[House Report 105-39]
[From the U.S. Government Publishing Office]
105th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 105-39
_______________________________________________________________________
21ST CENTURY PATENT SYSTEM IMPROVEMENT ACT
_______________________________________________________________________
March 20, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Coble, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 400]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 400) to amend title 35, United States Code, with respect
to patents, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``21st Century Patent System Improvement
Act''.
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--PATENT AND TRADEMARK OFFICE MODERNIZATION
Sec. 101. Short title.
Subtitle A--United States Patent and Trademark Office
Sec. 111. Establishment of Patent and Trademark Office as a Government
corporation.
Sec. 112. Powers and duties.
Sec. 113. Organization and management.
Sec. 114. Management Advisory Board.
Sec. 115. Conforming amendments.
Sec. 116. Trademark Trial and Appeal Board.
Sec. 117. Board of Patent Appeals and Interferences.
Sec. 118. Suits by and against the Office.
Sec. 119. Annual report of Director.
Sec. 120. Suspension or exclusion from practice.
Sec. 121. Funding.
Sec. 122. Extension of surcharges on patent fees.
Sec. 123. Transfers.
Sec. 124. GAO study and report.
Subtitle B--Effective Date; Technical Amendments
Sec. 131. Effective date.
Sec. 132. Technical and conforming amendments.
Subtitle C--Miscellaneous Provisions
Sec. 141. References.
Sec. 142. Exercise of authorities.
Sec. 143. Savings provisions.
Sec. 144. Transfer of assets.
Sec. 145. Delegation and assignment.
Sec. 146. Authority of Director of the Office of Management and Budget
with respect to functions transferred.
Sec. 147. Certain vesting of functions considered transfers.
Sec. 148. Availability of existing funds.
Sec. 149. Definitions.
TITLE II--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH
PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION
Sec. 201. Short title.
Sec. 202. Publication.
Sec. 203. Time for claiming benefit of earlier filing date.
Sec. 204. Provisional rights.
Sec. 205. Prior art effect of published applications.
Sec. 206. Cost recovery for publication.
Sec. 207. Conforming changes.
Sec. 208. Patent term extension authority.
Sec. 209. Further examination of patent applications.
Sec. 210. Last day of pendency of provisional application.
Sec. 211. Reporting requirement.
Sec. 212. Effective date.
TITLE III--PROTECTION FOR PRIOR DOMESTIC USERS OF PATENTED TECHNOLOGIES
Sec. 301. Short title.
Sec. 302. Defense to patent infringement based on prior domestic
commercial or research use.
Sec. 303. Effective date and applicability.
TITLE IV--ENHANCED PROTECTION OF INVENTORS' RIGHTS
Sec. 401. Short title.
Sec. 402. Invention development services.
Sec. 403. Technical and conforming amendment.
Sec. 404. Effective date.
TITLE V--IMPROVED REEXAMINATION PROCEDURES
Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Effective date.
TITLE VI--MISCELLANEOUS IMPROVEMENTS
Sec. 601. Provisional applications.
Sec. 602. International applications.
Sec. 603. Plant patents.
Sec. 604. Electronic filing.
Sec. 605. Divisional applications.
TITLE I--PATENT AND TRADEMARK OFFICE MODERNIZATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``Patent and Trademark Office
Modernization Act''.
Subtitle A--United States Patent and Trademark Office
SEC. 111. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A GOVERNMENT
CORPORATION.
Section 1 of title 35, United States Code, is amended to read as
follows:
``Sec. 1. Establishment
``(a) Establishment.--The United States Patent and Trademark Office
is established as a wholly owned Government corporation subject to
chapter 91 of title 31, separate from any department of the United
States, and shall be an agency of the United States under the policy
direction of the Secretary of Commerce. For purposes of internal
management, the United States Patent and Trademark Office shall be a
corporate body not subject to direction or supervision by any
department of the United States, except as otherwise provided in this
title.
``(b) Offices.--The United States Patent and Trademark Office shall
maintain its principal office in the metropolitan Washington, D.C.
area, for the service of process and papers and for the purpose of
carrying out its functions. The United States Patent and Trademark
Office shall be deemed, for purposes of venue in civil actions, to be a
resident of the district in which its principal office is located,
except where jurisdiction is otherwise provided by law. The United
States Patent and Trademark Office may establish satellite offices in
such other places as it considers necessary and appropriate in the
conduct of its business.
``(c) Reference.--For purposes of this title, the United States
Patent and Trademark Office shall also be referred to as the `Office'
and the `Patent and Trademark Office'.''.
SEC. 112. POWERS AND DUTIES.
Section 2 of title 35, United States Code, is amended to read as
follows:
``Sec. 2. Powers and duties
``(a) In General.--The United States Patent and Trademark Office,
under the policy direction of the Secretary of Commerce--
``(1) shall be responsible for the granting and issuing of
patents and the registration of trademarks;
``(2) may conduct studies, programs, or exchanges of items or
services regarding domestic and international law of patents,
trademarks, and other matters, the administration of the
Office, or any function vested in the Office by law, including
programs to recognize, identify, assess, and forecast the
technology of patented inventions and their utility to
industry;
``(3)(A) may authorize or conduct studies and programs
cooperatively with foreign patent and trademark offices and
international organizations, in connection with patents,
trademarks, and other matters; and
``(B) with the concurrence of the Secretary of State, may
authorize the transfer of not to exceed $100,000 in any year to
the Department of State for the purpose of making special
payments to international intergovernmental organizations for
studies and programs for advancing international cooperation
concerning patents, trademarks, and other matters; and
``(4) shall be responsible for disseminating to the public
information with respect to patents and trademarks.
The special payments under paragraph (3)(B) shall be in addition to any
other payments or contributions to international organizations
described in paragraph (3)(B) and shall not be subject to any
limitations imposed by law on the amounts of such other payments or
contributions by the United States Government.
``(b) Specific Powers.--The Office--
``(1) shall have perpetual succession;
``(2) shall adopt and use a corporate seal, which shall be
judicially noticed and with which letters patent, certificates
of trademark registrations, and papers issued by the Office
shall be authenticated;
``(3) may sue and be sued in its corporate name and be
represented by its own attorneys in all judicial and
administrative proceedings, subject to the provisions of
section 7;
``(4) may indemnify the Director, and other officers,
attorneys, agents, and employees (includingmembers of the
Management Advisory Board established in section 5) of the Office for
liabilities and expenses incurred within the scope of their employment;
``(5) may adopt, amend, and repeal bylaws, rules,
regulations, and determinations, which--
``(A) shall govern the manner in which its business
will be conducted and the powers granted to it by law
will be exercised;
``(B) shall be made after notice and opportunity for
full participation by interested public and private
parties;
``(C) shall facilitate and expedite the processing of
patent applications, particularly those which can be
filed, stored, processed, searched, and retrieved
electronically, subject to the provisions of section
122 relating to the confidential status of
applications;
``(D) may govern the recognition and conduct of
agents, attorneys, or other persons representing
applicants or other parties before the Office, and may
require them, before being recognized as
representatives of applicants or other persons, to show
that they are of good moral character and reputation
and are possessed of the necessary qualifications to
render to applicants or other persons valuable service,
advice, and assistance in the presentation or
prosecution of their applications or other business
before the Office; and
``(E) recognize the public interest in continuing to
safeguard broad access to the United States patent
system through the reduced fee structure for small
entities under section 41(h)(1) of this title;
``(6) may acquire, construct, purchase, lease, hold, manage,
operate, improve, alter, and renovate any real, personal, or
mixed property, or any interest therein, as it considers
necessary to carry out its functions;
``(7)(A) may make such purchases, contracts for the
construction, maintenance, or management and operation of
facilities, and contracts for supplies or services, without
regard to the provisions of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 471 and
following), the Public Buildings Act (40 U.S.C. 601 and
following), and the Stewart B. McKinney Homeless Assistance Act
(42 U.S.C. 11301 and following); and
``(B) may enter into and perform such purchases and contracts
for printing services, including the process of composition,
platemaking, presswork, silk screen processes, binding,
microform, and the products of such processes, as it considers
necessary to carry out the functions of the Office, without
regard to sections 501 through 517 and 1101 through 1123 of
title 44;
``(8) may use, with their consent, services, equipment,
personnel, and facilities of other departments, agencies, and
instrumentalities of the Federal Government, on a reimbursable
basis, and cooperate with such other departments, agencies, and
instrumentalities in the establishment and use of services,
equipment, and facilities of the Office;
``(9) may obtain from the Administrator of General Services
such services as the Administrator is authorized to provide to
other agencies of the United States, on the same basis as those
services are provided to other agencies of the United States;
``(10) may, when the Director determines that it is
practicable, efficient, and cost-effective to do so, use, with
the consent of the United States and the agency, government, or
international organization concerned, the services, records,
facilities, or personnel of any State or local government
agency or instrumentality or foreign government or
international organization to perform functions on its behalf;
``(11) may determine the character of and the necessity for
its obligations and expenditures and the manner in which they
shall be incurred, allowed, and paid, subject to the provisions
of this title and the Act of July 5, 1946 (commonly referred to
as the `Trademark Act of 1946');
``(12) may retain and use all of its revenues and receipts,
including revenues from the sale, lease, or disposal of any
real, personal, or mixed property, or any interest therein, of
the Office, including for research and development and capital
investment, subject to the provisions of section 10101 of the
Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41 note);
``(13) shall have the priority of the United States with
respect to the payment of debts from bankrupt, insolvent, and
decedents' estates;
``(14) may accept monetary gifts or donations of services, or
of real, personal, or mixed property, in order to carry out the
functions of the Office;
``(15) may execute, in accordance with its bylaws, rules, and
regulations, all instruments necessary and appropriate in the
exercise of any of its powers; and
``(16) may provide for liability insurance and insurance
against any loss in connection with its property, other assets,
or operations either by contract or by self-insurance.
``(c) Construction.--Nothing in this section shall be construed to
nullify, void, cancel, or interrupt any pending request-for-proposal
let or contract issued by the General Services Administration for the
specific purpose of relocating or leasing space to the United States
Patent and Trademark Office.''.
SEC. 113. ORGANIZATION AND MANAGEMENT.
Section 3 of title 35, United States Code, is amended to read as
follows:
``Sec. 3. Officers and employees
``(a) Director.--
``(1) In general.--The management of the United States Patent
and Trademark Office shall be vested in a Director of the
United States Patent and Trademark Office (in this title
referred to as the `Director'), who shall be a citizen of the
United States and who shall be appointed by the President, by
and with the advice and consent of the Senate. The Director
shall be a person who, by reason of professional background and
experience in patent or trademark law, is especially qualified
to manage the Office.
``(2) Duties.--
``(A) In general.--The Director shall be responsible
for the management and direction of the Office,
including the issuance of patents and the registration
of trademarks, and shall perform these duties in a
fair, impartial, and equitable manner.
``(B) Advising the president.--The Director shall
advise the President, through the Secretary of
Commerce, of all activities of the Office undertaken in
response to obligations of the United States under
treaties and executive agreements, or which relate to
cooperative programs with those authorities of foreign
governments that are responsible for granting patents
or registering trademarks. The Director shall also
recommend to the President, through the Secretary of
Commerce, changes in law or policy which may improve
the ability of United States citizens to secure and
enforce patent rights or trademark rights in the United
States or in foreign countries.
``(C) Consulting with the management advisory
board.--The Director shall consult with the Management
Advisory Board established in section 5 on a regular
basis on matters relating to the operation of the
Office, and shall consult with the Advisory Board
before submitting budgetary proposals to the Office of
Management and Budget or changing or proposing to
change patent or trademark user fees or patent or
trademark regulations.
``(D) Security clearances.--The Director, in
consultation with the Director of the Office of
Personnel Management, shall maintain a program for
identifying national security positions and providing
for appropriate security clearances.
``(3) Term.--The Director shall serve a term of 5 years, and
may continue to serve after the expiration of the Director's
term until a successor is appointed and assumes office. The
Director may be reappointed to subsequent terms.
``(4) Oath.--The Director shall, before taking office, take
an oath to discharge faithfully the duties of the Office.
``(5) Compensation.--The Director shall receive compensation
at the rate of pay in effect for level III of the Executive
Schedule under section 5314 of title 5 and, in addition, may
receive as a bonus, an amount which would raise the Director's
total compensation to not more than the equivalent of the level
of the rate of pay in effect for level Iof the Executive
Schedule under section 5312 of title 5, based upon an evaluation by the
Secretary of Commerce of the Director's performance as defined in an
annual performance agreement between the Director and the Secretary.
The annual performance agreement shall incorporate measurable goals as
delineated in an annual performance plan agreed to by the Director and
the Secretary.
``(6) Removal.--The Director may be removed from office by
the President. The President shall provide notification of any
such removal to both Houses of Congress.
``(7) Designee of director.--The Director shall designate an
officer of the Office who shall be vested with the authority to
act in the capacity of the Director in the event of the absence
or incapacity of the Director.
``(b) Officers and Employees of the Office.--
``(1) Commissioners.--The Director shall appoint a
Commissioner for Patents and a Commissioner for Trademarks for
terms that shall expire on the date on which the Director's
term expires. The Commissioner for Patents shall be a person
with demonstrated experience in patent law and the Commissioner
for Trademarks shall be a person with demonstrated experience
in trademark law. The Commissioner for Patents and the
Commissioner for Trademarks shall be the principal policy and
management advisers to the Director on all aspects of the
activities of the Office that affect the administration of
patent and trademark operations, respectively.
``(2) Other officers and employees.--The Director shall--
``(A) appoint such officers, employees (including
attorneys), and agents of the Office as the Director
considers necessary to carry out the functions of the
Office; and
``(B) define the authority and duties of such
officers and employees and delegate to them such of the
powers vested in the Office as the Director may
determine.
The Office shall not be subject to any administratively or
statutorily imposed limitation on positions or personnel, and
no positions or personnel of the Office shall be taken into
account for purposes of applying any such limitation.
``(c) Continued Applicability of Title 5.--Officers and employees of
the Office shall be subject to the provisions of title 5 relating to
Federal employees. Section 2302 of title 5 applies to the Office,
notwithstanding subsection (a)(2)(B)(i) of such section.
``(d) Adoption of Existing Labor Agreements.--The Office shall adopt
all labor agreements which are in effect, as of the day before the
effective date of the Patent and Trademark Office Modernization Act,
with respect to such Office (as then in effect).
``(e) Carryover of Personnel.--
``(1) From pto.--Effective as of the effective date of the
Patent and Trademark Office Modernization Act, all officers and
employees of the Patent and Trademark Office on the day before
such effective date shall become officers and employees of the
Office, without a break in service.
``(2) Other personnel.--Any individual who, on the day before
the effective date of the Patent and Trademark Office
Modernization Act, is an officer or employee of the Department
of Commerce (other than an officer or employee under paragraph
(1)) shall be transferred to the Office if--
``(A) such individual serves in a position for which
a major function is the performance of work reimbursed
by the Patent and Trademark Office, as determined by
the Secretary of Commerce;
``(B) such individual serves in a position that
performed work in support of the Patent and Trademark
Office during at least half of the incumbent's work
time, as determined by the Secretary of Commerce; or
``(C) such transfer would be in the interest of the
Office, as determined by the Secretary of Commerce in
consultation with the Director.
Any transfer under this paragraph shall be effective as of the
same effective date as referred to in paragraph (1), and shall
be made without a break in service.
``(3) Accumulated leave.--The amount of sick and annual leave
and compensatory time accumulated under title 5 before the
effective date described in paragraph (1), by those becoming
officers or employees of the Office pursuant to this
subsection, are obligations of the Office.
``(f) Transition Provisions.--
``(1) Interim appointment of director.--On or after the
effective date of the Patent and Trademark Office Modernization
Act, the President shall appoint an individual to serve as the
Director until the date on which a Director qualifies under
subsection (a). The President shall not make more than one such
appointment under this subsection.
``(2) Continuation in office of certain officers.--(A) The
individual serving as the Assistant Commissioner for Patents on
the day before the effective date of the Patent and Trademark
Office Modernization Act may serve as the Commissioner for
Patents until the date on which a Commissioner for Patents is
appointed under subsection (b).
``(B) The individual serving as the Assistant Commissioner
for Trademarks on the day before the effective date of the
Patent and Trademark Office Modernization Act may serve as the
Commissioner for Trademarks until the date on which a
Commissioner for Trademarks is appointed under subsection
(b).''.
SEC. 114. MANAGEMENT ADVISORY BOARD.
Chapter 1 of part I of title 35, United States Code, is amended by
inserting after section 4 the following:
``Sec. 5. Patent and Trademark Office Management Advisory Board
``(a) Establishment of Management Advisory Board.--
``(1) Appointment.--The United States Patent and Trademark
Office shall have a Management Advisory Board (hereafter in
this title referred to as the `Advisory Board') of 12 members,
4 of whom shall be appointed by the President, 4 of whom shall
be appointed by the Speaker of the House of Representatives,
and 4 of whom shall be appointed by the majority leader of the
Senate. Not more than 3 of the 4 members appointed by each
appointing authority shall be members of the same political
party.
``(2) Terms.--Members of the Advisory Board shall be
appointed for a term of 4 years each, except that of the
members first appointed by each appointing authority, 1 shall
be for a term of 1 year, 1 shall be for a term of 2 years, and
1 shall be for a term of 3 years. No member may serve more than
1 term.
``(3) Chair.--The President shall designate the chair of the
Advisory Board, whose term as chair shall be for 3 years.
``(4) Timing of appointments.--Initial appointments to the
Advisory Board shall be made within 3 months after the
effective date of the Patent and Trademark Office Modernization
Act, and vacancies shall be filled within 3 months after they
occur.
``(5) Vacancies.--Vacancies shall be filled in the manner in
which the original appointment was made under this subsection.
Members appointed to fill a vacancy occurring before the
expiration of the term for which the member's predecessor was
appointed shall be appointed only for the remainder of that
term. A member may serve after the expiration of that member's
term until a successor is appointed.
``(6) Committees.--The Chair shall designate members of the
Advisory Board to serve on a committee on patent operations and
on a committee on trademark operations to perform the duties
set forth in subsection (e) as they relate specifically to the
Office's patent operations, and the Office's trademark
operations, respectively.
