. 76.151), and 
                sports blackout protection (47 C.F.R. 76.67) to 
                the retransmission of the signals of nationally 
                distributed superstations by satellite carriers 
                to subscribers; and
                    ``(B) to the extent technically feasible 
                and not economically prohibitive, apply sports 
                blackout protection (47 C.F.R. 76.67) to the 
                retransmission of the signals of network 
                stations by satellite carriers to subscribers.
            ``(2) Deadline for action.--The Commission shall 
        complete all actions necessary to prescribe regulations 
        required by this section so that the regulations shall 
        become effective within 1 year after such date of 
        enactment.
    ``(c) Eligibility for Retransmission.--
            ``(1) Signal standard for satellite carrier 
        purposes.--For the purposes of identifying an unserved 
        household under section 119(d)(10) of title 17, United 
        States Code, within 1 year after the date of enactment 
        of the Satellite Home Viewer Improvement Act of 1999, 
        the Commission shall conclude an inquiry to evaluate 
        all possible standards and factors for determining 
        eligibility for retransmissions of the signals of 
        network stations, and, if appropriate--
                    ``(A) recommend modifications to the Grade 
                B intensity standard for analog signals set 
                forth in section 73.683(a) of its regulations 
                (47 C.F.R. 73.683(a)), or recommend alternative 
                standards or factors for purposes of 
                determining such eligibility; and
                    ``(B) make a further recommendation 
                relating to an appropriate standard for digital 
                signals.
            ``(2) Waivers.--A subscriber who is denied the 
        retransmission of a signal of a network station under 
        section 119 of title 17, United States Code, may 
        request a waiver from such denial by submitting a 
        request, through such subscriber's satellite carrier, 
        to the network station asserting that the 
        retransmission is prohibited. The network station shall 
        accept or reject a subscriber's request for a waiver 
        within 30 days after receipt of the request. The 
        subscriber shall be permitted to receive such 
        retransmission under section 119(d)(10)(B) of title 17, 
        United States Code, if such station agrees to the 
        waiver request and files with the satellite carrier a 
        written waiver with respect to that subscriber allowing 
        the subscriber to receive such retransmission. If a 
        television network station fails to accept or reject a 
        subscriber's request for a waiver within the 30-day 
        period after receipt of the request, that station shall 
        be deemed to agree to the waiver request and have filed 
        such written waiver.
            ``(3) Establishment of improved predictive model 
        required.--Within 180 days after the date of enactment 
        of the Satellite Home Viewer Improvement Act of 1999, 
        the Commission shall take all actions necessary, 
        including any reconsideration, to develop and prescribe 
        by rule a point-to-point predictive model for reliably 
        and presumptively determining the ability of individual 
        locations to receive signals in accordance with the 
        signal intensity standard in effect under section 
        119(d)(10)(A) of title 17, United States Code. In 
        prescribing such model, the Commission shall rely on 
        the Individual Location Longley-Rice model set forth by 
        the Federal Communications Commission in Docket 98-201 
        and ensure that such model takes into account terrain, 
        building structures, and other land cover variations. 
        The Commission shall establish procedures for the 
        continued refinement in the application of the model by 
        the use of additional data as it becomes available.
            ``(4) Objective verification.--
                    ``(A) In general.--If a subscriber's 
                request for a waiver under paragraph (2) is 
                rejected and the subscriber submits to the 
                subscriber's satellite carrier a request for a 
                test verifying the subscriber's inability to 
                receive a signal that meets the signal 
                intensity standard in effect under section 
                119(d)(10)(A) of title 17, United States Code, 
                the satellite carrier and the network station 
                or stations asserting that the retransmission 
                is prohibited with respect to that subscriber 
                shall select a qualified and independent person 
                to conduct a test in accordance with section 
                73.686(d) of its regulations (47 C.F.R. 
                73.686(d)), or any successor regulation. Such 
                test shall be conducted within 30 days after 
                the date the subscriber submits a request for 
                the test. If the written findings and 
                conclusions of a test conducted in accordance 
                with such section (or any successor regulation) 
                demonstrate that the subscriber does not 
                receive a signal that meets or exceeds the 
                signal intensity standard in effect under 
                section 119(d)(10)(A) of title 17, United 
                States Code, the subscriber shall not be denied 
                the retransmission of a signal of a network 
                station under section 119 of title 17, United 
                States Code.
                    ``(B) Designation of tester and allocation 
                of costs.--If the satellite carrier and the 
                network station or stations asserting that the 
                retransmission is prohibited are unable to 
                agree on such a person to conduct the test, the 
                person shall be designated by an independent 
                and neutral entity designated by the Commission 
                by rule. Unless the satellite carrier and the 
                network station or stations otherwise agree, 
                the costs of conducting the test under this 
                paragraph shall be borne by the satellite 
                carrier, if the station's signal meets or 
                exceeds the signal intensity standard in effect 
                under section 119(d)(10)(A) of title 17, United 
                States Code, or by the network station, if its 
                signal fails to meet or exceed such standard.
                    ``(C) Avoidance of undue burden.-- 
                Commission regulations prescribed under this 
                paragraph shall seek to avoid any undue burden 
                on any party.
    ``(d) Definitions.--For the purposes of this section:
            ``(1) Local market.--The term `local market' has 
        the meaning given that term under section 122(j) of 
        title 17, United States Code.
            ``(2) Nationally distributed superstation.--The 
        term `nationally distributed superstation' means a 
        television broadcast station, licensed by the 
        Commission, that--
                    ``(A) is not owned or operated by or 
                affiliated with a television network that, as 
                of January 1, 1995, offered interconnected 
                program service on a regular basis for 15 or 
                more hours per week to at least 25 affiliated 
                television licensees in 10 or more States;
                    ``(B) on May 1, 1991, was retransmitted by 
                a satellite carrier and was not a network 
                station at that time; and
                    ``(C) was, as of July 1, 1998, 
                retransmitted by a satellite carrier under the 
                statutory license of section 119 of title 17, 
                United States Code.
            ``(3) Network station.--The term `network station' 
        has the meaning given such term under section 119(d) of 
        title 17, United States Code.
            ``(4) Satellite carrier.--The term `satellite 
        carrier' has the meaning given such term under section 
        119(d) of title 17, United States Code.
            ``(5) Television network.--The term `television 
        network' means a television network in the United 
        States which offers an interconnected program service 
        on a regular basis for 15 or more hours per week to at 
        least 25 affiliated broadcast stations in 10 or more 
        States.''.
    (b) Network Station Definition.--Section 119(d)(2) of title 
17, United States Code, is amended--
            (1) in subparagraph (B) by striking the period and 
        inserting a semicolon; and
            (2) by adding after subparagraph (B) the following:
``except that the term does not include the signal of the 
Alaska Rural Communications Service, or any successor entity to 
that service.''.

SEC. 1009. RETRANSMISSION CONSENT.

    (a) In General.--Section 325(b) of the Communications Act 
of 1934 (47 U.S.C. 325(b)) is amended--
            (1) by amending paragraphs (1) and (2) to read as 
        follows:
    ``(b)(1) No cable system or other multichannel video 
programming distributor shall retransmit the signal of a 
broadcasting station, or any part thereof, except--
            ``(A) with the express authority of the originating 
        station;
            ``(B) under section 614, in the case of a station 
        electing, in accordance with this subsection, to assert 
        the right to carriage under such section; or
            ``(C) under section 338, in the case of a station 
        electing, in accordance with this subsection, to assert 
        the right to carriage under such section.
    ``(2) This subsection shall not apply--
            ``(A) to retransmission of the signal of a 
        noncommercial television broadcast station;
            ``(B) to retransmission of the signal of a 
        television broadcast station outside the station's 
        local market by a satellite carrier directly to its 
        subscribers, if--
                    ``(i) such station was a superstation on 
                May 1, 1991;
                    ``(ii) as of July 1, 1998, such station was 
                retransmitted by a satellite carrier under the 
                statutory license of section 119 of title 17, 
                United States Code; and
                    ``(iii) the satellite carrier complies with 
                any network nonduplication, syndicated 
                exclusivity, and sports blackout rules adopted 
                by the Commission under section 339(b) of this 
                Act;
            ``(C) until December 31, 2004, to retransmission of 
        the signals of network stations directly to a home 
        satellite antenna, if the subscriber receiving the 
        signal--
                    ``(i) is located in an area outside the 
                local market of such stations; and
                    ``(ii) resides in an unserved household;
            ``(D) to retransmission by a cable operator or 
        other multichannel video provider, other than a 
        satellite carrier, of the signal of a television 
        broadcast station outside the station's local market if 
        such signal was obtained from a satellite carrier and--
                    ``(i) the originating station was a 
                superstation on May 1, 1991; and
                    ``(ii) as of July 1, 1998, such station was 
                retransmitted by a satellite carrier under the 
                statutory license of section 119 of title 17, 
                United States Code; or
            ``(E) during the 6-month period beginning on the 
        date of enactment of the Satellite Home Viewer 
        Improvement Act of 1999, to the retransmission of the 
        signal of a television broadcast station within the 
        station's local market by a satellite carrier directly 
        to its subscribers under the statutory license of 
        section 122 of title 17, United States Code.
For purposes of this paragraph, the terms `satellite carrier' 
and `superstation' have the meanings given those terms, 
respectively, in section 119(d) of title 17, United States 
Code, as in effect on the date of enactment of the Cable 
Television Consumer Protection and Competition Act of 1992, the 
term `unserved household' has the meaning given that term under 
section 119(d) of such title, and the term `local market' has 
the meaning given that term in section 122(j) of such title.'';
            (2) by adding at the end of paragraph (3) the 
        following new subparagraph:
    ``(C) Within 45 days after the date of enactment of the 
Satellite Home Viewer Improvement Act of 1999, the Commission 
shall commence a rulemaking proceeding to revise the 
regulations governing the exercise by television broadcast 
stations of the right to grant retransmission consent under 
this subsection, and such other regulations as are necessary to 
administer the limitations contained in paragraph (2). The 
Commission shall complete all actions necessary to prescribe 
such regulations within 1 year after such date of enactment. 
Such regulations shall--
            ``(i) establish election time periods that 
        correspond with those regulations adopted under 
        subparagraph (B) of this paragraph; and
            ``(ii) until January 1, 2006, prohibit a television 
        broadcast station that provides retransmission consent 
        from engaging in exclusive contracts for carriage or 
        failing to negotiate in good faith, and it shall not be 
        a failure to negotiate in good faith if the television 
        broadcast station enters into retransmission consent 
        agreements containing different terms and conditions, 
        including price terms, with different multichannel 
        video programming distributors if such different terms 
        and conditions are based on competitive marketplace 
        considerations.'';
            (3) in paragraph (4), by adding at the end the 
        following new sentence: ``If an originating television 
        station elects under paragraph (3)(C) to exercise its 
        right to grant retransmission consent under this 
        subsection with respect to a satellite carrier, section 
        338 shall not apply to the carriage of the signal of 
        such station by such satellite carrier.'';
            (4) in paragraph (5), by striking ``614 or 615'' 
        and inserting ``338, 614, or 615''; and
            (5) by adding at the end the following new 
        paragraph:
            ``(7) For purposes of this subsection, the term--
                    ``(A) `network station' has the meaning 
                given such term under section 119(d) of title 
                17, United States Code; and
                    ``(B) `television broadcast station' means 
                an over-the-air commercial or noncommercial 
                television broadcast station licensed by the 
                Commission under subpart E of part 73 of title 
                47, Code of Federal Regulations, except that 
                such term does not include a low-power or 
                translator television station.''.
    (b) Enforcement Provisions for Consent for 
Retransmissions.--Section 325 of the Communications Act of 1934 
(47 U.S.C. 325) is amended by adding at the end the following 
new subsection:
    ``(e) Enforcement Proceedings Against Satellite Carriers 
Concerning Retransmissions of Television Broadcast Stations in 
the Respective Local Markets of Such Carriers.--
            ``(1) Complaints by television broadcast 
        stations.--If after the expiration of the 6-month 
        period described under subsection (b)(2)(E) a 
        television broadcast station believes that a satellite 
        carrier has retransmitted its signal to any person in 
        the local market of such station in violation of 
        subsection (b)(1), the station may file with the 
        Commission a complaint providing--
                    ``(A) the name, address, and call letters 
                of the station;
                    ``(B) the name and address of the satellite 
                carrier;
                    ``(C) the dates on which the alleged 
                retransmission occurred;
                    ``(D) the street address of at least 1 
                person in the local market of the station to 
                whom the alleged retransmission was made;
                    ``(E) a statement that the retransmission 
                was not expressly authorized by the television 
                broadcast station; and
                    ``(F) the name and address of counsel for 
                the station.
            ``(2) Service of complaints on satellite 
        carriers.--For purposes of any proceeding under this 
        subsection, any satellite carrier that retransmits the 
        signal of any broadcast station shall be deemed to 
        designate the Secretary of the Commission as its agent 
        for service of process. A television broadcast station 
        may serve a satellite carrier with a complaint 
        concerning an alleged violation of subsection (b)(1) 
        through retransmission of a station within the local 
        market of such station by filing the original and 2 
        copies of the complaint with the Secretary of the 
        Commission and serving a copy of the complaint on the 
        satellite carrier by means of 2 commonly used overnight 
        delivery services, each addressed to the chief 
        executive officer of the satellite carrier at its 
        principal place of business, and each marked `URGENT 
        LITIGATION MATTER' on the outer packaging. Service 
        shall be deemed complete 1 business day after a copy of 
        the complaint is provided to the delivery services for 
        overnight delivery. On receipt of a complaint filed by 
        a television broadcast station under this subsection, 
        the Secretary of the Commission shall send the original 
        complaint by United States mail, postage prepaid, 
        receipt requested, addressed to the chief executive 
        officer of the satellite carrier at its principal place 
        of business.
            ``(3) Answers by satellite carriers.--Within 5 
        business days after the date of service, the satellite 
        carrier shall file an answer with the Commission and 
        shall serve the answer by a commonly used overnight 
        delivery service and by United States mail, on the 
        counsel designated in the complaint at the address 
        listed for such counsel in the complaint.
            ``(4) Defenses.--
                    ``(A) Exclusive defenses.--The defenses 
                under this paragraph are the exclusive defenses 
                available to a satellite carrier against which 
                a complaint under this subsection is filed.
                    ``(B) Defenses.--The defenses referred to 
                under subparagraph (A) are the defenses that--
                            ``(i) the satellite carrier did not 
                        retransmit the television broadcast 
                        station to any person in the local 
                        market of the station during the time 
                        period specified in the complaint;
                            ``(ii) the television broadcast 
                        station had, in a writing signed by an 
                        officer of the television broadcast 
                        station, expressly authorized the 
                        retransmission of the station by the 
                        satellite carrier to each person in the 
                        local market of the television 
                        broadcast station to which the 
                        satellite carrier made such 
                        retransmissions for the entire time 
                        period during which it is alleged that 
                        a violation of subsection (b)(1) has 
                        occurred;
                            ``(iii) the retransmission was made 
                        after January 1, 2002, and the 
                        television broadcast station had 
                        elected to assert the right to carriage 
                        under section 338 as against the 
                        satellite carrier for the relevant 
                        period; or
                            ``(iv) the station being 
                        retransmitted is a noncommercial 
                        television broadcast station.
            ``(5) Counting of violations.--The retransmission 
        without consent of a particular television broadcast 
        station on a particular day to 1 or more persons in the 
        local market of the station shall be considered a 
        separate violation of subsection (b)(1).
            ``(6) Burden of proof.--With respect to each 
        alleged violation, the burden of proof shall be on a 
        television broadcast station to establish that the 
        satellite carrier retransmitted the station to at least 
        1 person in the local market of the station on the day 
        in question. The burden of proof shall be on the 
        satellite carrier with respect to all defenses other 
        than the defense under paragraph (4)(B)(i).
            ``(7) Procedures.--
                    ``(A) Regulations.--Within 60 days after 
                the date of enactment of the Satellite Home 
                Viewer Improvement Act of 1999, the Commission 
                shall issue procedural regulations implementing 
                this subsection which shall supersede 
                procedures under section 312.
                    ``(B) Determinations.--
                            ``(i) In general.--Within 45 days 
                        after the filing of a complaint, the 
                        Commission shall issue a final 
                        determination in any proceeding brought 
                        under this subsection. The Commission's 
                        final determination shall specify the 
                        number of violations committed by the 
                        satellite carrier. The Commission shall 
                        hear witnesses only if it clearly 
                        appears, based on written filings by 
                        the parties, that there is a genuine 
                        dispute about material facts. Except as 
                        provided in the preceding sentence, the 
                        Commission may issue a final ruling 
                        based on written filings by the 
                        parties.
                            ``(ii) Discovery.--The Commission 
                        may direct the parties to exchange 
                        pertinent documents, and if necessary 
                        to take prehearing depositions, on such 
                        schedule as the Commission may approve, 
                        but only if the Commission first 
                        determines that such discovery is 
                        necessary to resolve a genuine dispute 
                        about material facts, consistent with 
                        the obligation to make a final 
                        determination within 45 days.
            ``(8) Relief.--If the Commission determines that a 
        satellite carrier has retransmitted the television 
        broadcast station to at least 1 person in the local 
        market of such station and has failed to meet its 
        burden of proving 1 of the defenses under paragraph (4) 
        with respect to such retransmission, the Commission 
        shall be required to--
                    ``(A) make a finding that the satellite 
                carrier violated subsection (b)(1) with respect 
                to that station; and
                    ``(B) issue an order, within 45 days after 
                the filing of the complaint, containing--
                            ``(i) a cease-and-desist order 
                        directing the satellite carrier 
                        immediately to stop making any further 
                        retransmissions of the television 
                        broadcast station to any person within 
                        the local market of such station until 
                        such time as the Commission determines 
                        that the satellite carrier is in 
                        compliance with subsection (b)(1) with 
                        respect to such station;
                            ``(ii) if the satellite carrier is 
                        found to have violated subsection 
                        (b)(1) with respect to more than 2 
                        television broadcast stations, a cease-
                        and-desist order directing the 
                        satellite carrier to stop making any 
                        further retransmission of any 
                        television broadcast station to any 
                        person within the local market of such 
                        station, until such time as the 
                        Commission, after giving notice to the 
                        station, that the satellite carrier is 
                        in compliance with subsection (b)(1) 
                        with respect to such stations; and
                            ``(iii) an award to the complainant 
                        of that complainant's costs and 
                        reasonable attorney's fees.
            ``(9) Court proceedings on enforcement of 
        commission order.--
                    ``(A) In general.--On entry by the 
                Commission of a final order granting relief 
                under this subsection--
                            ``(i) a television broadcast 
                        station may apply within 30 days after 
                        such entry to the United States 
                        District Court for the Eastern District 
                        of Virginia for a final judgment 
                        enforcing all relief granted by the 
                        Commission; and
                            ``(ii) the satellite carrier may 
                        apply within 30 days after such entry 
                        to the United States District Court for 
                        the Eastern District of Virginia for a 
                        judgment reversing the Commission's 
                        order.
                    ``(B) Appeal.--The procedure for an appeal 
                under this paragraph by the satellite carrier 
                shall supersede any other appeal rights under 
                Federal or State law. A United States district 
                court shall be deemed to have personal 
                jurisdiction over the satellite carrier if the 
                carrier, or a company under common control with 
                the satellite carrier, has delivered television 
                programming by satellite to more than 30 
                customers in that district during the preceding 
                4-year period. If the United States District 
                Court for the Eastern District of Virginia does 
                not have personal jurisdiction over the 
                satellite carrier, an enforcement action or 
                appeal shall be brought in the United States 
                District Court for the District of Columbia, 
                which may find personal jurisdiction based on 
                the satellite carrier's ownership of licenses 
                issued by the Commission. An application by a 
                television broadcast station for an order 
                enforcing any cease-and-desist relief granted 
                by the Commission shall be resolved on a highly 
                expedited schedule. No discovery may be 
                conducted by the parties in any such 
                proceeding. The district court shall enforce 
                the Commission order unless the Commission 
                record reflects manifest error and an abuse of 
                discretion by the Commission.
            ``(10) Civil action for statutory damages.--Within 
        6 months after issuance of an order by the Commission 
        under this subsection, a television broadcast station 
        may file a civil action in any United States district 
        court that has personal jurisdiction over the satellite 
        carrier for an award of statutory damages for any 
        violation that the Commission has determined to have 
        been committed by a satellite carrier under this 
        subsection. Such action shall not be subject to 
        transfer under section 1404(a) of title 28, United 
        States Code. On finding that the satellite carrier has 
        committed 1 or more violations of subsection (b), the 
        District Court shall be required to award the 
        television broadcast station statutory damages of 
        $25,000 per violation, in accordance with paragraph 
        (5), and the costs and attorney's fees incurred by the 
        station. Such statutory damages shall be awarded only 
        if the television broadcast station has filed a binding 
        stipulation with the court that such station will 
        donate the full amount in excess of $1,000 of any 
        statutory damage award to the United States Treasury 
        for public purposes. Notwithstanding any other 
        provision of law, a station shall incur no tax 
        liability of any kind with respect to any amounts 
        so donated. Discovery may be conducted by the parties 
        in any proceeding under this paragraph only if and to 
        the extent necessary to resolve a genuinely disputed 
        issue of fact concerning 1 of the defenses under 
        paragraph (4). In any such action, the defenses under 
        paragraph (4) shall be exclusive, and the burden of 
        proof shall be on the satellite carrier with respect 
        to all defenses other than the defense under paragraph 
        (4)(B)(i). A judgment under this paragraph may be enforced in 
        any manner permissible under Federal or State law.
            ``(11) Appeals.--
                    ``(A) In general.--The nonprevailing party 
                before a United States district court may 
                appeal a decision under this subsection to the 
                United States Court of Appeals with 
                jurisdiction over that district court. The 
                Court of Appeals shall not issue any stay of 
                the effectiveness of any decision granting 
                relief against a satellite carrier unless the 
                carrier presents clear and convincing evidence 
                that it is highly likely to prevail on appeal 
                and only after posting a bond for the full 
                amount of any monetary award assessed against 
                it and for such further amount as the Court of 
                Appeals may believe appropriate.
                    ``(B) Appeal.--If the Commission denies 
                relief in response to a complaint filed by a 
                television broadcast station under this 
                subsection, the television broadcast station 
                filing the complaint may file an appeal with 
                the United States Court of Appeals for the 
                District of Columbia Circuit.
            ``(12) Sunset.--No complaint or civil action may be 
        filed under this subsection after December 31, 2001. 
        This subsection shall continue to apply to any 
        complaint or civil action filed on or before such 
        date.''.

SEC. 1010. SEVERABILITY.

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

SEC. 1011. TECHNICAL AMENDMENTS.

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

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

                and
                    (B) by amending the section heading for 
                section 510 to read as follows:

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

            (5) Section 801(b)(2)(A) is amended--
                    (A) by striking ``cable subscribers'' and 
                inserting ``terrestrial service subscribers''; 
                and
                    (B) by striking ``cable industry'' and 
                inserting ``terrestrial service industry''.
            (6) Section 111 is amended by striking 
        ``compulsory'' each place it appears and inserting 
        ``statutory''.
            (7) Section 510(b) is amended by striking 
        ``compulsory'' and inserting ``statutory''.
    (b) Technical Amendments Relating to Performance or 
Displays Of Works.--
            (1) Section 111 of title 17, United States Code, is 
        amended--
                    (A) in subsection (a), in the matter 
                preceding paragraph (1), by striking ``primary 
                transmission embodying a performance or display 
                of a work'' and inserting ``performance or 
                display of a work embodied in a primary 
                transmission'';
                    (B) in subsection (b), in the matter 
                preceding paragraph (1), by striking ``primary 
                transmission embodying a performance or display 
                of a work'' and inserting ``performance or 
                display of a work embodied in a primary 
                transmission''; and
                    (C) in subsection (c)--
                            (i) in paragraph (1)--
                                    (I) by inserting ``a 
                                performance or display of a 
                                work embodied in'' after ``by a 
                                terrestrial system of''; and
                                    (II) by striking ``and 
                                embodying a performance or 
                                display of a work''; and
                            (ii) in paragraphs (3) and (4)--
                                    (I) by striking ``a primary 
                                transmission'' and inserting 
                                ``a performance or display of a 
                                work embodied in a primary 
                                transmission''; and
                                    (II) by striking ``and 
                                embodying a performance or 
                                display of a work''.
            (2) Section 119(a) of title 17, United States Code, 
        is amended--
                    (A) in paragraph (1), by striking ``primary 
                transmission made by a superstation and 
                embodying a performance or display of a work'' 
                and inserting ``performance or display of a 
                work embodied in a primary transmission made by 
                a superstation'';
                    (B) in paragraph (2)(A), by striking 
                ``programming'' and all that follows through 
                ``a work'' and inserting ``a performance or 
                display of a work embodied in a primary 
                transmission made by a network station'';
                    (C) in paragraph (4)--
                            (i) by inserting ``a performance or 
                        display of a work embodied in'' after 
                        ``by a satellite carrier of''; and
                            (ii) by striking ``and embodying a 
                        performance or display of a work''; and
                    (D) in paragraph (6)--
                            (i) by inserting ``performance or 
                        display of a work embodied in'' after 
                        ``by a satellite carrier of''; and
                            (ii) by striking ``and embodying a 
                        performance or display of a work''.
            (3) Section 501(e) of title 17, United States Code, 
        is amended by striking ``primary transmission embodying 
        the performance or display of a work'' and inserting 
        ``performance or display of a work embodied in a 
        primary transmission''.
    (c) Technical Amendment Relating to Terrestrial Systems.--
Section 111(f) of title 17, United States Code, is amended in 
the first sentence of the definition of `terrestrial system', 
by inserting ``, other than a digital online communication 
service,'' after ``other communications channels''.
    (d) Conforming Amendment.--Section 119(a)(2)(C) of title 
17, United States Code, is amended in the first sentence by 
striking ``currently''.
    (e) Work Made for Hire.--Section 101 of title 17, United 
States Code, is amended in the definition relating to work for 
hire in paragraph (2) by inserting ``as a sound recording,'' 
after ``audiovisual work''.

SEC. 1012. EFFECTIVE DATES.

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

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

SEC. 2001. SHORT TITLE.

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

SEC. 2002. LOAN GUARANTEES.