``(b) Basis for Appointments.--Members of the Advisory Board shall be
citizens of the United States who shall be chosen so as to represent
the interests of diverse users of the United States Patent and
Trademark Office, and shall include individuals with substantial
background and achievement in corporate finance and management.
``(c) Applicability of Certain Ethics Laws.--Members of the Advisory
Board shall be special Government employees within the meaning of
section 202 of title 18.
``(d) Meetings.--The Advisory Board shall meet at the call of the
chair to consider an agenda set by the chair.
``(e) Duties.--The Advisory Board shall--
``(1) review the policies, goals, performance, budget, and
user fees of the United States Patent and Trademark Office, and
advise the Director on these matters; and
``(2) within 60 days after the end of each fiscal year,
prepare an annual report on the matters referred to in
paragraph (1), transmit the report to the President and the
Committees on the Judiciary of the Senate and the House of
Representatives, and publish the report in the Patent and
Trademark Office Official Gazette.
``(f) Compensation.--Members of the Advisory Board shall be
compensated for each day (including travel time) during which they are
attending meetings or conferences of the Advisory Board or otherwise
engaged in the business of the Advisory Board, at the rate which is the
daily equivalent of the annual rate of basic pay in effect for level
III of the Executive Schedule under section 5314 of title 5, and while
away from their homes or regular places of business they may be allowed
travel expenses, including per diem in lieu of subsistence, as
authorized by section 5703 of title 5.
``(g) Access to Information.--Members of the Advisory Board shall be
provided access to records and information in the United States Patent
and Trademark Office, except for personnel or other privileged
information and information concerning patent applications required to
be kept in confidence by section 122.''.
SEC. 115. CONFORMING AMENDMENTS.
(a) Duties.--Chapter 1 of title 35, United States Code, is amended by
striking section 6.
(b) Regulations for Agents and Attorneys.--Section 31 of title 35,
United States Code, and the item relating to such section in the table
of sections for chapter 3 of title 35, United States Code, are
repealed.
SEC. 116. TRADEMARK TRIAL AND APPEAL BOARD.
Section 17 of the Act of July 5, 1946 (commonly referred to as the
``Trademark Act of 1946'') (15 U.S.C. 1067) is amended to read as
follows:
``Sec. 17. (a) In every case of interference, opposition to
registration, application to register as a lawful concurrent user, or
application to cancel the registration of a mark, the Director shall
give notice to all parties and shall direct a Trademark Trial and
Appeal Board to determine and decide the respective rights of
registration.
``(b) The Trademark Trial and Appeal Board shall include the
Director, the Commissioner for Patents, the Commissioner for
Trademarks, and administrative trademark judges who are appointed by
the Director.''.
SEC. 117. BOARD OF PATENT APPEALS AND INTERFERENCES.
Chapter 1 of title 35, United States Code, is amended by striking
section 7 and inserting after section 5 the following:
``Sec. 6. Board of Patent Appeals and Interferences
``(a) Establishment and Composition.--There shall be in the United
States Patent and Trademark Office a Board of Patent Appeals and
Interferences. The Director, the Commissioner for Patents, the
Commissioner for Trademarks, and the administrative patent judges shall
constitute the Board. The administrative patent judges shall be persons
of competent legal knowledge and scientific ability who are appointed
by the Director.
``(b) Duties.--The Board of Patent Appeals and Interferences shall,
on written appeal of an applicant, review adverse decisions of
examiners upon applications for patents and shall determine priority
and patentability of invention in interferences declared under section
135(a). Each appeal and interference shall be heard by at least 3
members of the Board, who shall be designated by the Director. Only the
Board of Patent Appeals and Interferences may grant rehearings.''.
SEC. 118. SUITS BY AND AGAINST THE OFFICE.
Chapter 1 of part I of title 35, United States Code, is amended by
inserting after section 6 the following new section:
``Sec. 7. Suits by and against the Office
``(a) Actions Under United States Law.--Any civil action or
proceeding to which the United States Patent and Trademark Office is a
party is deemed to arise under the laws of the United States. The
Federal courts shall have exclusive jurisdiction over all civil actions
by or against the Office.
``(b) Representation by the Department of Justice.--The United States
Patent and Trademark Office shall be deemed an agency of the United
States for purposes of section 516 of title 28.
``(c) Prohibition on Attachment, Liens, Etc.--No attachment,
garnishment, lien, or similar process, intermediate or final, in law or
equity, may be issued against property of the Office.''.
SEC. 119. ANNUAL REPORT OF DIRECTOR.
Section 14 of title 35, United States Code, is amended to read as
follows:
``Sec. 14. Annual report to Congress
``The Director shall report to the Congress, not later than 180 days
after the end of each fiscal year, the moneys received and expended by
the Office, the purposes for which the moneys were spent, the quality
and quantity of the work of the Office, and other information relating
to the Office. The report under this section shall also meet the
requirements of section 9106 of title 31, to the extent that such
requirements are not inconsistent with the preceding sentence. The
report required under this section shall not be deemed to be the report
of the United States Patent and Trademark Office under section 9106 of
title 31, and the Director shall file a separate report under such
section.''.
SEC. 120. SUSPENSION OR EXCLUSION FROM PRACTICE.
Section 32 of title 35, United States Code, is amended by inserting
before the last sentence the following: ``The Director shall have the
discretion to designate any attorney who is an officer or employee of
the United States Patent and Trademark Office to conduct the hearing
required by this section.''.
SEC. 121. FUNDING.
Section 42 of title 35, United States Code, is amended to read as
follows:
``Sec. 42. Patent and Trademark Office funding
``(a) Fees Payable to the Office.--All fees for services performed by
or materials furnished by the United States Patent and Trademark Office
shall be payable to the Office.
``(b) Use of Moneys.--Moneys from fees shall be available to the
United States Patent and Trademark Office to carry out, to the extent
provided in appropriations Acts, the functions of the Office. Moneys of
the Office not otherwise used to carry out the functions of the Office
shall be kept in cash on hand or on deposit, or invested in obligations
of the United States or guaranteed by the United States, or in
obligations or other instruments which are lawful investments for
fiduciary, trust, or public funds. Fees available to the Office under
this title shall be used for the processing of patent applications and
for other services and materials relating to patents. Fees available to
the Office under section 31 of the Act of July 5, 1946 (commonly
referred to as the `Trademark Act of 1946'; 15 U.S.C. 1113), shall be
used only for the processing of trademark registrations and for other
services and materials relating to trademarks.
``(c) Borrowing Authority.--The United States Patent and Trademark
Office is authorized to issue from time to time for purchase by the
Secretary of the Treasury its debentures, bonds, notes, and other
evidences of indebtedness (hereafter in this subsection referred to as
`obligations') to assist in financing its activities. Borrowing under
this subsection shall be subject to prior approval in appropriations
Acts. Such borrowing shall not exceed amounts approved in
appropriations Acts. Any borrowing under this subsection shall be
repaid only from fees paid to the Office and surcharges appropriated by
the Congress. Such obligations shall be redeemable at the optionof the
Office before maturity in the manner stipulated in such obligations and
shall have such maturity as is determined by the Office with the
approval of the Secretary of the Treasury. Each such obligation issued
to the Treasury shall bear interest at a rate not less than the current
yield on outstanding marketable obligations of the United States of
comparable maturity during the month preceding the issuance of the
obligation as determined by the Secretary of the Treasury. The
Secretary of the Treasury shall purchase any obligations of the Office
issued under this subsection and for such purpose the Secretary of the
Treasury is authorized to use as a public-debt transaction the proceeds
of any securities issued under chapter 31 of title 31, and the purposes
for which securities may be issued under that chapter are extended to
include such purpose. Payment under this subsection of the purchase
price of such obligations of the United States Patent and Trademark
Office shall be treated as public debt transactions of the United
States.''.
SEC. 122. EXTENSION OF SURCHARGES ON PATENT FEES.
(a) In General.--Section 10101 of the Omnibus Budget Reconciliation
Act of 1990 (35 U.S.C. 41 note) is amended to read as follows:
``SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.
``(a) Surcharges.--There shall be a surcharge on all fees authorized
by subsections (a) and (b) of section 41 of title 35, United States
Code, in order to ensure that the amounts specified in subsection (c)
are collected.
``(b) Use of Surcharges.--Notwithstanding section 3302 of title 31,
United States Code, all surcharges collected by the Patent and
Trademark Office--
``(1) shall be credited to a separate account established in
the Treasury and ascribed to the activities of the United
States Patent and Trademark Office as offsetting collections,
``(2) shall be collected by and available to the United
States Patent and Trademark Office for all authorized
activities and operations of the Office, including all direct
and indirect costs of services provided by the office, and
``(3) shall remain available until expended.
``(c) Establishment of Surcharges.--The Director of the United States
Patent and Trademark Office shall establish surcharges under subsection
(a), subject to the provisions of section 553 of title 5, United States
Code, in order to ensure that $119,000,000, but not more than
$119,000,000, are collected in fiscal year 1999 and each fiscal year
thereafter.
``(d) Appropriations Act Required.--Notwithstanding subsections (a)
through (c), no fee established by subsection (a) shall be collected
nor shall be available for spending without prior authorization in
appropriations Acts.''.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect on October 1, 1998.
SEC. 123. TRANSFERS.
(a) Transfer of Functions.--Except to the extent that such functions,
powers, and duties relate to the direction of patent or trademark
policy, there are transferred to, and vested in, the United States
Patent and Trademark Office all functions, powers, and duties vested by
law in the Secretary of Commerce or the Department of Commerce or in
the officers or components in the Department of Commerce with respect
to the authority to grant patents and register trademarks, and in the
Patent and Trademark Office, as in effect on the day before the
effective date of this title, and in the officers and components of
such Office.
(b) Transfer of Funds and Property.--The Secretary of Commerce shall
transfer to the United States Patent and Trademark Office, on the
effective date of this title, so much of the assets, liabilities,
contracts, property, records, and unexpended and unobligated balances
of appropriations, authorizations, allocations, and other funds
employed, held, used, arising from, available to, or to be made
available to the Department of Commerce, including funds set aside for
accounts receivable, which are related to functions, powers, and duties
which are vested in the Patent and Trademark Office by this title.
SEC. 124. GAO STUDY AND REPORT.
The Comptroller General shall conduct a study of and, not later than
the date that is 2 years after the effective date of this title, submit
to the Committee on the Judiciary of the House of Representatives and
the Committee on the Judiciary of the Senate a report on--
(1) the operations of the Patent and Trademark Office as a
Government corporation; and
(2) the feasibility and desirability of making the trademark
operations of the Patent and Trademark Office a separate
Government corporation or agency.
Subtitle B--Effective Date; Technical Amendments
SEC. 131. EFFECTIVE DATE.
This title and the amendments made by this title shall take effect 4
months after the date of the enactment of this Act.
SEC. 132. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Amendments to Title 35.--
(1) The item relating to part I in the table of parts for
chapter 35, United States Code, is amended to read as follows:
``I. United States Patent and Trademark Office......... 1''.
(2) The heading for part I of title 35, United States Code,
is amended to read as follows:
``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.
(3) The table of chapters for part I of title 35, United
States Code, is amended by amending the item relating to
chapter 1 to read as follows:
``1. Establishment, Officers and Employees, Functions....... 1''.
(4) The table of sections for chapter 1 of title 35, United
States Code, is amended to read as follows:
``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS
``Sec.
``1. Establishment.
``2. Powers and duties.
``3. Officers and employees.
``4. Restrictions on officers and employees as to interest in patents.
``5. Patent and Trademark Office Management Advisory Board.
``6. Board of Patent Appeals and Interferences.
``7. Suits by and against the Office.
``8. Library.
``9. Classification of patents.
``10. Certified copies of records.
``11. Publications.
``12. Exchange of copies of patents with foreign countries.
``13. Copies of patents for public libraries.
``14. Annual report to Congress.''.
(5) Section 155 of title 35, United States Code, is amended
by striking ``Commissioner of Patents and Trademarks'' and
inserting ``Director''.
(6) Section 155A(c) of title 35, United States Code, is
amended by striking ``Commissioner of Patents and Trademarks''
and inserting ``Director''.
(7) Section 302 of title 35, United States Code, is amended
by striking ``Commissioner of Patents'' and inserting
``Director''.
(8) Section 303(b) of title 35, United States Code, is
amended by striking ``Commissioner's'' and inserting
``Director's''.
(9) Title 35, United States Code, is amended by striking
``Commissioner'' each place it appears and inserting
``Director''.
(10) Section 41(a)(8)(A) of title 35, United States Code, is
amended by striking ``On'' and inserting ``on''.
(b) Other Provisions of Law.--
(1)(A) Section 45 of the Act of July 5, 1946 (commonly
referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1127),
is amended by striking ``The term `Commissioner' means the
Commissioner of Patents and Trademarks.'' and inserting ``The
term `Director' means the Director of the United States Patent
and Trademark Office.''.
(B) The Act of July 5, 1946 (commonly referred to as the
``Trademark Act of 1946''; 15 U.S.C. 1051 and following),
except for section 17, as amended by section 116 of this Act,
is amended by striking ``Commissioner'' each place it appears
and inserting ``Director''.
(2) Section 9101(3) of title 31, United States Code, is
amended by adding at the end the following:
``(R) the United States Patent and Trademark
Office.''.
(3) Section 500(e) of title 5, United States Code, is amended
by striking ``Patent Office'' and inserting ``United States
Patent and Trademark Office''.
(4) Section 5102(c)(23) of title 5, United States Code, is
amended to read as follows:
``(23) administrative patent judges and designated
administrative patent judges in the United States Patent and
Trademark Office;''.
(5) Section 5316 of title 5, United States Code (5 U.S.C.
5316) is amended by striking ``Commissioner of Patents,
Department of Commerce.'', ``Deputy Commissioner of Patents and
Trademarks.'', ``Assistant Commissioner for Patents.'', and
``Assistant Commissioner for Trademarks.''.
(6) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C.
638(p)(1)(B)) is amended to read as follows:
``(B) the Director of the United States Patent and
Trademark Office; and''.
(7) Section 12 of the Act of February 14, 1903 (15 U.S.C.
1511) is amended by striking ``(d) Patent and Trademark
Office;'' and redesignating subsections (a) through (g) as
paragraphs (1) through (6), respectively.
(8) Section 19 of the Tennessee Valley Authority Act of 1933
(16 U.S.C. 831r) is amended--
(A) by striking ``Patent Office of the United
States'' and inserting ``United States Patent and
Trademark Office''; and
(B) by striking ``Commissioner of Patents'' and
inserting ``Director of the United States Patent and
Trademark Office''.
(9) Section 182(b)(2)(A) of the Trade Act of 1974 (19 U.S.C.
2242(b)(2)(A)) is amended by striking ``Commissioner of Patents
and Trademarks'' and inserting ``Director of the United States
Patent and Trademark Office''.
(10) Section 302(b)(2)(D) of the Trade Act of 1974 (19 U.S.C.
2412(b)(2)(D)) is amended by striking ``Commissioner of Patents
and Trademarks'' and inserting ``Director of the United States
Patent and Trademark Office''.
(11) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91)
is amended by striking ``Patent Office'' and inserting ``United
States Patent and Trademark Office''.
(12) Sections 505(m) and 512(o) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each
amended by striking ``Patent and Trademark Office of the
Department of Commerce'' and inserting ``United States Patent
and Trademark Office''.
(13) Section 702(d) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner of
Patents'' and inserting ``Director of the United States Patent
and Trademark Office''.
(14) Section 105(e) of the Federal Alcohol Administration Act
(27 U.S.C. 205(e)) is amended by striking ``United States
Patent Office'' and inserting ``United States Patent and
Trademark Office''.
(15) Section 1295(a)(4) of title 28, United States Code, is
amended--
(A) in subparagraph (A) by inserting ``United
States'' before ``Patent and Trademark''; and
(B) in subparagraph (B) by striking ``Commissioner of
Patents and Trademarks'' and inserting ``Director of
the United States Patent and Trademark Office''.
(16) Section 1744 of title 28, United States Code is
amended--
(A) by striking ``Patent Office'' each place it
appears in the text and section heading and inserting
``United States Patent and Trademark Office'';
(B) by striking ``Commissioner of Patents'' and
inserting ``Director of the United States Patent and
Trademark Office''; and
(C) by striking ``Commissioner'' and inserting
``Director''.
(17) Section 1745 of title 28, United States Code, is amended
by striking ``United States Patent Office'' and inserting
``United States Patent and Trademark Office''.
(18) Section 1928 of title 28, United States Code, is amended
by striking ``Patent Office'' and inserting ``United States
Patent and Trademark Office''.
(19) Section 151 of the Atomic Energy Act of 1954 (42 U.S.C.
2181) is amended in subsections c. and d. by striking
``Commissioner of Patents'' and inserting ``Director of the
United States Patent and Trademark Office''.
(20) Section 152 of the Atomic Energy Act of 1954 (42 U.S.C.
2182) is amended by striking ``Commissioner of Patents'' each
place it appears and inserting ``Director of the United States
Patent and Trademark Office''.
(21) Section 305 of the National Aeronautics and Space Act of
1958 (42 U.S.C. 2457) is amended--
(A) in subsection (c) by striking ``Commissioner of
Patents'' and inserting ``Director of the United States
Patent and Trademark Office (hereafter in this section
referred to as the `Director')''; and
(B) by striking ``Commissioner'' each subsequent
place it appears and inserting ``Director''.
(22) Section 12(a) of the Solar Heating and Cooling
Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by
striking ``Commissioner of the Patent Office'' and inserting
``Director of the United States Patent and Trademark Office''.
(23) Section 1111 of title 44, United States Code, is amended
by striking ``the Commissioner of Patents,''.
(24) Section 1114 of title 44, United States Code, is amended
by striking ``the Commissioner of Patents,''.
(25) Section 1123 of title 44, United States Code, is amended
by striking ``the Patent Office,''.
(26) Sections 1337 and 1338 of title 44, United States Code,
and the items relating to those sections in the table of
contents for chapter 13 of such title, are repealed.
(27) Section 10(i) of the Trading With the Enemy Act (50
U.S.C. App. 10(i)) is amended by striking ``Commissioner of
Patents'' and inserting ``Director of the United States Patent
and Trademark Office''.
(28) Section 11 of the Inspector General Act of 1978 (5
U.S.C. App.) is amended--
(A) in paragraph (1)--
(i) by striking ``and'' before ``the chief
executive officer of the Resolution Trust
Corporation;'';
(ii) by striking ``and'' before ``the
Chairperson of the Federal Deposit Insurance
Corporation;'';
(iii) by striking ``or'' before ``the
Commissioner of Social Security,''; and
(iv) by inserting ``or the Director of the
United States Patent and Trademark Office;''
after ``Social Security Administration;''; and
(B) in paragraph (2)--
(i) by striking ``or'' before ``the Veterans'
Administration,''; and
(ii) by striking ``or the Social Security
Administration'' and inserting ``the Social
Security Administration, or the United States
Patent and Trademark Office''.
Subtitle C--Miscellaneous Provisions
SEC. 141. REFERENCES.
(a) In General.--Any reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any document of
or pertaining to a department or office from which a function is
transferred by this title--
(1) to the head of such department or office is deemed to
refer to the head of the department or office to which such
function is transferred; or
(2) to such department or office is deemed to refer to the
department or office to which such function is transferred.
(b) Specific References.--Any reference in any other Federal law,
Executive order, rule, regulation, or delegation of authority, or any
document of or pertaining to the Patent and Trademark Office--
(1) to the Commissioner of Patents and Trademarks is deemed
to refer to the Director of the United States Patent and
Trademark Office;
(2) to the Assistant Commissioner for Patents is deemed to
refer to the Commissioner for Patents; or
(3) to the Assistant Commissioner for Trademarks is deemed to
refer to the Commissioner for Trademarks.
SEC. 142. EXERCISE OF AUTHORITIES.
Except as otherwise provided by law, a Federal official to whom a
function is transferred by this title may, for purposes of performing
the function, exercise all authorities under any other provision of law
that were available with respect to the performance of that function to
the official responsible for the performance of the function
immediately before the effective date of the transfer of the function
under this title.
SEC. 143. SAVINGS PROVISIONS.
(a) Legal Documents.--All orders, determinations, rules, regulations,
permits, grants, loans, contracts, agreements, certificates, licenses,
and privileges--
(1) that have been issued, made, granted, or allowed to
become effective by the President, the Secretary of Commerce,
any officer or employee of any office transferred by this
title, or any other Government official, or by a court of
competent jurisdiction, in the performance of any function that
is transferred by this title, and
(2) that are in effect on the effective date of such transfer
(or become effective after such date pursuant to their terms as
in effect on such effective date),
shall continue in effect according to their terms until modified,
terminated, superseded, set aside, or revoked in accordance with law by
the President, any other authorized official, a court of competent
jurisdiction, or operation of law.
(b) Proceedings.--This title shall not affect any proceedings or any
application for any benefits, service, license, permit, certificate, or
financial assistance pending on the effective date of this title before
an office transferred by this title, but such proceedings and
applications shall be continued. Orders shall be issued in such
proceedings, appeals shall be taken therefrom, and payments shall be
made pursuant to such orders, as if this title had not been enacted,
and orders issued in any such proceeding shall continue in effect until
modified, terminated, superseded, or revoked by a duly authorized
official, by a court of competent jurisdiction, or by operation of law.
Nothing in this subsection shall be considered to prohibit the
discontinuance or modification of any such proceeding under the same
terms and conditions and to the same extent that such proceeding could
have been discontinued or modified if this title had not been enacted.
(c) Suits.--This title shall not affect suits commenced before the
effective date of this title, and in all such suits, proceedings shall
be had, appeals taken, and judgments rendered in the same manner and
with the same effect as if this title had not been enacted.
(d) Nonabatement of Actions.--No suit, action, or other proceeding
commenced by or against the Department of Commerce or the Secretary of
Commerce, or by or against any individual in the official capacity of
such individual as an officer or employee of an office transferred by
this title, shall abate by reason of the enactment of this title.
(e) Continuance of Suits.--If any Government officer in the official
capacity of such officer is party to a suit with respect to a function
of the officer, and under this title such function is transferred to
any other officer or office, then such suit shall be continued with the
other officer or the head of such other office, as applicable,
substituted or added as a party.
(f) Administrative Procedure and Judicial Review.--Except as
otherwise provided by this title, any statutory requirements relating
to notice, hearings, action upon the record, or administrative or
judicial review that apply to any function transferred by this title
shall apply to the exercise of such function by the head of the Federal
agency, and other officers of the agency, to which such function is
transferred by this title.
SEC. 144. TRANSFER OF ASSETS.
Except as otherwise provided in this title, so much of the personnel,
property, records, and unexpended balances of appropriations,
allocations, and other funds employed, used, held, available, or to be
made available in connection with a function transferred to an official
or agency by this title shall be available to the official or the head
of that agency, respectively, at such time or times as the Director of
the Office of Management and Budget directs for use in connection with
the functions transferred.
SEC. 145. DELEGATION AND ASSIGNMENT.
Except as otherwise expressly prohibited by law or otherwise provided
in this title, an official to whom functions are transferred under this
title (including the head of any office to which functions are
transferred under this title) may delegate any of the functions so
transferred to such officers and employees of the office of the
official as the official may designate, and may authorize successive
redelegations of such functions as may be necessary or appropriate. No
delegation of functions under this section or under any other provision
of this title shall relieve the official to whom a function is
transferred under this title of responsibility for the administration
of the function.
SEC. 146. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET
WITH RESPECT TO FUNCTIONS TRANSFERRED.
(a) Determinations.--If necessary, the Director of the Office of
Management and Budget shall make any determination of the functions
that are transferred under this title.
(b) Incidental Transfers.--The Director of the Office of Management
and Budget, at such time or times as the Director shall provide, may
make such determinations as may be necessary with regard to the
functions transferred by this title, and to make such additional
incidental dispositions of personnel, assets, liabilities, grants,
contracts, property, records, and unexpended balances of
appropriations, authorizations, allocations, and other funds held,
used, arising from, available to, or to be made available in connection
with such functions, as may be necessary to carry out the provisions of
this title. The Director shall provide for the termination of the
affairs of all entities terminated by this title and for such further
measures and dispositions as may be necessary to effectuate the
purposes of this title.
SEC. 147. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.
For purposes of this title, the vesting of a function in a department
or office pursuant to reestablishment of an office shall be considered
to be the transfer of the function.
SEC. 148. AVAILABILITY OF EXISTING FUNDS.
Existing appropriations and funds available for the performance of
functions, programs, and activities terminated pursuant to this title
shall remain available, for the duration of their period of
availability, for necessary expenses in connection with the termination
and resolution of such functions, programs, and activities.
SEC. 149. DEFINITIONS.
For purposes of this title--
(1) the term ``function'' includes any duty, obligation,
power, authority, responsibility, right, privilege, activity,
or program; and
(2) the term ``office'' includes any office, administration,
agency, bureau, institute, council, unit, organizational
entity, or component thereof.
TITLE II--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH
PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION
SEC. 201. SHORT TITLE.
This title may be cited as the ``Examining Procedure Improvements
Act''.
SEC. 202. PUBLICATION.
Section 122 of title 35, United States Code, is amended to read as
follows:
``Sec. 122. Confidential status of applications; publication of patent
applications
``(a) Confidentiality.--Except as provided in subsection (b),
applications for patents shall be kept in confidence by the Patent and
Trademark Office and no information concerning applications for patents
shall be given without authority of the applicant or owner unless
necessary to carry out the provisions of an Act of Congress or in such
special circumstances as may be determined by the Director.
``(b) Publication.--
``(1) In general.--(A) Subject to paragraph (2), each
application for patent, except applications for design patents
filed under chapter 16 of this title and provisional
applications filed under section 111(b) of this title, shall be
published, in accordance with procedures determined by the
Director, promptly after the expiration of a period of 18
months from the earliest filing date for which a benefit is
sought under this title. At the request of the applicant, an
application may be published earlier than the end of such 18-
month period.
``(B) No information concerning published patent applications
shall be made available to the public except as the Director
determines.
``(C) Notwithstanding any other provision of law, a
determination by the Director to release or not to release
information concerning a published patent application shall be
final and nonreviewable.
``(2) Exceptions.--(A) An application that is no longer
pending shall not be published.
``(B) An application that is subject to a secrecy order
pursuant to section 181 of this title shall not be published.
``(C)(i) Upon the request of the applicant at the time of
filing, the application shall not be published in accordance
with paragraph (1) until 3 months after the Director makes a
notification to the applicant under section 132 of this title.
``(ii) Applications filed pursuant to section 363 of this
title, applications asserting priority under section 119 or
365(a) of this title, and applications asserting the benefit of
an earlier application under section 120, 121, or 365(c) of
this title shall not be eligible for a request pursuant to this
subparagraph.
``(iii) In a request under this subparagraph, the applicant
shall certify that the invention disclosed in the application
was not and will not be the subject of an application filed in
a foreign country.
``(iv) The Director may establish appropriate procedures and
fees for making a request under this subparagraph.
``(D)(i) In a case in which an applicant, after making a
request under subparagraph (C)(i), determines to file an
application in a foreign country, the applicant shall notify
the Director promptly. The application shall then be published
in accordance with the provisions of paragraph (1).
``(ii) The Director may establish appropriate fees to cover
the costs of processing notifications under clause (i),
including the costs of any special handling of applications
resulting from the initial request under subparagraph (C)(i).
``(c) Pre-Issuance Opposition.--The provisions of this section shall
not operate to create any new opportunity for pre-issuance opposition.
The Director may establish appropriate procedures to ensure that this
section does not create any new opportunity for pre-issuance
opposition.''.
SEC. 203. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE.
(a) In a Foreign Country.--Section 119(b) of title 35, United States
Code, is amended to read as follows:
``(b)(1) No application for patent shall be entitled to this right of
priority unless a claim is filed in the Patent and Trademark Office, at
such time during the pendency of the application as is required by the
Director, that identifies the foreign application by specifying its
application number, the country in or for which the application was
filed, and the date of its filing.
``(2) The Director may consider the failure of the applicant to file
a timely claim for priority as a waiver of any such claim, and may
require the payment of a surcharge as a condition of accepting an
untimely claim during the pendency of the application.
``(3) The Director may require a certified copy of the original
foreign application, specification, and drawings upon which it is
based, a translation if not in the English language, and such other
information as the Director considers necessary. Any such certification
shall be made by the intellectual property authority in the foreign
country in which the foreign application was filed and show the date of
the application and of the filing of the specification and other
papers.''.
(b) In the United States.--Section 120 of title 35, United States
Code, is amended by adding at the end the following: ``No application
shall be entitled to the benefit of an earlier filed application under
this section unless an amendment containing the specific reference to
the earlier filed application is submitted at such time during the
pendency of the application as is required by the Commissioner. The
Director may consider the failure to submit such an amendment within
that time period as a waiver of any benefit under this section. The
Director may establish procedures, including the payment of a
surcharge, to accept unavoidably late submissions of amendments under
this section.''.
SEC. 204. PROVISIONAL RIGHTS.
Section 154 of title 35, United States Code, is amended--
(1) in the section caption by inserting ``; provisional
rights'' after ``patent''; and
(2) by adding at the end the following new subsection:
``(d) Provisional Rights.--
``(1) In general.--In addition to other rights provided by
this section, a patent shall include the right to obtain a
reasonable royalty from any person who, during the period
beginning on the date of publication of the application for
such patent pursuant to section 122(b) of this title, or in the
case of an international application filed under the treaty
defined in section 351(a) of this title designating the United
States under Article 21(2)(a) of such treaty, the date of
publication of the application, and ending on the date the
patent is issued--
``(A)(i) makes, uses, offers for sale, or sells in
the United States the invention as claimed in the
published patent application or imports such an
invention into the United States; or
``(ii) if the invention as claimed in the published
patent application is a process, uses, offers for sale,
or sells in the United States or imports into the
United States products made by that process as claimed
in the published patent application; and
``(B) had actual notice of the published patent
application and, where the right arising under this
paragraph is based upon an international application
designating the United States that is published in a
language other than English, a translation of the
international application into the English language.
``(2) Right based on substantially identical inventions.--The
right under paragraph (1) to obtain a reasonable royalty shall
not be available under this subsection unless the invention as
claimedin the patent is substantially identical to the
invention as claimed in the published patent application.
``(3) Time limitation on obtaining a reasonable royalty.--The
right under paragraph (1) to obtain a reasonable royalty shall
be available only in an action brought not later than 6 years
after the patent is issued. The right under paragraph (1) to
obtain a reasonable royalty shall not be affected by the
duration of the period described in paragraph (1).
``(4) Requirements for international applications.--The right
under paragraph (1) to obtain a reasonable royalty based upon
the publication under the treaty defined in section 351(a) of
this title of an international application designating the
United States shall commence from the date that the Patent and
Trademark Office receives a copy of the publication under such
treaty of the international application, or, if the publication
under the treaty of the international application is in a
language other than English, from the date that the Patent and
Trademark Office receives a translation of the international
application in the English language. The Director may require
the applicant to provide a copy of the international
publication of the international application and a translation
thereof.''.
SEC. 205. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.
Section 102(e) of title 35, United States Code, is amended to read as
follows:
``(e) the invention was described in--
``(1) an application for patent, published pursuant to
section 122(b) of this title, by another filed in the United
States before the invention by the applicant for patent, except
that an international application filed under the treaty
defined in section 351(a) of this title shall have the effect
under this subsection of a national application published under
section 122(b) of this title only if the international
application designating the United States was published under
Article 21(2)(a) of such treaty in the English language, or
``(2) a patent granted on an application for patent by
another filed in the United States before the invention by the
applicant for patent, or''.
SEC. 206. COST RECOVERY FOR PUBLICATION.
The Director of the United States Patent and Trademark Office shall
recover the cost of early publication required by the amendment made by
section 202 by adjusting the filing, issue, and maintenance fees under
title 35, United States Code, by charging a separate publication fee,
or by any combination of these methods.
SEC. 207. CONFORMING CHANGES.
The following provisions of title 35, United States Code, are
amended:
(1) Section 11 is amended in paragraph 1 of subsection (a) by
inserting ``and published applications for patents'' after
``Patents''.
(2) Section 12 is amended--
(A) in the section caption by inserting ``and
applications'' after ``patents''; and
(B) by inserting ``and published applications for
patents'' after ``patents''.
(3) Section 13 is amended--
(A) in the section caption by inserting ``and
applications'' after ``patents''; and
(B) by inserting ``and published applications for
patents'' after ``patents''.
(4) The items relating to sections 12 and 13 in the table of
sections for chapter 1, as amended by section 132(a)(4) of this
Act, are each amended by inserting ``and applications'' after
``patents''.
(5) The item relating to section 122 in the table of sections
for chapter 11 is amended by inserting ``; publication of
patent applications'' after ``applications''.
(6) The item relating to section 154 in the table of sections
for chapter 14 is amended by inserting ``; provisional rights''
after ``patent''.
(7) Section 181 is amended--
(A) in the first paragraph--
(i) by inserting ``by the publication of an
application or'' after ``disclosure''; and
(ii) by inserting ``the publication of the
application or'' after ``withhold'';
(B) in the second paragraph by inserting ``by the
publication of an application or'' after ``disclosure
of an invention'';
(C) in the third paragraph--
(i) by inserting ``by the publication of the
application or'' after ``disclosure of the
invention''; and
(ii) by inserting ``the publication of the
application or'' after ``withhold''; and
(D) in the fourth paragraph by inserting ``the
publication of an application or'' after ``and'' in the
first sentence.
(8) Section 252 is amended in the first paragraph by
inserting ``substantially'' before ``identical'' each place it
appears.
(9) Section 284 is amended by adding at the end of the second
paragraph the following: ``Increased damages under this
paragraph shall not apply to provisional rights under section
154(d) of this title.''.
(10) Section 374 is amended to read as follows:
``Sec. 374. Publication of international application: Effect
``The publication under the treaty defined in section 351(a) of this
title of an international application designating the United States
shall confer the same rights and shall have the same effect under this
title as an application for patent published under section 122(b),
except as provided in sections 102(e) and 154(d) of this title.''.
(11) Section 135(b) of title 35, United States Code, is
amended--
(A) by inserting ``(1)'' after ``(b)'';
(B) by striking ``from the date on which the patent
was granted'' and inserting ``after the date on which
the patent is granted and the applicant makes a prima
facie showing of prior invention''; and
(C) by adding at the end the following:
``(2) A claim which is the same as, or for the same or substantially
the same subject matter as, a claim of a published application may be
made in an application filed after the published application is
published only if the claim is made prior to one year after the date on
which the published application is published and the applicant of the
later filed application makes a prime facie showing of prior
invention.''.
SEC. 208. PATENT TERM EXTENSION AUTHORITY.
Section 154(b) of title 35, United States Code, is amended to read as
follows:
``(b) Term Extension.--
``(1) Basis for patent term extension.--
``(A) Delay.--Subject to the limitations set forth in
paragraph (2), if the issue of an original patent is
delayed due to--
``(i) a proceeding under section 135(a) of
this title, including any appeal under section
141, or any civil action under section 146, of
this title,
``(ii) the imposition of an order pursuant to
section 181 of this title,
``(iii) appellate review by the Board of
Patent Appeals and Interferences or by a
Federal court in a case in which the patent was
issued pursuant to a decision in the review
reversing an adverse determination of
patentability, or
``(iv) an unusual administrative delay by the
Patent and Trademark Office in issuing the
patent,
the term of the patent shall be extended for the period
of delay.