    (a) Purpose.--The purpose of this title is to ensure 
improved access to the signals of local television stations by 
multichannel video providers to all households which desire 
such service in unserved and underserved rural areas by 
December 31, 2006.
    (b) Assistance to Borrowers.--Subject to the appropriations 
limitation under subsection (c)(2), the Secretary, after 
consultation with the Secretary of the Treasury and the Federal 
Communications Commission, may provide loan guarantees to 
borrowers to finance projects to provide local television 
broadcast signals by providers of multichannel video services 
including direct broadcast satellite licensees and licensees of 
multichannel multipoint distribution systems, to areas that do 
not receive local television broadcast signals over commercial 
for-profit direct-to-home satellite distribution systems. A 
borrower that receives a loan guarantee under this title may 
not transfer any part of the proceeds of the monies from the 
loans guaranteed under this program to an affiliate of the 
borrower.
    (c) Underwriting Criteria; Prerequisites.--
            (1) In general.--The Secretary shall administer the 
        underwriting criteria developed under subsection (f)(1) 
        to determine which loans are eligible for a guarantee 
        under this title.
            (2) Authority to make loan guarantees.--The 
        Secretary shall be authorized to guarantee loans under 
        this title only to the extent provided for in advance 
        by appropriations Acts.
            (3) Prerequisites.--In addition to meeting the 
        underwriting criteria under paragraph (1), a loan is 
        not eligible for a loan guarantee under this title 
        unless--
                    (A) the loan is made to finance the 
                acquisition, improvement, enhancement, 
                construction, deployment, launch, or 
                rehabilitation of the means by which local 
                television broadcast signals will be delivered 
                to an area not receiving such signals over 
                commercial for-profit direct-to-home satellite 
                distribution systems;
                    (B) the proceeds of the loan will not be 
                used for operating expenses;
                    (C) the total amount of all such loans may 
                not exceed in the aggregate $1,250,000,000;
                    (D) the loan does not exceed $100,000,000, 
                except that 1 loan under this title may exceed 
                $100,000,000, but shall not exceed 
                $625,000,000;
                    (E) the loan bears interest and penalties 
                which, in the Secretary's judgment, are not 
                unreasonable, taking into consideration the 
                prevailing interest rates and customary fees 
                incurred under similar obligations in the 
                private capital market; and
                    (F) the Secretary determines that taking 
                into account the practices of the private 
                capital markets with respect to the financing 
                of similar projects, the security of the loan 
                is adequate.
            (4) Additional criteria.--In addition to the 
        requirements of paragraphs (1), (2), and (3), a loan 
        for which a guarantee is sought under this title shall 
        meet any additional criteria promulgated under 
        subsection (f)(1).
    (d) Additional Requirements.--The Secretary may not make a 
loan guarantee under this title unless--
            (1) repayment of the obligation is required to be 
        made within a term of the lesser of--
                    (A) 25 years from the date of its 
                execution; or
                    (B) the useful life of the primary assets 
                used in the delivery of relevant signals;
            (2) the Secretary has been given the assurances and 
        documentation necessary to review and approve the 
        guaranteed loans;
            (3) the Secretary makes a determination in writing 
        that--
                    (A) the applicant has given reasonable 
                assurances that the assets, facilities, or 
                equipment will be utilized economically and 
                efficiently;
                    (B) necessary and sufficient regulatory 
                approvals, spectrum rights, and delivery 
                permissions have been received by project 
                participants to assure the project's ability to 
                repay obligations under this title; and
                    (C) repayment of the obligation can 
                reasonably be expected, including the use of an 
                appropriate combination of credit risk premiums 
                and collateral offered by the applicant to 
                protect the Federal Government.
    (e) Approval of NTIA Required.--
            (1) In general.--The Secretary may not issue a loan 
        guarantee under this title unless the National 
        Telecommunications and Information Administration 
        consults with the Secretary and certifies that--
                    (A) the issuance of the loan guarantee is 
                consistent with subsection (a) of this section; 
                and
                    (B) consistent with subsection (b) of this 
                section, the project to be financed by a loan 
                guaranteed under this section is not likely to 
                have a substantial adverse impact on 
                competition between multichannel video 
                programming distributors that outweighs the 
                benefits of improving access to the signals of 
                a local television station by a multichannel 
                video provider.
            (2) Certification.--The Secretary shall provide the 
        appropriate information on each loan guarantee 
        application recommended by the Secretary to the 
        National Telecommunications and Information 
        Administration for certification. The National 
        Telecommunications and Information Administration shall 
        make the determination required under this subsection 
        within 90 days, without regard to the provision of 
        chapter 5 of title 5, United States Code, and sections 
        10 and 11 of the Federal Advisory Committee Act (5 
        U.S.C. App.).
    (f) Requirements.--
            (1) In general.--Within 180 days after the date of 
        enactment of this Act, the Secretary shall consult with 
        the Office of Management and Budget and an independent 
        public accounting firm to develop underwriting criteria 
        relating to the issuance of loan guarantees, 
        appropriate collateral and cash flow levels for the 
        types of loan guarantees that might be issued under 
        this title, and such other matters as the Secretary 
        determines appropriate.
            (2) Authority of secretary.--In lieu of or in 
        combination with appropriations of budget authority to 
        cover the costs of loan guarantees as required under 
        section 504(b)(1) of the Federal Credit Reform Act of 
        1990, the Secretary may accept on behalf of an 
        applicant for assistance under this title a commitment 
        from a non-Federal source to fund in whole or in part 
        the credit risk premiums with respect to the 
        applicant's loan. The aggregate of appropriations of 
        budget authority and credit risk premiums described in 
        this paragraph with respect to a loan guarantee may not 
        be less than the cost of that loan guarantee.
            (3) Credit risk premium amount.--The Secretary 
        shall determine the amount required for credit risk 
        premiums under this subsection on the basis of--
                    (A) the circumstances of the applicant, 
                including the amount of collateral offered;
                    (B) the proposed schedule of loan 
                disbursements;
                    (C) the borrower's business plans for 
                providing service;
                    (D) financial commitment from the broadcast 
                signal provider;
                    (E) approval of the Office of Management 
                and Budget; and
                    (F) any other factors the Secretary 
                considers relevant.
            (4) Payment of premiums.--Credit risk premiums 
        under this subsection shall be paid to an account 
        established in the Treasury which shall accrue interest 
        and such interest shall be retained by the account, 
        subject to paragraph (5).
            (5) Cohorts of loans.--In order to maintain 
        sufficient balances of credit risk premiums to 
        adequately protect the Federal Government from risk of 
        default, while minimizing the length of time the 
        Government retains possession of those balances, the 
        Secretary in consultation with the Office of Management 
        and Budget shall establish cohorts of loans. When all 
        obligations attached to a cohort of loans have been 
        satisfied, credit risk premiums paid for the cohort, 
        and interest accrued thereon, which were not used to 
        mitigate losses shall be returned to the original 
        source on a pro rata basis.
    (g) Conditions of Assistance.--A borrower shall agree to 
such terms and conditions as are sufficient, in the judgment of 
the Secretary to ensure that, as long as any principal or 
interest is due and payable on such obligation, the borrower--
            (1) will maintain assets, equipment, facilities, 
        and operations on a continuing basis;
            (2) will not make any discretionary dividend 
        payments that reduce the ability to repay obligations 
        incurred under this section; and
            (3) will remain sufficiently capitalized.
    (h) Lien on Interests in Assets.--Upon providing a loan 
guarantee to a borrower under this title, the Secretary shall 
have liens which shall be superior to all other liens on assets 
of the borrower equal to the unpaid balance of the loan subject 
to such guarantee.
    (i) Perfected Interest.--The Secretary and the lender shall 
have a perfected security interest in those assets of the 
borrower fully sufficient to protect the Secretary and the 
lender.
    (j) Insurance Policies.--In accordance with practices of 
private lenders, as determined by the Secretary, the borrower 
shall obtain, at its expense, insurance sufficient to protect 
the interests of the Federal Government, as determined by the 
Secretary.
    (k) Special Provision for Satellite Carriers.--No satellite 
carrier that provided television broadcast signals to 
subscribers on October 1, 1999, and no company that is an 
affiliate of any such carrier, shall be eligible for a loan 
guarantee under this section if either the carrier or its 
affiliate holds a license for unused spectrumthat would be 
suitable for delivering local television signals into unserved and 
underserved markets.
    (l) Authorization of Appropriations.--For the additional 
costs of the loans guaranteed under this title, including the 
cost of modifying the loans as defined in section 502 of the 
Congressional Budget Act of 1974 (2 U.S.C. 661(a)), there are 
authorized to be appropriated for fiscal years 2000 through 
2006, such amounts as may be necessary. In addition there are 
authorized to be appropriated such sums as may be necessary to 
administer this title. Any amounts appropriated under this 
subsection shall remain available until expended.

SEC. 2003. ADMINISTRATION OF LOAN GUARANTEES.

    (a) Applications.--The Secretary shall prescribe the form 
and contents for an application for a loan guarantee under 
section 2002.
    (b) Assignment of Loan Guarantees.--The holder of a loan 
guaranteed under this title may assign the loan guarantee in 
whole or in part, subject to such requirements as the Secretary 
may prescribe.
    (c) Modifications.--The Secretary may approve the 
modification of any term or condition of a loan guarantee 
including the rate of interest, time of payment of interest or 
principal, or security requirements, if the Secretary finds in 
writing that--
            (1) the modification is equitable and is in the 
        overall best interests of the United States;
            (2) consent has been obtained from the borrower and 
        the lender;
            (3) the modification is consistent with the 
        objective underwriting criteria developed in 
        consultation with the Office of Management and Budget 
        and an independent public accounting firm under section 
        2002(f);
            (4) the modification does not adversely affect the 
        Federal Government's interest in the entity's assets or 
        loan collateral;
            (5) the modification does not adversely affect the 
        entity's ability to repay the loan; and
            (6) the National Telecommunications and Information 
        Administration does not object to the modification on 
        the ground that it is inconsistent with the 
        certification under section 2002(e).
    (d) Priority Markets.--
            (1) In general.--To the maximum extent practicable, 
        the Secretary shall give priority to projects which 
        serve the most underserved rural markets, as determined 
        by the Secretary. In making prioritization 
        determinations, the Secretary shall consider prevailing 
        market conditions, feasibility of providing service, 
        population, terrain, and other factors the Secretary 
        determines appropriate.
            (2) Priority relating to consumer costs and 
        separate tier of signals.--The Secretary shall give 
        priority to projects that--
                    (A) offer a separate tier of local 
                broadcast signals; and
                    (B) provide lower projected costs to 
                consumers of such separate tier.
            (3) Performance schedules.--Applicants for priority 
        projects under this section shall enter into stipulated 
        performance schedules with the Secretary.
            (4) Penalty.--The Secretary may assess a borrower a 
        penalty not to exceed 3 times the interest due on the 
        guaranteed loan, if the borrower fails to meet its 
        stipulated performance schedule. The penalty shall be 
        paid to the account established by the Treasury under 
        section 2002.
            (5) Limitation on consideration of most populated 
        areas.--The Secretary shall not provide a loan 
        guarantee for a project that is primarily designed to 
        serve the 40 most populated designated market areas and 
        shall take into consideration the importance of serving 
        rural markets that are not likely to be otherwise 
        offered service under section 122 of title 17, United 
        States Code, except through the loan guarantee program 
        under this title.
    (e) Compliance.--The Secretary shall enforce compliance by 
an applicant and any other party to the loan guarantee for 
whose benefit assistance is intended, with the provisions of 
this title, regulations issued hereunder, and the terms and 
conditions of the loan guarantee, including through regular 
periodic inspections and audits.
    (f) Commercial Validity.--For purposes of claims by any 
party other than the Secretary, a loan guarantee or loan 
guarantee commitment shall be conclusive evidence that the 
underlying obligation is in compliance with the provisions of 
the title, and that such obligation has been approved and is 
legal as to principal, interest, and other terms. Such a 
guarantee or commitment shall be valid and incontestable in the 
hands of a holder thereof, including the original lender or any 
other holder, as of the date when the Secretary granted the 
application therefor, except as to fraud or material 
misrepresentation by such holder.
    (g) Defaults.--The Secretary shall prescribe regulations 
governing a default on a loan guaranteed under this title.
    (h) Rights of the Secretary.--
            (1) Subrogation.--If the Secretary authorizes 
        payment to a holder, or a holder's agent, under 
        subsection (g) in connection with a loan guarantee made 
        under section 2002, the Secretary shall be subrogated 
        to all of the rights of the holder with respect to the 
        obligor under the loan.
            (2) Disposition of property.--The Secretary may 
        complete, recondition, reconstruct, renovate, repair, 
        maintain, operate, rent, sell, or otherwise dispose of 
        any property or other interests obtained under this 
        section in a manner that maximizes taxpayer return and 
        is consistent with the public convenience and 
        necessity.
            (3) Warrants.--To ensure that the United States 
        Government is compensated for the risk in making 
        guarantees under this title, the Secretary shall enter 
        into contracts under which the Government, contingent 
        on the financial success of the borrower, would 
        participate in a percentage of the gains of any for 
        profit borrower or its security holders in connection 
        with the project funded by loans so guaranteed.
    (i) Action Against Obligor.--The Secretary may bring a 
civil action in an appropriate district court of the United 
States in the name of the United States or of the holder of the 
obligation in the event of a default on a loan guaranteed under 
this title. The holder of a guarantee shall make available to 
the Secretary all records and evidence necessary to prosecute 
the civil action. The Secretary may accept property in full or 
partial satisfaction of any sums owed as a result of default. 
If the Secretary receives, through the sale or other 
disposition of such property, an amount greater than the 
aggregate of--
            (1) the amount paid to the holder of a guarantee 
        under subsection (g) of this section; and
            (2) any other cost to the United States of 
        remedying the default, the Secretary shall pay such 
        excess to the obligor.
    (j) Breach of Conditions.--The Attorney General shall 
commence a civil action in a court of appropriate jurisdiction 
to enjoin any activity which the Secretary finds is in 
violation of this title, regulations issued hereunder, or any 
conditions which were duly agreed to, and to secure any other 
appropriate relief, including relief against any affiliate of 
the borrower.
    (k) Attachment.--No attachment or execution may be issued 
against the Secretary or any property in the control of the 
Secretary prior to the entry of final judgment to such effect 
in any State, Federal, or other court.
    (l) Investigation Charge and Fees.--
            (1) Appraisal fee.--The Secretary may charge and 
        collect from an applicant a reasonable fee for 
        appraisal for the value of the equipment or facilities 
        for which the loan guarantee is sought, and for making 
        necessary determinations and findings. The fee may not, 
        in the aggregate, be more than one-half of one percent 
        of the principal amount of the obligation. The fee 
        imposed under this paragraph shall be used to offset 
        the administrative costs of the program.
            (2) Loan origination fee.--The Secretary may charge 
        a loan origination fee.
    (m) Annual Audit.--The General Accounting Office shall 
annually audit the administration of this title and report the 
results to the Agriculture, Appropriations, and Judiciary 
Committees of the Senate and the House of Representatives, the 
House of Representatives Committee on Commerce, the Senate 
Committee on Commerce, Science, and Transportation, the Senate 
Committee on Banking, Housing, and Urban Affairs, and the House 
of Representatives Committee on Banking and Financial Services.
    (n) Indemnification.--An affiliate of the borrower shall 
indemnify the Government for any losses it incurs as a result 
of--
            (1) a judgment against the borrower;
            (2) any breach by the borrower of its obligations 
        under the loan guarantee agreement;
            (3) any violation of the provisions of this title 
        by the borrower;
            (4) any penalties incurred by the borrower for any 
        reason, including the violation of the stipulated 
        performance; and
            (5) any other circumstances that the Secretary 
        determines to be appropriate.
    (o) Sunset.--The Secretary may not approve a loan guarantee 
under this title after December 31, 2006.

SEC. 2004. RETRANSMISSION OF LOCAL TELEVISION BROADCAST STATIONS.

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

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

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

SEC. 2006. DEFINITIONS.

    In this title:
            (1) Affiliate.--The term ``affiliate'' means any 
        person or entity that controls, or is controlled by, or 
        is under common control with, another person or entity.
            (2) Borrower.--The term ``borrower'' means any 
        person or entity receiving a loan guarantee under this 
        program.
            (3) Commission.--The term ``Commission'' means the 
        Federal Communications Commission.
            (4) Cost.--
                    (A) In general.--The term ``cost'' means 
                the estimated long-term cost to the Government 
                of a loan guarantee or modification thereof, 
                calculated on a net present value basis, 
                excluding administrative costs and any 
                incidental effects on governmental receipts or 
                outlays.
                    (B) Loan guarantees.--For purposes of this 
                paragraph the cost of a loan guarantee--
                            (i) shall be the net present value, 
                        at the time when the guaranteed loan is 
                        disbursed, of the estimated cash flows 
                        of--
                                    (I) payments by the 
                                Government to cover defaults 
                                and delinquencies, interest 
                                subsidies, or other payments;
                                    (II) payments to the 
                                Government, including 
                                origination and other fees, 
                                penalties, and recoveries; and
                            (ii) shall include the effects of 
                        changes in loan terms resulting from 
                        the exercise by the guaranteed lender 
                        of an option included in the loan 
                        guarantee contract, or by the borrower 
                        of an option included in the guaranteed 
                        loan contract.
                    (C) Cost of modification.--The cost of the 
                modification shall be the difference between 
                the current estimate of the net present value 
                of the remaining cash flows under the terms of 
                a loan guarantee contract, and the current 
                estimate of the net present value of the 
                remaining cash flows under the terms of the 
                contract, as modified.
                    (D) Discount rate.--In estimating net 
                present value, the discount rate shall be the 
                average interest rate on marketable Treasury 
                securities of similar maturity to the cash 
                flows of the guarantee for which the estimate 
                is being made.
                    (E) Fiscal year assumptions.--When funds of 
                a loan guarantee under this title are 
                obligated, the estimated cost shall be based on 
                the current assumptions, adjusted to 
                incorporate the terms of the loan contract, for 
                the fiscal year in which the funds are 
                obligated.
            (5) Current.--The term ``current'' has the same 
        meaning as in section 250(c)(9) of the Balanced Budget 
        and Emergency Deficit Control Act of 1985.
            (6) Designated market area.--The term ``designated 
        market area'' has the meaning given that term under 
        section 122(j) of title 17, United States Code.
            (7) Loan guarantee.--The term ``loan guarantee'' 
        means any guarantee, insurance, or other pledge with 
        respect to the payment of all or part of the principal 
        or interest on any debt obligation of a non-Federal 
        borrower to the Federal Financing Bank or a non-Federal 
        lender, but does not include the insurance of deposits, 
        shares, or other withdrawable accounts in financial 
        institutions.
            (8) Modification.--The term ``modification'' means 
        any Government action that alters the estimated cost of 
        an outstanding loan guarantee (or loan guarantee 
        commitment) from the current estimate of cash flows, 
        including the sale of loan assets, with or without 
        recourse, and the purchase of guaranteed loans.
             (9) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
            (10) Common terms.--Except as provided in 
        paragraphs (1) through (9), any term used in this title 
        that is defined in the Communications Act of 1934 (47 
        U.S.C. 151 et seq.) has the meaning given it in that 
        Act.

              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

SEC. 3001. SHORT TITLE; REFERENCES.

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

SEC. 3002. CYBERPIRACY PREVENTION.

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

SEC. 3003. DAMAGES AND REMEDIES.

    (a) Remedies in Cases of Domain Name Piracy.--
            (1) Injunctions.--Section 34(a) of the Trademark 
        Act of 1946 (15 U.S.C. 1116(a)) is amended in the first 
        sentence by striking ``(a) or (c)'' and inserting 
        ``(a), (c), or (d)''.
            (2) Damages.--Section 35(a) of the Trademark Act of 
        1946 (15 U.S.C. 1117(a)) is amended in the first 
        sentence by inserting ``, (c), or (d)'' after ``section 
        43(a)''.
    (b) Statutory Damages.--Section 35 of the Trademark Act of 
1946 (15 U.S.C. 1117) is amended by adding at the end the 
following:
    ``(d) In a case involving a violation of section 43(d)(1), 
the plaintiff may elect, at any time before final judgment is 
rendered by the trial court, to recover, instead of actual 
damages and profits, an award of statutory damages in the 
amount of not less than $1,000 and not more than $100,000 per 
domain name, as the court considers just.''.

SEC. 3004. LIMITATION ON LIABILITY.

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

SEC. 3005. DEFINITIONS.

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

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

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

SEC. 3007. HISTORIC PRESERVATION.

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

SEC. 3008. SAVINGS CLAUSE.

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

SEC. 3009. TECHNICAL AND CONFORMING AMENDMENTS.

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

SEC. 3010. EFFECTIVE DATE.

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

                     TITLE IV--INVENTOR PROTECTION

SEC. 4001. SHORT TITLE.

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

                     Subtitle A--Inventors' Rights

SEC. 4101. SHORT TITLE.

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

SEC. 4102. INTEGRITY IN INVENTION PROMOTION SERVICES.

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

``Sec. 297. Improper and deceptive invention promotion

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

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

SEC. 4103. EFFECTIVE DATE.

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

             Subtitle B--Patent and Trademark Fee Fairness

SEC. 4201. SHORT TITLE.

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

SEC. 4202. ADJUSTMENT OF PATENT FEES.

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

SEC. 4203. ADJUSTMENT OF TRADEMARK FEES.

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

SEC. 4204. STUDY ON ALTERNATIVE FEE STRUCTURES.

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

SEC. 4205. PATENT AND TRADEMARK OFFICE FUNDING.

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

SEC. 4206. EFFECTIVE DATE.

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

                   Subtitle C--First Inventor Defense

SEC. 4301. SHORT TITLE.

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

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

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

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

    ``(a) Definitions.--For purposes of this section--
            ``(1) the terms `commercially used' and `commercial 
        use' mean use of a method in the United States, so long 
        as such use is in connection with an internal 
        commercial use or an actual arm's-length sale or other 
        arm's-length commercial transfer of a useful end 
        result, whether or not the subject matter at issue is 
        accessible to or otherwise known to the public, except 
        that the subject matter for which commercial marketing 
        or use is subject to a premarketing regulatory review 
        period during which the safety or efficacy of the 
        subject matter is established, including any period 
        specified in section 156(g), shall be deemed 
        `commercially used' and in `commercial use' during such 
regulatory review period;
            ``(2) in the case of activities performed by a 
        nonprofit research laboratory, or nonprofit entity such 
        as a university, research center, or hospital, a use 
        for which the public is the intended beneficiary shall 
        be considered to be a use described in paragraph (1), 
        except that the use--
                    ``(A) may be asserted as a defense under 
                this section only for continued use by and in 
                the laboratory or nonprofit entity; and
                    ``(B) may not be asserted as a defense with 
                respect to any subsequent commercialization or 
                use outside such laboratory or nonprofit 
                entity;
            ``(3) the term `method' means a method of doing or 
        conducting business; and
            ``(4) the `effective filing date' of a patent is 
        the earlier of the actual filing date of the 
        application for the patent or the filing date of any 
        earlier United States, foreign, or international 
        application to which the subject matter at issue is 
        entitled under section 119, 120, or 365 of this title.
    ``(b) Defense to Infringement.--
            ``(1) In general.--It shall be a defense to an 
        action for infringement under section 271 of this title 
        with respect to any subject matter that would otherwise 
        infringe one or more claims for a method in the patent 
        being asserted against a person, if such person had, 
        acting in good faith, actually reduced the subject 
        matter to practice at least one year before the 
        effective filing date of such patent, and commercially 
        used the subject matter before the effective filing 
        date of such patent.
            ``(2) Exhaustion of right.--The sale or other 
        disposition of a useful end product produced by a 
        patented method, by a person entitled to assert a 
        defense under this section with respect to that useful 
        end result shall exhaust the patent owner's rights 
        under the patent to the extent such rights would have 
        been exhausted had such sale or other disposition been 
        made by the patent owner.
            ``(3) Limitations and qualifications of defense.--
        The defense to infringement under this section is 
        subject to the following:
                    ``(A) Patent.--A person may not assert the 
                defense under this section unless the invention 
                for which the defense is asserted is for a 
                method.
                    ``(B) Derivation.--A person may not assert 
                the defense under this section if the subject 
                matter on which the defense is based was 
                derived from the patentee or persons in privity 
                with the patentee.
                    ``(C) Not a general license.--The defense 
                asserted by a person under this section is not 
                a general license under all claims of the 
                patent at issue, but extends only to the 
                specific subject matter claimed in the patent 
                with respect to which the person can assert a 
                defense under this chapter, except that the 
                defense shall also extend to variations in the 
                quantity or volume of use of the claimed 
                subject matter, and to improvements in the 
                claimed subject matter that do not infringe 
                additional specifically claimed subject matter 
                of the patent.
            ``(4) Burden of proof.--A person asserting the 
        defense under this section shall have the burden of 
        establishing the defense by clear and convincing 
        evidence.
            ``(5) Abandonment of use.--A person who has 
        abandoned commercial use of subject matter may not rely 
        on activities performed before the date of such 
        abandonment in establishing a defense under this 
        section with respect to actions taken after the date of 
        such abandonment.
            ``(6) Personal defense.--The defense under this 
        section may be asserted only by the person who 
        performed the acts necessary to establish the defense 
        and, except for any transfer to the patent owner, the 
        right to assert the defense shall not be licensed or 
        assigned or transferred to another person except as an 
        ancillary and subordinate part of a good faith 
        assignment or transfer for other reasons of the entire 
        enterprise or line of business to which the defense 
        relates.
            ``(7) Limitation on sites.--A defense under this 
        section, when acquired as part of a good faith 
        assignment or transfer of an entire enterprise or line 
        of business to which the defense relates, may only be 
        asserted for uses at sites where the subject matter 
        that would otherwise infringe one or more of the claims 
        is in use before the later of the effective filing date 
        of the patent or the date of the assignment or transfer 
        of such enterprise or line of business.
            ``(8) Unsuccessful assertion of defense.--If the 
        defense under this section is pleaded by a person who 
        is found to infringe the patent and who subsequently 
        fails to demonstrate a reasonable basis for asserting 
        the defense, the court shall find the case exceptional 
        for the purpose of awarding attorney fees under section 
        285 of this title.
            ``(9) Invalidity.--A patent shall not be deemed to 
        be invalid under section 102 or 103 of this title 
        solely because a defense is raised or established under 
        this section.''.
    (b) Conforming Amendment.--The table of sections at the 
beginning of chapter 28 of title 35, United States Code, is 
amended by adding at the end the following new item:

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

SEC. 4303. EFFECTIVE DATE AND APPLICABILITY.

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

                   Subtitle D--Patent Term Guarantee

SEC. 4401. SHORT TITLE.

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

SEC. 4402. PATENT TERM GUARANTEE AUTHORITY.

    (a) Adjustment of Patent Term.--Section 154(b) of title 35, 
United States Code, is amended to read as follows:
    ``(b) Adjustment of Patent Term.--
            ``(1) Patent term guarantees.--
                    ``(A) Guarantee of prompt patent and 
                trademark office responses.--Subject to the 
                limitations under paragraph (2), if the issue 
                of an original patent is delayed due to the 
                failure of the Patent and Trademark Office to--
                            ``(i) provide at least 1 of the 
                        notifications under section 132 of this 
                        title or a notice of allowance under 
                        section 151 of this title not later 
                        than 14 months after--
                                    ``(I) the date on which an 
                                application was filed under 
                                section 111(a) of this title; 
                                or
                                    ``(II) the date on which an 
                                international application 
                                fulfilled the requirements of 
                                section 371 of this title;
                            ``(ii) respond to a reply under 
                        section 132, or to an appeal taken 
                        under section 134, within 4 months 
                        after the date on which the reply was 
                        filed or the appeal was taken;
                            ``(iii) act on an application 
                        within 4 months after the date of a 
                        decision by the Board of Patent Appeals 
                        and Interferences under section 134 or 
                        135 or a decision by a Federal court 
                        under section 141, 145, or 146 in a 
                        case in which allowable claims remain 
                        in the application; or
                            ``(iv) issue a patent within 4 
                        months after the date on which the 
                        issue fee was paid under section 151 
                        and all outstanding requirements were 
                        satisfied,
                the term of the patent shall be extended one 
                day for each day after the end of the period 
                specified in clause (i), (ii), (iii), or (iv), 
                as the case may be, until the action described 
                in such clause is taken.
                    ``(B) Guarantee of no more than 3-year 
                application pendency.--Subject to the 
                limitations under paragraph (2), if the issue 
                of an original patent is delayed due to the 
                failure of the United States Patent and 
                Trademark Office to issue a patent within 3 
                years after the actual filing date of the 
                application in the United States, not 
                including--
                            ``(i) any time consumed by 
                        continued examination of the 
                        application requested by the applicant 
                        under section 132(b);
                            ``(ii) any time consumed by a 
                        proceeding under section 135(a), any 
                        time consumed by the imposition of an 
                        order under section 181, or any time 
                        consumed by appellate review by the 
                        Board of Patent Appeals and 
                        Interferences or by a Federal court; or
                            ``(iii) any delay in the processing 
                        of the application by the United States 
                        Patent and Trademark Office requested 
                        by the applicant except as permitted by 
                        paragraph (3)(C),
                the term of the patent shall be extended 1 day 
                for each day after the end of that 3-year 
                period until the patent is issued.
                    ``(C) Guarantee or adjustments for delays 
                due to interferences, secrecy orders, and 
                appeals.--Subject to the limitations under 
                paragraph (2), if the issue of an original 
                patent is delayed due to--
                            ``(i) a proceeding under section 
                        135(a);
                            ``(ii) the imposition of an order 
                        under section 181; or
                            ``(iii) appellate review by the 
                        Board of Patent Appeals and 
                        Interferences or by a Federal court in 
                        a case in which the patent was issued 
                        under a decision in the review 
                        reversing an adverse determination of 
                        patentability,
                the term of the patent shall be extended one 
                day for each day of the pendency of the 
                proceeding, order, or review, as the case may 
                be.
            ``(2) Limitations.--
                    ``(A) In general.--To the extent that 
                periods of delay attributable to grounds 
                specified in paragraph (1) overlap, the period 
                of any adjustment granted under this subsection 
                shall not exceed the actual number of days the 
                issuance of the patent was delayed.
                    ``(B) Disclaimed term.--No patent the term 
                of which has been disclaimed beyond a specified 
                date may be adjusted under this section beyond 
                the expiration date specified in the 
                disclaimer.
                    ``(C) Reduction of period of adjustment.--
                            ``(i) The period of adjustment of 
                        the term of a patent under paragraph 
                        (1) shall be reduced by a period equal 
                        to the period of time during which the 
                        applicant failed to engage in 
                        reasonable efforts to conclude 
                        prosecution of the application.
                            ``(ii) With respect to adjustments 
                        to patent term made under the authority 
                        of paragraph (1)(B), an applicant shall 
                        be deemed to have failed to engage in 
                        reasonable efforts to conclude 
                        processing or examination of an 
                        application for the cumulative total of 
                        any periods of time in excess of 3 
                        months that are taken to respond to a 
                        notice from the Office making any 
                        rejection, objection, argument, or 
                        other request, measuring such 3-month 
                        period from the date the notice was 
                        given or mailed to the applicant.
                            ``(iii) The Director shall 
                        prescribe regulations establishing the 
                        circumstances that constitute a failure 
                        of an applicant to engage in reasonable 
                        efforts to conclude processing or 
                        examination of an application.
            ``(3) Procedures for patent term adjustment 
        determination.--
                    ``(A) The Director shall prescribe 
                regulations establishing procedures for the 
                application for and determination of patent 
                term adjustments under this subsection.
                    ``(B) Under the procedures established 
                under subparagraph (A), the Director shall--
                            ``(i) make a determination of the 
                        period of any patent term adjustment 
                        under this subsection, and shall 
                        transmit a notice of that determination 
                        with the written notice of allowance of 
                        the application under section 151; and
                            ``(ii) provide the applicant one 
                        opportunity to request reconsideration 
                        of any patent term adjustment 
                        determination made by the Director.
                    ``(C) The Director shall reinstate all or 
                part of the cumulative period of time of an 
                adjustment under paragraph (2)(C) if the 
                applicant, prior to the issuance of the patent, 
                makes a showing that, in spite of all due care, 
                the applicant was unable to respond within the 
                3-month period, but in no case shall more than 
                3 additional months for each such response 
                beyond the original 3-month period be 
                reinstated.
                    ``(D) The Director shall proceed to grant 
                the patent after completion of the Director's 
                determination of a patent term adjustment under 
                the procedures established under this 
                subsection, notwithstanding any appeal taken by 
                the applicant of such determination.
            ``(4) Appeal of patent term adjustment 
        determination.--
                    ``(A) An applicant dissatisfied with a 
                determination made by the Director under 
                paragraph (3) shall have remedy by a civil 
                action against the Director filed in the United 
                States District Court for the District of 
                Columbia within 180 days after the grant of the 
                patent. Chapter 7 of title 5 shall apply to 
                such action. Any final judgment resulting in a 
                change to the period of adjustment of the 
                patent term shall be served on the Director, 
                and the Director shall thereafter alter the 
                term of the patent to reflect such change.
                    ``(B) The determination of a patent term 
                adjustment under this subsection shall not be 
                subject to appeal or challenge by a third party 
                prior to the grant of the patent.''.
    (b) Conforming Amendments.--
            (1) Section 282 of title 35, United States Code, is 
        amended in the fourth paragraph by striking ``156 of 
        this title'' and inserting ``154(b) or 156 of this 
        title''.
            (2) Section 1295(a)(4)(C) of title 28, United 
        States Code, is amended by striking ``145 or 146'' and 
        inserting ``145, 146, or 154(b)''.

SEC. 4403. CONTINUED EXAMINATION OF PATENT APPLICATIONS.

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

SEC. 4404. TECHNICAL CLARIFICATION.

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

SEC. 4405. EFFECTIVE DATE.

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

   Subtitle E--Domestic Publication of Patent Applications Published 
                                 Abroad

SEC. 4501. SHORT TITLE.

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

SEC. 4502. PUBLICATION.

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

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

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

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

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

SEC. 4504. PROVISIONAL RIGHTS.

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

SEC. 4505. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.

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

SEC. 4506. COST RECOVERY FOR PUBLICATION.

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

SEC. 4507. CONFORMING AMENDMENTS.

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

``Sec. 374. Publication of international application

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

SEC. 4508. EFFECTIVE DATE.

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

       Subtitle F--Optional Inter Partes Reexamination Procedure

SEC. 4601. SHORT TITLE.

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

SEC. 4602. EX PARTE REEXAMINATION OF PATENTS.

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

SEC. 4603. DEFINITIONS.

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

SEC. 4604. OPTIONAL INTER PARTES REEXAMINATION PROCEDURES.

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

      ``CHAPTER 31--OPTIONAL INTER PARTES REEXAMINATION PROCEDURES

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

``Sec. 311. Request for inter partes reexamination

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

``Sec. 312. Determination of issue by Director

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

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

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

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

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

``Sec. 315. Appeal

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

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

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

``Sec. 317. Inter partes reexamination prohibited

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

``Sec. 318. Stay of litigation

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

``30. Prior Art Citations to Office and Ex Parte Reexamination of 
              Patents.............................................   301
``31. Optional Inter Partes Reexamination of Patents..............311''.

SEC. 4605. CONFORMING AMENDMENTS.

    (a) Patent Fees; Patent Search Systems.--Section 41(a)(7) 
of title 35, United States Code, is amended to read as follows:
            ``(7) On filing each petition for the revival of an 
        unintentionally abandoned application for a patent, for 
        the unintentionally delayed payment of the fee for 
        issuing each patent, or for an unintentionally delayed 
        response by the patent owner in any reexamination 
        proceeding, $1,210, unless the petition is filed under 
        section 133 or 151 of this title, in which case the fee 
        shall be $110.''.
    (b) Appeal to the Board of Patents Appeals and 
Interferences.--Section 134 of title 35, United States Code, is 
amended to read as follows:

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

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

SEC. 4606. REPORT TO CONGRESS.

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

SEC. 4607. ESTOPPEL EFFECT OF REEXAMINATION.

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

SEC. 4608. EFFECTIVE DATE.

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

                Subtitle G--Patent and Trademark Office

SEC. 4701. SHORT TITLE.

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

          CHAPTER 1--UNITED STATES PATENT AND TRADEMARK OFFICE

SEC. 4711. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE.

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

``Sec. 1. Establishment

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

SEC. 4712. POWERS AND DUTIES.

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

``Sec. 2. Powers and duties

    ``(a) In General.--The United States Patent and Trademark 
Office, subject to the policy direction of the Secretary of 
Commerce--
            ``(1) shall be responsible for the granting and 
        issuing of patents and the registration of trademarks; 
        and
            ``(2) shall be responsible for disseminating to the 
        public information with respect to patents and 
        trademarks.
    ``(b) Specific Powers.--The Office--
            ``(1) shall adopt and use a seal of the Office, 
        which shall be judicially noticed and with which 
        letters patent, certificates of trademark 
        registrations, and papers issued by the Office shall be 
        authenticated;
            ``(2) may establish regulations, not inconsistent 
        with law, which--
                    ``(A) shall govern the conduct of 
                proceedings in the Office;
                    ``(B) shall be made in accordance with 
                section 553 of title 5;
                    ``(C) shall facilitate and expedite the 
                processing of patent applications, particularly 
                those which can be filed, stored, processed, 
                searched, and retrieved electronically, subject 
                to the provisions of section 122 relating to 
                the confidential status of applications;
                    ``(D) may govern the recognition and 
                conduct of agents, attorneys, or other persons 
                representing applicants or other parties before 
                the Office, and may require them, before being 
                recognized as representatives of applicants or 
                other persons, to show that they are of good 
                moral character and reputation and are 
                possessed of the necessary qualifications to 
                render to applicants or other persons valuable 
                service, advice, and assistance in the 
                presentation or prosecution of their 
                applications or other business before the 
                Office;
                    ``(E) shall recognize the public interest 
                in continuing to safeguard broad access to the 
                United States patent system through the reduced 
                fee structure for small entities under section 
                41(h)(1) of this title; and
                    ``(F) provide for the development of a 
                performance-based process that includes 
                quantitative and qualitative measures and 
                standards for evaluating cost-effectiveness and 
                is consistent with the principles of 
                impartiality and competitiveness;
            ``(3) may acquire, construct, purchase, lease, 
        hold, manage, operate, improve, alter, and renovate any 
        real, personal, or mixed property, or any interest 
        therein, as it considers necessary to carry out its 
        functions;
            ``(4)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation 
        of facilities, and contracts for supplies or services, 
        without regard to the provisions of the Federal 
        Property and Administrative Services Act of 1949 (40 
        U.S.C. 471 et seq.), the Public Buildings Act (40 
        U.S.C. 601 et seq.), and the Stewart B. McKinney 
        Homeless Assistance Act (42 U.S.C. 11301 et seq.); and
            ``(B) may enter into and perform such purchases and 
        contracts for printing services, including the process 
        of composition, platemaking, presswork, silk screen 
        processes, binding, microform, and the products of such 
        processes, as it considers necessary to carry out the 
        functions of the Office, without regard to sections 501 
        through 517 and 1101 through 1123 of title 44;
            ``(5) may use, with their consent, services, 
        equipment, personnel, and facilities of other 
        departments, agencies, and instrumentalities of the 
        Federal Government, on a reimbursable basis, and 
        cooperate with such other departments, agencies, and 
        instrumentalities in the establishment and use of 
        services, equipment, and facilities of the Office;
            ``(6) may, when the Director determines that it is 
        practicable, efficient, and cost-effective to do so, 
        use, with the consent of the United States and the 
        agency, instrumentality, patent and trademark office, 
        or international organization concerned, the services, 
        records, facilities, or personnel of any State or local 
        government agency or instrumentality or foreign patent 
        and trademark office or international organization to 
        perform functions on its behalf;
            ``(7) may retain and use all of its revenues and 
        receipts, including revenues from the sale, lease, or 
        disposal of any real, personal, or mixed property, or 
        any interest therein, of the Office;
            ``(8) shall advise the President, through the 
        Secretary of Commerce, on national and certain 
        international intellectual property policy issues;
            ``(9) shall advise Federal departments and agencies 
        on matters of intellectual property policy in the 
        United States and intellectual property protection in 
        other countries;
            ``(10) shall provide guidance, as appropriate, with 
        respect to proposals by agencies to assist foreign 
        governments and international intergovernmental 
        organizations on matters of intellectual property 
        protection;
            ``(11) may conduct programs, studies, or exchanges 
        of items or services regarding domestic and 
        international intellectual property law and the 
        effectiveness of intellectual property protection 
        domestically and throughout the world;
            ``(12)(A) shall advise the Secretary of Commerce on 
        programs and studies relating to intellectual property 
        policy that are conducted, or authorized to be 
        conducted, cooperatively with foreign intellectual 
        property offices and international intergovernmental 
        organizations; and
            ``(B) may conduct programs and studies described in 
        subparagraph (A); and
            ``(13)(A) in coordination with the Department of 
        State, may conduct programs and studies cooperatively 
        with foreign intellectual property offices and 
        international intergovernmental organizations; and
            ``(B) with the concurrence of the Secretary of 
        State, may authorize the transfer of not to exceed 
        $100,000 in any year to the Department of State for the 
        purpose of making special payments to international 
        intergovernmental organizations for studies and 
        programs for advancing international cooperation 
        concerning patents, trademarks, and other matters.
    ``(c) Clarification of Specific Powers.--(1) The special 
payments under subsection (b)(13)(B) shall be in addition to 
any other payments or contributions to international 
organizations described in subsection (b)(13)(B) and shall not 
be subject to any limitations imposed by law on the amounts of 
such other payments or contributions by the United States 
Government.
    ``(2) Nothing in subsection (b) shall derogate from the 
duties of the Secretary of State or from the duties of the 
United States Trade Representative as set forth in section 141 
of the Trade Act of 1974 (19 U.S.C. 2171).
    ``(3) Nothing in subsection (b) shall derogate from the 
duties and functions of the Register of Copyrights or otherwise 
alter current authorities relating to copyright matters.
    ``(4) In exercising the Director's powers under paragraphs 
(3) and (4)(A) of subsection (b), the Director shall consult 
with the Administrator of General Services.
    ``(5) In exercising the Director's powers and duties under 
this section, the Director shall consult with the Register of 
Copyrights on all copyright and related matters.
    ``(d) Construction.--Nothing in this section shall be 
construed to nullify, void, cancel, or interrupt any pending 
request-for-proposal let or contract issued by the General 
Services Administration for the specific purpose of relocating 
or leasing space to the United States Patent and Trademark 
Office.''.

SEC. 4713. ORGANIZATION AND MANAGEMENT.

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

``Sec. 3. Officers and employees

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

SEC. 4714. PUBLIC ADVISORY COMMITTEES.

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

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

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

SEC. 4715. CONFORMING AMENDMENTS.

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

SEC. 4716. TRADEMARK TRIAL AND APPEAL BOARD.

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

SEC. 4717. BOARD OF PATENT APPEALS AND INTERFERENCES.

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

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

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

SEC. 4718. ANNUAL REPORT OF DIRECTOR.

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

``Sec. 13. Annual report to Congress

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

SEC. 4719. SUSPENSION OR EXCLUSION FROM PRACTICE.

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

SEC. 4720. PAY OF DIRECTOR AND DEPUTY DIRECTOR.

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

            CHAPTER 2--EFFECTIVE DATE; TECHNICAL AMENDMENTS

SEC. 4731. EFFECTIVE DATE.

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

SEC. 4732. TECHNICAL AND CONFORMING AMENDMENTS.

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

``I. United States Patent and Trademark Office....................  1''.

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

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

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

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

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

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

``Sec.
`` 1. Establishment.
`` 2. Powers and duties.
`` 3. Officers and employees.
`` 4. Restrictions on officers and employees as to interest in patents.
`` 5. Patent and Trademark Office Public Advisory Committees.
`` 6. Board of Patent Appeals and Interferences.
`` 7. Library.
`` 8. Classification of patents.
`` 9. Certified copies of records.
``10. Publications.
``11. Exchange of copies of patents and applications with foreign 
          countries.
``12. Copies of patents and applications for public libraries.
``13. Annual report to Congress.''.

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

                  CHAPTER 3--MISCELLANEOUS PROVISIONS

SEC. 4741. REFERENCES.

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

SEC. 4742. EXERCISE OF AUTHORITIES.

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

SEC. 4743. SAVINGS PROVISIONS.

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

SEC. 4744. TRANSFER OF ASSETS.

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

SEC. 4745. DELEGATION AND ASSIGNMENT.

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

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

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

SEC. 4747. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

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

SEC. 4748. AVAILABILITY OF EXISTING FUNDS.

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

SEC. 4749. DEFINITIONS.

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

              Subtitle H--Miscellaneous Patent Provisions

SEC. 4801. PROVISIONAL APPLICATIONS.

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

SEC. 4802. INTERNATIONAL APPLICATIONS.

    Section 119 of title 35, United States Code, is amended as 
follows:
            (1) In subsection (a), insert ``or in a WTO member 
        country,'' after ``or citizens of the United States,''.
            (2) At the end of section 119 add the following new 
        subsections:
    ``(f) Applications for plant breeder's rights filed in a 
WTO member country (or in a foreign UPOV Contracting Party) 
shall have the same effect for the purpose of the right of 
priority under subsections (a) through (c) of this section as 
applications for patents, subject to the same conditions and 
requirements of this section as apply to applications for 
patents.
    ``(g) As used in this section--
            ``(1) the term `WTO member country' has the same 
        meaning as the term is defined in section 104(b)(2) of 
        this title; and
            ``(2) the term `UPOV Contracting Party' means a 
        member of the International Convention for the 
        Protection of New Varieties of Plants.''.

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

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

SEC. 4804. ELECTRONIC FILING AND PUBLICATIONS.

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

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

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

SEC. 4806. PRIOR INVENTION.

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

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

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

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

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

                   TITLE V--MISCELLANEOUS PROVISIONS

SEC. 5001. COMMISSION ON ONLINE CHILD PROTECTION.

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

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

    (a) Amendment.--Section 396(k) of the Communications Act of 
1934 (47 U.S.C. 396(k)) is amended by adding at the end the 
following new paragraph:
    ``(12) Funds may not be distributed under this subsection 
to any public broadcasting entity that directly or indirectly--
            ``(A) rents contributor or donor names (or other 
        personally identifiable information) to or from, or 
        exchanges such names or information with, any Federal, 
        State, or local candidate, political party, or 
        political committee; or
            ``(B) discloses contributor or donor names, or 
        other personally identifiable information, to any 
        nonaffiliated third party unless--
                    ``(i) such entity clearly and conspicuously 
                discloses to the contributor or donor that such 
                information may be disclosed to such third 
                party;
                    ``(ii) the contributor or donor is given 
                the opportunity, before the time that such 
                information is initially disclosed, to direct 
                that such information not be disclosed to such 
                third party; and
                    ``(iii) the contributor or donor is given 
                an explanation of how the contributor or donor 
                may exercise that nondisclosure option.''.
    (b) Effective Date.--The amendment made by subsection (a) 
shall apply with respect to funds distributed on or after 6 
months after the date of enactment of this Act.

SEC. 5003. COMPLETION OF BIENNIAL REGULATORY REVIEW.

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

SEC. 5004. PUBLIC BROADCASTING ENTITIES.

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

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

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

SEC. 5006. INFORMAL RULEMAKING OF COPYRIGHT DETERMINATION.

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

SEC. 5007. SERVICE OF PROCESS FOR SURETY CORPORATIONS.

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

SEC. 5008. LOW-POWER TELEVISION.

    (a) Short Title.--This section may be cited as the 
``Community Broadcasters Protection Act of 1999''.
    (b) Findings.--Congress finds the following:
            (1) Since the creation of low-power television 
        licenses by the Federal Communications Commission, a 
        small number of license holders have operated their 
        stations in a manner beneficial to the public good 
        providing broadcasting to their communities that would 
        not otherwise be available.
            (2) These low-power broadcasters have operated 
        their stations in a manner consistent with the 
        programming objectives and hours of operation of full-
        power broadcasters providing worthwhile services to 
        their respective communities while under severe license 
        limitations compared to their full-power counterparts.
            (3) License limitations, particularly the temporary 
        nature of the license, have blocked many low-power 
        broadcasters from having access to capital, and have 
        severely hampered their ability to continue to provide 
        quality broadcasting, programming, or improvements.
            (4) The passage of the Telecommunications Act of 
        1996 has added to the uncertainty of the future status 
        of these stations by the lack of specific provisions 
        regarding the permanency of their licenses, or their 
        treatment during the transition to high definition, 
        digital television.
            (5) It is in the public interest to promote 
        diversity in television programming such as that 
        currently provided by low-power television stations to 
        foreign-language communities.
    (c) Preservation of Low-Power Community Television 
Broadcasting.--Section 336 of the Communications Act of 1934 
(47 U.S.C. 336) is amended--
            (1) by redesignating subsections (f) and (g) as 
        subsections (g) and (h), respectively; and
            (2) by inserting after subsection (e) the following 
        new subsection:
    ``(f) Preservation of Low-Power Community Television 
Broadcasting.--
            ``(1) Creation of class a licenses.--
                    ``(A) Rulemaking Required.--Within 120 days 
                after the date of enactment of the Community 
                Broadcasters Protection Act of 1999, the 
                Commission shall prescribe regulations to 
                establish a class A television license to be 
                available to licensees of qualifying low-power 
                television stations. Such regulations shall 
                provide that--
                            ``(i) the license shall be subject 
                        to the same license terms and renewal 
                        standards as the licenses for full-
                        power television stations except as 
                        provided in this subsection; and
                            ``(ii) each such class A licensee 
                        shall be accorded primary status as a 
                        television broadcaster as long as the 
                        station continues to meet the 
                        requirements for a qualifying low-power 
                        station in paragraph (2).
                    ``(B) Notice to and certification by 
                licensees.--Within 30 days after the date of 
                enactment of the Community Broadcasters 
                Protection Act of 1999, the Commission shall 
                send a notice to the licensees of all low-power 
                televisions licenses that describes the 
                requirements for class A designation. Within 60 
                days after such date of enactment, licensees 
                intending to seek class A designation shall 
                submit to the Commission a certification of 
                eligibility based on the qualification 
                requirements of this subsection. Absent a 
                material deficiency, the Commission shall grant 
                certification of eligibility to apply for class 
                A status.
                    ``(C) Application for and award of 
                licenses.--Consistent with the requirements set 
                forth in paragraph (2)(A) of this subsection, a 
                licensee may submit an application for class A 
                designation under this paragraph within 30 days 
                after final regulations are adopted under 
                subparagraph (A) of this paragraph. Except as 
                provided in paragraphs (6) and (7), the 
                Commission shall, within 30 days after receipt 
                of an application of a licensee of a qualifying 
                low-power television station that is acceptable 
                for filing, award such a class A television 
                station license to such licensee.
                    ``(D) Resolution of technical problems.--
                The Commission shall act to preserve the 
                service areas of low-power television licensees 
                pending the final resolution of a class A 
                application. If, after granting certification 
                of eligibility for a class A license, technical 
                problems arise requiring an engineering 
                solution to a full-power station's allotted 
                parameters or channel assignment in the digital 
                television Table of Allotments, the Commission 
                shall make such modifications as necessary--
                            ``(i) to ensure replication of the 
                        full-power digital television 
                        applicant's service area, as provided 
                        for in sections 73.622 and 73.623 of 
                        the Commission's regulations (47 C.F.R. 
                        73.622, 73.623); and
                            ``(ii) to permit maximization of a 
                        full power digital television 
                        applicant's service area consistent 
                        with such sections 73.622 and 73.623;
                if such applicant has filed an application for 
                maximization or a notice of its intent to seek 
                such maximization by December 31, 1999, and 
                filed a bona fide application for maximization 
                by May 1, 2000. Any such applicant shallcomply 
with all applicable Commission rules regarding the construction of 
digital television facilities.
                    ``(E) Change applications.--If a station 
                that is awarded a construction permit to 
                maximize or significantly enhance its digital 
                television service area, later files a change 
                application to reduce its digital television 
                service area, the protected contour of that 
                station shall be reduced in accordance with 
                such change modification.
            ``(2) Qualifying low-power television stations.--
        For purposes of this subsection, a station is a 
        qualifying low-power television station if--
                    ``(A)(i) during the 90 days preceding the 
                date of enactment of the Community Broadcasters 
                Protection Act of 1999--
                            ``(I) such station broadcast a 
                        minimum of 18 hours per day;
                            ``(II) such station broadcast an 
                        average of at least 3 hours per week of 
                        programming that was produced within 
                        the market area served by such station, 
                        or the market area served by a group of 
                        commonly controlled low-power stations 
                        that carry common local programming 
                        produced within the market area served 
                        by such group; and
                            ``(III) such station was in 
                        compliance with the Commission's 
                        requirements applicable to low-power 
                        television stations; and
                    ``(ii) from and after the date of its 
                application for a class A license, the station 
                is in compliance with the Commission's 
                operating rules for full-power television 
                stations; or
                    ``(B) the Commission determines that the 
                public interest, convenience, and necessity 
                would be served by treating the station as a 
                qualifying low-power television station for 
                purposes of this section, or for other reasons 
                determined by the Commission.
            ``(3) Common ownership.--No low-power television 
        station authorized as of the date of enactment of the 
        Community Broadcasters Protection Act of 1999 shall be 
        disqualified for a class A license based on common 
        ownership with any other medium of mass communication.
            ``(4) Issuance of licenses for advanced television 
        services to television translator stations and 
        qualifying low-power television stations.--The 
        Commission is not required to issue any additional 
        license for advanced television services to the 
        licensee of a class A television station under this 
        subsection, or to any licensee of any television 
        translator station, but shall accept a license 
        application for such services proposing facilities that 
        will not cause interference to the service area of any 
        other broadcast facility applied for, protected, 
        permitted, or authorized on the date of filing of the 
        advanced television application. Such new license or 
        the original license of the applicant shall be 
        forfeited after the end of the digital television 
        service transition period, as determined by the 
        Commission. A licensee of a low-power television 
        station or television translator station may, at the 
        option of licensee, elect to convert to the provision 
        of advanced television services on its analog channel, 
        but shall not be required to convert to digital 
        operation until the end of such transition period.
            ``(5) No preemption of section 337.--Nothing in 
        this subsection preempts or otherwise affects section 
        337 of this Act.
            ``(6) Interim qualification.--
                    ``(A) Stations operating within certain 
                bandwidth.--The Commission may not grant a 
                class A license to a low-power television 
                station for operation between 698 and 806 
                megahertz, but the Commission shall provide to 
                low-power television stations assigned to and 
                temporarily operating in that bandwidth the 
                opportunity to meet the qualification 
                requirements for a class A license. If such a 
                qualified applicant for a class A license is 
                assigned a channel within the core spectrum (as 
                such term is defined in MM Docket 87-286, 
                February 17, 1998), the Commission shall issue 
                a class A license simultaneously with the 
                assignment of such channel.
                    ``(B) Certain channels off-limits.--The 
                Commission may not grant under this subsection 
                a class A license to a low-power television 
                station operating on a channel within the core 
                spectrum that includes any of the 175 
                additional channels referenced in paragraph 45 
                of its February 23, 1998, Memorandum Opinion 
                and Order on Reconsideration of the Sixth 
                Report and Order (MM Docket No. 87-268). Within 
                18 months after the date of enactment of the 
                Community Broadcasters Protection Act of 1999, 
                the Commission shall identify by channel, 
                location, and applicable technical parameters 
                those 175 channels.
            ``(7) No interference requirement.--The Commission 
        may not grant a class A license, nor approve a 
        modification of a class A license, unless the applicant 
        or licensee shows that the class A station for which 
        the license or modification is sought will not cause--
                    ``(A) interference within--
                            ``(i) the predicted Grade B contour 
                        (as of the date of enactment of the 
                        Community Broadcasters Protection Act 
                        of 1999, or November 1, 1999, whichever 
                        is later, or as proposed in a change 
                        application filed on or before such 
                        date) of any television station 
                        transmitting in analog format; or
                            ``(ii)(I) the digital television 
                        service areas provided in the DTV Table 
                        of Allotments; (II) the areas protected 
                        in the Commission's digital television 
                        regulations (47 C.F.R. 73.622(e) and 
                        (f)); (III) the digital television 
                        service areas of stations subsequently 
                        granted by the Commission prior to the 
                        filing of a class A application; and 
                        (IV) stations seeking to maximize power 
                        under the Commission's rules, if such 
                        station has complied with the 
                        notification requirements in paragraph 
                        (1)(D);
                    ``(B) interference within the protected 
                contour of any low-power television station or 
                low-power television translator station that--
                            ``(i) was licensed prior to the 
                        date on which the application for a 
                        class A license, or for the 
                        modification of such a license, was 
                        filed;
                            ``(ii) was authorized by 
                        construction permit prior to such date; 
                        or
                            ``(iii) had a pending application 
                        that was submitted prior to such date;
                    ``(C) interference within the protected 
                contour of 80 miles from the geographic center 
                of the areas listed in section 22.625(b)(1) or 
                90.303 of the Commission's regulations (47 
                C.F.R. 22.625(b)(1) and 90.303) for frequencies 
                in--
                            ``(i) the 470-512 megahertz band 
                        identified in section 22.621 or 90.303 
                        of such regulations; or
                            ``(ii) the 482-488 megahertz band 
                        in New York.
            ``(8) Priority for displaced low-power stations.--
        Low-power stations that are displaced by an application 
        filed under this section shall have priority over other 
        low-power stations in the assignment of available 
        channels.''.

      And the Senate agree to the same.