``(B) Administrative delay.--For purposes of
subparagraph (A)(iv), an unusual administrative delay
by the Patent and Trademark office is the failure to--
``(i) make a notification of the rejection of
any claim for a patent or any objection or
argument under section 132 of this title or
give or mail a written notice of allowance
under section 151 of this title not later than
14 months after the date on which the
application was filed;
``(ii) respond to a reply under section 132
of this title or to an appeal taken under
section 134 of this title not later than 4
months after the date on which the reply was
filed or the appeal was taken;
``(iii) act on an application not later than
4 months after the date of a decision by the
Board of Patent Appeals and Interferences under
section 134 or 135 of this title or a decision
by a Federal court under section 141, 145, or
146 of this title in a case in which allowable
claims remain in an application;
``(iv) issue a patent not later than 4 months
after the date on which the issue fee was paid
under section 151 of this title and all
outstanding requirements were satisfied; or
``(v) issue a patent within 3 years after the
filing date of the application in the United
States, if the applicant--
``(I) has not obtained further
limited examination of the application
under section 209 of the Examining
Procedure Improvements Act;
``(II) has responded to all
rejections, objections, arguments, or
other requests of the Patent and
Trademark Office within 3 months after
the date on which they are made;
``(III) has not benefitted from an
extension of patent term under clause
(i), (ii) or (iii) of paragraph (1)(A);
``(IV) has not sought or obtained
appellate review by the Board of Patent
Appeals and Interferences or by a
Federal Court other than in a case in
which the patent was issued pursuant to
a decision in the review reversing an
adverse determination of patentability;
and
``(V) has not requested any delay in
the processing of the application by
the Patent and Trademark Office.
``(2) Limitations.--(A) The total duration of any extensions
granted pursuant to either clause (iii) or (iv) of paragraph
(1)(A) or both such clauses shall not exceed 10 years. To the
extent that periodsof delay attributable to grounds specified
in paragraph (1) overlap, the period of any extension granted under
this subsection shall not exceed the actual number of days the issuance
of the patent was delayed.
``(B) The period of extension of the term of a patent under
this subsection shall be reduced by a period equal to the time
in which the applicant failed to engage in reasonable efforts
to conclude prosecution of the application. The Director shall
prescribe regulations establishing the circumstances that
constitute a failure of an applicant to engage in reasonable
efforts to conclude processing or examination of an application
in order to ensure that applicants are appropriately
compensated for any delays by the Patent and Trademark Office
in excess of the time periods specified in paragraph (1)(B).
``(C) No patent the term of which has been disclaimed beyond
a specified date may be extended under this section beyond the
expiration date specified in the disclaimer.
``(3) Procedures.--The Director shall prescribe regulations
establishing procedures for the notification of patent term
extensions under this subsection and procedures for contesting
patent term extensions under this subsection.''.
SEC. 209. FURTHER EXAMINATION OF PATENT APPLICATIONS.
The Director of the United States Patent and Trademark Office shall
prescribe regulations to provide for the further limited reexamination
of applications for patent. The Director may establish appropriate fees
for such further limited reexamination and shall be authorized to
provide a 50 percent reduction on such fees for small entities that
qualify for reduced fees under section 41(h)(1) of title 35, United
States Code.
SEC. 210. LAST DAY OF PENDENCY OF PROVISIONAL APPLICATION.
Section 119(e) of title 35, United States Code, is amended by adding
at the end the following:
``(3) If the day that is 12 months after the filing date of a
provisional application falls on a Saturday, Sunday, or Federal holiday
within the District of Columbia, the period of pendency of the
provisional application shall be extended to the next succeeding
business day.''.
SEC. 211. REPORTING REQUIREMENT.
The Director of the United States Patent and Trademark Office shall
report to the Congress not later than April 1, 2001, and not later than
April 1 of each year thereafter, regarding the impact of publication on
the patent applications filed by an applicant who has been accorded the
status of independent inventor under section 41(h) of title 35, United
States Code. The report shall include information concerning the
frequency and number of initial and continuing patent applications,
pendency, interferences, reexaminations, rejection, abandonment rates,
fees, other expenses, and other relevant information related to the
prosecution of patent applications.
SEC. 212. EFFECTIVE DATE.
(a) Sections 202 Through 207.--Sections 202 through 207, and the
amendments made by such sections, shall take effect on April 1, 1998,
and shall apply to all applications filed under section 111 of title
35, United States Code, on or after that date, and all international
applications designating the United States that are filed on or after
that date.
(b) Sections 208 Through 210.--The amendments made by sections 208
through 210 shall take effect on the date of the enactment of this Act
and, except for a design patent application filed under chapter 16 of
title 35, United States Code, shall apply to any application filed on
or after June 8, 1995.
TITLE III--PROTECTION FOR PRIOR DOMESTIC USERS OF PATENTED TECHNOLOGIES
SEC. 301. SHORT TITLE.
This title may be cited as the ``Protection for Prior Domestic
Commercial and Research Users of Patented Technologies Act''.
SEC. 302. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR DOMESTIC
COMMERCIAL OR RESEARCH USE.
(a) Defense.--Chapter 28 of title 35, United States Code, is amended
by adding at the end the following new section:
``Sec. 273. Prior domestic commercial or research use; defense to
infringement
``(a) Definitions.--For purposes of this section--
``(1) the terms `commercially used', `commercially use', and
`commercial use' mean the use in the United States in commerce
or the use in the design, testing, or production in the United
States of a product or service which is used in commerce,
whether or not the subject matter at issue is accessible to or
otherwise known to the public;
``(2) in the case of activities performed by a nonprofit
research laboratory, or nonprofit entity such as a university,
research center, or hospital, a use for which the public is the
intended beneficiary shall be considered to be a use described
in paragraph (1) if the use is limited to activity that
occurred within the laboratory or nonprofit entity or by
persons in privity with that laboratory or nonprofit entity
before the effective filing date of the application for patent
at issue, except that the use--
``(A) may be asserted as a defense under this section
only by the laboratory or nonprofit entity; and
``(B) may not be asserted as a defense with respect
to any subsequent use by any entity other than such
laboratory, nonprofit entity, or persons in privity;
``(3) the terms `used in commerce', and `use in commerce'
mean that there has been an actual sale or other arm's-length
commercial transfer of the subject matter at issue or that
there has been an actual sale or other arm's-length commercial
transfer of a product or service resulting from the use of the
subject matter at issue; and
``(4) the `effective filing date' of a patent is the earlier
of the actual filing date of the application for the patent or
the filing date of any earlier United States, foreign, or
international application to which the subject matter at issue
is entitled under section 119, 120, or 365 of this title.
``(b) Defense to Infringement.--(1) A person shall not be liable as
an infringer under section 271 of this title with respect to any
subject matter that would otherwise infringe one or more claims in the
patent being asserted against such person, if such person had, acting
in good faith, commercially used the subject matter before the
effective filing date of such patent.
``(2) The sale or other disposition of the subject matter of a patent
by a person entitled to assert a defense under this section with
respect to that subject matter shall exhaust the patent owner's rights
under the patent to the extent such rights would have been exhausted
had such sale or other disposition been made by the patent owner.
``(c) Limitations and Qualifications of Defense.--The defense to
infringement under this section is subject to the following:
``(1) Derivation.--A person may not assert the defense under
this section if the subject matter on which the defense is
based was derived from the patentee or persons in privity with
the patentee.
``(2) Not a general license.--The defense asserted by a
person under this section is not a general license under all
claims of the patent at issue, but extends only to the subject
matter claimed in the patent with respect to which the person
can assert a defense under this chapter, except that the
defense shall also extend to variations in the quantity or
volume of use of the claimed subject matter, and to
improvements in the claimed subject matter that do not infringe
additional specifically claimed subject matter of the patent.
``(3) Effective and serious preparation.--With respect to
subject matter that cannot be commercialized without a
significant investment of time, money, and effort, a person
shall be deemed to have commercially used the subject matter
if--
``(A) before the effective filing date of the patent,
the person actually reduced the subject matterto
practice in the United States, completed a significant portion of the
total investment necessary to commercially use the subject matter, and
made an arm's-length commercial transaction in the United States in
connection with the preparation to use the subject matter; and
``(B) thereafter the person diligently completed the
remainder of the activities and investments necessary
to commercially use the subject matter, and promptly
began commercial use of the subject matter, even if
such activities were conducted after the effective
filing date of the patent.
``(4) Burden of proof.--A person asserting the defense under
this section shall have the burden of establishing the defense.
``(5) Abandonment of use.--A person who has abandoned
commercial use of subject matter may not rely on activities
performed before the date of such abandonment in establishing a
defense under subsection (b) with respect to actions taken
after the date of such abandonment.
``(6) Personal defense.--The defense under this section may
only be asserted by the person who performed the acts necessary
to establish the defense and, except for any transfer to the
patent owner, the right to assert the defense shall not be
licensed or assigned or transferred to another person except in
connection with the good faith assignment or transfer of the
entire enterprise or line of business to which the defense
relates.
``(7) One-year limitation.--A person may not assert a defense
under this section unless the subject matter on which the
defense is based had been commercially used or actually reduced
to practice more than one year prior to the effective filing
date of the patent by the person asserting the defense or
someone in privity with that person.
``(d) Unsuccessful Assertion of Defense.--If the defense under this
section is pleaded by a person who is found to infringe the patent and
who subsequently fails to demonstrate a reasonable basis for asserting
the defense, the court shall find the case exceptional for the purpose
of awarding attorney's fees under section 285 of this title.
``(e) Invalidity.--A patent shall not be deemed to be invalid under
section 102 or 103 of this title solely because a defense is
established under this section.''.
(b) Conforming Amendment.--The table of sections at the beginning of
chapter 28 of title 35, United States Code, is amended by adding at the
end the following new item:
``273. Prior domestic commercial or research use; defense to
infringement.''.
SEC. 303. EFFECTIVE DATE AND APPLICABILITY.
This title and the amendments made by this title shall take effect on
the date of the enactment of this Act, but shall not apply to any
action for infringement that is pending on such date of enactment or
with respect to any subject matter for which an adjudication of
infringement, including a consent judgment, has been made before such
date of enactment.
TITLE IV--ENHANCED PROTECTION OF INVENTORS' RIGHTS
SEC. 401. SHORT TITLE.
This title may be cited as the ``Enhanced Protection of Inventors'
Rights Act''.
SEC. 402. INVENTION DEVELOPMENT SERVICES.
Part I of title 35, United States Code, is amended by adding after
chapter 4 the following new chapter:
``CHAPTER 5--INVENTION DEVELOPMENT SERVICES
``Sec.
``51. Definitions.
``52. Contracting requirements.
``53. Standard provisions for cover notice.
``54. Reports to customer required.
``55. Mandatory contract terms.
``56. Remedies.
``57. Records of complaints.
``58. Fraudulent representation by an invention developer.
``59. Rule of construction.
``Sec. 51. Definitions
``For purposes of this chapter--
``(1) the term `contract for invention development services'
means a contract by which an invention developer undertakes
invention development services for a customer;
``(2) the term `customer' means any person, firm,
partnership, corporation, or other entity who is solicited by,
seeks the services of, or enters into a contract with an
invention promoter for invention promotion services;
``(3) the term `invention promoter' means any person, firm,
partnership, corporation, or other entity who offers to perform
or performs for, or on behalf of, a customer any act described
under paragraph (4), but does not include--
``(A) any department or agency of the Federal
Government or of a State or local government;
``(B) any nonprofit, charitable, scientific, or
educational organization, qualified under applicable
State law or described under section 170(b)(1)(A) of
the Internal Revenue Code of 1986; or
``(C) any person duly registered with, and in good
standing before, the United States Patent and Trademark
Office acting within the scope of that person's
registration to practice before the Patent and
Trademark Office; and
``(4) the term `invention development services' means, with
respect to an invention by a customer, any act involved in--
``(A) evaluating the invention to determine its
protectability as some form of intellectual property,
other than evaluation by a person licensed by a State
to practice law who is acting solely within the scope
of that person's professional license;
``(B) evaluating the invention to determine its
commercial potential by any person for purposes other
than providing venture capital; or
``(C) marketing, brokering, licensing, selling, or
promoting the invention or a product or service in
which the invention is incorporated or used, except
that the display only of an invention at a trade show
or exhibit shall not be considered to be invention
development services.
``Sec. 52. Contracting requirements
``(a) In General.--(1) Every contract for invention development
services shall be in writing and shall be subject to the provisions of
this chapter. A copy of the signed written contract shall be given to
the customer at the time the customer enters into the contract.
``(2) If a contract is entered into for the benefit of a third party,
such party shall be considered a customer for purposes of this chapter.
``(b) Requirements of Invention Developer.--The invention developer
shall--
``(1) state in a written document, at the time a customer
enters into a contract for invention development services,
whether the usual business practice of the invention developer
is to--
``(A) seek more than 1 contract in connection with an
invention; or
``(B) seek to perform services in connection with an
invention in 1 or more phases, with the performance of
each phase covered in 1 or more subsequent contracts;
and
``(2) supply to the customer a copy of the written document
together with a written summary of the usual business practices
of the invention developer, including--
``(A) the usual business terms of contracts; and
``(B) the approximate amount of the usual fees or
other consideration that may be required from the
customer for each of the services provided by the
developer.
``(c) Right of Customer To Cancel Contract.--(1) Notwithstanding any
contractual provision to the contrary, a customer shall have the right
to terminate a contract for invention development services by sending a
written letter to the invention developer stating the customer's intent
to cancel the contract. The letter of termination must be deposited
with the United States Postal Service on or before 5 business days
after the date upon which the customer or the invention developer
executes the contract, whichever is later.
``(2) Delivery of a promissory note, check, bill of exchange, or
negotiable instrument of any kind to the invention developer or to a
third party for the benefit of the invention developer, without regard
to the date or dates appearing in such instrument, shall be deemed
payment received by the invention developer on the date received for
purposes of this section.
``Sec. 53. Standard provisions for cover notice
``(a) Contents.--Every contract for invention development services
shall have a conspicuous and legible cover sheet attached with the
following notice imprinted in boldface type of not less than 12-point
size:
`` `YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO
TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER TO THE
COMPANY STATING YOUR INTENT TO CANCEL THIS CONTRACT. THE LETTER
OF TERMINATION MUST BE DEPOSITED WITH THE UNITED STATES POSTAL
SERVICE ON OR BEFORE FIVE (5) BUSINESS DAYS AFTER THE DATE ON
WHICH YOU OR THE COMPANY EXECUTE THE CONTRACT, WHICHEVER IS
LATER.
`` `THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE INVENTION
DEVELOPER FOR COMMERCIAL POTENTIAL IN THE PAST FIVE (5) YEARS
IS __________. OF THAT NUMBER, __________ RECEIVED POSITIVE
EVALUATIONS AND __________ RECEIVED NEGATIVE EVALUATIONS.
`` `IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO
THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE THE
RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR CONSENT
AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.
`` `THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH
THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS IS
__________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS
INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF THIS
INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF MONEY IN EXCESS
OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION DEVELOPER
IS ______________.
`` `THE OFFICERS OF THIS INVENTION DEVELOPER HAVE
COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN
(10) YEARS WITH THE FOLLOWING INVENTION DEVELOPMENT COMPANIES:
(LIST THE NAMES AND ADDRESSES OF ALL PREVIOUS INVENTION
DEVELOPMENT COMPANIES WITH WHICH THE PRINCIPAL OFFICERS HAVE
BEEN AFFILIATED AS OWNERS, AGENTS, OR EMPLOYEES). YOU ARE
ENCOURAGED TO CHECK WITH THE UNITED STATES PATENT AND TRADEMARK
OFFICE, THE FEDERAL TRADE COMMISSION, YOUR STATE ATTORNEY
GENERAL'S OFFICE, AND THE BETTER BUSINESS BUREAU FOR ANY
COMPLAINTS FILED AGAINST ANY OF THESE COMPANIES.
`` `YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF YOUR
OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY PROCEEDING
WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED TO PRACTICE BEFORE
THE UNITED STATES PATENT AND TRADEMARK OFFICE, YOU COULD LOSE
ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR INVENTION.'.
``(b) Other Requirements for Cover Notice.--The cover notice shall
contain the items required under subsection (a) and the name, primary
office address, and local office address of the invention developer,
and may contain no other matter.
``(c) Disclosure of Certain Customers Not Required.--The requirement
in the notice set forth in subsection (a) to include the `TOTAL NUMBER
OF CUSTOMERS WHO HAVE CONTRACTED WITH THE INVENTION DEVELOPER IN THE
PAST FIVE (5) YEARS' need not include information with respect to
customers who have purchased trade show services, research,
advertising, or other nonmarketing services from the invention
developer, nor with respect to customers who have defaulted in their
payments to the invention developer.
``Sec. 54. Reports to customer required
``With respect to every contract for invention development services,
the invention developer shall deliver to the customer at the address
specified in the contract, at least once every 3 months throughout the
term of the contract, a written report that identifies the contract and
includes--
``(1) a full, clear, and concise description of the services
performed to the date of the report and of the services yet to
be performed and names of all persons who it is known will
perform the services; and
``(2) the name and address of each person, firm, corporation,
or other entity to whom the subject matter of the contract has
been disclosed, the reason for each such disclosure, the nature
of the disclosure, and complete and accurate summaries of all
responses received as a result of those disclosures.
``Sec. 55. Mandatory contract terms
``(a) Mandatory Terms.--Each contract for invention development
services shall include in boldface type of not less than 12-point
size--
``(1) the terms and conditions of payment and contract
termination rights required under section 52;
``(2) a statement that the customer may avoid entering into
the contract by not making a payment to the invention
developer;
``(3) a full, clear, and concise description of the specific
acts or services that the invention developer undertakes to
perform for the customer;
``(4) a statement as to whether the invention developer
undertakes to construct, sell, or distribute one or more
prototypes, models, or devices embodying the invention of the
customer;
``(5) the full name and principal place of business of the
invention developer and the name and principal place of
business of any parent, subsidiary, agent, independent
contractor, and any affiliated company or person who it is
known will perform any of the services or acts that the
invention developer undertakes to perform for the customer;
``(6) if any oral or written representation of estimated or
projected customer earnings is given by the invention developer
(or any agent, employee, officer, director, partner, or
independent contractor of such invention developer), a
statement of that estimation or projection and a description of
the data upon which such representation is based;
``(7) the name and address of the custodian of all records
and correspondence relating to the contracted for invention
development services, and a statement that the invention
developer is required to maintain all records and
correspondence relating to performance of the invention
development services for such customer for a period of not less
than 2 years after expiration of the term of such contract; and
``(8) a statement setting forth a time schedule for
performance of the invention development services, including an
estimated date in which such performance is expected to be
completed.