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

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

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

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

         TITLE I--SATELLITE HOME VIEWER IMPROVEMENT ACT OF 1999

      When Congress passed the Satellite Home Viewer Act in 
1988, few Americans were familiar with satellite television. 
They typically resided in rural areas of the country where the 
only means of receiving television programming was through use 
of a large, backyard C-band satellite dish. Congress recognized 
the importance of providing these people with access to 
broadcast programming, and created a compulsory copyright 
license in the Satellite Home Viewer Act that enabled satellite 
carriers to easily license the copyrights to the broadcast 
programming that they retransmitted to their subscribers.
      The 1988 Act fostered a boom in the satellite television 
industry. Coupled with the development of high-powered 
satellite service, or DSS, which delivers programming to a 
satellite dish as small as 18 inches in diameter, the satellite 
industry now serves homes nationwide with a wide range of high 
quality programming. Satellite is no longer primarily a rural 
service, for it offers an attractive alternative to other 
providers of multichannel video programming; in particular, 
cable television. Because satellite can provide direct 
competition with the cable industry, it is in the public 
interest to ensure that satellite operates under a copyright 
framework that permits it to be an effective competitor.
      The compulsory copyright license created by the 1988 Act 
was limited to a five year period to enable Congress to 
consider its effectiveness and renew it where necessary. The 
license was renewed in 1994 for an additional five years, and 
amendments made that were intended to increase the enforcement 
of the network territorial restrictions of the compulsory 
license. Two-year transitional provisions were created to 
enable local network broadcasters to challenge satellite 
subscribers' receipt of satellite network service where the 
local network broadcaster had reason to believe that these 
subscribers received an adequate off-the-air signal from the 
broadcaster. The transitional provisions were minimally 
effective and caused much consumer confusion and anger 
regarding receipt of television network stations.
      The satellite license is slated to expire at the end of 
this year, requiring Congress to again consider the copyright 
licensing regime for satellite retransmissions of over-the-air 
television broadcast stations. In passing this legislation, the 
Conference Committee was guided by several principles. First, 
the Conference Committee believes that promotion of competition 
in the marketplace for delivery of multichannel video 
programming is an effective policy to reduce costs to 
consumers. To that end, it is important that the satellite 
industry be afforded a statutory scheme for licensing 
television broadcast programming similar to that of the cable 
industry. At the same time, the practical differences between 
the two industries must be recognized and accounted for.
      Second, the Conference Committee reasserts the importance 
of protecting and fostering the system of television networks 
as they relate to the concept of localism. It is well 
recognized that television broadcast stations provide valuable 
programming tailored to local needs, such as news, weather, 
special announcements and information related to local 
activities. To that end, the Committee has structured the 
copyright licensing regime for satellite to encourage and 
promote retransmissions by satellite of local television 
broadcast stations to subscribers who reside in the local 
markets of those stations.
      Third, perhaps most importantly, the Conference Committee 
is aware that in creating compulsory licenses, it is acting in 
derogation of the exclusive property rights granted by the 
Copyright Act to copyright holders, and that it therefore needs 
to act as narrowly as possible to minimize the effects of the 
government's intrusion on the broader market in which the 
affected property rights and industries operate. In this 
context, the broadcast television market has developed in such 
a way that copyright licensing practices in this area take into 
account the national network structure, which grants exclusive 
territorial rights to programming in a local market to local 
stations either directly or through affiliation agreements. The 
licenses granted in this legislation attempt to hew as closely 
to those arrangements as possible. For example, these 
arrangements are mirrored in the section 122 ``local-to-local'' 
license, which grants satellite carriers the right to 
retransmit local stations within the station's local market, 
and does not require a separate copyright payment because the 
works have already been licensed and paid for with respect to 
viewers in those local markets. By contrast, allowing the 
importation of distant or out-of-market network stations in 
derogation of the local stations' exclusive right--bought and 
paid for in market-negotiated arrangements--to show the works 
in question undermines those market arrangements. Therefore, 
the specific goal of the 119 license, which is to allow for a 
life-line network television service to those homes beyond the 
reach of their local television stations, must be met by only 
allowing distant network service to those homes which cannot 
receive the local network television stations. Hence, the 
``unserved household'' limitation that has been in the license 
since its inception. The Committee is mindful and respectful of 
the interrelationship between the communications policy of 
``localism'' outlined above and property rights considerations 
in copyright law, and seeks a proper balance between the two.
      Finally, although the legislation promotes satellite 
retransmissions of local stations, the Conference Committee 
recognizes the continued need to monitor the effects of distant 
signal importation by satellite. To that end, the compulsory 
license for retransmission of distant signals is extended for 
aperiod of five years, to afford Congress the opportunity to evaluate 
the effectiveness and continuing need for that license at the end of 
the five-year period.
Sec. 1001. Short title
      This title may be cited as the ``Satellite Home Viewer 
Improvement Act.''
Sec. 1002. Limitations on exclusive rights; secondary transmissions by 
        satellite carriers within local markets
      The House and the Senate provisions were in most respects 
highly similar. The conference substitute generally follows the 
House approach, with the differences described here.
      Section 1002 of this Act creates a new statutory license, 
with no sunset provision, as a new section 122 of the Copyright 
Act of 1976. The new license authorizes the retransmission of 
television broadcast stations by satellite carriers to 
subscribers located within the local markets of those stations.
      Creation of a new statutory license for retransmission of 
local signals is necessary because the current section 119 
license is limited to the retransmission of distance signals by 
satellite. The section 122 license allows satellite carriers 
for the first time to provide their subscribers with the 
television signals they want most: their local stations. A 
carrier may retransmit the signal of a network station (or 
superstation) to all subscribers who reside within the local 
market of that station, without regard to whether the 
subscriber resides in an ``unserved household.'' The term 
``local market'' is defined in Section 119(j)(2), and generally 
refers to a station's Designated Market Area as defined by 
Nielsen.
      Because the section 122 license is permanent, subscribers 
may obtain their local television stations without fear that 
their local broadcast service may be turned off at a future 
date. In addition, satellite carriers may deliver local 
stations to commercial establishments as well as homes, as the 
cable industry does under its license. These amendments create 
parity and enhanced competition between the satellite and cable 
industries in the provision of local television broadcast 
stations.
      For a satellite carrier to be eligible for this license, 
this Act, following the House approach, provides both in new 
section 122(a) and in new section 122(d) that a carrier may use 
the new local-to-local license only if it is in full compliance 
with all applicable rules and regulations of the Federal 
Communications Commission, including any requirements that the 
Commission may adopt by regulation concerning carriage of 
stations or programming exclusivity. These provisions are 
modeled on similar provisions in section 111, the terrestrial 
compulsory license. Failure to fully comply with Commission 
rules with respect to retransmission of one or more stations in 
the local market precludes the carrier from making use of the 
section 122 license. Put another way, the statutory license 
overrides the normal copyright scheme only to the extent that 
carriers strictly comply with the limits Congress has put on 
that license.
      Because terrestrial systems, such as cable, as a general 
rule do not pay any copyright royalty for local retransmissions 
of broadcast stations, the section 122 license does not require 
payment of any copyright royalty by satellite carriers for 
transmissions made in compliance with the requirements of 
section 122. By contrast, the section 119 statutory license for 
distant signals does require payment of royalties. In addition, 
the section 122 statutory license contains no ``unserved 
household'' limitation, while the section 119 license does 
contain that limitation.
      Satellite carriers are liable for copyright infringement, 
and subject to the full remedies of the Copyright Act, if they 
violate one or more of the following requirements of the 
section 122 license. First, satellite carriers may not in any 
way willfully alter the programming contained on a local 
broadcast station.
      Second, satellite carriers may not use the section 122 
license to retransmit a television broadcast station to a 
subscriber located outside the local market of the station. 
Retransmission of a station to a subscriber located outside the 
station's local market is covered by section 119, and is 
permitted only when all conditions of that license are 
satisfied. Accordingly, satellite carriers are required to 
provide local broadcasters with accurate lists of the street 
addresses of their local-to-local subscribers so that 
broadcasters may verify that satellite carriers are making 
proper use of the license. The subscriber information supplied 
to broadcasters is for verification purposes only, and may not 
be used by broadcasters for any other reason. Any knowing 
provision of false information by a satellite carrier would, 
under section 122(d), bar use of the Section 122 license by the 
carrier engaging in such practices. The section 122 license 
contains remedial provisions parallel to those of Section 119, 
including a ``pattern or practice'' provision that requires 
termination of the Section 122 statutory license as to a 
particular satellite carrier if it engages in certain abuses of 
the license.
      Under this provision, just as in the statutory licenses 
codified in sections 111 and 119, a violation may be proven by 
showing willful activity, or simple delivery of the secondary 
transmission over a certain period of time. In addition to 
termination of service on a nationwide or local or regional 
basis, statutory damages are available up to $250,000 for each 
6-month period during which the pattern or practice of 
violations was carried out. Satellite carriers have the burden 
of proving that they are not improperly making use of the 
section 122 license to serve subscribers outside the local 
markets of the television broadcast stations they are 
providing. The penalties created under this section parallel 
those under Section 119, and are to deter satellite carriers 
from providing signals to subscribers in violation of the 
licenses.
      The section 122 license is limited in geographic scope to 
service to locations in the United States, including any 
commonwealth, territory or possession of the United States. In 
addition, section 122(j) makes clear that local retransmission 
of television broadcast stations to subscribers is governed 
solely by the section 122 license, and that no provision of the 
section 111 cable compulsory license should be interpreted to 
allow satellite carriers to make local retransmissions of 
television broadcast stations under that license. Likewise, no 
provision of the section 119 license (or any other law) should 
be interpreted as authorizing local-to-local retransmissions. 
As with all statutory licenses, these explicit limitations are 
consistent with the general rule that, because statutory 
licenses are in derogation of the exclusive rights granted 
under the Copyright Act, they should be interpreted narrowly.
      Section 1002(a) of this Act contains new standing 
provisions. Adopting the approach of the House bill, section 
122(f)(1) of the Copyright Act is parallel to section 119(e), 
and ensures that local stations, in addition to any other 
parties that qualify under other standing provisions of the 
Act, will have the ability to sue for violations of section 
122. New section 122(f)(2) of the Copyright Act enables a local 
television station that is not being carried by a satellite 
carrier in violation of the license to file a copyright 
infringement lawsuit in federal court to enforce its rights.
Sec. 1003. Extension of effect of amendments to section 119 of title 
        17, United States Code
      As in both the House bill and the Senate amendment, this 
Act extends the section 119 satellite statutory license for a 
period of five years by changing the expiration date of the 
legislation from December 31, 1999, to December 31, 2004. The 
procedural and remedial provisions of section 119, which have 
already been interpreted by the courts, are being extended 
without change. Should the section 119 license be allowed to 
expire in 2004, it shall do so at midnight on December 31, 
2004, so that the license will cover the entire second 
accounting period of 2004.
      The advent of digital terrestrial broadcasting will 
necessitate additional review and reform of the distant signal 
statutory license. And responsibility to oversee the 
development of the nascent local station satellite service may 
also require for review of the distant signal statutory license 
in the future. For each of these reasons, this Act establishes 
a period for review in 5 years.
      Although the section 119 regime is largely being extended 
in its current form, certain sections of the Act may have a 
near-term effect on pending copyright infringement lawsuits 
brought by broadcasters against satellite carriers. These 
changes are prospective only; Congress does not intend to 
change the legality of any conduct that occurred prior to the 
date of enactment. Congress does intend, however, to benefit 
consumers where possible and consistent with existing copyright 
law and principles.
      This Act attempts to strike a balance among a variety of 
public policy goals. While increasing the number of potential 
subscribers to distant network signals, this Act clarifies that 
satellite carriers may carry up to, but no more than, two 
stations affiliated with the same network. The original purpose 
of the Satellite Home Viewer Act was to ensure that all 
Americans could receive network programming and other 
television services provided they could not receive those 
services over-the-air or in any other way. This bill reflects 
the desire of the Conference to meet this requirement and 
consumers' expectations to receive the traditional level of 
satellite service that has built up over the years, while 
avoiding an erosion of the programming market affected by the 
statutory licenses.
Sec. 1004. Computation of royalty fees for satellite carriers
      Like both the House bill and the Senate amendment, this 
Act reduces the royalty fees currently paid by satellite 
carriers for the retransmission of network and superstations by 
45 percent and 30 percent, respectively. These are reductions 
of the 27-cent royalty fees made effective by the Librarian of 
Congress on January 1, 1998. The reductions take effect on July 
1, 1999, which is the beginning of the second accounting period 
for 1999, and apply to all accounting periods for the five-year 
extension of the section 119 license. The Committee has drafted 
this provision such that, if the section 119 license is renewed 
after 2004, the 45 percent and 30 percent reductions of the 27-
cent fee will remain in effect, unless altered by legislative 
amendment.
      In addition, section 119(c) of title 17, United States 
Code, is amended to clarify that in royalty distribution 
proceedings conducted under section 802 of the Copyright Act, 
the Public Broadcasting Service may act as agent for all public 
television copyright claimants and all Public Broadcasting 
Service member stations.
Sec. 1005. Distant signal eligibility for consumers
      The Senate bill contained provisions retaining the 
existing Grade B intensity standard in the definition of 
``unserved household.'' The House agreed to the Senate 
provisions with amendments, which extend the ``unserved 
household'' definition of section 119 of title 17 intact in 
certain respects and amend it in other respects. Consistent 
with the approach of the Senate amendment, the central feature 
of the existing definition of ``unserved household''--inability 
to receive, through use of a conventional outdoor rooftop 
receiving antenna, a signal of Grade B intensity from a primary 
network station--remains intact. The legislation directs the 
FCC, however, to examine the definition of ``Grade B 
intensity'', reflecting the dBu levels long set by the Federal 
Communications Commission in 47 C.F.R. Sec. 73.683(a), and 
issue a rulemaking within 6 months after enactment to evaluate 
the standard and, if appropriate, make recommendations to 
Congress about how to modify the analog standard, and make a 
further recommendation about what an appropriate standard would 
be for digital signals. In this fashion, the Congress will have 
the best input and recommendations from the Commission, 
allowing the Commission wide latitude in its inquiry and 
recommendations, but reserve for itself the final decision-
making authority over the scope of the copyright licenses in 
question, in light of all relevant factors.
      The amended definition of ``unserved household'' makes 
other consumer-friendly changes. It will eliminate the 
requirement that a cable subscriber wait 90 days to be eligible 
for satellite delivery of distant network signals. After 
enactment, cable subscribers will be eligible to receive 
distant network signals by satellite, upon choosing to do so, 
if they satisfy the other requirements of section 119.
      In addition, this Act adds three new categories to the 
definition of ``unserved household'' in section 119(d)(10): (a) 
certain subscribers to network programming who are not 
predicted to receive a signal of Grade A intensity from any 
station of the relevant network, (b) operators of recreational 
vehicles and commercial trucks who have complied with certain 
documentation requirements, and (c) certain C-band subscribers 
to network programming. This Act also confirms in new section 
119(d)(10)(B) what has long been understood by the parties and 
accepted by the courts, namely that a subscriber may receive 
distant network service if all network stations affiliated with 
the relevant network that are predicted to serve that 
subscriber give their written consent.
      Section 105(a)(2) of the bill creates a new section 
119(a)(2)(B)(i) of the Copyright Act to prohibit a satellite 
carrier from delivering more than two distant TV stations 
affiliated with a single network in a single day to a 
particular customer. This clarifies that a satellite carrier 
provides a signal of a television station throughout the 
broadcast day, rather than switching between stations 
throughout a day to pick the best programming among different 
signals.
      Section 1005(a)(2) of this Act creates a new section 
119(a)(2)(B)(ii)(I) of the Copyright Act to confirm that courts 
should rely on the FCC's ILLR model to presumptively determine 
whether a household is capable of receiving a signal of Grade B 
intensity. The conferees understand that the parties to 
copyright infringement litigation under the Satellite Home 
Viewer Act have agreed on detailed procedures for implementing 
the current version of ILLR, and nothing in this Act requires 
any change in those procedures. In the future, when the FCC 
amends the ILLR model to make it more accurate pursuant to 
section 339(c)(3) of the Communications Act of 1934, the 
amended model should be used in place of the current version of 
ILLR. The new language also confirms in new section 
119(a)(2)(B)(ii)(II) that the ultimate determination of 
eligibility to receive network signals shall be a signal 
intensity test pursuant to 47 C.F.R. Sec. 73.686(d), as 
reflected in new section 339(c)(5) of the Communications Act of 
1934. Again, the conferees understand that existing Satellite 
Home Viewer Act court orders already incorporate this FCC-
approved measurement method, and nothing in this Act requires 
any change insuch orders. Such a signal intensity test may be 
conducted by any party to resolve a customer's eligibility in 
litigation under section 119.
      Section 1005(a)(2) of this Act creates a new section 
119(a)(2)(B)(iii) of the Copyright Act to permit continued 
delivery by means of C-band transmissions of network stations 
to C-band dish owners who received signals of the pertinent 
network on October 31, 1999, or were recently required to have 
such service terminated pursuant to court orders or settlements 
under section 119. This provision does not authorize satellite 
delivery of network stations to such persons by any technology 
other than C-band.
      Section 1005(b) also adds a new provision (E) to section 
119(a)(5). The purpose of this provision is to allow certain 
longstanding superstations to continue to be delivered to 
satellite customers without regard to the ``unserved 
household'' limitation, even if the station now technically 
qualifies as a ``network station'' under the 15-hour-per-week 
definition of the Act. This exception will cease to apply if 
such a station in the future becomes affiliated with one of the 
four networks (ABC, CBS, Fox, and NBC) that qualified as 
networks as of January 1, 1995.
      Section 1005(c) of this Act adds a new section 119(e) of 
the Copyright Act. This provision contains a moratorium on 
terminations of network stations to certain otherwise 
ineligible recent subscribers to network programming whose 
service has been (or soon would have been) terminated and 
allows them to continue to be eligible for distant signal 
services. The subscribers affected are those predicted by the 
current version of the ILLR model to receive a signal of less 
than Grade A intensity from any network station of the relevant 
network defined in section 73.683(a) of Commission regulations 
(47 C.F.R. 73.683(a)) as in effect January 1, 1999. As the 
statutory language reflects, recent court orders and 
settlements between the satellite and broadcasting industries 
have required (or will in the near future require) significant 
numbers of terminations of network stations to ineligible 
subscribers in this category. Although the conferees strongly 
condemn lawbreaking by satellite carriers, and intend for 
satellite carriers to be subject to all other available legal 
remedies for any infringements in which the carriers have 
engaged, the conferees have concluded that the public interest 
will be served by the grandfathering of this limited category 
of subscribers whose service would otherwise be terminated.
      The decision by the conferees to direct this limited 
grandfathering should not be understood as condoning unlawful 
conduct by satellite carriers, but rather reflects the concern 
of the conference for those subscribers who would otherwise be 
punished for the actions of the satellite carriers. Note that 
in the previous 18 months, court decisions have required the 
termination of some distant network signals to some 
subscribers. However, the Conferees are aware that in some 
cases satellite carriers terminated distant network service 
that was not subject to the original lawsuit. The Conferees 
intend that affected subscribers remain eligible for such 
service.
      The words ``shall remain eligible'' in section 119(e) 
refer to eligibility to receive stations affiliated with the 
same network from the same satellite carrier through use of the 
same transmission technology at the same location; in other 
words, grandfathered status is not transferable to a different 
carrier or a different type of dish or at a new address. The 
provisions of new section 119(e) are incorporated by reference 
in the definition of ``unserved household'' as new section 
119(d)(10)(C).
      Section 1005(d) of this Act creates a new section 
119(a)(11), which contains provisions governing delivery of 
network stations to recreational vehicles and commercial 
trucks. This provision is, in turn, incorporated in the 
definition of ``unserved household'' in new section 
119(d)(10)(D). The purpose of these amendments is to allow the 
operators of recreational vehicles and commercial trucks to use 
satellite dishes permanently attached to those vehicles to 
receive, on television sets located inside those vehicles, 
distant network signals pursuant to section 119. To prevent 
abuse of this provision, the exception for recreational 
vehicles and commercial trucks is limited to persons who have 
strictly complied with the documentation requirements set forth 
in section 119(a)(11). Among other things, the exception will 
only become available as to a particular recreational vehicle 
or commercial truck after the satellite carrier has provided 
all affected networks with all documentation set forth in 
section 119(a). The exception will apply only for reception in 
that particular recreational vehicle or truck, and does not 
authorize any delivery of network stations to any fixed 
dwelling.
      Section 1005(e) of this Act adds a new proviso to the 
definition of ``satellite carrier'' to exclude from that 
definition the provision of any ``digital online communications 
service.'' As the Copyright Office concluded in its 1997 Review 
of the Copyright Licensing Regimes Covering Retransmission of 
Broadcast Signals, no existing statutory license (whether in 
section 111, section 119, or otherwise) authorizes 
retransmission of television broadcast signals via the Internet 
or any other online service. The extension of any statutory 
license for television programming to online transmissions 
would raise profound policy considerations, including, most 
notably, the apparent impossibility of limiting such 
transmissions to ``unserved households.'' In any event, the 
committee's intent is that, neither section 111, section 119, 
nor section 122 creates any authorization for third parties to 
disseminate television programming via online delivery of any 
kind, and the amendment to the definition of ``satellite 
carrier'' simply confirms existing law on that point.
Sec. 1006. Public Broadcasting Service satellite feed
      The conference agreement follows the Senate bill with an 
amendment that applies the network copyright royalty rate to 
the Public Broadcasting Service the satellite feed. The 
conference agreement grants satellite carriers a section 119 
compulsory license to retransmit a national satellite feed 
distributed and designated by PBS. The license would apply to 
educational and informational programming to which PBS 
currently holds broadcast rights. The license, which would 
extend to all households in the United States, would sunset on 
January 1, 2002, the date when local-to-local must-carry 
obligations become effective. Under the conference agreement, 
PBS will designate the national satellite feed for purposes of 
this section.
Sec. 1007. Application of Federal Communications Commission regulations
      The section 119 license is amended to clarify that 
satellite carriers must comply with all rules, regulations, and 
authorizations of the Federal Communications Commission in 
order to obtain the benefits of the section 119 license. As 
provided in the House bill, this would include any programming 
exclusivity provisions or carriage requirements that the 
Commission may adopt. Violations of such rules, regulations or 
authorizations would render a carrier ineligible for the 
copyright statutory license with respect to that 
retransmission.
Sec. 1008. Rules for satellite carriers retransmitting television 
        broadcast signals
      The Senate agrees to the House bill provisions regarding 
carriage of television broadcast signals, with certain 
amendments, as discussed below. Section 108 creates new 
sections 338 and 339 of theCommunications Act of 1934. Section 
338 addresses carriage of local television signals, while section 339 
addresses distant television signals.
      New section 338 requires satellite carriers, by January 
1, 2002, to carry upon request all local broadcast stations' 
signals in local markets in which the satellite carriers carry 
at least one signal pursuant to section 122 of title 17, United 
States Code. The conference report added the cross-reference to 
section 122 to the House provision to indicate the relationship 
between the benefits of the statutory license and the carriage 
requirements imposed by this Act. Thus, the conference report 
provides that, as of January 1, 2002, royalty-free copyright 
licenses for satellite carriers to retransmit broadcast signals 
to viewers in the broadcasters' service areas will be available 
only on a market-by-market basis.
      The procedural provisions applicable to section 338 
(concerning costs, avoidance of duplication, channel 
positioning, compensation for carriage, and complaints by 
broadcast stations) are generally parallel to those applicable 
to cable systems. Within one year after enactment, the Federal 
Communications Commission is to issue implementing regulations 
which are to impose obligations comparable to those imposed on 
cable systems under paragraphs (3) and (4) of section 614(b) 
and paragraphs (1) and (2) of section 615(g), such as the 
requirement to carry a station's entire signal without 
additions or deletions. The obligation to carry local stations 
on contiguous channels is illustrative of the general 
requirement to ensure that satellite carriers position local 
stations in a way that is convenient and practically accessible 
for consumers. By directing the FCC to promulgate these must-
carry rules, the conferees do not take any position regarding 
the application of must-carry rules to carriage of digital 
television signals by either cable or satellite systems.
      To make use of the local license, satellite carriers must 
provide the local broadcast station signal as part of their 
satellite service, in a manner consistent with paragraphs (b), 
(c), (d), and (e), FCC regulations, and retransmission consent 
requirements. Until January 1, 2002, satellite carriers are 
granted a royalty-free copyright license to retransmit 
broadcast signals on a station-by-station basis, consistent 
with retransmission consent requirements. The transition period 
is intended to provide the satellite industry with a 
transitional period to begin providing local-into-local 
satellite service to communities throughout the country.
      The conferees believe that the must-carry provisions of 
this Act neither implicate nor violate the First Amendment. 
Rather than requiring carriage of stations in the manner of 
cable's mandated duty, this Act allows a satellite carrier to 
choose whether to incur the must-carry obligation in a 
particular market in exchange for the benefits of the local 
statutory license. It does not deprive any programmers of 
potential access to carriage by satellite carriers. Satellite 
carriers remain free to carry any programming for which they 
are able to acquire the property rights. The provisions of this 
Act allow carriers an easier and more inexpensive way to obtain 
the right to use the property of copyright holders when they 
retransmit signals from all of a market's broadcast stations to 
subscribers in that market. The choice whether to retransmit 
those signals is made by carriers, not by the Congress. The 
proposed licenses are a matter of legislative grace, in the 
nature of subsidies to satellite carriers, and reviewable under 
the rational basis standard.\1\
---------------------------------------------------------------------------
    \1\ See Rust v. Sullivan, 500 U.S. 173 (1991) (grants); Indopco, 
Inc. v. Commissioner, 503 U.S. 79, 84 (1992) (tax benefits). The First 
Amendment requires only that Congress not aim at ``the suppression of 
dangerous ideas.'' NEA v. Finley, 118 S. Ct. 2168, 2178-79 (1998).
---------------------------------------------------------------------------
      In addition, the conferees are confident that the 
proposed license provisions would pass constitutional muster 
even if subjected to the O'Brien standard applied to the cable 
must-carry requirement.\2\ The proposed provisions are intended 
to preserve free television for those not served by satellite 
or cable systems and to promote widespread dissemination of 
information from a multiplicity of sources. The Supreme Court 
has found both to be substantial interests, unrelated to the 
suppression of free expression.\3\ Providing the proposed 
license on a market-by-market basis furthers both goals by 
preventing satellite carriers from choosing to carry only 
certain stations and effectively preventing many other local 
broadcasters from reaching potential viewers in their service 
areas. The Conference Committee is concerned that, absent must-
carry obligations, satellite carriers would carry the major 
network affiliates and few other signals. Non-carried stations 
would face the same loss of viewership Congress previously 
found with respect to cable noncarriage.\4\
---------------------------------------------------------------------------
    \2\ See United States v. O'Brien, 391 U.S. 367 (1968).
    \3\ See Turner Broadcasting Sys., Inc. v. FCC, 512 U.S. 622, 663 
(1994).
    \4\ See, e.g., H.R. Rep. No. 102-628, p. 51 (1992); S. Rep. No. 
102-92, p. 62 (1991); see also Feb. 24 Hearing (Al DeVaney).
---------------------------------------------------------------------------
      The proposed licenses place satellite carrier in a 
comparable position to cable systems, competing for the same 
customers. Applying a must-carry rule in markets which 
satellite carriers choose to serve benefits consumers and 
enhances competition with cable by allowing consumers the same 
range of choice in local programming they receive through cable 
service. The conferees expect that, by January 1, 2002, 
satellite carriers' market share will have increased and that 
the Congress' interest in maintaining free over-the-air 
television will be undermined if local broadcasters are 
prevented from reaching viewers by either cable or satellite 
distribution systems. The Congress' preference for must-carry 
obligations has already been proven effective, as attested by 
the appearance of several emerging networks, which often serve 
underserved market segments. There are no narrower alternatives 
that would achieve the Congress' goals. Although the conferees 
expect that subscribers who receive no broadcast signals at all 
from their satellite service may install antennas or subscribe 
to cable service in addition to satellite service, the 
Conference Committee is less sanguine that subscribers who 
receive network signals and hundreds of other programming 
choices from their satellite carrier will undertake such 
trouble and expense to obtain over-the-air signals from 
independent broadcast stations. National feeds would also be 
counterproductive because they siphon potential viewers from 
local over-the-air affiliates. In sum, the Conference Committee 
finds that trading the benefits of the copyright license for 
the must carry requirement is a fair and reasonable way of 
helping viewers have access to all local programming while 
benefitting satellite carriers and their customers.
      Section 338(c) contains a limited exception to the 
general must-carry requirements, stating that a satellite 
carrier need not carry two local affiliates of the same network 
that substantially duplicate each others' programming, unless 
the duplicating stations are licensed to communities in 
different states. The latter provisions address unique and 
limited cases, including WMUR (Manchester, New Hampshire)/WCVB 
(Boston, Massachusetts) and WPTZ (Plattsburg, New York)/WNNE 
(White River Junction,Vermont), in which mandatory carriage of 
both duplicating local stations upon request assures that satellite 
subscribers will not be precluded from receiving the network affiliate 
that is licensed to the state in which they reside.
      Because of unique technical challenges on satellite 
technology and constraints on the use of satellite spectrum, 
satellite carriers may initially be limited in their ability to 
deliver must carry signals into multiple markets. New 
compression technologies, such as video streaming, may help 
overcome these barriers however, and, if deployed, could enable 
satellite carriers to deliver must-carry signals into many more 
markets than they could otherwise. Accordingly, the conferees 
urge the FCC, pursuant to its obligations under section 338, or 
in any other related proceedings, to not prohibit satellite 
carriers from using reasonable compression, reformatting, or 
similar technologies to meet their carriage obligations, 
consistent with existing authority.
      New section 339 of the Communications Act contains 
provisions concerning carriage of distant television stations 
by satellite carriers. Section 339(a)(1) limits satellite 
carriers to providing a subscriber with no more than two 
stations affiliated with a given television network from 
outside the local market. In addition, a satellite carrier that 
provides two distant signals to eligible households may also 
provide the local television signals pursuant to section 122 of 
title 17 if the subscriber offers local-to-local service in the 
subscriber's market. This provision furthers the congressional 
policy of localism and diversity of broadcast programming, 
which provides locally-relevant news, weather, and information, 
but also allows consumers in unserved households to enjoy 
network programming obtained via distant signals. Under new 
section 339(a)(2), which is based on the Senate amendment, the 
knowing and willful provision of distant television signals in 
violation of these restrictions is subject to a forfeiture 
penalty under section 503 of the Communications Act of $50,000 
per violation or for each day of a continuing violation.
      New section 339(b)(1)(A) requires the Commission to 
commence within 45 days of enactment, and complete within one 
year after the date of enactment, a rulemaking to develop 
regulations to apply network nonduplication, syndicated 
exclusivity and sports blackout rules to the transmission of 
nationally distributed superstations by satellite carriers. New 
section 339(b)(1)(B) requires the Commission to promulgate 
regulations on the same schedule with regard to the application 
of sports blackout rules to network stations. These regulations 
under subparagraph (B) are to be imposed ``to the extent 
technically feasible and not economically prohibitive'' with 
respect to the affected parties. The burden of showing that 
conforming to rules similar to cable would be ``economically 
prohibitive'' is a heavy one. It would entail a very serious 
economic threat to the health of the carrier. Without that 
showing, the rules should be as similar as possible to that 
applicable to cable services.
      Section 339(c) of the Communications Act of 1934 
addresses the three distinct areas discussed by the Commission 
in its Report & Order in Docket No. 98-201: (i) the definition 
of ``Grade B intensity,'' which is the substantive standard for 
determining eligibility to receive distant network stations by 
satellite, (ii) prediction of whether a signal of Grade B 
intensity from a particular station is present at a particular 
household, and (iii) measurement of whether a signal of Grade B 
intensity from a particular station is present at a particular 
household. Section 339(c) addresses each of these topics.
      New section 339(c) addresses evaluation and possible 
recommendations for modification by the Commission of the 
definition of Grade B intensity, which is incorporated into the 
definition of ``unserved household'' in section 119 of the 
Copyright Act. Under section 339(c), the Commission is to 
complete a rulemaking within 1 year after enactment to 
evaluate, and if appropriate to recommend modifications to the 
Grade B intensity standard for analog signals set forth in 47 
C.F.R. Sec. 73.683(a), for purposes of determining eligibility 
for distant signal satellite service. In addition, the 
Commission is to recommend a signal standard for digital 
signals to prepare Congress to update the statutory license for 
digital television broadcasting. The Committee intends that 
this report would reflect the FCC's best recommendations in 
light of all relevant considerations, and be based on whatever 
factors and information the Commission deems relevant to 
determining whether the signal intensity standard should be 
modified and in what way. As discussed above, the two-part 
process allows the Commission to recommend modifications 
leaving to Congress the decision-making power on modifications 
of the copyright licenses at issue.
      Section 339(c)(3) addresses requests to local television 
stations by consumers for waivers of the eligibility 
requirements under section 119 of title 17, United States Code. 
If a satellite carrier is barred from delivering distant 
network signals to a particular customer because the ILLR model 
predicts the customer to be served by one or more television 
stations affiliated with the relevant network, the consumer may 
submit to those stations, through his or her satellite carrier, 
a written request for a waiver. The statutory phrase ``station 
asserting that the retransmission is prohibited'' refers to a 
station that is predicted by the ILLR model to serve the 
household. Each such station must accept or reject the waiver 
request within 30 days after receiving the request from the 
satellite carrier. If a relevant network station grants the 
requested waiver, or fails to act on the waiver within 30 days, 
the viewer shall be deemed unserved with respect to the local 
network station in question.
      Section 339(c)(4) addresses the ILLR predictive model 
developed by the Commission in Docket No. 98-201. The provision 
requires the Commission to attempt to increase its accuracy 
further by taking into account not only terrain, as the ILLR 
model does now, but also land cover variations such as 
buildings and vegetation. If the Commission discovers other 
practical ways to improve the accuracy of the ILLR model still 
further, it shall implement those methods as well. The linchpin 
of whether particular proposed refinements to the ILLR model 
result in greater accuracy is whether the revised model's 
predictions are closer to the results of actual field testing 
in terms of predicting whether households are served by a local 
affiliate of the relevant network.
      The ILLR model of predicting subscribers' eligibility 
will be of particular use in rural areas. To make the ILLR more 
accurate and more useful to this group of Americans, the 
Conference Committee believes the Commission should be 
particularly careful to ensure that the ILLR is accurate in 
areas that use star routes, postal routes, or other addressing 
systems that may not indicate clearly the location of the 
actual dwelling of a potential subscriber. The Commission 
should to ensure the model accurately predicts the signal 
strength at the viewers' actual location.
      New section 339(c)(5) addresses the third area discussed 
in the Commission's Report & Order in Docket No. 98-201, namely 
signal intensity testing. This provision permits satellite 
carriers and broadcasters to carry out signal intensity 
measurements, using the procedures set forth by the Commission 
in 47 C.F.R. Sec. 73.686(d), to determine whether particular 
households are unserved. Unless the parties otherwise agree, 
any such tests shall be conducted on a ``loser pays'' basis, 
with the network station bearing the costs of tests showing the 
household to be unserved, and the satellite carrier bearing the 
costs of tests showing the household to be served. If the 
satellite carrier and station is unable to agreeon a qualified 
individual to perform the test, the Commission is to designate an 
independent and neutral entity by rule. The Commission is to promulgate 
rules that avoid any undue burdens being imposed on any party.
Sec. 1009. Retransmission consent
      Section 1009 amends the provisions of section 325 of the 
Communications Act governing retransmission consent. As 
revised, section 325(b)(1) bars multichannel video programming 
distributors from retransmitting the signals of television 
broadcast stations, or any part thereof, without the express 
authority of the originating station. Section 325(b)(2) 
contains several exceptions to this general prohibition, 
including noncommercial stations, certain superstations, and, 
until the end of 2004, retransmission of not more than two 
distant signals by satellite carriers to unserved households 
outside of the local market of the retransmitted stations, and 
(E) for six months to the retransmission of local stations 
pursuant to the statutory license in section 122 of the title 
17.
      Section 1009 also amends section 325(b) of the 
Communications Act to require the Commission to issue 
regulations concerning the exercise by television broadcast 
stations of the right to grant retransmission consent. The 
regulations would, until January 1, 2006, prohibit a television 
broadcast station from entering into an exclusive 
retransmission consent agreement with a multichannel video 
programming distributor or refusing to negotiate in good faith 
regarding retransmission consent agreements. A television 
station may generally offer different retransmission consent 
terms or conditions, including price terms, to different 
distributors. The FCC may determine that such different terms 
represent a failure to negotiate in good faith only if they are 
not based on competitive marketplace considerations.
      Section 1009 of the bill adds a new subsection (e) to 
section 325 of the Communications Act. New subsection 325(e) 
creates a set of expedited enforcement procedures for the 
alleged retransmission of a television broadcast station in its 
own local market without the station's consent. The purpose of 
these expedited procedures is to ensure that delays in 
obtaining relief from violations do not make the right to 
retransmission consent an empty one. The new provision requires 
45-day processing of local-to-local retransmission consent 
complaints at the Commission, followed by expedited enforcement 
of any Commission orders in the United States District Court 
for the Eastern District of Virginia. In addition, a television 
broadcast station that has been retransmitted in its local 
market without its consent will be entitled to statutory 
damages of $25,000 per violation in an action in federal 
district court. Such damages will be awarded only if the 
television broadcast station agrees to contribute any statutory 
damage award above $1,000 to the United States Treasury for 
public purposes. The expedited enforcement provision contains a 
sunset which prevents the filing of any complaint with the 
Commission or any action in federal district court to enforce 
any Commission order under this section after December 31, 
2001. The conferees believe that these procedural provisions, 
which provide ample due process protections while ensuring 
speedy enforcement, will ensure that retransmission consent 
will be respected by all parties and promote a smoothly 
functioning marketplace.
Sec. 1010. Severability
      Section 1010 of the Act provides that if any provision of 
section 325(b) of the Communications Act as amended by this Act 
is declared unconstitutional, the remaining provisions of that 
section will stand.
Sec. 1011. Technical amendments
      Section 1011 of this Act makes technical and conforming 
amendments to sections 101, 111, 119, 501, and 510 of the 
Copyright Act. Section 1011(e) makes a technical and clarifying 
change to the definition of a ``work made for hire'' in section 
101 of the Copyright Act. Sound recordings have been registered 
in the Copyright Office as works made for hire since being 
protected in their own right. This clarifying amendment shall 
not be deemed to imply that any sound recording or any other 
work would not otherwise qualify as a work made for hire in the 
absence of the amendment made by this subsection.
Sec. 1012. Effective dates
      Under section 1012 of this Act, sections 1001, 1003, 
1005, and 1007 through 1011 shall be effective on the date of 
enactment. The amendments made by sections 1002, 1004, and 1006 
shall be effective as of July 1, 1999.