``(b) Invention Developer as Fiduciary.--To the extent that the
description of the specific acts or services affords discretion to the
invention developer with respect to what specific acts or services
shall be performed, the invention developer shall be deemed a
fiduciary.
``(c) Availability of Information.--Records and correspondence
described under subsection (a)(7) shall be made available after 7 days
written notice to the customer or the representative of the customer to
review and copy at a reasonable cost on the invention developer's
premises during normal business hours.
``Sec. 56. Remedies
``(a) In General.--(1) Any contract for invention development
services that does not comply with the applicable provisions of this
chapter shall be voidable at the option of the customer.
``(2) Any contract for invention development services entered into in
reliance upon any material false, fraudulent, or misleading
information, representation, notice, or advertisement of the invention
developer (or any agent, employee, officer, director, partner, or
independent contractor of such invention developer) shall be voidable
at the option of the customer.
``(3) Any waiver by the customer of any provision of this chapter
shall be deemed contrary to public policy and shall be void and
unenforceable.
``(4) Any contract for invention development services which provides
for filing for and obtaining utility, design, or plant patent
protection shall be voidable at the option of the customer unless the
invention developer offers to perform or performs such act through a
person duly registered to practice before, and in good standing with,
the Patent and Trademark Office.
``(b) Civil Action.--(1) Any customer who is injured by a violation
of this chapter by an invention developer or by any material false or
fraudulent statement or representation, or any omission of material
fact, by an invention developer (or any agent, employee, director,
officer, partner, or independent contractor of such invention
developer) or by failure of an invention developer to make all the
disclosures required under this chapter, may recover in a civil action
against the invention developer (or the officers, directors, or
partners of such invention developer) in addition to reasonable costs
and attorneys' fees, the greater of--
``(A) $5,000; or
``(B) the amount of actual damages sustained by the customer.
``(2) Notwithstanding paragraph (1), the court may increase damages
to not more than 3 times the amount awarded.
``(c) Rebuttable Presumption of Injury.--For purposes of this
section, substantial violation of any provision of this chapter by an
invention developer or execution by the customer of a contract for
invention development services in reliance on any material false or
fraudulentstatements or representations or omissions of material fact
shall establish a rebuttable presumption of injury.
``Sec. 57. Records of complaints
``(a) Release of Complaints.--The Director shall make all complaints
received by the United States Patent and Trademark Office involving
invention developers publicly available, together with any response of
the invention developers.
``(b) Request for Complaints.--The Director may request complaints
relating to invention development services from any Federal or State
agency and include such complaints in the records maintained under
subsection (a), together with any response of the invention developers.
``Sec. 58. Fraudulent representation by an invention developer
``Whoever, in providing invention development services, knowingly
provides any false or misleading statement, representation, or omission
of material fact to a customer or fails to make all the disclosures
required under this chapter, shall be guilty of a misdemeanor and fined
not more than $10,000 for each offense.
``Sec. 59. Rule of construction
``Except as expressly provided in this chapter, no provision of this
chapter shall be construed to affect any obligation, right, or remedy
provided under any other Federal or State law.''.
SEC. 403. TECHNICAL AND CONFORMING AMENDMENT.
The table of chapters for part I of title 35, United States Code, is
amended by adding after the item relating to chapter 4 the following:
``5. Invention Development Services......................... 51''.
SEC. 404. EFFECTIVE DATE.
This title and the amendments made by this title shall take effect 60
days after the date of the enactment of this Act.
TITLE V--IMPROVED REEXAMINATION PROCEDURES
SEC. 501. SHORT TITLE.
This title may be cited as the ``Improved Reexamination Procedures
Act''.
SEC. 502. DEFINITIONS.
Section 100 of title 35, United States Code, is amended by adding at
the end the following new subsection:
``(e) The term `third-party requester' means a person requesting
reexamination under section 302 of this title who is not the patent
owner.''.
SEC. 503. REEXAMINATION PROCEDURES.
(a) Request for Reexamination.--Section 302 of title 35, United
States Code, is amended to read as follows:
``Sec. 302. Request for reexamination
``Any person at any time may file a request for reexamination by the
Office of a patent on the basis of any prior art cited under the
provisions of section 301 of this title or on the basis of the
requirements of section 112 of this title other than the requirement to
set forth the best mode of carrying out the invention. The request must
be in writing, must include the identity of the real party in interest,
and must be accompanied by payment of a reexamination fee established
by the Director pursuant to the provisions of section 41 of this title.
The request must set forth the pertinency and manner of applying cited
prior art to every claim for which reexamination is requested or the
manner in which the patent specification or claims fail to comply with
the requirements of section 112 of this title. Unless the requesting
person is the owner of the patent, the Director promptly shall send a
copy of the request to the owner of record of the patent.''.
(b) Determination of Issue by Director.--Section 303 of title 35,
United States Code, is amended to read as follows:
``Sec. 303. Determination of issue by Director
``(a) Reexamination.--Not later than 3 months after the filing of a
request for reexamination under the provisions of section 302 of this
title, the Director shall determine whether a substantial new question
of patentability affecting any claim of the patent concerned is raised
by the request, with or without consideration of other patents or
printed publications. On the Director's initiative, at any time, the
Director may determine whether a substantial new question of
patentability is raised by any other patent or publication or by the
failure of the patent specification or claims of a patent to comply
with the requirements of section 112 of this title other than the best
mode requirement described in section 302.
``(b) Record.--A record of the Director's determination under
subsection (a) shall be placed in the official file of the patent, and
a copy shall be promptly given or mailed to the owner of record of the
patent and to the third-party requester, if any.
``(c) Final Decision.--A determination by the Director pursuant to
subsection (a) shall be final and nonappealable. Upon a determination
that no substantial new question of patentability has been raised, the
Director may refund a portion of the reexamination fee required under
section 302 of this title.''.
(c) Reexamination Order by Director.--Section 304 of title 35, United
States Code, is amended to read as follows:
``Sec. 304. Reexamination order by Director
``If, in a determination made under the provisions of section 303(a)
of this title, the Director finds that a substantial new question of
patentability affecting a claim of a patent is raised, the
determination shall include an order for reexamination of the patent
for resolution of the question. The order may be accompanied by the
initial action of the Patent and Trademark Office on the merits of the
reexamination conducted in accordance with section 305 of this
title.''.
(d) Conduct of Reexamination Proceedings.--Section 305 of title 35,
United States Code, is amended to read as follows:
``Sec. 305. Conduct of reexamination proceedings
``(a) In General.--Subject to subsection (b), reexamination shall be
conducted according to the procedures established for initial
examination under the provisions of sections 132 and 133 of this title.
In any reexamination proceeding under this chapter, the patent owner
shall be permitted to propose any amendment to the patent and a new
claim or claims, except that no proposed amended or new claim enlarging
the scope of the claims of the patent shall be permitted.
``(b) Response.--(1) This subsection shall apply to any reexamination
proceeding in which the order for reexamination is based upon a request
by a third-party requester.
``(2) With the exception of the reexamination request, any document
filed by either the patent owner or the third-party requester shall be
served on the other party.
``(3) If the patent owner files a response to any action on the
merits by the Patent and Trademark Office, the third-party requester
shall have 1 opportunity to file written comments within a reasonable
period not less than 1 month after the date of service of the patent
owner's response. Written comments provided under this paragraph shall
be limited to issues covered by action of the Patent and Trademark
Office or the patent owner's response.
``(c) Special Dispatch.--Unless otherwise provided by the Director
for good cause, all reexamination proceedings under this section,
including any appeal to the Board of Patent Appeals and Interferences,
shall be conducted with special dispatch within the Office.''.
(e) Appeal.--Section 306 of title 35, United States Code, is amended
to read as follows:
``Sec. 306. Appeal
``(a) Patent Owner.--The patent owner involved in a reexamination
proceeding under this chapter--
``(1) may appeal under the provisions of section 134 of this
title, and may appeal under the provisions of sections 141
through 144 of this title, with respect to any decision adverse
to the patentability of any original or proposed amended or new
claim of the patent; and
``(2) may be a party to any appeal taken by a third-party
requester pursuant to subsection (b) of this section.
``(b) Third-Party Requester.--A third-party requester in a
reexamination proceeding--
``(1) may appeal under the provisions of section 134 of this
title, and may appeal under the provisions of sections 141
through 144 of this title, with respect to any final decision
in the reexamination proceeding that is favorable to the
patentability of any original or proposed amended or new claim
of the patent; and
``(2) may be a party to any appeal taken by the patent owner
with respect to a decision in the reexamination proceeding,
subject to subsection (c) of this section.
``(c) Participation as Party.--(1) A third-party requester who, under
the provisions of sections 141 through 144 of this title, files a
notice of appeal, or who participates as a party to an appeal by the
patent owner, with respect to a reexamination proceeding, is estopped
from asserting at a later time, in any forum, the invalidity of any
claim determined to be patentable on that appeal on any ground which
the third-party requester raised or could have raised during the
reexamination proceeding. This subsection does not prevent the
assertion of invalidity based on newly discovered prior art unavailable
to the third-party requester and the Patent and Trademark Office at the
time of the reexamination proceeding.
``(2) For purposes of paragraph (1), a third-party requester is
deemed not to have participated as a party to an appeal by the patent
owner unless, not later than 20 days after the patent owner has filed a
notice of appeal, the third-party requester files notice with the
Commissioner electing to participate.''.
(f) Reexamination Prohibited.--(1) Chapter 30 of title 35, United
States Code, is amended by adding at the end the following new section:
``Sec. 308. Reexamination prohibited
``(a) Order for Reexamination.--Notwithstanding any provision of this
chapter, once an order for reexamination of a patent has been issued
under section 304 of this title, neither the patent owner nor the
third-party requester, if any, nor privies of either, may, unless
authorized by the Director, file a subsequent request for reexamination
of the patent until a certificate relating to that reexamination
proceeding is issued and published under section 307 of this title.
``(b) Final Decision.--Once a final decision has been entered against
a party in a civil action arising in whole or in part under section
1338 of title 28 that the party has not sustained its burden of proving
the invalidity of any patent claim in suit, or if a final decision in a
reexamination proceeding instituted by a third-party requester is
favorable to the patentability or any original or proposed amended or
new claim of the patent and such decision is not appealed by the third-
party requester under section 306(b), then neither that party nor its
privies may thereafter request reexamination of any such patent claim
on the basis of issues which that party or its privies raised or could
have raised in such civil action or reexamination proceeding. This
subsection does not prevent the assertion of invalidity based on newly
discovered prior art unavailable to the party or privies and the Office
at the time of the civil action or reexamination proceeding, as the
case may be.''.
(2) The table of sections for chapter 30 of title 35, United States
Code, is amended by adding at the end the following:
``308. Reexamination prohibited.''.
(g) Report to Congress.--Within 4 years after the effective date of
this title, the Director of the United States Patent and Trademark
Office shall submit to the Congress a report evaluating whether the
reexamination proceedings established under the amendments made by this
title are inequitable to any of the parties in interest and, if so, the
report shall contain recommendations for changes to the amendments made
by this title to remove such inequity.
SEC. 504. CONFORMING AMENDMENTS.
(a) Board of Patent Appeals and Interferences.--The first sentence of
section 6(b) of title 35, United States Code, as amended by section 117
of this Act, is amended to read as follows: ``The Board of Patent
Appeals and Interferences shall, on written appeal of an applicant, or
a patent owner or a third-party requester ina reexamination proceeding,
review adverse decisions of examiners upon applications for patents and
decisions of examiners in reexamination proceedings, and shall
determine priority and patentability of invention in interferences
declared under section 135(a) of this title.''.
(b) Patent Fees; Patent and Trademark Search Systems.--Section
41(a)(7) of title 35, United States Code, is amended to read as
follows:
``(7) On filing each petition for the revival of an
unintentionally abandoned application for a patent, for the
unintentionally delayed payment of the fee for issuing each
patent, or for an unintentionally delayed response by the
patent owner in a reexamination proceeding, $1,250, unless the
petition is filed under section 133 or 151 of this title, in
which case the fee shall be $110.''.
(c) Appeal to the Board of Patent Appeals and Interferences.--Section
134 of title 35, United States Code, is amended to read as follows:
``Sec. 134. Appeal to the Board of Patent Appeals and Interferences
``(a) Patent Applicant.--An applicant for a patent, any of whose
claims has been twice rejected, may appeal from the decision of the
primary examiner to the Board of Patent Appeals and Interferences,
having once paid the fee for such appeal.
``(b) Patent Owner.--A patent owner in a reexamination proceeding may
appeal from the final rejection of any claim by the primary examiner to
the Board of Patent Appeals and Interferences, having once paid the fee
for such appeal.
``(c) Third-Party.--A third-party requester may appeal to the Board
of Patent Appeals and Interferences from the final decision of the
primary examiner favorable to the patentability of any original or
proposed amended or new claim of a patent, having once paid the fee for
such appeal.''.
(d) Appeal to Court of Appeals for the Federal Circuit.--Section 141
of title 35, United States Code, is amended by amending the first
sentence to read as follows: ``An applicant, a patent owner, or a
third-party requester, dissatisfied with the final decision in an
appeal to the Board of Patent Appeals and Interferences under section
134 of this title, may appeal the decision to the United States Court
of Appeals for the Federal Circuit.''.
(e) Proceedings on Appeal.--Section 143 of title 35, United States
Code, is amended by amending the third sentence to read as follows:
``In ex parte and reexamination cases, the Director shall submit to the
court in writing the grounds for the decision of the United States
Patent and Trademark Office, addressing all the issues involved in the
appeal.''.
(f) Civil Action To Obtain Patent.--Section 145 of title 35, United
States Code, is amended in the first sentence by inserting ``(a)''
after ``section 134''.
SEC. 505. EFFECTIVE DATE.
This title and the amendments made by this title shall take effect on
the date that is 6 months after the date of the enactment of this Act
and shall apply to all reexamination requests filed on or after such
date.
TITLE VI--MISCELLANEOUS IMPROVEMENTS
SEC. 601. PROVISIONAL APPLICATIONS.
(a) Abandonment.--Section 111(b)(5) of title 35, United States Code,
is amended to read as follows:
``(5) Abandonment.--Notwithstanding the absence of a claim,
upon timely request and as prescribed by the Director, a
provisional application may be treated as an application filed
under subsection (a). If no such request is made, the
provisional application shall be regarded as abandoned 12
months after the filing date of such application and shall not
be subject to revival thereafter.''.
(b) Effective Date.--The amendment made by subsection (a) applies to
any provisional application filed on or after June 8, 1995.
SEC. 602. INTERNATIONAL APPLICATIONS.
Section 119 of title 35, United States Code, is amended--
(1) in subsection (a), by inserting ``or in a WTO member
country,'' after ``or to citizens of the United States,''; and
(2) by adding at the end the following new subsections:
``(f) Applications for Plant Breeder's Rights.--Applications for
plant breeder's rights filed in a WTO member country (or in a UPOV
Contracting Party) shall have the same effect for the purpose of the
right of priority under subsections (a) through (c) of this section as
applications for patents, subject to the same conditions and
requirements of this section as apply to applications for patents.
``(g) Definitions.--As used in this section--
``(1) the term `WTO member country' has the same meaning as
the term is defined in section 104(b)(2) of this title; and
``(2) the term `UPOV Contracting Party' means a member of the
International Convention for the Protection of New Varieties of
Plants.''.
SEC. 603. PLANT PATENTS.
(a) Tuber Propagated Plants.--Section 161 of title 35, United States
Code, is amended by striking ``a tuber propagated plant or''.
(b) Rights in Plant Patents.--The text of section 163 of title 35,
United States Code, is amended to read as follows: ``In the case of a
plant patent, the grant shall include the right to exclude others from
asexually reproducing the plant, and from using, offering for sale, or
selling the plant so reproduced, or any of its parts, throughout the
United States, or from importing the plant so reproduced, or any parts
thereof, into the United States.''.
(c) Effective Date.--The amendment made by subsection (a) shall apply
on the date of the enactment of this Act. The amendment made by
subsection (b) shall apply to any plant patent issued on or after the
date of the enactment of this Act.
SEC. 604. ELECTRONIC FILING.
Section 22 of title 35, United States Code, is amended by striking
``printed or typewritten'' and inserting ``printed, typewritten, or on
an electronic medium''.
SEC. 605. DIVISIONAL APPLICATIONS.
Section 121 of title 35, United States Code, is amended--
(1) in the first sentence by striking ``If'' and inserting
``(a) If''; and
(2) by adding at the end the following new subsections:
``(b) In a case in which restriction is required on the ground that
two or more independent and distinct inventions are claimed in an
application, the applicant shall be entitled to submit an examination
fee and request examination for each independent and distinct invention
in excess of one. The examination fee shall be equal to the filing fee,
including excess claims fees, that would have applied had the claims
corresponding to the asserted independent and distinct inventions been
presented in a separate application for patent. For each of the
independent and distinct inventions in excess of one for which the
applicant pays an examination fee within two months after the
requirement for restriction, the Director shall cause an examination to
be made and a notification of rejection or written notice of allowance
provided to the applicant within the time period specified in section
154(b)(1)(B)(i) of this title for the original application. Failure to
meet this or any other time limit set forth in section 154(b)(1)(B) of
this title shall be treated as an unusual administrative delay under
section 154(b)(1)(A)(iv) of this title.
``(c) An applicant who requests reconsideration of a requirement for
restriction under this section and submits examination fees pursuant to
such requirement shall, if the requirement is determined to be
improper, be entitled to a refund of any examination fees determined to
have been paid pursuant to the requirement.''.
CONTENTS
Page
Purpose and Summary.............................................. 29
Background and Need for the Legislation.......................... 30
Hearings......................................................... 38
Committee Consideration.......................................... 40
Committee Oversight Findings..................................... 41
Committee on Government Reform and Oversight Findings............ 41
New Budget Authority and Tax Expenditures........................ 41
Congressional Budget Office Estimate............................. 41
Constitutional Authority Statement............................... 41
Section-by-Section Analysis and Discussion....................... 41
Changes in Existing Law.......................................... 77
Purpose and Summary
The United States is by far the world's largest producer
of intellectual property, and this has greatly benefitted our
balance of trade. This success is dependent upon a rational and
sound policy of protecting intellectual property by encouraging
the development of new inventions and processes.
Despite this success, the U.S. patent system is not without
its problems. Some dilatory patent applicants and plaintiffs'
attorneys have developed ways to abuse the system and
ultimately extort hundreds of millions of dollars from
industries--costs that are ultimately passed on to American
consumers. Another key problem is that the Patent and Trademark
Office is bogged down in bureaucratic red tape. It cannot run
at its peak efficiency. Many other nations have learned from
our success--America no longer stands alone in its commitment
to a strong system of patent protection for its inventors,
small businesses, and industries. Consequently, it is more
important now than ever that Congresses adopt certain reforms
that will ensure that America maintains its position as the
world leader in the production of intellectual property.
H.R. 400 contains several titles addressing and solving
major problems threatening our patent system. With the
exception of the title containing miscellaneous provisions,
each title consists of an independent bill that was the subject
of comprehensive hearings in the Subcommittee on Courts and
Intellectual Property over the last two Congresses. Each of
these titles also reflects changes that were made in response
to valuable comments submitted by expert witnesses, Members,
independent inventors, small businesses, large corporations,
universities and research institutions, industry organizations,
patent law associations, and the Patent and Trademark Office.
Background and Need for the Legislation
The following is a breakdown and explanation of the
background and need for each of the patent titles contained in
H.R. 400:
TITLE I.--PATENT AND TRADEMARK OFFICE MODERNIZATION
Under Title I, the United States Patent and Trademark
Office (``PTO''), currently a bureau within the Department of
Commerce, would be established as an independent government
agency, subject to the Government Corporation Act, under the
policy direction of the Secretary of Commerce. These provisions
separate the Office from any established department, creating a
new agency of the United States, but maintain policy direction
from the Executive Branch to ensure uniform goals in the area
of intellectual property rights.
The PTO is one of a few government entities which lends
itself to being subject to the Government Corporation Act. It
was recommended for government corporation status by the
National Academy of Public Administration. It is funded
completely by user fees. It can and should operate to serve
most efficiently the public interest, including the interest of
those who pay user fees to support it--patent and trademark
applicants. Further, the Office performs a quasi-judicial
function, which should be handled in an independent manner.
Apart from policy, the work of the PTO, such as the
processing and examination of applications, has always been
independent, but the Department of Commerce has exercised
control over its finances and its rulemarking procedures. An
independently managed government corporation with the
accountability measures provided in the Government Corporation
Act, in H.R. 400 itself, through oversight by Congress and
through congressionally approved fee usage and borrowing
authority, will possess the operational flexibility and
independence required to best serve the public and the
innovators who have become an increasingly important aspect of
our national economy. If the PTO is to operate in a
businesslike manner to accomplish operational efficiency with
integrity, it must have management, operational, and financial
flexibility that it does not currently have.
Title I establishes the Patent and Trademark Office as an
independent wholly owned government corporation and transfers
to it the duties carried out by the existing Office while
maintaining the policy direction of the Secretary of Commerce.
It establishes that the Office shall be managed by a Director
who is appointed by the President, by and with the advice and
consent of the Senate, for a term of five years. The length of
the term should provide continuity and carry-over between
presidential Administrations. Under this title, the President
is required to nominate a Director who, ``by reason of
professional background and experience in patent or trademark
law, is especially qualified to manage the Office.''
Title I caps the salaries of the Director, the Commissioner
for Patents, the Commissioner for Trademarks (both of whom are
appointed by the Director), and any other employees hired by
the PTO. It further leaves to Congress the duty of setting
filing fees which establish and control the budget of the PTO.
The title further requires that an Inspector General be
appointed under the provisions of the Inspector General Act.
Title I provides that the new government agency would be
able to purchase personal property based on an established
bidding process without proceeding through the General Services
Administration. Importantly, it frees the Office from any
administratively or statutorily imposed limitations on
positions or personnel so that it can hire as many examiners as
are needed to serve its applicants effectively to the extent
feasible in its budget. The title guarantees that PTO
employees, as government employees, will retain full civil
service protection, including federal health, life, and
retirement benefits.
The title further provides for a bipartisan Management
Advisory Board, comprised of members of the private sector who
represent users of the PTO. Under this title, the Board would
be made up of 12 members: four to be appointed by the
President, four to be appointed by the Speaker of the House,
and four to be appointed by the Majority Leader of the Senate.
The terms of the members of the Board would be for four years,
and the terms would be staggered. The Chairman of the Board
would be appointed by the President and would serve for three
years. The Board shall review the policies, goals, performance,
budget, and user fees of the PTO and advise the Commissioner.
Its powers are limited to an advisory capacity only. The Board
shall also prepare an annual report to the President and the
Judiciary Committees of the House and the Senate, which will be
published in the PTO Official Gazette.
Title I maintains the Trademark Trial and Appeals Board
which determines the rights of registration in every case,
opposition to registration, or application to cancel the
registration of a mark. It further maintains a Board of Patent
Appeals and Interferences which shall, on written appeal of an
applicant, review adverse decisions of patent examiners.
Under the title, a relationship is established with the
Justice department for assistance in the defense of lawsuits
brought against the Office. The PTO will be required to report
to Congress annually on budget and patent quality issues.
The PTO is granted borrowing authority, subject to annual
appropriations Acts, and is allowed to issue bonds for purchase
by the Secretary of the Treasury. Any monies not otherwise used
to carry on the duties of the PTO must be kept in cash on hand,
in deposit, or invested in U.S. obligations or other lawful
investments for public funds. The PTO cannot borrow money
without explicit advance approval in appropriations acts and
not without guaranteeing its payment from future user fee
income. The PTO remains subject to the Chief Financial Officers
Act and remains subject to review by the Comptroller General.
Title I was written to reflect the concerns of employees
of the PTO, expressed in hearing testimony. It will provide
better service to America's creative community through a better
work force under the oversight of the Government Corporation
Act, Congress and the President with increased input by
inventors and trademark applicants.
Title I also responds to past practices and current
proposals to divert up to $119 million from the PTO, which
receives no taxpayer dollars, to other tax-funded areas of the
government. Taxpayer support for the operations of the Office
was eliminated in 1990 with the passage of the Omnibus Budget
Reconciliation Act. The Act imposed a massive fee increase
(referred to as a ``surcharge'') on America s inventors and
industry in order to replace taxpayer support the Office was
then receiving. The revenues generated by this surcharge, $119
million, which constitute approximately 20% of the PTO s
operating budget, are placed into a surcharge account. The PTO
is required to request of the Appropriations Committees that
they be allowed to use these surcharge revenues in this account
to support the 20% of its operations these revenues represent.
It was anticipated in 1990 that Congress would routinely grant
the PTO permission to use the surcharge revenue since it was
generated originally from fees paid by users of the patent and
trademark systems to support the cost of those systems.
Unfortunately, experience has shown us that the user fees
paid into the surcharge account have become a target of
opportunity to fund other, unrelated, taxpayer-funded
government programs. The temptation to use the surcharge, and
thus a significant portion of the operating budget of the PTO,
has proven increasingly irresistible, to the detriment and
sound functioning of our nation s patent and trademark systems.
Beginning with the diversion of $8 million in 1992, Congress
has increasingly redirected a larger share of the surcharge
revenue, reaching a record level of $54 million in the current
year. In total, over the past six fiscal years, more than $142
million has been diverted from the PTO.
This, of course, has had a debilitating impact on the
Patent and Trademark Office. The effort to reclassify the
patent search file to keep it current with developing
technologies had to be eliminated. The efforts to provide
technological training for patent examiners and to expose them
to the latest developments in their fields has been reduced.
The support of legal training for patent examiners has been cut
50%. One of the most promising cost-saving steps contemplated
by the PTO, allowing applicants to file their applications
electronically, has been postponed indefinitely. Since the
diversion of $54 million this year, the Office has been forced
to reduce the hiring of patent examiners 50% at a time when
patent application filings are increasing by nearly 10%
annually. We cannot afford to allow this dismantling of our
patent system to occur.
This legislation is revenue neutral. It does not increase
an expenditure of taxpayer revenues which would increase the
deficit. It merely permits the PTO to use all of the patent and
trademark fees it receives to examine patent and trademark
applications, to grant patents, and to register trademarks. It
does this by placing the fees generated by the surcharge
mandated by the Omnibus Budget Reconciliation Act of 1990 into
the same category as the other user fees paid by patent and
trademark applicants. Specifically, it would characterize these
fees as ``offsetting collections'' rather than ``offsetting
receipts'' so that all of the fees collected could be used for
the purposes for which they were paid. Allowing the PTO to have
access to all of its funds will ensure that patents are issued
more rapidly, adding to the term of the patent.
The establishment of the PTO as a separate government
agency under the Government Corporation Act is necessary to
achieve cost-effective, quality examining operations which will
best serve its users, and consequently, the public interest.
Title II.--Term Extension and Patent Publication
Title II will ensure that every diligent patent applicant
is guaranteed at least a 17-year patent term under the current
20 year from filing system. In most cases, applicants will gain
term under its provisions.
Term Issues
One of the key patent provisions in the TRIPS Agreement
was the establishment of an international standard minimum term
for patent protection. In accordance with the treaty, the
United States is obliged to establish a minimum patent term of
twenty years from the time the patent application was filed.
Formerly, the U.S. provided only 17 years of protection from
the time the patent was issued. Consequently, a change in the
law was required to ensure compliance.
In 1994, the Congress took a straightforward approach to
complying with this obligation and simply adopted the 20 year
from filing term, the minimum required by TRIPS. Since June 8,
1995, that has been the standard to measure patent term in the
United States. Obviously, any patent that is granted within
three years will result in an increase in patent term for
patent applicants. Under this new system, even based on
historical data from a time when there was not the same
incentive to expedite processing, the vast majority of patent
applicants, nearly 90%, will experience a significant increase
in patent term.
Nevertheless, because the system changed from one based
upon grant to one based upon filing, there was some concern
that delays in the Patent Office would diminish some
applicants' patent term through no fault of the applicants.
This is addressed to some extent by present law, where the 20
year patent term may be extended for a total of up to five
years for delays in the issuance of a patent due to
interferences, secrecy orders, or successful appeals to the
Board of Patent Appeals and Interferences or the Federal
courts.
Title II provides that unusual administrative delays shall
justify extended term compensation by introducing an objective
time clock to interpret the unusual administrative delay
standard. Under the objective time clock, the Patent Office is
required to compensate automatically and fully any delays
beyond a stated minimum. Under the provisions of Title II,
every diligent patent applicant is ensured at least 17 years of
patent term from the date of grant, and in most cases, a term
closer to 18 years.
Publication Provisions
All of the major patent systems throughout the world, with
the exception of the United States, publish applications 18
months from the earliest effective filing date. In an age where
worldwide patent protection is becoming increasingly important,
the current system places U.S. inventors at a clear
disadvantage. For example, an invention that is the subject of
a patent application in Japan will be published in the Japanese
language after 18 months. Inventors reviewing the Japanese
patent application disclosures will have the benefit of the
early disclosure in Japan. This is especially beneficial to
domestic inventors in Japan as they are able to obtain an early
disclosure of the technology in the Japanese language.
Meanwhile, in the United States, domestic inventors do not have
the benefit of an English language publication of the
technology disclosed in an application for a patent until the
patent is actually issued. This situation provides foreign
inventors a clear advantage relative to U.S. domestic
inventors.
The early publication provisions of Title II would provide
American inventors with a prompt English-language publication
of relatively current technology. There would be no need to
await the grant of a patent to gain an understanding of the
technology it contains. This will speed disclosure of foreign-
origin U.S. patent technology by at least 12 months. Further,
technology contained in patent applications that never mature
into patents would also be available. Our domestic inventors
would be able to take advantage of this earlier access to
English-language patent application technology and build upon
it more rapidly than they are able to do in our current system.
In this way, the Constitutional objective of ``promoting the
progress of . . . [the] useful arts'' would be advanced.
In addition, these provisions would promote more efficient
use of limited research and development resources by preventing
duplication of research, signaling promising areas of research,
and indicating which research topics are being pursued by
others. Further, with this law, inventors would be able to
avoid the commitment of substantial resources to develop an
invention based on an incomplete, erroneous assessment of its
patentability.
This legislation would also help to address the submarine
patent problem that has long plagued the U.S. patent system.
Submarine patents surface from applications that have been
purposely delayed by the applicant and are pending in the PTO
for many years. The belatedly granted patents often cause
disruptions in the market place because competitors unknowingly
regarded and adopted the later- patented technology as
commonplace publicly available information. No disclosure has
ever been made warning others not to develop the technology
broadly included in a claim filed by a ``submariner''. Those
competitors are often required to negotiate a license with the
late-arriving patentee against a threat of a lawsuit which
might shut down their operations. Early publication would
provide the above competitors with the necessary information to
make the requisite business decisions before entering a given
field.
In return for the disclosure that would be made by virtue
of early publication, patentees would be given provisional
rights to obtain compensation for any use of an invention
disclosed in the patent application for the time period between
publication, and grant. In conjunction with a 20-year patent
term, provisional rights would give eventual patentees the
opportunity to obtain at least 18\1/2\ years of patent rights
(provisional rights from publication at 18 months until grant
plus full rights upon grant) regardless of patent pendency. If
a provisional patent application is filed, or if publication is
requested earlier than the eighteenth month, an eventual
patentee could obtain up to 19\1/2\ years or more of patent
rights.
Title II takes a significant additional step to protect
those who may not want their application published. It proposes
to amend title 35 to enable an independent inventor to defer
publication until three months after an initial patentability
determination by the PTO. To be eligible for this provision, an
inventor must certify that he or she has not also filed the
application in a foreign country (where it will inevitably be
published within 18 months). Situations are extremely rare
where an independent inventor who is actively seeking an early
PTO action will not obtain at least one patentability
determination (most will receive two) before three months prior
to the 18 months of pendency of his/her application. However,
this provision ensures that such an action will be received by
qualified independent inventors in a timely manner. In this
way, the independent inventor is given ample opportunity to
withdraw his application and pursue the trade secret route when
patentability is unlikely and the invention can be kept secret.
The 20-year term and the 18-month publication provisions
of Title II have the strong support of the current and previous
presidential administrations and five of the past six living
Commissioners of Patents and Trademarks. Title II also has the
backing of key industry groups like the National Association of
Manufacturers and the Biotechnology Industry Organization as
well as every major intellectual property and bar association
that has expressed an opinion on these topics.
Title III.--Prior Domestic User Rights
Title III provides a defense of prior user rights against
infringement of a patent to businesses, universities, and
nonprofit research institutions. The defense typically arises
when an original inventor, who decided not to patent a
manufacturing process, or simply didn t consider patenting,
uses the process as a trade secret in a commercial or
university-related endeavor. The original inventor is later
sued by a party, often a party outside the United States, who
subsequently patented the process. While U.S. law permits the
assertion of prior public use as a method of defeating a patent
under our first-to-invent system, it does not recognize secret
prior use as a defense to patent infringement.
An inventor may develop a process without ever considering
obtaining a patent, may not be able to afford obtaining a
patent, or may choose for strategic or personal reasons to
protect his process as a trade secret. One of the more famous
trade secrets is the formula for Coca-Cola which has never been
patented. While there is no federal trade secret law, there is
state common law protection for trade secrets and many states
have enacted statutes to protect trade secrets specifically or
in unfair competition laws.
Under current law, choosing to practice an invention as a
trade secret has its risks because while prior public
disclosure of an invention defeats a patent, an undisclosed
invention which relies on trade secret protection may not.
Title III would eliminate this risk by granting a prior
commercial or university user, in effect, a defense against
infringement suits for practicing the later patented invention.
This personal defense does not extend to later developed
products and processes that infringe upon the patent.
Title III would allow an inventor to choose whether to
patent an invention or use it as a trade secret by granting a
personal defense against an infringement suit to any inventor
who commercially used an invention at least one year before the
filing date of a patent for the very same invention issued to
another. This prior use defense leaves the patent intact for
assertions against all others. This balance is designed to
maintain incentives to patent new inventions without forcing
inventors to seek patents on every trivial advancement.
Under the current system, foreign patentees, who are
treated the same as U.S. inventors under our patent laws, may
obtain patents on processes or products protected by trade
secret laws in the U.S. and sue the original U.S. inventors for
infringement. However, U.S. inventors are not able to do the
same abroad because most of our foreign trading partners have
enacted prior user rights as a means of protecting their
manufacturers.
Title IV.--Inventor Protection
Title IV would create a new chapter 5 in title 35 of the
United States Code, designed to curb the deceptive practices of
certain invention marketing companies. Many of these companies
operate under the following scenario. They advertise that
inventors may call a toll-free number for an invention
evaluation form, which they claim is used to provide expert
analysis of the development possibilities of their inventions.
The inventors return the form with descriptions of the
inventions, which become the basis for contacts by salespeople
at the marketing companies. The next step is a costly product
research report which usually contains nothing more than
boilerplate information stating merely that the invention may
qualify for a design patent. Then the marketing companies
attempt to convince the inventor to buy marketing services--
typically consisting of a mere mention in a few press releases
and trade shows--at a cost of up to $10,000.
This title aims to confront these problems by requiring
that: (1) contracts between marketing companies and inventors
contain standardized disclosures, including the number of
applicants rejected by the companies, statistics on the profits
actually earned by inventors, and contractual terms prescribing
payment conditions and termination rights; and (2) marketing
companies submit quarterly reports to their subscribing
inventors.
Remedies against companies for failing to comply include
private civil actions for actual or $5,000 statutory damages,
the possibility of treble damages, and costs and attorneys'
fees. Criminal penalties of up to $10,000 are also provided.
Title V.--Patent Reexamination Reform
In 1980, Congress enacted Public Law No. 96-517 to
authorize the reexamination of U.S. patents in the Patent and
Trademark Office. The reexamination provisions, set forth in 35
U.S.C. Sec. Sec. 301-307, and the rules governing reexamination
(37 CFR 1.501-1.570) became effective on July 1, 1981. The
reexamination statute permits the patent owner or any other
person to (1) cite to the Office patents or printed
publications as prior art pertaining to the validity of an
issued patent, and (2) request that the Office reexamine any
claim of that patent on the basis of the cited prior art.