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

      The Conference Committee agrees that it is very important 
that rural Americans receive the benefits of this Act along 
with urban residents. There are concerns that without this 
title, many rural Americans would not receive local broadcast 
signals.
      Conferees were advised that major satellite carriers 
intended to provide local broadcast TV stations via satellite 
only in the largest markets rather than in more rural areas. 
These satellite providers have stated that is it not 
economically feasible to provide such service in rural areas at 
the present time. Many rural areas of the United States are not 
served by broadcast television or cable service.
      Title II of this Act authorizes the Department of 
Agriculture, in consultation with OMB, the Secretary of 
Treasury, and the FCC, and with the certification of the 
National Telecommunications and Information Administration, to 
guarantee loans not exceeding $1.25 billion for providing local 
broadcast TV signals in rural areas. In addition, providers can 
offer other services, such as data service, should excess 
capacity permit. No single loan can exceed $625 million to any 
one provider and the rest of the loans may not exceed $100 
million face value.
      No loan shall be guaranteed unless: 1) approved in 
advance by an appropriations Act; 2) USDA consults with OMB, 
NTIA, and with a public accounting firm; 3) USDA has security 
that is ``adequate'' to protect the government's interests; 4) 
USDA can reasonably expect repayment ``using an appropriate 
combination of credit risk premiums and collateral offered by 
the applicant to protect the Federal Government;'' and, 5) the 
borrower has ``insurance sufficient to protect the interests of 
the Federal Government.''
      The provisions are technology neutral in that the 
borrower can use any delivery mechanism to provide local TV 
that otherwise meets the requirements of this title.
      The language of Title II is similar to the Railroad 
Rehabilitation and Improvement Financing Act which provided up 
to $3.5 billion in federal loan guarantees to help shortline 
railroads serve rural America. The underwriting criteria for 
the USDA loan guarantee--such as cash flow levels and 
appropriate collateral--will be developed in consultation with 
OMB and a public accounting firm and are modeled after the 
Railroad Act language.
Sec. 2001. Short title
      This title may be referred to as the ``Rural Local 
Broadcast Signal Act.''
Sec. 2002. Loan guarantees
      Subject to appropriations Acts, the Secretary of 
Agriculture is authorized to establish a program of loan 
guarantees to fund projects which finance the acquisition, 
improvement, enhancement, deployment, launch, or rehabilitation 
of the means by which local television broadcast signals will 
be delivered to areas not receiving such signals over 
commercial for-profit direct-to-home satellite distribution 
systems.
      No single guaranteed loan can exceed $625 million to any 
one provider of local TV stations and none of the remaining 
loans may exceed $100 million in face value. Strict 
requirements for insurance, collateral, assurances of 
repayments to the Secretary, perfected interests of the 
Secretary, liens on assets, and strong security provisions are 
set forth in the law. All of these provisions are designed to 
protect the interests of the taxpayers.
      In developing underwriting standards relating to the 
issuance of loan guarantees, appropriate collateral and cash 
flow levels, the Secretary is required to consult with OMB and 
with a public accounting firm. In addition, the Secretary may 
accept on behalf of an applicant a commitment from a non-
Federal source to fund in whole or in part the credit risk 
premiums with respect to the loan.
Sec. 2003. Administration of loan guarantees
      In deciding which loan guarantees to approve, the 
Secretary, to the maximum extent practicable shall give 
priority to projects which serve the most unserved and 
underserved rural markets, taking into account such factors as 
feasibility, population, terrain, prevailing market conditions, 
and projected costs to consumers. These applicants for priority 
projects shall agree to performance schedules which if missed 
make the borrower potentially subject to stiff penalties. 
Detailed subrogation, disposition of property, default, breach 
of agreement, attachment, and audit provisions are designed to 
protect the interests of the taxpayers.
      The Secretary may require an affiliate of the borrower to 
indemnify the Government for any losses it incurs as a result 
of a judgment against the borrower, and breach of the 
borrower's obligations, or any violation of the provisions of 
the Act.
      The sunset clause provides that the Secretary may not 
approve a loan guarantee under this title after December 31, 
2006.
Sec. 2004. Retransmission of local television broadcast stations
      Borrowers shall have the same copyright authority and 
other rights to transmit the signals of local television 
broadcast stations as provided in this title and shall carry 
the signals of local stations without charge.
Sec. 2005. Local television service in unserved and underserved markets
      To encourage the FCC to approve needed licenses (or other 
authorizations to use spectrum) to provide local TV service in 
rural areas, the Commission is required to make determinations 
regarding needed licenses within one year of enactment.
      However, the FCC shall ensure that no license or 
authorization provided under this section will cause ``harmful 
interference'' to the primary users of the spectrum or to 
public safety use. Subparagraph (2), states that the Commission 
shall not license under subsection (a) any facility that causes 
harmful interference to existing primary users of spectrum or 
to public safety use. The Commission typically categorizes a 
licensed service as primary or secondary. Under Commission 
rules, a secondary service cannot be authorized to operate in 
the same band as a primary user of that band unless the 
proposed secondary user conclusively demonstrates that the 
proposed secondary use will not cause harmful interference to 
the primary service. The Commission is to define ``harmful 
interference'' pursuant to the definition at 47 C.F.R. section 
2.1 and in accordance with Commission rules and policies.
      For purposes of section 2005(b)(3) the FCC may consider a 
compression, reformatting or other technology to be 
unreasonable if the technology is incompatible with other 
applicable FCC regulation or policy under the Communications 
Act of 1934, as amended.
      The Commission also may not restrict any entity granted a 
license or other authorization under this section, except as 
otherwise specified, from using any reasonable compression, 
reformatting, or other technology.
Sec. 2006. Definitions
      Section 2006 defines terms used in the title such as 
``loan guarantees,'' ``discount rate,'' ``loan guarantee,'' 
``modification,'' and ``borrower.''

              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

Sec. 3001. Short title; references
      This section provides that the Act may be cited as the 
``Anticybersquatting Consumer Protection Act'' and that any 
references within the bill to the Trademark Act of 1946 shall 
be a reference to the Act entitled ``An Act to provide for the 
registration and protection of trademarks used in commerce, to 
carry out the provisions of certain international conventions, 
and for other purposes,'' approved July 5, 1946 (15 U.S.C. 1051 
et seq.), also commonly referred to as the Lanham Act.
Sec. 3002. Cyberpiracy prevention
            Subsection (a). In general
      This subsection amends the Trademark Act to provide an 
explicit trademark remedy for cybersquatting under a new 
section 43(d). Under paragraph (1)(A) of the new section 43(d), 
actionable conduct would include the registration, trafficking 
in, or use of a domain name that is identical or confusingly 
similar to, or dilutive of, the mark of another, including a 
personal name that is protected as a mark under section 43 of 
the Lanham Act, provided that the mark was distinctive (i.e., 
enjoyed trademark status) at the time the domain name was 
registered, or in the case of trademark dilution, was famous at 
the time the domain name was registered. The bill is carefully 
and narrowly tailored, however, to extend only to cases where 
the plaintiff can demonstrate that the defendant registered, 
trafficked in, or used the offending domain name with bad-faith 
intent to profit from the goodwill of a mark belonging to 
someone else. Thus, the bill does not extend to innocent domain 
name registrations by those who are unaware of another's use of 
the name, or even to someone who is aware of the trademark 
status of the name but registers a domain name containing the 
mark for any reason other than with bad faith intent to profit 
from the goodwill associated with that mark.
      The phrase ``including a personal name which is protected 
as a mark under this section'' addresses situations in which a 
person's name is protected under section 43 of the Lanham Act 
and is used as a domain name. The Lanham Act prohibits the use 
of false designations of origin and false or misleading 
representations. Protection under section 43 of the Lanham Act 
has been applied by the courts to personal names which function 
as marks, such as service marks, when such marks are infringed. 
Infringement may occur when the endorsement of products or 
services in interstate commerce is falsely implied through the 
use of a personal name, or otherwise, without regard to the 
goods or services of the parties. This protection also applies 
to domain names on the Internet, where falsely implied 
endorsements and other types of infringement can cause greater 
harm to the owner and confusion to a consumer in a shorter 
amount of time than is the case with traditional media. The 
protection offered by section 43 to a personal name which 
functions as a mark, as applied to domain names, is subject to 
the same fair use and first amendment protections as have been 
applied traditionally under trademark law, and is not intended 
to expand or limit any rights to publicity recognized by States 
under State law.
      Paragraph (1)(B)(i) of the new section 43(d) sets forth a 
number of nonexclusive, nonexhaustive factors to assist a court 
in determining whether the required bad-faith element exists in 
any given case. These factors are designed to balance the 
property interests of trademark owners with the legitimate 
interests of Internet users and others who seek to make lawful 
uses of others' marks, including for purposes such as 
comparative advertising, comment, criticism, parody, news 
reporting, fair use, etc. The bill suggests a total of nine 
factors a court may wish to consider. The first four suggest 
circumstances that may tend to indicate an absence of bad-faith 
intent to profit from the goodwill of a mark, and the next four 
suggest circumstances that may tend to indicate that such bad-
faith intent exists. The last factor may suggest either bad-
faith or an absence thereof depending on the circumstances.
      First, under paragraph (1)(B)(i)(I), a court may consider 
whether the domain name registrant has trademark or any other 
intellectual property rights in the name. This factor 
recognizes, as does trademark law in general, that there may be 
concurring uses of the same name that are noninfringing, such 
as the use of the ``Delta'' mark for both air travel and sink 
faucets. Similarly, the registration of the domain name 
``deltaforce.com'' by a movie studio would not tend to indicate 
a bad faith intent on the part of the registrant to trade on 
Delta Airlines' or Delta Faucets' trademarks.
      Second, under paragraph (1)(B)(i)(II), a court may 
consider the extent to which the domain name is the same as the 
registrant's own legal name or a nickname by which that person 
is commonly identified. This factor recognizes, again as does 
the concept of fair use in trademark law, that a person should 
be able to be identified by their own name, whether in their 
business or on a web site. Similarly, a person may bear a 
legitimate nickname that is identical or similar to a well-
known trademark, such as in the well-publicized case of the 
parents who registered the domain name ``pokey.org'' for their 
young son who goes by that name, and these individuals should 
not be deterred by this bill from using their name online. This 
factor is not intended to suggest that domain name registrants 
may evade the application of this act by merely adopting Exxon, 
Ford, or other well-known marks as their nicknames. It merely 
provides a court with the appropriate discretion to determine 
whether or not the fact that a person bears a nickname similar 
to a mark at issue is an indication of an absence of bad-faith 
on the part of the registrant.
      Third, under paragraph (1)(B)(i)(III), a court may 
consider the domain name registrant's prior use, if any, of the 
domain name in connection with the bona fide offering of goods 
or services. Again, this factor recognizes that the legitimate 
use of the domain name in online commerce may be a good 
indicator of the intent of the person registering that name. 
Where the person has used the domain name in commerce without 
creating a likelihood of confusion as to the source or origin 
of the goods or services and has not otherwise attempted to use 
the name in order to profit from the goodwill of the trademark 
owner's name, a court may look to this as an indication of the 
absence of bad faith on the part of the registrant.
      Fourth, under paragraph (1)(B)(i)(IV), a court may 
consider the person's bona fide noncommercial or fair use of 
the mark in a web site that is accessible under the domain name 
at issue. This factor is intended to balance the interests of 
trademark owners with the interests of those who would make 
lawful noncommercial or fair uses of others' marks online, such 
as in comparative advertising, comment, criticism, parody, news 
reporting, etc. Under the bill, the mere fact that the domain 
name is used for purposes of comparative advertising, comment, 
criticism, parody, news reporting, etc., would not alone 
establish a lack of bad-faith intent. The fact that a person 
uses a mark in a site in such a lawful manner may be an 
appropriate indication that the person's registration or use of 
the domain name lacked the required element of bad-faith. This 
factor is not intended to create a loophole that otherwise 
might swallow the bill, however, by allowing a domain name 
registrant to evade application of the Act by merely putting up 
a noninfringing site under an infringing domain name. For 
example, in the well known case of Panavision Int'l v. Toeppen, 
141 F.3d 1316 (9th Cir. 1998), a well known cybersquatter 
hadregistered a host of domain names mirroring famous trademarks, 
including names for Panavision, Delta Airlines, Neiman Marcus, Eddie 
Bauer, Lufthansa, and more than 100 other marks, and had attempted to 
sell them to the mark owners for amounts in the range of $10,000 to 
$15,000 each. His use of the ``panavision.com'' and ``panaflex.com'' 
domain names was seemingly more innocuous, however, as they served as 
addresses for sites that merely displayed pictures of Pana Illinois and 
the word ``Hello'' respectively. This bill would not allow a person to 
evade the holding of that case--which found that Mr. Toeppen had made a 
commercial use of the Panavision marks and that such uses were, in 
fact, diluting under the Federal Trademark Dilution Act--merely by 
posting noninfringing uses of the trademark on a site accessible under 
the offending domain name, as Mr. Toeppen did. Similarly, the bill does 
not affect existing trademark law to the extent it has addressed the 
interplay between First Amendment protections and the rights of 
trademark owners. Rather, the bill gives courts the flexibility to 
weigh appropriate factors in determining whether the name was 
registered or used in bad faith, and it recognizes that one such factor 
may be the use the domain name registrant makes of the mark.
      Fifth, under paragraph (1)(B)(i)(V), a court may consider 
whether, in registering or using the domain name, the 
registrant intended to divert consumers away from the trademark 
owner's website to a website that could harm the goodwill of 
the mark, either for purposes of commercial gain or with the 
intent to tarnish or disparage the mark, by creating a 
likelihood of confusion as to the source, sponsorship, 
affiliation, or endorsement of the site. This factor recognizes 
that one of the main reasons cybersquatters use other people's 
trademarks is to divert Internet users to their own sites by 
creating confusion as to the source, sponsorship, affiliation, 
or endorsement of the site. This is done for a number of 
reasons, including to pass off inferior goods under the name of 
a well-known mark holder, to defraud consumers into providing 
personally identifiable information, such as credit card 
numbers, to attract ``eyeballs'' to sites that price online 
advertising according to the number of ``hits'' the site 
receives, or even just to harm the value of the mark. Under 
this provision, a court may give appropriate weight to evidence 
that a domain name registrant intended to confuse or deceive 
the public in this manner when making a determination of bad-
faith intent.
      Sixth, under paragraph (1)(B)(i)(VI), a court may 
consider a domain name registrant's offer to transfer, sell, or 
otherwise assign the domain name to the mark owner or any third 
party for financial gain, where the registrant has not used, 
and did not have any intent to use, the domain name in the bona 
fide offering of any goods or services. A court may also 
consider a person's prior conduct indicating a pattern of such 
conduct. This factor is consistent with the court cases, like 
the Panavision case mentioned above, where courts have found a 
defendant's offer to sell the domain name to the legitimate 
mark owner as being indicative of the defendant's intent to 
trade on the value of a trademark owner's marks by engaging in 
the business of registering those marks and selling them to the 
rightful trademark owners. It does not suggest that a court 
should consider the mere offer to sell a domain name to a mark 
owner or the failure to use a name in the bona fide offering of 
goods or services as sufficient to indicate bad faith. Indeed, 
there are cases in which a person registers a name in 
anticipation of a business venture that simply never pans out. 
And someone who has a legitimate registration of a domain name 
that mirrors someone else's domain name, such as a trademark 
owner that is a lawful concurrent user of that name with 
another trademark owner, may, in fact, wish to sell that name 
to the other trademark owner. This bill does not imply that 
these facts are an indication of bad-faith. It merely provides 
a court with the necessary discretion to recognize the evidence 
of bad-faith when it is present. In practice, the offer to sell 
domain names for exorbitant amounts to the rightful mark owner 
has been one of the most common threads in abusive domain name 
registrations. Finally, by using the financial gain standard, 
this paragraph allows a court to examine the motives of the 
seller.
      Seventh, under paragraph (1)(B)(i)(VII), a court may 
consider the registrant's intentional provision of material and 
misleading false contact information in an application for the 
domain name registration, the person's intentional failure to 
maintain accurate contact information, and the person's prior 
conduct indicating a pattern of such conduct. Falsification of 
contact information with the intent to evade identification and 
service of process by trademark owners is also a common thread 
in cases of cybersquatting. This factor recognizes that fact, 
while still recognizing that there may be circumstances in 
which the provision of false information may be due to other 
factors, such as mistake or, as some have suggested in the case 
of political dissidents, for purposes of anonymity. This bill 
balances those factors by limiting consideration to the 
person's contact information, and even then requiring that the 
provision of false information be material and misleading. As 
with the other factors, this factor is nonexclusive and a court 
is called upon to make a determination based on the facts 
presented whether or not the provision of false information 
does, in fact, indicate bad-faith.
      Eight, under paragraph (1)(B)(i)(VIII), a court may 
consider the domain name registrant's acquisition of multiple 
domain names which the person knows are identical or 
confusingly similar to, or dilutive of, others' marks. This 
factor recognizes the increasingly common cybersquatting 
practice known as ``warehousing'', in which a cybersquatter 
registers multiple domain names--sometimes hundreds, even 
thousands--that mirror the trademarks of others. By sitting on 
these marks and not making the first move to offer to sell them 
to the mark owner, these cybersquatters have been largely 
successful in evading the case law developed under the Federal 
Trademark Dilution Act. This bill does not suggest that the 
mere registration of multiple domain names is an indication of 
bad faith, but it allows a court to weigh the fact that a 
person has registered multiple domain names that infringe or 
dilute the trademarks of others as part of its consideration of 
whether the requisite bad-faith intent exists.
      Lastly, under paragraph (1)(B)(i)(IX), a court may 
consider the extent to which the mark incorporated in the 
person's domain name registration is or is not distinctive and 
famous within the meaning of subsection (c)(1) of section 43 of 
the Trademark Act of 1946. The more distinctive or famous a 
mark has become, the more likely the owner of that mark is 
deserving of the relief available under this act. At the same 
time, the fact that a mark is not well-known may also suggest a 
lack of bad-faith.
      Paragraph (1)(B)(ii) underscores the bad-faith 
requirement by making clear that bad-faith shall not be found 
in any case in which the court determines that the person 
believed and had reasonable grounds to believe that the use of 
the domain name was a fair use or otherwise lawful.
      Paragraph (1)(C) makes clear that in any civil action 
brought under the new section 43(d), a court may order the 
forfeiture, cancellation, or transfer of a domain name to the 
owner of the mark.
      Paragraph (1)(D) clarifies that a prohibited ``use'' of a 
domain name under the bill applies only to a use by the domain 
name registrant or that registrant's authorized licensee.
      Paragraph (1)(E) defines what means to ``traffic in'' a 
domain name. Under this Act, ``traffics in'' refers to 
transactions that include, but are not limited to, sales, 
purchases, loans, pledges, licenses, exchanges of currency, and 
any other transfer for consideration or receipt in exchange for 
consideration.
      Paragraph (2)(A) provides for in rem jurisdiction, which 
allows a mark owner to seek the forfeiture, cancellation, or 
transfer of an infringing domain name by filing an in rem 
action against the name itself, where the mark owner has 
satisfied the court that it has exercised due diligence in 
trying to locate the owner of the domain name but is unable to 
do so, or where the mark owner is otherwise unable to obtain in 
personam jurisdiction over such person. As indicated above, a 
significant problem faced by trademark owners in the fight 
against cybersquatting is the fact that many cybersquatters 
register domain names under aliases or otherwise provide false 
information in their registration applications in order to 
avoid identification and service of process by the mark owner. 
This bill will alleviate this difficulty, while protecting the 
notions of fair play and substantial justice, by enabling a 
mark owner to seek an injunction against the infringing 
property in those cases where, after due diligence, a mark 
owner is unable to proceed against the domain name registrant 
because the registrant has provided false contact information 
and is otherwise not to be found, or where a court is unable to 
assert personal jurisdiction over such person, provided the 
mark owner can show that the domain name itself violates 
substantive federal trademark law (i.e., that the domain name 
violates the rights of the registrant of a mark registered in 
the Patent and Trademark Office, or section 43 (a) or (c) of 
the Trademark Act). Under the bill, a mark owner will be deemed 
to have exercised due diligence in trying to find a defendant 
if the mark owner sends notice of the alleged violation and 
intent to proceed to the domain name registrant at the postal 
and e-mail address provided by the registrant to the registrar 
and publishes notice of the action as the court may direct 
promptly after filing the action. Such acts are deemed to 
constitute service of process by paragraph (2)(B).
      The concept of in rem jurisdiction has been with us since 
well before the Supreme Court's landmark decision in Pennoyer 
v. Neff, 95 U.S. 714 (1877). Although more recent decisions 
have called into question the viability of quasi in rem 
``attachment'' jurisdiction, see Shaffer v. Heitner, 433 U.S. 
186 (1977), the Court has expressly acknowledged the propriety 
of true in rem proceedings (or even type I quasi in rem 
proceedings \5\) where ``claims to the property itself are the 
source of the underlying controversy between the plaintiff and 
the defendant.'' Id. at 207-08. The Act clarifies the 
availability of in rem jurisdiction in appropriate cases 
involving claims by trademark holders against cyberpirates. In 
so doing, the Act reinforces the view that in rem jurisdiction 
has continuing constitutional vitality, see R.M.S. Titanic, 
Inc. v. Haver, 171 F.3d 943, 957-58 (4th Cir. 1999) (``In rem 
actions only require that a party seeking an interest in a res 
bring the res into the custody of the court and provide 
reasonable, public notice of its intention to enable others to 
appear in the action to claim an interest in the res.''); 
Chapman v. Vande Bunte, 604 F. Supp. 714, 716-17 (E.D. N.C. 
1985) (``In a true in rem proceeding, in order to subject 
property to a judgment in rem, due process requires only that 
the property itself have certain minimum contacts with the 
territory of the forum.'').
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    \5\ The Supreme Court has described the ``two types'' of quasi in 
rem proceedings: a type I proceeding, in which ``the plaintiff is 
seeking to secure a pre-existing claim in the subject property and to 
extinguish or establish the nonexistence of similar interests of 
particular persons,'' and a type II action, in which ``the plaintiff 
seeks to apply what he concedes to be the property of the defendant to 
the satisfaction of a claim against him.'' Hanson v. Denckla, 357 U.S. 
235, 246 n.12 (1958).
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      By authorizing in rem jurisdiction, the Act also attempts 
to respond to the problems faced by trademark holders in 
attempting to effect personal service of process on 
cyberpirates. In an effort to avoid being held accountable for 
their infringement or dilution of famous trademarks, 
cyberpirates often have registered domain names under 
fictitious names and addresses or have used offshore addresses 
or companies to register domain names. Even when they actually 
do receive notice of a trademark holder's claim, cyberpirates 
often either refuse to acknowledge demands from a trademark 
holder altogether, or simply respond to an initial demand and 
then ignore all further efforts by the trademark holder to 
secure the cyberpirate's compliance. The in rem provisions of 
the Act accordingly contemplate that a trademark holder may 
initiate in rem proceedings in cases where domain name 
registrants are not subject to personal jurisdiction or cannot 
reasonably be found by the trademark holder.
      Paragraph (2)(C) provides that in an in rem proceeding, a 
domain name shall be deemed to have its situs in the judicial 
district in which (1) the domain name registrar, registry, or 
other domain name authority that registered or assigned the 
domain name is located, or (2) documents sufficient to 
establish control and authority regarding the disposition of 
the registration and use of the domain name are deposited with 
the court.
      Paragraph (2)(D) limits the relief available in such an 
in rem action to an injunction ordering the forfeiture, 
cancellation, or transfer of the domain name. Upon receipt of a 
written notification of the complaint, the domain name 
registrar, registry, or other authority is required to deposit 
with the court documents sufficient to establish the court's 
control and authority regarding the disposition of the 
registration and use of the domain name to the court, and may 
not transfer, suspend, or otherwise modify the domain name 
during the pendency of the action, except upon order of the 
court. Such domain name registrar, registry, or other authority 
is immune from injunctive or monetary relief in such an action, 
except in the case of bad faith or reckless disregard, which 
would include a willful failure to comply with any such court 
order.
      Paragraph (3) makes clear that the new civil action 
created by this Act and the in rem action established therein, 
and any remedies available under such actions, shall be in 
addition to any other civil action or remedy otherwise 
applicable. This paragraph thus makes clear that the creation 
of a new section 43(d) in the Trademark Act does not in any way 
limit the application of current provisions of trademark, 
unfair competition and false advertising, or dilution law, or 
other remedies under counterfeiting or other statutes, to 
cybersquatting cases.
      Paragraph (4) makes clear that the in rem jurisdiction 
established by the bill is in addition to any other 
jurisdiction that otherwise exists, whether in rem or in 
personam.
            Subsection (b). Cyberpiracy protection for individuals
      Subsection (b) prohibits the registration of a domain 
name that is the name of another living person, or a name that 
is substantially and confusingly similar thereto, without such 
person's permission, if the registrant's specific intent is to 
profit from the domain name by selling it for financial gain to 
such person or a third party. While the provision is broad 
enough to apply to the registration of full names (e.g., 
johndoe.com), appellations (e.g., doe.com), and variations 
thereon (e.g. john-doe.com or jondoe.com), the provision is 
still very narrow in that it requires a showing that the 
registrant of the domain name registered that name with a 
specific intent to profit from the name by selling it to that 
person or to a third party for financial gain. This section 
authorizes the court to grant injunctive relief, including 
ordering the forfeiture or cancellation of the domain name or 
the transfer of the domain name to the plaintiff. Although the 
subsection does not authorize a court to grant monetary 
damages, the court may award costs and attorneys' fees to the 
prevailing party in appropriate cases.
      This subsection does not prohibit the registration of a 
domain name in good faith by an owner or licensee of a 
copyrighted work, such as an audiovisual work, a sound 
recording, a book, or other work of authorship, where the 
personal name is used in, affiliated with, or related to that 
work, where the person's intent in registering the domain is 
not to sell the domain name other than in conjunction with the 
lawful exploitation of the work, and where such registration is 
not prohibited by a contract between the domain name registered 
and the named person. This limited exemption recognizes the 
First Amendment issues that may arise in such cases and defers 
to existing bodies of law that have developed under State and 
Federal law to address such uses of personal names in 
conjunction with works of expression. Such an exemption is not 
intended to provide a loophole for those whose specific intent 
is to profit from another's name by selling the domain name to 
that person or a third party other than in conjunction with the 
bona fide exploitation of a legitimate work of authorship. For 
example, the registration of a domain name containing a 
personal name by the author of a screenplay that bears the same 
name, with the intent to sell the domain name in conjunction 
with the sale or license of the screenplay to a production 
studio would not be barred by this subsection, although other 
provisions of State or Federal law may apply. On the other 
hand, the exemption for good faith registrations of domain 
names tied to legitimate works of authorship would not exempt a 
person who registers a personal name as a domain name with the 
intent to sell the domain name by itself, or in conjunction 
with a work of authorship (e.g., a copyrighted web page) where 
the real object of the sale is the domain name, rather than the 
copyrighted work.
      In sum, this subsection is a narrow provision intended to 
curtail one form of ``cybersquatting''--the act of registering 
someone else's name as a domain name for the purpose of 
demanding remuneration from the person in exchange for the 
domain name. Neither this section nor any other section in this 
bill is intended to create a right of publicity of any kind 
with respect to domain names. Nor is it intended to create any 
new property rights, intellectual or otherwise, in a domain 
name that is the name of a person. This subsection applies 
prospectively only, affecting only those domain names 
registered on or after the date of enactment of this Act.
Sec. 3003. Damages and remedies
      This section applies traditional trademark remedies, 
including injunctive relief, recovery of defendant's profits, 
actual damages, and costs, to cybersquatting cases under the 
new section 43(d) of the Trademark Act. The bill also amends 
section 35 of the Trademark Act to provide for statutory 
damages in cybersquatting cases, in an amount of not less than 
$1,000 and not more than $100,000 per domain name, as the court 
considers just.
Sec. 3004. Limitation on liability
      This section amends section 32(2) of the Trademark Act to 
extend the Trademark Act's existing limitations on liability to 
the cybersquatting context. This section also creates a new 
subparagraph (D) in section 32(2) to encourage domain name 
registrars and registries to work with trademark owners to 
prevent cybersquatting through a limited exemption from 
liability for domain name registrars and registries that 
suspend, cancel, or transfer domain names pursuant to a court 
order or in the implementation of a reasonable policy 
prohibiting cybersquatting. Under this exemption, a registrar, 
registry, or other domain name registration authority that 
suspends, cancels, or transfers a domain name pursuant to a 
court order or a reasonable policy prohibiting cybersquatting 
will not be held liable for monetary damages, and will not be 
subject to injunctive relief provided that the registrar, 
registry, or other registration authority has deposited control 
of the domain name with a court in which an action has been 
filed regarding the disposition of the domain name, it has not 
transferred, suspended, or otherwise modified the domain name 
during the pendency of the action, other than in response to a 
court order, and it has not willfully failed to comply with any 
such court order. Thus, the exemption will allow a domain name 
registrar, registry, or other registration authority to avoid 
being joined in a civil action regarding the disposition of a 
domain name that has been taken down pursuant to a dispute 
resolution policy, provided the court has obtained control over 
the name from the registrar, registry, or other registration 
authority, but such registrar, registry, or other registration 
authority would not be immune from suit for injunctive relief 
where no such action has been filed or where the registrar, 
registry, or other registration authority has transferred, 
suspended, or otherwise modified the domain name during the 
pendency of the action or wilfully failed to comply with a 
court order.
      This section also protects the rights of domain name 
registrants against overreaching trademark owners. Under a new 
subparagraph (D)(iv) in section 32(2), a trademark owner who 
knowingly and materially misrepresents to the domain name 
registrar or registry that a domain name is infringing shall be 
liable to the domain name registrant for damages resulting from 
the suspension, cancellation, or transfer of the domain name. 
In addition, the court may grant injunctive relief to the 
domain name registrant by ordering the reactivation of the 
domain name or the transfer of the domain name back to the 
domain name registrant. In creating a new subparagraph (D)(iii) 
of section 32(2), this section codifies current case law 
limiting the secondary liability of domain name registrars and 
registries for the act of registration of a domain name, absent 
bad-faith on the part of the registrar and registry.
      Finally, subparagraph (D)(v) provides additional 
protections for domain name holders by allowing a domain name 
registrant whose name has been suspended, disabled, or 
transferred to file a civil action to establish that the 
registration or use of the domain name by such registrant is 
not a violation of the Lanham Act. In such cases, a court may 
grant injunctive relief to the domain nameregistrant, including 
the reactivation of the domain name or transfer of the domain name to 
the domain name registrant.
Sec. 3005. Definitions
      This section amends the Trademark Act's definitions 
section (section 45) to add definitions for key terms used in 
this Act. First, the term ``Internet'' is defined consistent 
with the meaning given that term in the Communications Act (47 
U.S.C. 230(f)(1)). Second, this section creates a narrow 
definition of ``domain name'' to target the specific bad faith 
conduct sought to be addressed while excluding such things as 
screen names, file names, and other identifiers not assigned by 
a domain name registrar or registry.
Sec. 3006. Study on abusive domain name registrations involving 
        personal names
      This section directs the Secretary of Commerce, in 
consultation with the Patent and Trademark Office and the 
Federal Election Commission, to conduct a study and report to 
Congress with recommendations on guidelines and procedures for 
resolving disputes involving the registration or use of domain 
names that include personal names of others or names that are 
confusingly similar thereto. This section further directs the 
Secretary of Commerce to collaborate with the Internet 
Corporation for Assigned Names and Numbers (ICANN) to develop 
guidelines and procedures for resolving disputes involving the 
registration or use of domain names that include personal names 
of others or names that are confusingly similar thereto.
Sec. 3007. Historic preservation
      This section provides a limited immunity from suit under 
trademark law for historic buildings that are on or eligible 
for inclusion on the National Register of Historic Places, or 
that are designated as an individual landmark or as a 
contributing building in a historic district.
Sec. 3008. Savings clause
      This section provides an explicit savings clause making 
clear that the bill does not affect traditional trademark 
defenses, such as fair use, or a person's first amendment 
rights.
Sec. 3009. Effective date
      This section provides that damages provided for under 
this bill shall not apply to the registration, trafficking, or 
use of a domain name that took place prior to the enactment of 
this Act.

                     TITLE VI--INVENTOR PROTECTION

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

                     Subtitle A--Inventors' Rights

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

             Subtitle B--Patent and Trademark Fee Fairness

      Subtitle B provides patent and trademark fee reform, by 
lowering patent fees, by directing the Director of the USPTO to 
study alternative fee structures to encourage full 
participation in our patent system by all inventors, large and 
small, and by strengthening the prohibition against the use of 
trademark fees for non-trademark uses.
Sec. 4201. Short title
      This subtitle may be cited as the ``Patent and Trademark 
Fee Fairness Act of 1999.''
Sec. 4202. Adjustment of patent fees
      This section reduces patent filing and reissue fees by 
$50, and reduces patent maintenance fees by $110. This would 
mark only the second time in history that patent fees have been 
reduced. Because trademark fees have not been increased since 
1993 and because of the application of accounting based cost 
principles and systems, patent fee income has been partially 
offsetting the cost of trademarkoperations. This section will 
restore fairness to patent and trademark fees by reducing patent fees 
to better reflect the cost of services.
Sec. 4203. Adjustment of trademark fees
      This section will allow the Director of the USPTO to 
adjust trademark fees in fiscal year 2000 without regard to 
fluctuations in the Consumer Price Index in order to better 
align those fees with the costs of services.
Sec. 4204. Study on alternative fee structures
      This section directs the Director of the USPTO to conduct 
a study and report to the Judiciary Committees of the House and 
Senate within one year on alternative fee structures that could 
be adopted by the USPTO to encourage maximum participation in 
the patent system by the American inventor community.
Sec. 4205. Patent and Trademark Office funding
      Pursuant to section 42(c) of the Patent Act, fees 
available to the Commissioner under section 31 of the Trademark 
Act of 1946 \6\ may be used only for the processing of 
trademark registrations and for other trademark-related 
activities, and to cover a proportionate share of the 
administrative costs of the USPTO. In an effort to more tightly 
``fence'' trademark funds for trademark purposes, section 4205 
amends this language such that all (trademark) fees available 
to the Commissioner shall be used for trademark registration 
and other trademark-related purposes. In other words, the 
Commissioner may exercise no discretion when spending funds; 
they must be earmarked for trademark purposes.
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    \6\ 15 U.S.C. Sec. 1051, et seq.
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                   Subtitle C--First Inventor Defense

      Subtitle C strikes an equitable balance between the 
interests of U.S. inventors who have invented and 
commercialized business methods and processes, many of which 
until recently were thought not to be patentable, and U.S. or 
foreign inventors who later patent the methods and processes. 
The subtitle creates a defense for inventors who have reduced 
an invention to practice in the U.S. at least one year before 
the patent filing date of another, typically later, inventor 
and commercially used the invention in the U.S. before the 
filing date. A party entitled to the defense must not have 
derived the invention from the patent owner. The bill protects 
the patent owner by providing that the establishment of the 
defense by such an inventor or entrepreneur does not invalidate 
the patent.
      The subtitle clarifies the interface between two key 
branches of intellectual property law--patents and trade 
secrets. Patent law serves the public interest by encouraging 
innovation and investment in new technology, and may be thought 
of as providing a right to exclude other parties from an 
invention in return for the inventor making a public disclosure 
of the invention. Trade secret law, however, also serves the 
public interest by protecting investments in new technology. 
Trade secrets have taken on a new importance with an increase 
in the ability to patent all business methods and processes. It 
would be administratively and economically impossible to expect 
any inventor to apply for a patent on all methods and processes 
now deemed patentable. In order to protect inventors and to 
encourage proper disclosure, this subtitle focuses on methods 
for doing and conducting business, including methods used in 
connection with internal commercial operations as well as those 
used in connection with the sale or transfer of useful end 
results--whether in the form of physical products, or in the 
form of services, or in the form of some other useful results; 
for example, results produced through the manipulation of data 
or other inputs to produce a useful result.
      The earlier-inventor defense is important to many small 
and large businesses, including financial services, software 
companies, and manufacturing firms--any business that relies on 
innovative business processes and methods. The 1998 opinion by 
the U.S. Court of Appeals for the Federal Circuit in State 
Street Bank and Trust Co. v. Signature Financial Group,\7\ 
which held that methods of doing business are patentable, has 
added to the urgency of the issue. As the Court noted, the 
reference to the business method exception had been improperly 
applied to a wide variety of processes, blurring the essential 
question of whether the invention produced a ``useful, 
concrete, and tangible result.'' In the wake of State Street, 
thousands of methods and processes used internally are now 
being patented. In the past, many businesses that developed and 
used such methods and processes thought secrecy was the only 
protection available. Under established law, any of these 
inventions which have been in commercial use--public or 
secret--for more than one year cannot now be the subject of a 
valid U.S. patent.
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    \7\ 149 F.3d 1368 (Fed. Cir. 1998) [hereinafter State Street].
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Sec. 4301. Short title
      This subtitle may be cited as the ``First Inventor 
Defense Act of 1999.''
Sec. 4302. Defense to patent infringement based on earlier inventor
      In establishing the defense, subsection (a) of section 
4302 creates a new section 273 of the Patent Act, which in 
subsection (a) sets forth the following definitions:
            (1) ``Commercially used and commercial use'' mean 
        use of any method in the United States so long as the 
        use is in connection with an internal commercial use or 
        an actual sale or transfer of a useful end result;
            (2) ``Commercial use as applied to a nonprofit 
        research laboratory and nonprofit entities such as a 
        university, research center, or hospital intended to 
        benefit the public'' means that such entities may 
        assert the defense only based on continued use by and 
        in the entities themselves, but that the defense is 
        inapplicable to subsequent commercialization or use 
        outside the entities;
            (3) ``Method'' means any method for doing or 
        conducting an entity's business; and
            (4) ``Effective filing date'' means the earlier of 
        the actual filing date of the application for the 
        patent or the filing date of any earlier U.S., foreign, 
        or international application to which the subject 
        matter at issue is entitled under the Patent Act.
      To be ``commercially used'' or in ``commercial use'' for 
purposes of subsection (a), the use must be in connection with 
either an internal commercial use or an actual arm's-length 
sale or other arm's-length commercial transfer of a useful end 
result. The method that is the subject matter of the defense 
may be an internal method for doing business, such as an 
internal human resources management process, or a method for 
conducting business such as a preliminary or intermediate 
manufacturing procedure, which contributes to the effectiveness 
of the business by producing a useful end result for the 
internal operation of the business or for external sale. 
Commercial use does not require the subject matter at issue to 
be accessible to or otherwise known to the public.
      Subject matter that must undergo a premarketing 
regulatory review period during which safety or efficacy is 
established before commercial marketing or use is considered to 
be commercially used and in commercial use during the 
regulatory review period.
      The issue of whether an invention is a method is to be 
determined based on its underlying nature and not on the 
technicality of the form of the claims in the patent. For 
example, a method for doing or conducting business that has 
been claimed in a patent as a programmed machine, as in the 
State Street case, is a method for purposes of section 273 if 
the invention could have as easily been claimed as a method. 
Form should not rule substance.
      Subsection (b)(1) of section 273 establishes a general 
defense against infringement under section 271 of the Patent 
Act. Specifically, a person will not be held liable with 
respect to any subject matter that would otherwise infringe one 
or more claims to a method in another party's patent if the 
person:
            (1) Acting in good faith, actually reduced the 
        subject matter to practice at least one year before the 
        effective filing date of the patent; and
            (2) Commercially used the subject matter before the 
        effective filing date of the patent.
      The first inventor defense is not limited to methods in 
any particular industry such as the financial services 
industry, but applies to any industry which relies on trade 
secrecy for protecting methods for doing or conducting the 
operations of their business.
      Subsection (b)(2) states that the sale or other lawful 
disposition of a useful end result produced by a patented 
method, by a person entitled to assert a section 273 defense, 
exhausts the patent owner's rights with respect to that end 
result to the same extent such rights would have been exhausted 
had the sale or other disposition been made by the patent 
owner. For example, if a purchaser would have had the right to 
resell a product or other end result if bought from the patent 
owner, the purchaser will have the same right if the product is 
purchased from a person entitled to a section 273 defense.
      Subsection (b)(3) creates limitations and qualifications 
on the use of the defense. First, a person may not assert the 
defense unless the invention for which the defense is asserted 
is for a commercial use of a method as defined in section 
273(a)(1) and (3). Second, a person may not assert the defense 
if the subject matter was derived from the patent owner or 
persons in privity with the patent owner. Third, subsection 
(b)(3) makes clear that the application of the defense does not 
create a general license under all claims of the patent in 
question--it extends only to the specific subject matter 
claimed in the patent with respect to which the person can 
assert the defense. At the same time, however, the defense does 
extend to variations in the quantity or volume of use of the 
claimed subject matter, and to improvements that do not 
infringe additional, specifically-claimed subject matter.
      Subsection (b)(4) requires that the person asserting the 
defense has the burden of proof in establishing it by clear and 
convincing evidence. Subsection (b)(5) establishes that the 
person who abandons the commercial use of subject matter may 
not rely on activities performed before the date of such 
abandonment in establishing the defense with respect to actions 
taken after the date of abandonment. Such a person can rely 
only on the date when commercial use of the subject matter was 
resumed.
      Subsection (b)(6) notes that the defense may only be 
asserted by the person who performed the acts necessary to 
establish the defense, and, except for transfer to the patent 
owner, the right to assert the defense cannot be licensed, 
assigned, or transferred to a third party except as an 
ancillary and subordinate part of a good-faith assignment or 
transfer for other reasons of the entire enterprise or line of 
business to which the defense relates.
      When the defense has been transferred along with the 
enterprise or line of business to which it relates as permitted 
by subsection (b)(6), subsection (b)(7) limits the sites for 
which the defense may be asserted. Specifically, when the 
enterprise or line of business to which the defense relates has 
been transferred, the defense may be asserted only for uses at 
those sites where the subject matter was used before the later 
of the patent filing date or the date of transfer of the 
enterprise or line of business.
      Subsection (b)(8) states that a person who fails to 
demonstrate a reasonable basis for asserting the defense may be 
held liable for attorneys' fees under section 285 of the Patent 
Act.
      Subsection (b)(9) specifies that the successful assertion 
of the defense does not mean that the affected patent is 
invalid. Paragraph (9) eliminates a point of uncertainty under 
current law, and strikes a balance between the rights of an 
inventor who obtains a patent after another inventor has taken 
the steps to qualify for a prior use defense. The bill provides 
that the commercial use of a method in operating a business 
before the patentee's filing date, by an individual or entity 
that can establish a section 273 defense, does not invalidate 
the patent. For example, under current law, although the matter 
has seldom been litigated, a party who commercially used an 
invention in secrecy before the patent filing date and who also 
invented the subject matter before the patent owner's invention 
may argue that the patent is invalid under section 102(g) of 
the Patent Act. Arguably, commercial use of an invention in 
secrecy is not suppression or concealment of the invention 
within the meaning of section 102(g), and therefore the party's 
earlier invention could invalidate the patent.\8\
---------------------------------------------------------------------------
    \8\ See Dunlop Holdings v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 
1975), cert. denied, 424 US 985 (1976).
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Sec. 4303. Effective date and applicability
      The effective date for subtitle C is the date of 
enactment, except that the title does not apply to any 
infringement action pending on the date of enactment or to any 
subject matter for which an adjudication of infringement, 
including a consent judgment, has been made before the date of 
enactment.

                   Subtitle D--Patent Term Guarantee

      Subtitle D amends the provisions in the Patent Act that 
compensate patent applicants for certain reductions in patent 
term that are not the fault of the applicant. The provisions 
that were initially included in the term adjustment provisions 
of patent bills in the 105th Congress only provided adjustments 
for up to 10 years for secrecy orders, interferences, and 
successful appeals. Not only are these adjustments too short in 
some cases, but no adjustments were provided for administrative 
delays caused by the USPTO that were beyond the control of the 
applicant. Accordingly, subtitle D removes the 10-year caps 
from the existing provisions, adds a new provision to 
compensate applicants fully for USPTO-caused administrative 
delays, and, for good measure, includes a new provision 
guaranteeing diligent applicants at least a 17-year term by 
extending the term of any patent not granted within three years 
of filing. Thus, no patent applicant diligently seeking to 
obtain a patent will receive a term of less than the 17 years 
as provided under the pre-GATT \9\ standard; in fact, most will 
receive considerably more. Only those who purposely manipulate 
the system to delay the issuance of their patents will be 
penalized under subtitle D, a result that the Conferees believe 
entirely appropriate.
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    \9\ General Agreement on Tariffs and Trade, Pub. L. No. 103-465. 
The framework for international trade since its inception in 1948, GATT 
is now administered under the auspices of the World Trade Organization 
(WTO) (see note 19, infra).
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Sec. 4401. Short title
      This subtitle may be cited as the ``Patent Term Guarantee 
Act of 1999.''
Sec. 4402. Patent term guarantee authority
      Section 4402 amends section 154(b) of the Patent Act 
covering term. First, new subsection (b)(1)(A)(i)-(iv) 
guarantees day-for-day restoration of term lost as a result of 
delay created by the USPTO when the agency fails to:
            (1) Make a notification of the rejection of any 
        claim for a patent or any objection or argument under 
        Sec. 132, or give or mail a written notice of allowance 
        under Sec. 151, within 14 months after the date on 
        which a non-provisional application was actually filed 
        in the USPTO;
            (2) Respond to a reply under Sec. 132, or to an 
        appeal taken under Sec. 134, within four months after 
        the date on which the reply was filed or the appeal was 
        taken;
            (3) Act on an application within four months after 
        the date of a decision by the Board of Patent Appeals 
        and Interferences under Sec. 134 or Sec. 135 or a 
        decision by a Federal court under Sec. Sec. 141, 145, 
        or 146 in a case in which allowable claims remain in 
        the application; or
            (4) Issue a patent within four months after the 
        date on which the issue fee was paid under Sec. 151 and 
        all outstanding requirements were satisfied.
      Further, subject to certain limitations, infra, section 
154(b)(1)(B) guarantees a total application pendency of no more 
than three years. Specifically, day-for-day restoration of term 
is granted if the USPTO has not issued a patent within three 
years after ``the actual date of the application in the United 
States.'' This language was intentionally selected to exclude 
the filing date of an application under the Patent Cooperation 
Treaty (PCT).\10\ Otherwise, an applicant could obtain up to a 
30-month extension of a U.S. patent merely by filing under PCT, 
rather than directly in the USPTO, gaining an unfair advantage 
in contrast to strictly domestic applicants. Any periods of 
time--
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    \10\ See Herbert F. Schwartz, Patent Law & Practice (2d ed., 
Federal Judicial Center, 1995), note 72 at 22. The PCT is a 
multilateral treaty among more than 50 nations that is designed to 
simplify the patenting process when an applicant seeks a patent on the 
same invention in more than one nation. See also 35 U.S.C.A. chs. 35-37 
and PCT Applicant's Guide (1992, rev. 1994).
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            (1) consumed in the continued examination of the 
        application under Sec. 132(b) of the Patent Act as 
        added by section 4403 of this Act;
            (2) lost due to an interference under 
        section135(a), a secrecy order under section 181, or 
        appellate review by the Board of Patent Appeals and 
        Interferences or by a Federal court (irrespective of 
        the outcome); and
            (3) incurred at the request of an applicant in 
        excess of the three months to respond to a notice from 
        the Office permitted by section 154(b)(2)(C)(ii) unless 
        excused by a showing by the applicant under section 
        154(b)(3)(C) that in spite of all due care the 
        applicant could not respond within three months
shall not be considered a delay by the USPTO and shall not be 
counted for purposes of determining whether the patent issued 
within three years from the actual filing date.
      Day-for-day restoration is also granted under new section 
154(b)(1)(C) for delays resulting from interferences,\11\ 
secrecy orders,\12\ and appeals by the Board of Patent Appeals 
and Interferences or a Federal court in which a patent was 
issued as a result of a decision reversing an adverse 
determination of patentability.
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    \11\ 35 U.S.C. Sec. 135(a).
    \12\ 35 U.S.C. Sec. 181.
---------------------------------------------------------------------------
      Section 4402 imposes limitations on restoration of term. 
In general, pursuant to new Sec. 154(b)(2)(A)-(C) of the bill, 
total adjustments granted for restorations under (b)(1) are 
reduced as follows:
            (1) To the extent that there are multiple grounds 
        for extending the term of a patent that may exist 
        simultaneously (e.g., delay due to a secrecy order 
        under section 181 and administrative delay under 
        section 154(b)(1)(A)), the term should not be extended 
        for each ground of delay but only for the actual number 
        of days that the issuance of a patent was delayed;
            (2) The term of any patent which has been 
        disclaimed beyond a date certain may not receive an 
        adjustment beyond the expiration date specified in the 
        disclaimer; and
            (3) Adjustments shall be reduced by a period equal 
        to the time in which the applicant failed to engage in 
        reasonable efforts to conclude prosecution of the 
        application, based on regulations developed by the 
        Director, and an applicant shall be deemed to have 
        failed to engage in such reasonable efforts for any 
        periods of time in excess of three months that are 
        taken to respond to a notice from the Office making any 
        rejection or other request;
      New section 154(b)(3) sets forth the procedures for the 
adjustment of patent terms. Paragraph (3)(A) empowers the 
Director to establish regulations by which term extensions are 
determined and contested. Paragraph (3)(B) requires the 
Director to send a notice of any determination with the notice 
of allowance and to give the applicant one opportunity to 
request reconsideration of the determination. Paragraph (3)(C) 
requires the Director to reinstate any time the applicant takes 
to respond to a notice from the Office in excess of three 
months that was deducted from any patent term extension that 
would otherwise have been granted if the applicant can show 
that he or she was, in spite of all due care, unable to respond 
within three months. In no case shall more than an additional 
three months be reinstated for each response. Paragraph (3)(D) 
requires the Director to grant the patent after completion of 
determining any patent term extension irrespective of whether 
the applicant appeals.
      New section 154(b)(4) regulates appeals of term 
adjustment determinations made by the Director. Paragraph 
(4)(A) requires a dissatisfied applicant to seek remedy in the 
District Court for the District of Columbia under the 
Administrative Procedures Act \13\ within 180 days after the 
grant of the patent. The Director shall alter the term of the 
patent to reflect any final judgment. Paragraph (4)(B) 
precludes a third party from challenging the determination of a 
patent term prior to patent grant.
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    \13\ 5 U.S.C. Sec. Sec. 551-559, 701-706, 1305, 3105, 3344, 5372, 
7521.
---------------------------------------------------------------------------
      Section 4402(b) makes certain conforming amendments to 
section 282 of the Patent Act and the appellate jurisdiction of 
the U.S. Court of Appeals for the Federal Circuit.\14\
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    \14\ 28 U.S.C. Sec. 1295.
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Sec. 4403. Continued examination of patent applications
      Section 4403 amends section 132 of the Patent Act to 
permit an applicant to request that an examiner continue the 
examination of an application following a notice of ``final'' 
rejection by the examiner. New section 132(b) authorizes the 
Director to prescribe regulations for the continued examination 
of an application notwithstanding a final rejection, at the 
request of the applicant. The Director may also establish 
appropriate fees for continued examination proceedings, and 
shall provide a 50% fee reduction for small entities which 
qualify for such treatment under section 41(h)(1) of the Patent 
Act.
Sec. 4404. Technical clarification
      Section 4404 of the bill coordinates technical term 
adjustment provisions set forth in section 154(b) with those in 
section 156(a) of the Patent Act.
Sec. 4405. Effective date
      The effective date for the amendments in section 4402 and 
4404 is six months after the date of enactment and, with the 
exception of design applications (the terms of which are not 
measured from filing), applies to any application filed on or 
after such date. The amendments made by section 4403 take 
effect six months after date of enactment to allow the USPTO to 
prepare implementing regulations that apply to all national and 
international (PCT) applications filed on or after June 8, 
1995.