Within three months of such a request or on his own initiative,
the Director must determine whether a substantial new question
of patentability is raised by the prior art cited to or
discovered by him. If a substantial new question of
patentability is found, the Director will issue an order
granting the reexamination. The patent owner is then given two
months to file a preliminary statement responding to the
reexamination order. If the order follows a request by a third
party to reexamine the patent, and the patent owner files a
preliminary statement responding to the order, the third-party
requester may, within two months, file a reply to the patent
owner's preliminary statement. The claim or claims in question
are then reexamined by the Office ``with special dispatch,''
but otherwise using essentially the same procedures applicable
to the examination of patent applications.
Reexamination proceedings, like the examination of patent
applications, are ex parte in nature (i.e., they exclude
participation by parties other than the Office and the patent
owner). In such proceedings, the patent owner may file
amendments to the specification, amend existing claims or
present new claims, conduct interviews and take appeals from
final adverse determinations of patentability by the Office.
Reexamination concludes with the issuance of a reexamination
certificate which cancels any claims found to be unpatentable,
and confirms the patentability of claims determined to be
patentable whether originally amended or newly submitted during
the reexamination.
Current reexamination procedures have been criticized as
being biased against ``third-party'' requesters (i.e., a party
other than the patent owner who requests reexamination). A
third-party requester cannot participate in the reexamination
proceeding beyond filing the initial request for reexamination.
Some have claimed that the ex parte nature of prosecution
following a reexamination order, while reducing the time and
costs involved, provides the patent owner with an unfair
advantage.
Conclusions of the Office in reexamination proceedings are
given considerable weight by a court in considering the
validity of reexamined claims of a patent. This has led some to
conclude that a third party's burden of proving invalidity in
litigation will be more difficult to sustain than in instances
where the patent was not involved in a reexamination. Many
third parties are accordingly reluctant to request
reexamination even when they possess relevant prior art. Thus,
reexamination has not realized its full potential as an
inexpensive and expeditious alternative to litigation.
The reexamination system established in 1980 needs to be
revised to make it a more effective and balanced procedure for
reviewing patent validity. This legislation would introduce
changes to the reexamination provisions to accomplish this
objective.
There are three main elements of the legislation. First,
the legislation provides third parties with a greater
opportunity to participate in reexamination proceedings while
maintaining most of the features which make reexamination a
desirable alternative to litigation in the federal courts
(e.g., low cost, expedited procedure). Second, the legislation
expands the basis and scope of reexamination to include review
of compliance with all aspects of 35 U.S.C. Sec. 112, except
the ``best mode'' requirement. Third, the proposed legislation
requires that the real party in interest be identified and
provides third-party requesters with certain appeal rights.
Exercising some of these rights (e.g., filing of an appeal to
the Federal Circuit), would be conditioned on the third-party
requester accepting a statutory estoppel against subsequent
review, either by the Office or by a federal court, of the
issues that were or could have been raised in the reexamination
proceeding. These limits, along with certain others introduced
in the legislation, would ensure that reexamination proceedings
could not be used to harass patent owners and would not be
available where court action makes reexamination unnecessary.
The proposed modifications would not unreasonably increase
the cost, complexity or duration of reexamination proceedings,
nor would they impose unreasonable burdens on the Office or
patentees. Reexamination proceedings would continue to be based
largely on the ex parte structure of regular examination. The
issues considered during reexamination would continue to be
those routinely considered by examiners in the course of
regular examination procedures. Most importantly, however,
these modifications would increase third-party use of the
reexamination system as a meaningful, inexpensive and
expeditious alternative to patent validity litigation, while
preventing abuse of the reexamination process by limiting
requests to one per claim.
Title VI.--Miscellaneous Patent Provisions
Title VI contains various technical, clarifying and
conforming changes to our patent law that are not related to
any of the five major titles of H.R. 400.
Hearings
There have been seven days of hearings and 61 witnesses
who have testified on the provisions of H.R. 400 in the 104th
and 105th Congresses.
The Committee's Subcommittee on Courts and Intellectual
Property held two days of hearings on Title I of H.R. 400 on
September 14, 1995, and March 8, 1996. Testimony was received
from The Honorable Bruce A. Lehman, Assistant Secretary of
Commerce and Commissioner of Patents and Trademarks, Patent and
Trademark Office, U.S. Department of Commerce; Dr. Harold
Seidman, Senior Fellow, and Alan Dean, Fellow, from the
National Academy of Public Administration; Michael K. Kirk,
Executive Director of the American Intellectual Property Law
Association; Herbert C. Wamsley, Executive Director of the
Intellectual Property Owners; Donald R. Dunner, Chair of the
Section on Intellectual Property Law Section of the American
Bar Association; The Honorable Dana Rohrabacher,
Representative, California 45th District; The Honorable Duncan
Hunter, Representative, California, 52nd District; Mr. Timothy
Reardon, Congressional Liaison, Patent & Trademark Office
Society; Mr. Robert M. Tobias, National President, National
Treasury Employees Union; Mr. Ronald J. Stern, President,
Patent Office Professional Association; Mr. Howard Friedman,
President, The Trademark Society, National Treasury Employees
Union, Chapter 245; and Ms. Catherine Simmons-Gill, President,
International Trademark Association.
The Committee's Subcommittee on Courts and Intellectual
Property held two days of hearings on Title II and Title V of
H.R. 400 on June 8, 1995 and November 1, 1995. Testimony was
received from The Honorable Bruce A. Lehman, Assistant
Secretary of Commerce and Commissioner of Patents and
Trademarks, Patent and Trademark Office, U.S. Department of
Commerce; Mr. Gary L. Griswold, Intellectual Property Owners;
Mr. Michael Kirk, American Intellectual Property Law
Association; Mr. Thomas E. Smith, American Bar Association,
Section on Intellectual Property Law; Mr. Andrew Kimbrell,
Director, International Center for Technology Assessment; Mr.
Kenneth Addison, Oklahoma Inventors Congress; Dr. Raymond
Damadian, President and Chairman, Fonar Corporation; The
Honorable Dana Rohrabacher, Representative, California, 45th
District; Mr. James L. Fergason, Inventor, Founder and
President of Optical Shields, Incorporated, Menlo Park,
California; Mr. Mark A. Lemley, Assistant Professor, School of
Law, University of Texas at Austin; Mr. Thomas W. Buckman,
Inventor, Vice President, Patents and Technology, Illinois Tool
Works, Incorporated, Glenview, Illinois, representing the
National Association of Manufacturers; Mr. William D. Budinger,
Inventor, Chairman & Chief Executive Officer, Rodel,
Incorporated, and Chair of the Technology and Innovation
Section of the White House Conference on Small Business; Mr.
Edward Stead, Vice President, General Counsel & Secretary,
Apple Computer, Incorporated, testifying on behalf of the
Information Technology Industry Council; Mr. Roger May,
Assistant General Counsel, Ford Motor Company, Member of the
Michigan Patent Law Association; Mr. Stephen Barram, Inventor,
Chief Executive Officer, Integrated Services, Incorporated,
Lake Oswego, Oregon; Dr. Raymond Damadian, Inventor, President
and Chairman, Fonar, Incorporated, Inventor and Manufacturer of
Magnetic Resonance Imaging (MRI); Mr. James Chandler, President
of the National Intellectual Property Law Institute,
Washington, D.C.; Dr. Robert Rines, Inventor, Founder, and
former President of the Franklin Pierce Law Center; Ms. Diane
L. Gardner, Patent Agent, Molecular Biosystems, Incorporated,
and President of the Intellectual Property Law Society at
Thomas Jefferson School of Law; Dr. Paul Crilly, Inventor, and
Associate Professor of Electronic Engineering University of
Tennessee, Knoxville; and Dr. David L. Hill, President, Patent
Enforcement Fund, Incorporated, Southport, Connecticut.
The Committee's Subcommittee on Courts and Intellectual
Property held one day of hearings on Title III of H.R. 400 on
October 26, 1995. Testimony was received from Mr. Dieter
Hoinkes, Senior Counsel, Office of Legislative and
International Affairs, Patent and Trademark Office, U.S.
Department of Commerce; Mr. Karl Jorda, Professor, Franklin
Pierce Law Center; Mr. Richard Schwaab, Adjunct Professor,
George Mason Law School and Partner, Foley & Lardner; Mr. Gary
L. Griswold, President of the Intellectual Property Owners; Mr.
Robert A. Armitage, President, American Intellectual Property
Law Association (AIPLA); and Mr. William D. Budinger, Chairman
and Chief Executive Officer, Rodel, Incorporated.
The Committee's Subcommittee on Courts and Intellectual
Property held one day of hearings on Title IV of H.R. 400 on
October 19, 1996. Testimony was received from G. Lee
Skillington, Counsel, Office of Legislative and International
Affairs, Patent and Trademark Office, United States Department
of Commerce; Senator Joseph I. Lieberman, the sponsor of S.
909, the Senate companion bill to H.R. 2419; Dr. William D.
Noonan, Klarquist, Sparkman, Campbell, Leigh & Whinston; Mr.
Donald R. Dunner, Chair, Section of Intellectual Property Law
Section, American Bar Association; Mr. Michael Kirk, Executive
Director, American Intellectual Property Law Association; and
Mr. Robert Lougher, Inventors Awareness Group.
The Committee's Subcommittee on Courts and Intellectual
Property held one day of hearings on all of the provisions of
H.R. 400 on February 26, 1997. Testimony was received by: The
Honorable Sue W. Kelly, Member of Congress, 19th District of
New York; The Honorable Duncan Hunter, Member of Congress, 52nd
District of California; The Honorable Dana Rohrabacher, Member
of Congress, 45th District of California; The Honorable Tom
Campbell, Member of Congress, 15th District of California; The
Honorable Bruce A. Lehman, Assistant Secretary of Commerce and
Commissioner of Patents and Trademarks, Patent and Trademark
Office, U.S. Department of Commerce; Mr. John R. Kirk, Chair,
Section of Intellectual Property Law, American Bar Association;
Mr. Michael K. Kirk, Executive Director, American Intellectual
Property Law Association; Mr. Chuck Ludlam, Vice President for
Government Relations; Biotechnology Industry Organization; Mr.
Erwin Bud Berrier, President, Intellectual Property Owners; Ms.
Mary Ann Alford, President, International Trademark
Association; Mr. Alan F. Holmer, President, Pharmaceutical
Research and Manufacturers of America; Mr. David L. Hill,
Chairman, Advisory Board, Alliance for American Innovation; Mr.
Harold C. Wegner, Professor, The George Washington University
National Law Center; Mr. Stephen H. Barram, Chief Executive
Officer, Integrated Services, Inc. andDelegate, White House
Conference on Small Business; Ms. Maureen Gilman, Director of
Legislation, National Treasury Employees Union; and Mr. Ronald
J. Stern, President, Patent Office Professional Association.
Committee Consideration
On March 5, 1997, the Subcommittee on Courts and
Intellectual Property considered H.R. 400. Amendments offered
by Mr. Coble, Chairman of the Subcommittee on Courts and
Intellectual Property, to extend protection to universities and
strengthen the guarantee of 17 years of patent term, were
considered en bloc and adopted by voice vote, a quorum by
present. The bill, as amended, was reported favorably to the
full Committee on the Judiciary by voice vote, a quorum being
present. On March 12, 1997, the Committee on the Judiciary
considered H.R. 400. Mr. Coble offered amendments to Titles III
and V to further extend protection to universities and research
institutions which were considered en bloc. The amendments was
adopted by voice vote, a quorum being present and the bill H.R.
400, as amended, were ordered reported favorably by voice vote,
a quorum being present, to the full House.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(l)(3)(C) of House Rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(C)(3) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 400, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 18, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 400, the 21st
Century Patent System Improvement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Rachel
Forward, who can be reached at 226-2860.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
Enclosure.
H.R. 400--21st Century Patent Improvement Act
Summary
H.R. 400 would establish the United States Patent and
Trademark Office (PTO) as a government corporation and make a
number of other changes in laws governing the issuance of
patents and related procedures.
CBO estimates that enacting H.R.400 would result in net
discretionary spending by the PTO totaling about $33 million
over the 1998-2002 period, assuming appropriation of the
authorized amounts. Enacting H.R. 400 would result in a net
decrease in direct spending of $15 million in fiscal year 1998
and $112 million over the 1998-2002 period. Because the bill
would affect direct spending in fiscal year 1998, pay-as-you-go
procedures would apply.
The legislation contains private-sector mandates, but CBO
is uncertain whether the costs associated with the new mandates
in the bill would exceed the $100 million threshold specified
in the Unfunded Mandates Reform Act of 1995 (UMRA). The costs
of private-sector mandates would exceed the threshold if the
extension of current PTO surcharges is included, but the costs
would be well below the $100 million threshold if only the
added fees are counted. H.R. 400 contains no intergovernmental
mandates as defined in UMRA and would not impose costs on
state, local, or tribal governments.
Title I would establish a wholly owned government
corporation to replace the existing PTO, an agency within the
Department of Commerce. The new government corporation would
retain the same name and would be subject to the policy
guidance of the Department of Commerce but would not be subject
to supervision by any department. The bill would authorize the
PTO to collect and spend a surcharge on existing patent and
trademark fees beginning in fiscal year 1999, subject to prior
approval in appropriations acts. Authority to collect such
surcharges currently expires after fiscal year 1998.
Title II would require the PTO to publish patent
applications within 18 months of filing regardless of whether a
patent has been granted and would authorize the PTO to charge a
fee to cover the cost of early publication. Title V would
modify current reexamination procedures to ease the
restrictions on third parties requesting the PTO to reexamine
the validity of an existing patent. The bill would require a
fee to be submitted with each third-party request for a patent
reexamination and would authorize the PTO to collect a fee from
the patent owner if the owner does not respond in a timely
manner to a request for information pertinent to the
reexamination. H.R. 400 also would require the PTO and the
General Accounting Office (GAO) to complete a number of studies
for the Congress.
H.R. 400 would make a number of other changes to patent law
that would not significantly affect the federal budget. The
bill would require invention marketing companies that evaluate
the market potential of inventions to include standardized
disclosures in contracts between the companies and the
inventors. The bill also would allow an inventor who has used
an invention at least one year before the invention is patented
by another party to continue using the invention without
infringing on the new patent.
Estimated Cost to the Federal Government
The estimated budgetary impact of H.R. 400 for the PTO is
shown in Table 1. Under current law, the PTO collects a number
of user fees that are spent by the agency to the extent
provided in advance in the appropriations acts. CBO assumes
that over time the PTO would be authorized to spend all of the
fees that the agency collects, except for the surcharge fees
required to be collected through 1998 pursuant to the Omnibus
Budget Reconciliation Act of 1990. Hence, our current law
projections show the estimated authorization levels for fiscal
years 1998 through 2002 net of the user fees estimated to be
collected and spent by the agency.
For the purposes of this estimate, CBO assumes that H.R.
400 would be enacted by the end of fiscal year 1997. Outlays
have been estimated on the basis of historical spending
patterns for the PTO and information provided by the agency.
TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 400
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending under current law:
Estimated authorization level \1\....................... 61 61 61 61 61 61
Estimated outlays....................................... -2 24 18 14 10 5
Proposed changes:
Estimated authorization level........................... 0 15 19 22 26 30
Estimated outlays....................................... 0 5 -26 8 21 25
Spending under H.R. 400:
Estimated authorization level \1\....................... 61 76 80 83 87 91
Estimated outlays....................................... -2 29 -8 22 31 30
CHANGES TO DIRECT SPENDING
Estimated budget authority................................ 0 -15 -19 -22 -26 -30
Estimated outlays......................................... 0 -15 -19 -22 -26 -30
----------------------------------------------------------------------------------------------------------------
\1\ The 1997 level is the amount appropriated for that year. The
estimated authorization levels for 1998-2002 reflect CBO baseline
estimates for the PTO, assuming no adjustment for inflation.
The costs of this legislation fall within budget function
370 (commerce and housing credit).
Basis of Estimate
Establishing the Patent and Trademark Office as a wholly
owned government corporation would result in a number of
efficiencies and savings, primarily for procurement and
administration, that CBO expects would be roughly offset by
expenditures for new requirements in the bill and for salary
increases.
Table 2 shows the estimated fee collections under H.R. 400
as compared to projected fee collections under current law. The
bill would allow an extension of the surcharge on the patent
and trademark fees that expires in fiscal year 1998, but would
make both the collection of the surcharge fees and the spending
from those collections subject to appropriations. That is, the
bill would change those collections from offsetting receipts (a
form of direct spending) to offsetting collections credited to
appropriations (a form of discretionary spending). H.R. 400
also would require the PTO to collect some additional user
fees, which CBO estimates would total $112 million over five
years.
TABLE 2.--ESTIMATED PTO FEES
[Outlays in millions of dollars, by fiscal year]
----------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Fees under current law:
Patent surcharge........................................ -115 -119 0 0 0 0
Patent and trademark user fees.......................... -604 -664 -731 -804 -884 -973
Proposed changes:
Patent surcharge \1\.................................... 0 0 -119 -119 -119 -119
Patent and trademark user fees \2\...................... 0 -15 -19 -22 -26 -30
Fees under H.R. 400:
Patent surcharge........................................ -115 -119 -119 -119 -119 -119
Patent and trademark user fees.......................... -604 -679 -750 -826 -910 -1003
----------------------------------------------------------------------------------------------------------------
Note: Fee collections are recorded as negative outlays.
\1\ Would require appropriations action and would be available for
spending.
\2\ Would not require appropriations action.
Spending Subject to Appropriation
Under current law, the PTO cannot spend any user fees
without prior approval in an appropriations act. Although H.R.
400 would establish the PTO as a government corporation, the
agency would still need to receive approval in appropriations
acts to spend any of the user fees collected.
H.R. 400 would authorize the PTO to impose surcharges on
certain user fees in order to collect an additional $119
million in fiscal year 1999 and in subsequent years. PTO would
not be able to collect or spend the surcharge fees without
prior approval in an appropriations act. CBO estimates that
enacting H.R. 400 would result in increased surcharge
collections of $476 million and additional discretionary
spending from those collections of $418 million over the 1999-
2002 period, assuming appropriation of the full amount of the
authorized surcharge fees.