   Subtitle E--Domestic Publication of Patent Applications Published 
                                 Abroad

      Subtitle E provides for the publication of pending patent 
applications which have a corresponding foreign counterpart. 
Any pending U.S. application filed only in the United States 
(e.g., one that does not have a foreign counterpart) will not 
be published if the applicant so requests. Thus, an applicant 
wishing to maintain her application in confidence may do so 
merely by filing only in the United States and requesting that 
the USPTO not publish the application. For those applicants who 
do file abroad or who voluntarily publish their applications, 
provisional rights will be available for assertion against any 
third party who uses the claimed invention between publication 
and grant provided that substantially similar claims are 
contained in both the published application and granted patent. 
This change will ensure that American inventors will be able to 
see the technology that our foreign competition is seeking to 
patent much earlier than is possible today.
Sec. 4501. Short title
      This subtitle may be cited as the ``Domestic Publication 
of Foreign Filed Patent Applications Act of 1999.''
Sec. 4502. Publication
      As provided in subsection (a) of section 4502, amended 
section 122(a) of the Patent Act continues the general rule 
that patent applications will be maintained in confidence. 
Paragraph (1)(A) of new subsection (b) of section 122 creates a 
new exception to this general rule by requiring publication of 
certain applications promptly after the expiration of an 18-
month period following the earliest claimed U.S. or foreign 
filing date. The Director is authorized by subparagraph (B) to 
determine what information concerning published applications 
shall be made available to the public, and, under subparagraph 
(C) any decision made in this regard is final and not subject 
to review.
      Subsection (b)(2) enumerates exceptions to the general 
rule requiring publication. Subparagraph (A) precludes 
publication of any application that is: (1) no longer pending 
at the 18th month from filing; (2) the subject of a secrecy 
order until the secrecy order is rescinded; (3) a provisional 
application; \15\ or (4) a design patent application.\16\
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    \15\ 35 U.S.C. Sec. 111(b). Pursuant to 35 U.S.C. Sec. 111(b)(5), 
all provisional applications are abandoned 12 months after the date of 
their filing; accordingly, they are not subject to the 18-month 
publication requirement.
    \16\ 35 U.S.C. Sec. 171. Since design applications do not disclose 
technology, inventors do not have a particular interest in having them 
published. The bill as written therefore simplifies the proposed system 
of publication to confine the requirement to those applications for 
which there is a need for publication.
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      Pursuant to subparagraph (B)(i), any applicant who is not 
filing overseas and does not wish her application to be 
published can simply make a request and state that her 
invention has not and will not be the subject of an application 
filed in a foreign country that requires publication after 18 
months. Subparagraph (B)(ii) clarifies that an applicant may 
rescind this request at any time. Moreover, if an applicant has 
requested that her application not be published in a foreign 
country with a publication requirement, subparagraph (B)(iii) 
imposes a duty on the applicant to notify the Director of this 
fact. An unexcused failure to notify the Director will result 
in the abandonment of the application. If an applicant either 
rescinds a request that her application not be published or 
notifies the Director that an application has been filed in an 
early publication country or through the PCT, the U.S. 
application will be published at 18 months pursuant to 
subsection (b)(1).
      Finally, under subparagraph (B)(v), where an applicant 
has filed an application in a foreign country, either directly 
or through the PCT, so that the application will be published 
18 months from its earliest effective filing date, the 
applicant may limit the scope of the publication by the USPTO 
to the total of the cumulative scope of the applications filed 
in all foreign countries. Where the foreign application is 
identical to the application filed in the United States or 
where an application filed under the PCT is identical to the 
application filed in the United States, the applicant may not 
limit the extent to which the application filed in the United 
States is published. However, where an applicant has limited 
the description of an application filed in a foreign country, 
either directly or through the PCT in comparison with the 
application filed in the USPTO, the applicant may restrict the 
publication by the USPTO to no more than the cumulative details 
of what will be published in all of the foreign applications 
and through the PCT. The applicant may restrict the extent of 
publication of her U.S. application by submitting a redacted 
copy of the application to the USPTO eliminating only those 
details that will not be published in any of the foreign 
applications. Any description contained in at least one of the 
foreign national or PCT filings may not be excluded from 
publication in the corresponding U.S. patent application. To 
ensure that any redacted copy of the U.S. application is 
published in place of the original U.S. application, the 
redacted copy must be received within 16 months from the 
earliest effective filing date. Finally, if the published U.S. 
application as redacted by the applicant does not enable a 
person skilled in the art to make and use the claimed 
invention, provisional rights under section 154(d) shall not be 
available.
      Subsection (c) requires the Director to establish 
procedures to ensure that no protest or other form of pre-
issuance opposition to the grant of a patent on an application 
may be initiated after publication without the express written 
consent of the applicant.
      Subsection (d) protects our national security by 
providing that no application may be published under subsection 
(b)(1) where the publication or disclosure of such invention 
would be detrimental to the national security. In addition, the 
Director of the USPTO is required to establish appropriate 
procedures to ensure that such applications are promptly 
identified and the secrecy of such inventions is maintained in 
accordance with chapter 17 of the Patent Act, which governs 
secrecy of inventions in the interest of national security.
      Subsection (b) of section 4502 of subtitle E requires the 
Government Accounting Office (GAO) to conduct a study of 
applicants who file only in the United States during a three-
year period beginning on the effective date of subtitle E. The 
study will focus on the percentage of U.S. applicants who file 
only in the United States versus those who file outside the 
United States; how many domestic-only filers request not to be 
published; how many who request not to be published later 
rescind that request; and whether there is any correlation 
between the type of applicant (e.g., small vs. large entity) 
and publication. The Comptroller General must submit the 
findings of the study, once completed, to the Committees on the 
Judiciary of the House and Senate.
Sec. 4503. Time for claiming benefit of earlier filing date
      Section 119 of the Patent Act prescribes procedures to 
implement the right to claim priority under Article 4 of the 
Paris Convention for the Protection of Industrial Property.\17\ 
Under that Article, an applicant seeking protection in the 
United States may claim the filing date of an application for 
the same invention filed in another Convention country--
provided the subsequent application is filed in the United 
States within 12 months of the earlier filing in the foreign 
country.
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    \17\ Mar. 20, 1883, as revised at Brussels, Dec. 14, 1900, 25 Stat. 
1645, T.S. No. 579, and subsequently through 1967. The Convention has 
156 member nations, including the United States.
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      Section 4503 of subtitle V amends section 119(b) of the 
Patent Act to authorize the Director to establish a cut-off 
date by which the applicant must claim priority. This is to 
ensure that the claim will be made early enough--generally not 
later than the 16th month from the earliest effective filing 
date--so as to permit an orderly publication schedule for 
pending applications. As the USPTO moves to electronic filing, 
it is envisioned that this date could be moved closer to the 
18th month.
      The amendment to Sec. 119(b) also gives the Director the 
discretion to consider the failure of the applicant to file a 
timely claim for priority to be a waiver of any such priority 
claim. The Director is also authorized to establish procedures 
(including the payment of a surcharge) to accept an 
unintentionally delayed priority claim.
      Section 4503(b) of subtitle E amends section 120 of the 
Patent Act in a similar way. This provision empowers the 
Director to: (1) establish a time by which the priority of an 
earlier filed United States application must be claimed; (2) 
consider the failure to meet that time limit to be a waiver of 
the right to claim such priority; and (3) accept an 
unintentionally late claim of priority subject to the payment 
of a surcharge.
Sec. 4504. Provisional rights
      Section 4504 amends section 154 of the Patent Act by 
adding a new subsection (d) to accord provisional rights to 
obtain a reasonable royalty for applicants whose applications 
are published under amended section 122(b) of the Patent Act, 
supra, or applications designating the United States filed 
under the PCT. Generally, this provision establishes the right 
of an applicant to obtain a reasonable royalty from any person 
who, during the period beginning on the date that his or her 
application is published and ending on the date a patent is 
issued--
            (1) makes, uses, offers for sale, or sells the 
        invention in the United States, or imports such an 
        invention into the United States; or
            (2) if the invention claimed is a process, makes, 
        uses, offers for sale, sells, or imports a product made 
        by that process in the United States; and
            (3) had actual notice of the published application 
        and, in the case of an application filed under the PCT 
        designating the United States that is published in a 
        language other than English, a translation of the 
        application into English.
      The requirement of actual notice is critical. The mere 
fact that the published application is included in a commercial 
database where it might be found is insufficient. The published 
applicant must give actual notice of the published application 
to the accused infringer and explain what acts are regarded as 
giving rise to provisional rights.
      Another important limitation on the availability of 
provisional royalties is that the claims in the published 
application that are alleged to give rise to provisional rights 
must also appear in the patent in substantially identical form. 
To allow anything less than substantial identity would impose 
an unacceptable burden on the public. If provisional rights 
were available in the situation where the only valid claim 
infringed first appeared in substantially that form in the 
granted patent, the public would have no guidance as to the 
specific behavior to avoid between publication and grant. Every 
person or company that might be operating within the scope of 
the disclosure of the published application would have to 
conduct her own private examination to determine whether a 
published application contained patentable subject matter that 
she should avoid. The burden should be on the applicant to 
initially draft a schedule of claims that gives adequate notice 
to the public of what she is seeking to patent.
      Amended section 154(d)(3) imposes a six-year statute of 
limitations from grant in which an action for reasonable 
royalties must be brought.
      Amended section 154(d)(4) sets forth some additional 
rules qualifying when an international application under the 
PCT will give rise to provisional rights. The date that will 
give rise to provisional rights for international applications 
will be the date on which the USPTO receives a copy of the 
application published under the PCT in the English language; if 
the application is published under the PCT in a language other 
than English, then the date on which provisional rights will 
arise will be the date on which the USPTO receives a 
translation of the international application in the English 
language. The Director is empowered to require an applicant to 
provide a copy of the international application and a 
translation of it.
Sec. 4505. Prior art effect of published applications
      Section 4505 amends section 102(e) of the Patent Act to 
treat an application published by the USPTO in the same fashion 
as a patent published by the USPTO. Accordingly, a published 
application is given prior art effect as of its earliest 
effective U.S. filing date against any subsequently filed U.S. 
applications. As with patents, any foreign filing date to which 
the published application is entitled will not be the effective 
filing date of the U.S. published application for prior art 
purposes. An exception tothis general rule is made for 
international applications designating the United States that are 
published under Article 21(2)(a) of the PCT in the English language. 
Such applications are given a prior art effect as of their 
international filing date. The prior art effect accorded to patents 
under section 4505 remains unchanged from present section 102(e) of the 
Patent Act.
Sec. 4506. Cost recovery for publications
      Section 4506 authorizes the Director to recover the costs 
of early publication required by the amendment made by section 
4502 of this Act by charging a separate publication fee after a 
notice of allowance is given pursuant to section 151 of the 
Patent Act.
Sec. 4507. Conforming amendments
      Section 4507 consists of various technical and conforming 
amendments to the Patent Act. These include amending section 
181 of the Patent Act to clarify that publication of pending 
applications does not apply to applications under secrecy 
orders, and amending section 284 of the Patent Act to ensure 
that increased damages authorized under section 284 shall not 
apply to the reasonable royalties possible under amended 
section 154(d). In addition, section 374 of the Patent Act is 
amended to provide that the effect of the publication of an 
international application designating the United States shall 
be the same as the publication of an application published 
under amended section 122(b), except as its effect as prior art 
is modified by amended section 102(e) and its giving rise to 
provisional rights is qualified by new section 154(d).
Sec. 4508. Effective date
      Subtitle E shall take effect on the date that is one year 
after the date of enactment and shall apply to all applications 
filed under section 111 of the Patent Act on or after that 
date; and to all applications complying with section 371 of the 
Patent Act that resulted from international applications filed 
on or after that date. The provisional rights provided in 
amended section 154(d) and the prior art effect provided in 
amended section 102(e) shall apply to all applications pending 
on the date that is one year after the date of enactment that 
are voluntarily published by their applicants. Finally, section 
404 (provisional rights) shall apply to international 
applications designating the United States that are filed on or 
after the date that is one year after the date of enactment.

       Subtitle F--Optional Inter Partes Reexamination Procedure

      Subtitle F is intended to reduce expensive patent 
litigation in U.S. district courts by giving third-party 
requesters, in addition to the existing ex parte reexamination 
in Chapter 30 of title 35, the option of inter partes 
reexamination proceedings in the USPTO. Congress enacted 
legislation to authorize ex parte reexamination of patents in 
the USPTO in 1980, but such reexamination has been used 
infrequently since a third party who requests reexamination 
cannot participate at all after initiating the proceedings. 
Numerous witnesses have suggested that the volume of lawsuits 
in district courts will be reduced if third parties can be 
encouraged to use reexamination by giving them an opportunity 
to argue their case for patent invalidity in the USPTO. 
Subtitle F provides that opportunity as an option to the 
existing ex parte reexamination proceedings.
      Subtitle F leaves existing ex parte reexamination 
procedures in Chapter 30 of title 35 intact, but establishes an 
inter partes reexamination procedure which third-party 
requesters can use at their option. Subtitle VI allows third 
parties who request inter partes reexamination to submit one 
written comment each time the patent owner files a response to 
the USPTO. In addition, such third-party requesters can appeal 
to the USPTO Board of Patent Appeals and Interferences from an 
examiner's determination that the reexamined patent is valid, 
but may not appeal to the Court of Appeals for the Federal 
Circuit. To prevent harassment, anyone who requests inter 
partes reexamination must identify the real party in interest 
and third-party requesters who participate in an inter partes 
reexamination proceeding are estopped from raising in a 
subsequent court action or inter partes reexamination any issue 
of patent validity that they raised or could have raised during 
such inter partes reexamination.
      Subtitle F contains the important threshold safeguard 
(also applied in ex parte reexamination) that an inter partes 
reexamination cannot be commenced unless the USPTO makes a 
determination that a ``substantial new question'' of 
patentability is raised. Also, as under Chapter 30, this 
determination cannot be appealed, and grounds for inter partes 
reexamination are limited to earlier patents and printed 
publications--grounds that USPTO examiners are well-suited to 
consider.
Sec. 4601. Short title
      This subtitle may be cited as the ``Optional Inter Partes 
Reexamination Procedure Act.''
Sec. 4602. Clarification of Chapter 30
      This section distinguishes Chapter 31 from existing 
Chapter 30 by changing the title of Chapter 30 to ``Ex Parte 
Reexamination of Patents.''
Sec. 4603. Definitions
      This section amends section 100 of the Patent Act by 
defining ``third-party requester'' as a person who is not the 
patent owner requesting ex parte reexamination under section 
302 or inter partes reexamination under section 311.
Sec. 4604. Optional inter partes reexamination procedure
      Section 4604 amends Part III of title 35 by inserting a 
new Chapter 31 setting forth optional inter partes 
reexamination procedures.
      New section 311, as amended by this section, differs from 
section 302 of existing law in Chapter 30 of the Patent Act by 
requiring any person filing a written request for inter partes 
reexamination to identify the real party in interest.
      Similar to section 303 of existing law, new section 312 
of the Patent Act confers upon the Director the authority and 
responsibility to determine, within three months after the 
filing of a request for inter partes reexamination, whether a 
substantial new question affecting patentability of any claim 
of the patent is raised by the request. Also, the decision in 
this regard is final and not subject to judicial review.
      Proposed sections 313-14 under this subtitle are 
similarly modeled after sections 304-305 of Chapter 30. Under 
proposed section 313, if the Director determines that a 
substantial new question of patentability affecting a claim is 
raised, the determination shall include an order for inter 
partes reexamination for resolution of the question. The order 
may be accompanied by the initial USPTO action on the merits of 
the inter partes reexamination conducted in accordance with 
section 314. Generally, under proposed section 314, inter 
partes reexamination shall be conducted according to the 
procedures set forth in sections 132-133 of the Patent Act. The 
patent owner will be permitted to propose any amendment to the 
patent and a new claim or claims, with the same exception 
contained in section 305: no proposed amended or new claim 
enlarging the scope of the claims will be allowed.
      Proposed section 314 elaborates on procedure with regard 
to third-party requesters who, for the first time, are given 
the option to participate in inter partes reexamination 
proceedings. With the exception of the inter partes 
reexamination request, any document filed by either the patent 
owner or the third-party requester shall be served on the other 
party. In addition, the third party-requester in an inter 
partes reexamination shall receive a copy of any communication 
sent by the USPTO to the patent owner. After each response by 
the patent owner to an action on the merits by the USPTO, the 
third-party requester shall have one opportunity to file 
written comments addressing issues raised by the USPTO or 
raised in the patent owner's response. Unless ordered by the 
Director for good cause, the agency must act in an inter partes 
reexamination matter with special dispatch.
      Proposed section 315 prescribes the procedures for appeal 
of an adverse USPTO decision by the patent owner and the third-
party requester in an inter partes reexamination. Both the 
patent owner and the third-party requester are entitled to 
appeal to the Board of Patent Appeals and Interferences 
(section 134 of the Patent Act), but only the patentee can 
appeal to the U.S. Court of Appeals for the Federal Circuit 
(Sec. Sec. 141-144); either may also be a party to any appeal 
by the other to the Board of Patent Appeals and Interferences. 
The patentee is not entitled to the alternative of an appeal of 
an inter partes reexamination to the U.S. District Court for 
the District of Columbia. Such appeals are rarely taken from ex 
parte reexamination proceedings under existing law and its 
removal should speed up the process.
      To deter unnecessary litigation, proposed section 315 
imposes constraints on the third-party requester. In general, a 
third-party requester who is granted an inter partes 
reexamination by the USPTO may not assert at a later time in 
any civil action in U.S. district court \18\ the invalidity of 
any claim finally determined to be patentable on any ground 
that the third-party requester raised or could have raised 
during the inter partes reexamination. However, the third-party 
requester may assert invalidity based on newly discovered prior 
art unavailable at the time of the reexamination. Prior art was 
unavailable at the time of the inter partes reexamination if it 
was not known to the individuals who were involved in the 
reexamination proceeding on behalf of the third-party requester 
and the USPTO.
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    \18\ See 28 U.S.C. Sec. 1338.
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      Section 316 provides for the Director to issue and 
publish certificates canceling unpatentable claims, confirming 
patentable claims, and incorporating any amended or new claim 
determined to be patentable in an inter partes procedure.
      Subtitle F creates a new section 317 which sets forth 
certain conditions by which inter partes reexamination is 
prohibited to guard against harassment of a patent holder. In 
general, once an order for inter partes reexamination has been 
issued, neither a third-party requester nor the patent owner 
may file a subsequent request for inter partes reexamination 
until an inter partes reexamination certificate is issued and 
published, unless authorized by the Director. Further, if a 
third-party requester asserts patent invalidity in a civil 
action and a final decision is entered that the party failed to 
prove the assertion of invalidity, or if a final decision in an 
inter partes reexamination instituted by the requester is 
favorable to patentability, after any appeals, that third-party 
requester cannot thereafter request inter partes reexamination 
on the basis of issues which were or which could have been 
raised. However, the third-party requester may assert 
invalidity based on newly discovered prior art unavailable at 
the time of the civil action or inter partes reexamination. 
Prior art was unavailable at the time if it was not known to 
the individuals who were involved in the civil action or inter 
partes reexamination proceeding on behalf of the third-party 
requester and the USPTO.
      Proposed section 318 gives a patent owner the right, once 
an inter partes reexamination has been ordered, to obtain a 
stay of any pending litigation involving an issue of 
patentability of any claims of the patent that are the subject 
of the inter partes reexamination, unless the court determines 
that the stay would not serve the interests of justice.
Sec. 4605. Conforming amendments
      Section 4605 makes the following conforming amendments to 
the Patent Act:
      A patent owner must pay a fee of $1,210 for each petition 
in connection with an unintentionally abandoned application, 
delayed payment, or delayed response by the patent owner during 
any reexamination.
      A patent applicant, any of whose claims has been twice 
rejected; a patent owner in a reexamination proceeding; and a 
third-party requester in an inter partes reexamination 
proceeding may all appeal final adverse decisions from a 
primary examiner to the Board of Patent Appeals and 
Interferences.
      Proposed section 141 states that a patent owner in a 
reexamination proceeding may appeal an adverse decision by the 
Board of Patent Appeals and Interferences only to the U.S. 
Court of Appeals for the Federal Circuit as earlier noted. A 
third-party requester in an inter partes reexamination 
proceeding may not appeal beyond the Board of Patent Appeals 
and Interferences.
      The Director is required pursuant to section 143 
(proceedings on appeal to the Federal Circuit) to submit to the 
court the grounds for the USPTO decision in any reexamination 
addressing all the issues involved in the appeal.
Sec. 4606. Report to Congress
      Not later than five years after the effective date of 
subtitle F, the Director must submit to Congress a report 
evaluating whether the inter partes reexamination proceedings 
set forth in the title are inequitable to any of the parties in 
interest and, if so, the report shall contain recommendations 
for change to eliminate the inequity.
Sec. 4607. Estoppel effect of reexamination
      Section 4607 estops any party who requests inter partes 
reexamination from challenging at a later time, in any civil 
action, any fact determined during the process of the inter 
partes reexamination, except with respect to a fact 
determination later proved to be erroneous based on information 
unavailable at the time of the inter partes reexamination. The 
estoppel arises after a final decision in the inter partes 
reexamination or a final decision in any appeal of such 
reexamination. If section 4607 is held to be unenforceable, the 
enforceability of the rest of subtitle F or the Act is not 
affected.
Sec. 4608. Effective date
      Subtitle F shall take effect on the date of the enactment 
and shall apply to any patent that issues from an original 
application filed in the United States on or after that date, 
except that the amendments made by section 4605(a) shall take 
effect one year from the date of enactment.

         Subtitle G--United States Patent and Trademark Office

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

        Subchapter A--United States Patent and Trademark Office

Sec. 4711. Establishment of Patent and Trademark Office
      Section 4711 establishes the USPTO as an agency of the 
United States within the Department of Commerce and under the 
policy direction of the Secretary of Commerce. The USPTO, as an 
autonomous agency, is explicitly responsible for decisions 
regarding the management and administration of its operations 
and has independent control of budget allocations and 
expenditures, personnel decisions and processes, procurements, 
and other administrative and management functions. Patent 
operations and trademark operations are to be treated as 
separate operating units within the Office, each under the 
direction of its respective Commissioner, as supervised by the 
Director.
      The USPTO shall maintain its principal office in the 
metropolitan Washington, D.C., area, for the service of process 
and papers and for the purpose of discharging its functions. 
For purposes of venue in civil actions, the agency is deemed to 
be a resident of the district in which its principal office is 
located, except where otherwise provided by law. The USPTO is 
also permitted to establish satellite offices in such other 
places in the United States as it considers necessary and 
appropriate to conduct business. This is intended to allow the 
USPTO, if appropriate, to serve American applicants better.
Sec. 4712. Powers and duties
      Subject to the policy direction of the Secretary of the 
Commerce, in general the USPTO will be responsible for the 
granting and issuing of patents, the registration of 
trademarks, and the dissemination of patent and trademark 
information to the public.
      The USPTO will also possess specific powers, which 
include:
            (1) a requirement to adopt and use an Office seal 
        for judicial notice purposes and for authenticating 
        patents, trademark certificates and papers issued by 
        the Office;
            (2) the authority to establish regulations, not 
        inconsistent with law, that
                    (A) govern the conduct of USPTO proceedings 
                within the Office,
                    (B) are in accordance with Sec. 553 of 
                title 5,
                    (C) facilitate and expedite the processing 
                of patent applications, particularly those 
                which can be processed electronically,
                    (D) govern the recognition, conduct, and 
                qualifications of agents, attorneys, or other 
                persons representing applicants or others 
                before the USPTO,
                    (E) recognize the public interest in 
                ensuring that the patent system retain a 
                reduced fee structure for small entities, and
                    (F) provide for the development of a 
                performance-based process for managing that 
                includes quantitative and qualitative measures, 
                standards for evaluating cost-effectiveness, 
                and consistency with principles of impartiality 
                and competitiveness;
            (3) the authority to acquire, construct, purchase, 
        lease, hold, manage, operate, improve, alter and 
        renovate any real, personal, or mixed property as it 
        considers necessary to discharge its functions;
            (4) the authority to make purchases of property, 
        contracts for construction, maintenance, or management 
        and operation of facilities, as well as to contract for 
        and purchase printing services without regard to those 
        federal laws which govern such proceedings;
            (5) the authority to use services, equipment, 
        personnel, facilities and equipment of other federal 
        entities, with their consent and on a reimbursable 
        basis;
            (6) the authority to use, with the consent of the 
        United States and the agency, government, or 
        international organization concerned, the services, 
        records, facilities or personnel of any State or local 
        government agency or foreign patent or trademark office 
        or international organization to perform functions on 
        its behalf;
            (7) the authority to retain and use all of its 
        revenues and receipts;
            (8) a requirement to advise the President, through 
        the Secretary of Commerce, on national and certain 
        international intellectual property policy issues;
            (9) a requirement to advise Federal departments and 
        agencies of intellectual property policy in the United 
        States and intellectual property protection abroad;
            (10) a requirement to provide guidance regarding 
        proposals offered by agencies to assist foreign 
        governments and international intergovernmental 
        organizations on matters of intellectual property 
        protection;
            (11) the authority to conduct programs, studies or 
        exchanges regarding domestic or international 
        intellectual property law and the effectiveness of 
        intellectual property protection domestically and 
        abroad;
            (12) a requirement to advise the Secretary of 
        Commerce on any programs and studies relating to 
        intellectual property policy that the USPTO may conduct 
        or is authorized to conduct, cooperatively with foreign 
        intellectual property offices and international 
        intergovernmental organizations; and
            (13) the authority to (A) coordinate with the 
        Department of State in conducting programs and studies 
        cooperatively with foreign intellectual property 
        offices and international intergovernmental 
        organizations, and (B) transfer, with the concurrence 
        of the Secretary of State, up to $100,000 in any year 
        to the Department of State to pay an international 
        intergovernmental organization for studies and programs 
        advancing international cooperation concerning patents, 
        trademarks, and other matters.
      The specific powers set forth in new subsection (b) are 
clarified in new subsection (c). The special payments of 
paragraph (14)(B) are additional to other payments or 
contributions and are not subject to any limitation imposed by 
law. Nothing in subsection (b) derogates from the duties of the 
Secretary of State or the United States Trade Representative as 
set forth in section 141 of the Trade Act of 1974,\19\ nor 
derogates from the duties and functions of the Register of 
Copyrights. The Director is required to consult with the 
Administrator of General Services when exercising authority 
under paragraphs (3) and (4)(A). Nothing in section 4712 may be 
construed to nullify, void, cancel, or interrupt any pending 
request-for-proposal let or contract issued by the General 
Services Administration for the specific purpose of relocating 
or leasing space to the USPTO. Finally, in exercising the 
powers and duties under this section, the Director shall 
consult with the Register of Copyright on all Copyright and 
related matters.
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    \19\ 19 U.S.C. Sec. 2171.
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Sec. 4713. Organization and management
      Section 4713 details the organization and management of 
the agency. The powers and duties of the USPTO shall be vested 
in the Under Secretary and Director, who shall be appointed by 
the President, by and with the consent of the Senate. The Under 
Secretary and Director performs two main functions. As Under 
Secretary of Commerce for Intellectual Property, she serves as 
the policy advisor to the Secretary of Commerce and the 
President on intellectual property issues. As Director, she is 
responsible for supervising the management and direction of the 
USPTO. She shall consult with the Public Advisory Committees, 
infra, on a regular basis regarding operations of the agency 
and before submitting budgetary proposals and fee or regulation 
changes. The Director shall take an oath of office. The 
President may remove the Director from office, but must provide 
notification to both houses of Congress.
      The Secretary of Commerce, upon nomination of the 
Director, shall appoint a Deputy Director to act in the 
capacity of the Director if the Director is absent or 
incapacitated. The Secretary of Commerce shall also appoint two 
Commissioners, one for Patents, the other for Trademarks, 
without regard to chapters 33, 51, or 53 of title 5 of the U.S. 
Code. The Commissioners will have five-year terms and may be 
reappointed to new terms by the Secretary. Each Commissioner 
shall possess a demonstrated experience in patent and trademark 
law, respectively; and they shall be responsible for the 
management and direction of the patent and trademark 
operations, respectively. In addition to receiving a basic rate 
of compensation under the Senior Executive Service \20\ and a 
locality payment,\21\ the Commissioners may receive bonuses of 
up to 50 percent of their annual basic rate of compensation, 
not to exceed the salary of the Vice President, based on a 
performance evaluation by the Secretary, acting through the 
Director. The Secretary may remove Commissioners for misconduct 
or unsatisfactory performance. It is intended that the 
Commissioners will be non-political expert appointees, 
independently responsible for operations, subject to 
supervision by the Director.
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    \20\ 28 U.S.C. Sec. 5382.
    \21\ 5 U.S.C. Sec. 5304(h)(2)(C).
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      The Director may appoint all other officers, agents, and 
employees as she sees fit, and define their responsibilities 
with equal discretion. The USPTO is specifically not subject to 
any administratively or statutorily imposed limits (full-time 
equivalents, or ``FTEs'') on positions or personnel.
      The USPTO is charged with developing and submitting to 
Congress a proposal for an incentive program to retain senior 
(of the primary examiner grade or higher) patent and trademark 
examiners eligible for retirement for the sole purpose of 
training patent and trademark examiners.
      The Director of the USPTO, in consultation with the 
Director of the Office of Personnel Management, is required to 
maintain a program for identifying national security positions 
at the USPTO and for providing for appropriate security 
clearances for USPTO employees in order to maintain the secrecy 
of inventions as described in section 181 of the Patent Act and 
to prevent disclosure of sensitive and strategic information in 
the interest of national security.
      The USPTO will be subject to all provisions of title 5 of 
the U.S. Code governing federal employees. All relevant labor 
agreements which are in effect the day before enactment of 
subtitle G shall be adopted by the agency. All USPTO employees 
as of the day before the effective date of subtitle G shall 
remain officers and employees of the agency without a break in 
service. Other personnel of the Department of Commerce shall be 
transferred to the USPTO only if necessary to carry out 
purposes of subtitle G of the bill and if a major function of 
their work is reimbursed by the USPTO, they spend at least half 
of their work time in support of the USPTO, or a transfer to 
the USPTO would be in the interest of the agency, as determined 
by the Secretary of Commerce in consultation with the Director.
      On or after the effective date of the Act, the President 
shall appoint an individual to serve as Director until a 
Director qualifies under subsection (a). The persons serving as 
the Assistant Commissioner for Patents and the Assistant 
Commissioner for Trademarks on the day before the effective 
date of the Act may serve as the Commissioner for Patents and 
the Commissioner for Trademarks, respectively, until a 
respective Commissioner is appointed under subsection (b)(2).
Sec. 4714. Public Advisory Committees
      Section 4714 provides a new section 5 of the Patent Act 
which establishes a Patent Public Advisory Committee and a 
Trademark Public Advisory Committee. Each Committee has nine 
voting members with three-year terms appointed by and serving 
at the pleasure of the Secretary of Commerce. Initial 
appointments will be made within three months of the effective 
date of the Act; and three of the initial appointees will 
receive one-year terms, three will receive two-year terms, and 
three will receive full terms. Vacancies will be filled within 
three months. The Secretary will also designate chairpersons 
for three-year terms.
      The members of the Committees will be U.S. citizens and 
will be chosen to represent the interests of USPTO users. The 
Patent Public Advisory Committee shall have members who 
represent small and large entity applicants in the United 
States in proportion to the number of applications filed by the 
small and large entity applicants. In no case shall the small 
entity applicants be represented by less than 25 percent of the 
members of the Patent Public Advisory Committee, at least one 
of whom shall be an independent inventor. The members of both 
Committees shall include individuals with substantial 
background and achievement in finance, management, labor 
relations, science, technology, and office automation. The 
patent and trademark examiners' unions are entitled to have one 
representative on their respective Advisory Committee in a non-
voting capacity.
      The Committees meet at the call of the chair to consider 
an agenda established by the chair. Each Committee reviews the 
policies, goals, performance, budget, and user fees that bear 
on its area of concern and advises the Director on these 
matters. Within 60 days of the end of a fiscal year, the 
Committees prepare annual reports, transmit the reports to the 
Secretary of Commerce, the President, and the Committees on the 
Judiciary of the Congress, and publish the reports in the 
Official Gazette of the USPTO.
      Members of the Committees are compensated at a defined 
daily rate for meeting and travel days. Members are provided 
access to USPTO records and information other than personnel or 
other privileged information including that concerning patent 
applications. Members are special Government employees within 
the meaning of section 202 of title 18. The Federal Advisory 
Committee Act shall not apply to the Committees. Finally, 
section 4714 provides that Committee meetings shall be open to 
the public unless by a majority vote the Committee meets in 
executive session to consider personnel or other confidential 
information.
Sec. 4715. Conforming amendments
      Technical conforming amendments to the Patent Act are set 
forth in section 4715.
Sec. 4716. Trademark Trial and Appeal Board
      Section 4716 amends section 17 of the Trademark Act of 
1946 by specifying that the Director shall give notice to all 
affected parties and shall direct a Trademark Trial and Appeal 
Board to determine the respective rights of those parties 
before it in a relevant proceeding. The section also invests 
the Director with the power of appointing administrative 
trademark judges to the Board. The Director, the Commissioner 
for Trademarks, the Commissioner for Patents, and the 
administrative trademark judges shall serve on the Board.
Sec. 4717. Board of Patent Appeals and Interferences
      Under existing section 7 of the Patent Act, the 
Commissioner, Deputy Commissioner, Assistant Commissioners, and 
the examiners-in-chief constitute the Board of Patent Appeals 
and Interferences. Pursuant to section 4717 of subtitle G, the 
Board shall be comprised of the Director, the Commissioner for 
Patents, the Commissioner for Trademarks, and the 
administrative patent judges. In addition, the existing statute 
allows each appellant a hearing before three members of the 
Board who are designated by the Director. Section 4717 empowers 
the Director with this authority.
Sec. 4718. Annual report of Director
      No later than 180 days after the end of each fiscal year, 
the Director must provide a report to Congress detailing funds 
received and expended by the USPTO, the purposes for which the 
funds were spent, the quality and quantity of USPTO work, the 
nature of training provided to examiners, the evaluations of 
the Commissioners by the Secretary of Commerce, the 
Commissioners' compensation, and other information relating to 
the agency.
Sec. 4719. Suspension or exclusion from practice
      Under existing section 32 of the Patent Act, the 
Commissioner (the Director pursuant to this Act) has the 
authority, after notice and a hearing, to suspend or exclude 
from further practice before the USPTO any person who is 
incompetent, disreputable, indulges in gross misconduct or 
fraud, or is noncompliant with USPTO regulations. Section 4719 
permits the Director to designate an attorney who is an officer 
or employee of the USPTO to conduct a hearing under section 32.
Sec. 4720. Pay of Director and Deputy Director
      Section 4720 replaces the Assistant Secretary of Commerce 
and Commissioner of Patents and Trademarks with the Under 
Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office to receive pay at 
Level III of the Executive Schedule.\22\ Section 4720 also 
establishes the pay of the Deputy Director at Level IV of the 
Executive Schedule.\23\
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    \22\ 5 U.S.C. Sec. 5314.
    \23\ 5 U.S.C. Sec. 5315.
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           Subchapter B--Effective Date; Technical Amendments

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

                 Subchapter C--Miscellaneous Provisions

Sec. 4741. References
      Section 4741 clarifies that any reference to the transfer 
of a function from a department or office to the head of such 
department or office means the head of such department or 
office to which the function is transferred. In addition, 
references in other federal materials to the current 
Commissioner of Patents and Trademarks refer, upon enactment, 
to the Under Secretary of Commerce for Intellectual Property 
and Director of the United States Patent and Trademark Office. 
Similarly, references to the Assistant Commissioner for Patents 
are deemed to refer to the Commissioner for Patents and 
references to the Assistant Commissioner for Trademarks are 
deemed to refer to the Commissioner for Trademarks.
Sec. 4742. Exercise of authorities
      Under section 4742, except as otherwise provided by law, 
a federal official to whom a function is transferred pursuant 
to subtitle G may exercise all authorities under any other 
provision of law that were available regarding the performance 
of that function to the official empowered to perform that 
function immediately before the date of the transfer of the 
function.
Sec. 4743. Savings provisions
      Relevant legal documents that relate to a function which 
is transferred by subtitle G, and which are in effect on the 
date of such transfer, shall continue in effect according to 
their terms unless later modified or repealed in an appropriate 
manner. Applications or proceedings concerning any benefit, 
service, or license pending on the effective date of subtitle G 
before an office transferred shall not be affected, and shall 
continue thereafter, but may later be modified or repealed in 
the appropriate manner.
      Subtitle G will not affect suits commenced before the 
effective date of passage. Suits or actions by or against the 
Department of Commerce, its employees, or the Secretary shall 
not abate by reason of enactment of subtitle G. Suits against a 
relevant government officer in her official capacity shall 
continue post enactment, and if a function has transferred to 
another officer by virtue of enactment, that other officer 
shall substitute as the defendant. Finally, administrative and 
judicial review procedures that apply to a function transferred 
shall apply to the head of the relevant federal agency and 
other officers to which the function is transferred.
Sec. 4744. Transfer of assets
      Section 4744 states that all available personnel, 
property, records, and funds related to a function transferred 
pursuant to subtitle G shall be made available to the relevant 
official or head of the agency to which the function transfers 
at such time or times as the Director of the Office of 
Management and Budget (OMB) directs.
Sec. 4745. Delegation and assignment
      Section 4745 allows an official to whom a function is 
transferred under subtitle G to delegate that function to 
another officer or employee. The official to whom the function 
was originally transferred nonetheless remains responsible for 
the administration of the function.
Sec. 4746. Authority of Director of the Office of Management and Budget 
        with respect to functions transferred
      Pursuant to section 4746, if necessary the Director of 
OMB shall make any determination of the functions transferred 
pursuant to subtitle G.
Sec. 4747. Certain vesting of functions considered transfers
      Section 4747 states that the vesting of a function in a 
department or office pursuant to reestablishment of an office 
shall be considered to be the transfer of that function.
Sec. 4748. Availability of existing funds
      Under section 4748, existing appropriations and funds 
available for the performance of functions and other activities 
terminated pursuant to subtitle G shall remain available (for 
the duration of their period of availability) for necessary 
expenses in connection with the termination and resolution of 
such functions and activities, subject to the submission of a 
plan to House and Senate appropriators in accordance with 
Public Law 105-277 (Departments of Commerce, Justice, and 
State, the Judiciary and Related Agencies Appropriations Act, 
Fiscal Year 1999).
Sec. 4749. Definitions
      ``Function'' includes any duty, obligation, power, 
authority, responsibility, right, privilege, activity, or 
program.
      ``Office'' includes any office, administration, agency, 
bureau, institute, council, unit, organizational entity, or 
component thereof.

              Subtitle H--Miscellaneous Patent Provisions

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

Sec. 5001. Commission on Online Child Protection
      Section 5001(a) provides that references contained in the 
amendments made by this title are to section 1405 of the Child 
Online Protection Act (47 U.S.C. 231 note).
      Section 5001(b) amends the membership of the Commission 
on Online Child Protection to remove a requirement that a 
specific number of representatives come from designated sectors 
of private industry, as outlined in the Act. Section 5001(b) 
also provides that the members appointed to the Commission as 
of October 31, 1999, shall remain as members. Section 5001(b) 
also prevents the members of the Commission from being paid for 
their work on the Commission. This provision, however, does not 
preclude members from being reimbursed for legitimate costs 
associated with participating in the Commission (such as travel 
expenses).
      Section 5001(c) extends the due date for the report of 
the Commission by one year.
      Section 5001(d) establishes that the Commission's 
statutory authority will expire either (1) 30 days after the 
submission of the report required by the Act, or (2) November 
30, 2000, whichever is earlier.
      Section 5001(e) requires the Commission to commence its 
first meeting no later than March 31, 2000. Section 5001(e) 
also requires that the Commission elect, by a majority vote, a 
chairperson of the Commission not later than 30 days after 
holding its first meeting.
      Section 5001(f) establishes minimum rules for the 
operations of the Commission, and also allows the Commission to 
adopt other rules as it deems necessary.
Sec. 5002. Privacy protection for donors to public broadcasting 
        entities
      This provision, which was added in Conference, protects 
the privacy of donors to public broadcasting entities.
Sec. 5003. Completion of biennial regulatory review
      Section 5003 provides that, within 180 days after the 
date of enactment, the FCC will complete the biennial review 
required by section 202(h) of the Telecommunications Act of 
1996. The Conferees expect that if the Commission concludes 
that it should retain any of the rules under the review 
unchanged, the Commission shall issue a report that includes a 
full justification of the basis for so finding.
Sec. 5004. Broadcasting entities
      This provision, added in Conference, allows for a 
remittance of copyright damages for public broadcasting 
entities where they are not aware and have no reason to believe 
that their activities constituted violations of copyright law. 
This is currently the standard for nonprofit libraries, 
archives and educational institutions.
Sec. 5005. Technical amendments relating to vessel hull design 
        protection
      This section makes several amendments to chapter 13 of 
title 17 relating to design protection for vessel hulls. The 
sunset provision for chapter 13, enacted as part of the Digital 
Millennium Copyright Act, is removed so that chapter 13 is now 
a permanent chapter of title 17. The timing and number of joint 
studies to be done by the Copyright Office and the Patent and 
Trademark Offices of the effectiveness of chapter 13 are also 
amended by reducing the number of studies from two to one, and 
requiring that the one study not be submitted until November 1, 
2003. Current law requires delivery of two studies within the 
first two years of chapter 13, which is unnecessary and an 
insufficient amount of time for the Copyright Office and the 
Patent and Trademark Office to accurately measure and assess 
the effectiveness of design protection within the marine 
industry.
      The definition of a ``vessel'' in chapter 13 is amended 
to provide that in addition to being able to navigate on or 
through water, a vessel must be self-propelled and able to 
steer, and must be designed tocarry at least one passenger. 
This clarifies Congress's intent not to allow design protection for 
such craft as barges, toy and remote controlled boas, inner tubes and 
surf boards.
Sec. 5006. Informal rulemaking of copyright determination
      The Copyright Office has requested that Congress make a 
technical correction to section 1201(a)(1)(C) of title 17 by 
deleting the phrase ``on the record.'' The Copyright Office 
believes that this correction is necessary to avoid any 
misunderstanding regarding the intent of Congress that the 
rulemaking proceeding which is to be conducted by the Copyright 
Office under this provision shall be an informal, rather than a 
formal, rulemaking proceeding. Accordingly, the phrase ``on the 
record'' is deleted as a technical correction to clarify the 
intent of Congress that the Copyright Office shall conduct the 
rulemaking under section 1201(a)(1)(C) as an informal 
rulemaking proceeding pursuant to section 553 of Title 5. The 
intent is to permit interested persons an opportunity to 
participate through the submission of written statements, oral 
presentations at one or more of the public hearings, and the 
submission of written responses to the submissions or 
presentations of others.
Sec. 5007. Service of process for surety corporations
      This section allows surety corporations, like other 
corporations, to utilize approved state officials to receive 
service of process in any legal proceeding as an alternative to 
having a separate agent for service of process in each of the 
94 federal judicial districts.
Sec. 5008. Low-power television
      Section 5009, which can be cited as the Community 
Broadcasters Protection Act of 1999, will ensure that many 
communities across the nation will continue to have access to 
free, over-the-air low-power television (LPTV) stations, even 
as full-service television stations proceed with their 
conversion to digital format. In particular, Section 5009 
requires the Federal Communications Commission (FCC) to provide 
certain qualifying LPTV stations with ``primary'' regulatory 
status, which in turn will enable these LPTV stations to 
attract the financing that is necessary to provide consumers 
with critical information and programming. At the same time, 
recognizing the importance of, and the engineering complexity 
in, the FCC's plan to convert full-service television stations 
to digital format, Section 5009 protects the ability of these 
stations to provide both digital and analog service throughout 
their existing service areas.
      The FCC began awarding licenses for low-power television 
service in 1982. Low-power television service is a relatively 
inexpensive and flexible means of delivering programming 
tailored to the interests of viewers in small localized areas. 
It also ensures that spectrum allocated for broadcast 
television service is more efficiently used and promotes 
opportunities for entering the television broadcast business.
      The FCC estimates that there are more than 2,000 licensed 
and operational LPTV stations, about 1,500 of which are 
operated in the continental United States by 700 different 
licensees in nearly 750 towns and cities.\28\ LPTV stations 
serve rural and urban communities alike, although about two-
thirds of all LPTV stations serve rural communities. LPTV 
stations in urban markets typically provide niche programming 
(e.g., bilingual or non-English programming) to under-served 
communities in large cities. In many rural markets, LPTV 
stations are consumers' only source of local, over-the-air 
programming. Owners of LPTV stations are diverse, including 
high school and college student populations, churches and 
religious groups, local governments, large and small 
businesses, and even individual citizens.
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    \28\ LPTV stations are distinct from so called ``translators.'' 
Whereas LPTV stations typically offer orginal programming, translators 
merely amplify or ``boost'' a full-service television station's signal 
into rural and mountainous regions adjacent to the station's market.
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      From an engineering standpoint, the term ``low-power 
television service'' means precisely what it implies, i.e., 
broadcast television service that operates at a lower level of 
power than full-service stations. Specifically, LPTV stations 
radiate 3 kilowatts of power for stations operating on the VHF 
band (i.e., channels 2 through 13), and 150 kilowatts of power 
for stations operating on the UHF band (i.e., channels 14 
through 69). By comparison, full-service stations on VHF 
channels radiate up to 316 kilowatts of power, and stations on 
UHF channels radiate up to 5,000 kilowatts of power. The 
reduced power levels that govern LPTV stations mean these 
stations serve a much smaller geographic region than do full-
service stations. LPTV signals typically extend to a range of 
approximately 12 to 15 miles, whereas the originating signal of 
full-service stations often reach households 60 or 80 miles 
away.
      Compared to its rules for full-service television station 
licensees, the FCC's rules for obtaining and operating an LPTV 
license are minimal. But in return for ease of licensing, LPTV 
stations must operate not only at reduced power levels but also 
as ``secondary'' licensees. This means LPTV stations are 
strictly prohibited from interfering with, and must accept 
signal interference from, ``primary'' licensees, such as full-
service television stations. Moreover, LPTV stations must yield 
at any point in time to full-service stations that increase 
their power levels, as well as to new full-service stations.
      The video programming marketplace is intensely 
competitive. The three largest broadcast networks that once 
dominated the market now face competition from several emerging 
broadcast and cable networks, cable systems, satellite 
television operators, wireless cable, and even the Internet. 
Low-power television plays a valuable, albeit modest, role in 
this market because it is capable of providing locally-
originated programming to rural and urban communities that have 
either no access to local programming, or an over-abundance of 
national programming.
      Low-power television's future, however, is uncertain. To 
begin with, LPTV's secondary regulatory status means a licensee 
can be summarily displaced by a full-service station that seeks 
to expand its own service area, or by a new full-service 
station seeking to enter the same market. This cloud of 
regulatory uncertainty necessarily affects the ability of LPTV 
stations to raise capital over the long-term, irrespective of 
an LPTV station's popularity among consumers.
      The FCC's plan to convert full-service stations to 
digital substantially complicates LPTV stations' already 
uncertain future. In its digital television (DTV) proceeding, 
the FCC adopted a table of allotments for DTV service that 
provided a second channel for each existing full-service 
station to use for DTV service in making the transition from 
the existing analog technology to the new DTV technology. These 
second channels were provided to broadcasters on a temporary 
basis. At the end of the DTV transition, which is currently 
scheduled for December 31, 2006, they must relinquish one of 
their two channels.
      In assigning DTV channels, the FCC maintained the 
secondary status of LPTV stations (as well as translators). In 
order to provide all full-service television stations with a 
second channel, the FCC was compelled to establish DTV 
allotments that will displace a number of LPTV stations, 
particularly in the larger urban market areas where the 
available spectrum is most congested.
      The FCC's plan also provides for the recovery of a 
portion of the existing broadcast television spectrum so that 
it can be reallocated to new uses. Specifically, the FCC 
provided for immediate recovery of broadcast channels 60 
through 69, and for recovery of broadcast channels 52 through 
59 at the end of the DTV transition. As further required by 
Congress under the Balanced Budget Act of 1997, \29\ the FCC 
has completed the reallocation of broadcast channels 60 through 
69. Existing analog stations, including LPTV stations and a few 
DTV stations, are permitted to operate on these channels during 
the DTV transition. But at the end of the transition, all 
analog broadcast TV stations will have to cease operation, and 
the DTV stations on broadcast channels 52 through 69 will be 
relocated to new channels in the DTV core spectrum. As a 
result, the FCC estimates that the DTV transition will require 
about 35 to 45 percent of all LPTV stations to either change 
their operation or cease operation. Indeed, some full-service 
stations have already ``bumped'' several LPTV stations a number 
of times, at substantial cost to the LPTV station, with no 
guarantee that the LPTV station will be permitted to remain on 
its new channel in the long term.
---------------------------------------------------------------------------
    \29\ See 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
      The conferees, therefore, seek to provide some regulatory 
certainty for low-power television service. The conferees 
recognize that, because of emerging DTV service, not all LPTV 
stations can be guaranteed a certain future. Moreover, it is 
not clear that all LPTV stations should be given such a 
guarantee in light of the fact that many existing LPTV stations 
provide little or no original programming service.
      Instead, the conferees seek to buttress the commercial 
viability of those LPTV stations which can demonstrate that 
they provide valuable programming to their communities. The 
House Committee on Commerce's record in considering this 
legislation reflects that there are a significant number of 
LPTV stations which broadcast programming--including locally 
originated programming--for a substantial portion of each day. 
From the consumers' perspective, these stations provide video 
programming that is functionally equivalent to the programming 
they view on full-service stations, as well as national and 
local cable networks. Consequently, these stations should be 
afforded roughly similar regulatory status. Section 5009, the 
Community Broadcasters Protection Act of 1999, will achieve 
that objective, and at the same time, protect the transition to 
digital.
      Section 5009(a) provides that the short title of this 
section is the ``Community Broadcasters Protection Act of 
1999.''
      Section 5009(b) describes the Congress' findings on the 
importance of low-power television service. The Congress finds 
that LPTV stations have operated in a manner beneficial to the 
public, and in many instances, provide worthwhile and diverse 
services to communities that lack access to over-the-air 
programming. The Congress also finds, however, that LPTV 
stations' secondary regulatory status effectively blocks access 
to capital.
      Section 5009(c) amends section 336 of the Communications 
Act of 1934 \30\ to require the FCC to create a new ``Class A'' 
license for certain qualifying LPTV stations. New paragraph 
(1)(A) in particular directs the FCC to prescribe rules within 
120 days of enactment for the establishment of a new Class A 
television license that will be available to qualifying LPTV 
stations. The FCC's rules must ensure that a Class A licensee 
receives the same license terms and renewal standards as any 
full-service licensee, and that each Class A licensee is 
accorded primary regulatory status. Subparagraph (B) further 
requires the FCC, within 30 days of enactment, to send to each 
existing LPTV licensee a notice that describes the requirements 
for Class A designation. Within 60 days of enactment (or within 
30 days of the FCC's notice), LPTV stations intending to seek 
Class A designation must submit a certification of eligibility 
to the FCC. Absent a material deficiency in an LPTV station's 
certification materials, the FCC is required under subparagraph 
(B) to grant a certification of eligibility.
---------------------------------------------------------------------------
    \30\ 47 U.S.C. Sec. 336.
---------------------------------------------------------------------------
      Subparagraph (C) permits an LPTV station, within 30 days 
of the issuance of the rules required under subparagraph (A), 
to submit an application for Class A designation. The FCC must 
award a Class A license to a qualifying LPTV station within 30 
days of receiving such application. Subparagraph (D) mandates 
that the FCC must act to preserve the signal contours of an 
LPTV station pending the final resolution of its application 
for a Class A license. In the event technical problems arise 
that require an engineering solution to a full-service 
station's allotted parameters or channel assignment in the DTV 
table of allotments, subparagraph (D) requires the FCC to make 
the necessary modifications to ensure that such full-service 
station can replicate or maximize its service area, as provided 
for in the FCC's rules.
      With regard to maximization, a full-service digital 
television station must file an application for maximization or 
a notice of intent to seek such maximization by December 31, 
1999, file a bona fide application for maximization by May 1, 
2000, and also comply with all applicable FCC rules regarding 
the construction of digital television facilities. The term 
``maximization'' is defined in paragraph 31 of the FCC's Sixth 
Report and Order as the process by which stations increase 
their service areas by operating with additional power or 
higher antennae than specified in the FCC's digital television 
table of allotments. Subparagraph (E) requires that a station 
must reduce the protected contour of its digitaltelevision 
service area in accordance with any modifications requested in future 
change applications. This provision is intended to ensure that stations 
indeed utilize the full amount of maximized spectrum for which they 
originally apply by the aforementioned deadlines.
      Paragraph (2) lists the criteria an LPTV station must 
meet to qualify for a Class A license. Specifically, the LPTV 
station must: during the 90 days preceding the date of 
enactment, broadcast a minimum of 18 hours per day--including 
at least 3 hours per week of locally-originated programming--
and also be in compliance with the FCC's rules on low-power 
television service; and from and after the date of its 
application for a Class A license, be in compliance with the 
FCC's rules for full-service television stations. In the 
alternative, the FCC may qualify an LPTV station as a Class A 
licensee if it determines that such qualification would serve 
the public interest, convenience, and necessity or for other 
reasons determined by the FCC.
      Paragraph (3) provides that no LPTV station authorized as 
of the date of enactment may be disqualified for a Class A 
license based on common ownership with any other medium of mass 
communication.
      Paragraph (4) makes clear that the FCC is not required to 
issue Class A LPTV stations (or translators) an additional 
license for advanced television services. The FCC, however, 
must accept applications for such services, provided the 
station will not cause interference to any other broadcast 
facility applied for, protected, permitted or authorized on the 
date of the filing of the application for advanced television 
services. Either the new license for advanced services or the 
original license must be forfeited at the end of the DTV 
transition. The licensee may elect to convert to advanced 
television services on its analog channel, but is not required 
to convert to digital format until the end of the DTV 
transition.
      Paragraph (5) clarifies that nothing in new subsection 
336(f) preempts, or otherwise affects, section 337 of the 
Communications Act of 1934.\31\
---------------------------------------------------------------------------
    \31\ 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
      Paragraph (6) precludes the FCC from granting Class A 
licenses to LPTV stations operating between 698 megahertz (MHz) 
and 806 MHz (i.e., television broadcast channels 52 through 
69). However, the FCC shall provide to LPTV stations assigned 
to, and temporarily operating on, those channels the 
opportunity to qualify for a Class A license. If a qualifying 
LPTV station is ultimately assigned a channel within the band 
of frequencies that will eventually comprise the ``core 
spectrum'' (i.e., television broadcast channels 2 through 51), 
then the FCC is required to issue a Class A license 
simultaneously. However, the FCC may not grant a Class A 
license to an LPTV station operating on a channel within the 
core spectrum that the FCC will identify within 180 days of 
enactment.
      Finally, paragraph (7) provides that the FCC may not 
grant a Class A license (or a modification thereto) unless the 
requesting LPTV station demonstrates that it will not interfere 
with one of three types of radio-based services. First, under 
subparagraph (A), the LPTV station must show that it will not 
interfere with: (i) the predicted Grade B contour of any 
station transmitting in analog format; or (ii) the digital 
television service areas provided in the DTV table of 
allotments; or the digital television areas explicitly 
protected (as opposed to those areas that may be permitted) in 
the Commission's digital television regulations; or the digital 
television service areas of stations subsequently granted by 
the FCC prior to the filing of a Class A application; or 
lastly, stations seeking to maximize power under the FCC's 
rules (provided such stations are in compliance with the 
notification requirements under paragraph (1)).
      Second, under subparagraph (B), the LPTV station must 
show that it will not interfere with any licensed, authorized 
or pending LPTV station or translator. And third, under 
subparagraph (C), the LPTV station must show that it will not 
interfere with other services (e.g., land mobile services) that 
also operate on television broadcast channels 14 through 20.
      Finally, paragraph (8) establishes priority for those 
LPTVs that are displaced by an application filed under this 
section, in that these LPTVs have priority over other LPTVs in 
the assignment of available channels.

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

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

                                  
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