Enacting H.R. 400 would result in collections of additional
user fees, which would be reflected as a net decrease in direct
spending. The bill would authorize the agency to collect an
estimated $112 million in publication and reexamination fees
over the 1998-2002 period, and CBO assumes that the agency
would be authorized in appropriations acts to spend these
additional fees. Because CBO expects a lag between the time the
PTO collects and spends the fees, we estimate that the agency
would only spend $91 million of the fees over the 1998-2002
period. This amount is included in Table 1 as spending subject
to appropriation.
H.R. 400 also would provide the PTO with the authority to
issue bonds or other forms of indebtedness for purchase by the
Treasury, subject to prior approval in appropriations acts. The
General Services Administration (GSA) is currently soliciting
proposals to lease an estimated 2 million square feet of office
space to house the PTO for 20 years beginning in 2002 or 2003.
Based on information from the GSA and PTO, the lease agreement
will likely contain a clause that would allow the federal
government to buy the buildings at several points during the
course of the lease. CBO estimates that the PTO could issue
$800 million worth of bonds for purchase by the Treasury and
use the proceeds for the purchase of the buildings after their
completion (probably no earlier than 2003), assuming
appropriation of the necessary amounts.
CBO estimates that enacting H.R. 400 would result in new
discretionary spending of less than $500,000 in fiscal year
1999 for GAO to conduct a study required by the bill, assuming
the appropriation of the necessary amount.
Direct Spending
Enacting the bill would affect direct spending by
increasing receipts from several types of fees.
Publication Fees.--H.R. 400 would authorize the PTO to
raise existing fees or establish a new fee to offset the cost
of publishing the patent applications. Because the PTO would
not be allowed to spend the additional fees without approval in
appropriations acts, any collections would reduce direct
spending. Based on information from the PTO, CBO estimates that
the PTO would collect about $98 million in publication fees
over the 1998-2002 period.
Reexamination Fee.--H.R. 400 would ease restrictions on
reexamination proceedings initiated by third parties, thus
causing an increase in the number of proceedings. Based on
information from the PTO, CBO estimates enacting H.R. 400 would
nearly double the number of reexamination requests, resulting
in additional fee collections of about $14 million over the
1998-2002 period.
Penalty Fee.--The bill would authorize the PTO to collect a
new penalty fee if a patent owner does not respond to a request
for information pertinent to the reexamination. CBO expects
that any receipts from this new fee would not be significant.
Pay-As-You-Go Considerations
Section 252 of the Balanced Budget and Emergency Deficit
Control Act of 1985 sets up pay-as-you-go procedures for
legislation affecting direct spending or receipts through 1998.
CBO estimates that enacting H.R. 400 would decrease direct
spending by about $15 million in fiscal year 1998 from the
increased collections of publication and reexamination fees.
Estimated Impact on State, Local, and Tribal Governments
H.R. 400 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act of 1995 (UMRA) and would
not impose costs on state, local, or tribal governments.
Estimated Impact on the Private Sector
H.R. 400 would impose new private-sector mandates by
extending the surcharge on patent and trademark fees, by
authorizing the PTO to raise or assess new fees for the
services it provides, and by placing requirements on the
invention development services industry. CBO has determined
that the extension of existing fees, increases to existing
fees, and the imposition of new fees by the PTO are mandates as
defined in UMRA.
First, the bill would impose a mandate by extending PTO's
authority to collect a surcharge on patent and trademark fees.
Under current law, patent and trademark surcharges by the PTO
expire after fiscal year 1998. H.R. 400 would permanently
extend the PTO's authority to collect $119 million in patent
and trademark surcharges beginning in fiscal year 1999--the
same amount as required for fiscal year 1998.
Because of ambiguities in UMRA, CBO is uncertain whether
extending surcharges would increase the direct costs of federal
private-sector mandates. UMRA could be interpreted as requiring
the estimate of direct costs of the mandate extension to be
based on a comparison with current costs under the existing
mandate. In that case, the direct costs of extending the
surcharge would be close to zero. An alternative interpretation
is that direct costs should be measured relative to current
law, under which there would be no surcharges imposed after
1998. The direct costs of the mandate under that approach would
be $119 million in each of the first five years that the
surcharge was effective.
Second, H.R. 400 would impose private-sector mandates by
authorizing the PTO to increase existing fees or to charge new
fees to offset the cost of publishing patent applications. In
addition, the bill would authorize the PTO to assess new
penalty fees against a patent owner who does not respond to a
request made under a reexamination proceeding. Direct costs
would rise, on average, by about $20 million annually over the
1998-2002 period as a result of the new fees.
Third, new mandates would be imposed on providers of
invention development services. H.R. 400 would require that
every contract for invention development services between
invention developers and their customers be in writing and
contain specific language. In addition, the bill would place an
enforceable duty on invention developers to produce and deliver
reports containing specific information about the status of
services provided to their customers at least every three
months throughout the term of the contract. The aggregate
additional costs imposed on providers of invention development
services would not be significant because the new requirements
are modest and the industry is small.
Thus, CBO is uncertain whether the total direct costs of
new private-sector mandates in H.R. 400 would exceed the $100
million threshold in UMRA. If the collections from extending
patent and trademark surcharges are excluded from direct costs,
new mandates would impose, on average, $20 million in direct
costs per year during the first five years that the mandates
were effective. However, if such surcharges are counted, the
direct costs of new private-sector mandates in H.R. 400 would
total about $140 million per year starting in 1999.
Estimated prepared by: Federal cost: Rachel Forward; impact
on State, local, and tribal governments: Leo Lex; and impact on
the private sector: Matthew Eyles.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Constitutional Authority
Pursuant to Rule XI, clause 2(1)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, clause 8, section 8 of the
Constitution.
Section-by-Section Analysis and Discussion
Section 1.--Short Title
This section entitles the Act as the ``21st Century Patent
System Improvement Act.
Section 2.--Table of Contents
This section sets forth the table of contents for the bill.
TITLE I.--PATENT AND TRADEMARK OFFICE MODERNIZATION
Section 101.--Short Title
This section entitles this title the ``Patent and Trademark
Office Modernization Act.''
SUBTITLE A.--UNITED STATES PATENT AND TRADEMARK OFFICE
Section 111.--Establishment of Patent and Trademark Office as a
Government Corporation
This section amends section 1 of title 35, United States
Code (35 U.S.C. Sec. 1) to establish the United States Patent
and Trademark Office (hereinafter the PTO or the Office) as a
wholly owned government corporation under chapter 91 of title
31, United States Code (31 U.S.C. Sec. 9101 et seq.). The
Office will continue to be under the policy direction of the
Secretary of Commerce. As a body corporate and government
agency, the Office will have the authority to direct its
personnel, procurement, budget, and similar administrative
functions in a manner consistent with the flexibilities
required for businesslike operations, without supervision by
any department unless expressly provided for in the Act, but
subject to the specific oversight provisions contained in the
Act. Establishing the PTO as a separate entity under the policy
direction of the Secretary of Commerce permits the Office to
establish its own rules, regulations, and other processes. It
is anticipated that the Office will achieve savings and
efficiencies from its status as a wholly owned government
corporation separate from the rules and procedures of other
departments and agencies of the United States Government, while
allowing the Administration to achieve an integrated approach
on patent and trademark policy and on general policies
affecting jobs, trade and technology.
Subsection (a) establishes the United States Patent and
Trademark Office as a wholly-owned government corporation under
the policy direction of the Secretary of Commerce on all
matters within his purview such as international treaties and
agreements concerning patents and trademarks, domestic patent
and trademark legislation, and issues involving interagency
coordination.
Subsection (b) requires that the Office maintain its
principal office in the Washington, D.C. metropolitan area for
purposes of service of process and authorizes the Office to
establish satellite offices elsewhere as well. Venue in civil
actions to which the Office is subject is established in the
district in which the principal office is located.
Section 112.--Powers and Duties
This section amends section 2 of title 35, United States
Code (35 U.S.C. Sec. 2) to provide the Office with the powers
and authorities necessary to carry out its functions as a
wholly owned government corporation.
Subsection (a)(1) provides that the PTO, as a sovereign
agency of the United States, will be responsible for the
granting and issuing of patents and the registration of
trademarks. These functions are transferred to the Office under
Section 123 of the Act. Article I, Section 8, paragraph 8 of
the Constitution of the United States gives to the Congress the
power to promote the progress of science and the useful arts,
by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries.
The Constitution leaves to the discretion of the Congress the
manner in which those rights are provided. Congress has
authority under the Commerce Clause of the Constitution to
provide a uniform trademark law for the United States and to
designate a body responsible for maintaining a register for
protected marks. The PTO, as a wholly owned government
corporation, will be able to carry out the functions necessary
for the granting and issuing of patents and the registration of
trademarks more efficiently and cost effectively than would be
the case if the Office were subject to the limitations placed
on taxpayer-funded Departments and Agencies.
Subsection (a)(2) authorizes the U.S. Patent and Trademark
Office to conduct studies, programs and exchanges regarding the
law of patents, trademarks and other matters. It allows, but
does not require the PTO to conduct, independently, studies,
programs and exchanges on patents, trademarks and other
matters, such as copyrights, database protection and other
related rights.
Subsection (a)(3)(A) addresses the ability of the U.S.
Patent and Trademark to conduct studies, programs and exchanges
with international organizations. Recently, the Patent and
Trademark Office has been selected by the Administration to
represent the United States as a party to international treaty
negotiations on intellectual property rights, including
negotiations on the law of patents, trademarks and copyrights.
The authorization contained in this subsection grants the
Office the ability to continue to serve in this capacity, if
chosen by the Administration to do so.
Subsection (A)(3)(B) authorizes the Office to transfer up
to $100,000 to the State Department, with the concurrence of
the Secretary of State, for making payments to international
intergovernmental organizations, such as the World Intellectual
Property Organization, for studies and programs advancing
international cooperation in connection with patents,
trademarks, and other matters. The payments referred to may be
in addition to other payments or contributions to these
international intergovernmental organizations.
Subsection (a)(4) makes the PTO responsible for
disseminating to the public information about patents and
trademarks. This is done currently though the Patent and
Trademark Depository Library program, the sale of electronic
data to information vendors, and the provision of public access
through the World Wide Web (the commercial multimedia component
of the Internet, or national and global information
infrastructure), as well as through other programs for the
public. It is expected that these programs would continue and
others would be developed. In fulfilling the responsibility set
out under Subsection (a)(4), the Office should pursue policies
that most effectively, efficiently, and broadly disseminate
patent and trademark information. In so doing, the Office
should continue to balance PTO direct services with its program
that provides bulk data in electronic form for a fee to any
member of the public wishing to buy it. This PTO program has
been one of the most successful in government in terms of
broad, far-reaching, efficient and effective dissemination of
information. With regard to direct services, the Office should
continue the policy which provides, for a fee, onsite direct
access to the Automated Patent System (APS) in the public
search room and in the Patent and Trademark Depository
Libraries; and the policy which provides, for no cost to the
user, access via the Internet to bibliographic records of
patents issued over the most recent 20 year period. The Office
should continue the policy which provides bulk patent and
trademark text and image data in electronic form, for a fee
which is based on the cost of dissemination. A vigorous,
competitive private sector patent information dissemination
industry has emerged as a direct result of the Patent and
Trademark Office's excellent bulk dissemination program. The
PTO should proceed with caution before creating any direct-to-
end-user retail services because they could undercut the value
of the bulk dissemination program and the value of the patent
information products and services now sold.
Subsection (b) identifies the specific powers granted the
PTO to carry out its functions efficiently and in a cost-
effective manner.
Subsection (b)(1) specifies that the Office shall have
perpetual succession.
Subsection (b)(2) authorizes the PTO to adopt and use a
corporate seal that is to be judicially noticed. All letters
patent, trademark registration certificates, and other official
papers issued by the Office are to be authenticated with the
seal.
Subsection (b)(3) provides that the Office may sue and be
sued in its own name. Wholly owned government corporations
generally have ``sue and be sued'' status which is specific to
the body corporate. The provisions regarding implementation of
the Office's authority to sue and be sued are in section 7 of
this title, which allows the Justice Department to represent
the Office in lieu of the Office's own attorneys at the
discretion of the Attorney General.
Subsection (b)(4) authorizes the PTO to indemnify all
officers, employees and agents of the Office, including the
members of the Management Advisory Board, against liabilities
and expenses incurred within the scope of their employment.
Subsection (b)(5) authorizes the PTO to adopt, amend, and
repeal any bylaws, rules, regulations, and determinations that
govern the conduct of its business and the exercise of the
powers granted to the Office by law. The adoption, amendment,
and repeal of bylaws, rules, regulations, and determinations
are to be made after notice and an opportunity for full
participation by interested public and private parties. The
purpose of any such adoption, amendment, or repeal should be to
facilitate and expedite the processing of patent and trademark
applications, particularly through the use of electronic media.
The provisions of section 122 regarding the confidential
treatment of patent applications are to be adhered to in any
expedited processing. With regard to any bylaws, rules,
regulations, and determination regarding the recognition and
conduct of agents, attorneys, or other persons representing
applicants or other parties before the Office (the bar of the
PTO), the PTO is expressly authorized to require, before
granting recognition to anyone who wishes to represent others
before the Office, that party show that he or she is of good
moral character and reputation and is qualified to render
applicants and others valuable service, advice, and assistance
in procedures before the Office. The power to recognize
includes the power to revoke recognition once granted in
accordance with the rules and regulations governing the conduct
of those authorized to practice before the Office.
Subsection (b)(6) gives the PTO broad authority to manage
its own real and personal property, or any interests in
property. The Office is authorized to acquire, construct,
purchase, lease, hold, manage, operate, improve, alter, and
renovate any real, personal, or mixed property or any interest
in such property, that it considers necessary to carry out the
responsibilities assigned to it.
Subsection (b)(7) provides that the PTO may make purchases,
contract for the construction, maintenance, or management and
operations of facilities, and contract for supplies or services
without regard to (1) the Federal Property and Administrative
Services Act of 1949 (``FPAS'') (40 U.S.C. Sec. 471 and
following), (2) the Public Buildings Act of 1949 (40 U.S.C.
Sec. 601 and following), and (3) the Stewart B. McKinney
Homeless Assistance Act (the McKinney Act) (42 U.S.C.
Sec. Sec. 11301 and following). Subsections (b)(7)(A) and (B)
provide the PTO with authorities to oversee its own
acquisitions.
The FPAS contains many detailed requirements that are not
appropriate for the businesslike operations of a fee-funded
government corporation and that often impose substantial
administrative costs. For example, the photocomposition
procurement for the Patent and Trademark Office took more than
two and one-half years to complete, resulting in wasted Office
resources, necessitating sole-source extensions, and revisions
of requirements to keep pace with technology advances. The
Office, as a nontaxpayer-funded, fee-funded government
corporation, has a responsibility to minimize operating costs
while assuring a fair and competitive process that reduces the
overall cost of acquisitions. The PTO is expected to follow
prudent business practices that achieve the objectives of FPAS,
such as obtaining effective competition, ensuring that prices
for supplies and services are fair and reasonable, and that
delivery times are reasonable. The Office remains subject to
the oversight provisions in the Act, as well as existing ethics
in government Acts.
The Public Buildings Act gives the Administrator of the
General Services Administration (``GSA'') exclusive authority
to acquire and manage office space for federal agencies. While
this system may be justified for taxpayer-funded agencies, it
is inappropriate and is not cost-effective when applied to
nontaxpayer-funded government corporations which are created to
operate intrinsically under businesslike principles. GSA may
not always be able to respond to the PTO's needs in a timely
manner. To ensure timely and cost-effective space acquisition
and management, the Office must have authority to act on its
own behalf in appropriate circumstances, subject to the
provision contained in Subsection (c). In addition, GSA imposes
surcharges upon agencies for the provision of its services.
Funds used to pay these surcharges could be better used by the
PTO in conducting its business. Mandatory, rather than
discretionary, GSA authority conflicts with the Office's need
to acquire its own space in a businesslike manner. This
proposal is consistent with the current trend for GSA to be an
asset management agency rather than a provider of services.
The McKinney Act requires that real property being disposed
of by a federal agency must be screened by the Department of
Housing and Urban Development to determine whether the property
may be used by agencies assisting the homeless. Because any
real property that the PTO might acquire would be paid for with
patent and trademark fees, rather than with taxpayer moneys, it
is inappropriate to apply the McKinney Act to disposal of PTO
property.
Subsection (b)(7)(B) exempts the PTO from the requirements
for printing and binding in sections 501-517 of title 44,
United States Code (44 U.S.C. Sec. Sec. 501-517) and from the
requirements of executive and judiciary printing and binding in
sections 1101-1123 of title 44, United States Code (44 U.S.C.
Sec. Sec. 1101-1123). There are instances when it may be more
efficient for the Office to have access to alternative printing
sources. For example, the Office is developing the capability
to print trademark registration certificates directly from its
automated computer systems, making it unnecessary to obtain
outside printing services. Without the exemption, the Office
would be unable to realize the cost savings associated with
this and future plans for technological improvement.
Subsection (b)(8) authorizes the PTO to use services,
equipment, personnel and facilities of other United States
departments, agencies, and instrumentalities with their consent
and with reimbursement. The Office is also authorized to
cooperate with other departments, agencies, and
instrumentalities by allowing them the use of services,
equipment, and facilities of the Office in a like manner.
Subsection (b)(9) authorizes the PTO, if it deems it
appropriate, to obtain services from the Administrator of
General Services under the same conditions that those services
are made available to other agencies of the United States.
Subsection (b)(10) authorizes the PTO to use the services,
records, facilities, or personnel of any State or local
government agency or instrumentality, any foreign government,
or any international organization, with their consent and that
of the United States, to perform functions on its behalf.
Subsection (b)(11) provides the PTO with the authority to
determine the character of, and necessity for, its financial
obligations and expenditures and the manner in which they are
incurred, allowed, and paid, subject to statutes expressly
applicable to wholly owned government corporations; title 35,
United States Code; and the Act of July 5, 1946 (commonly
referred to as the ``Trademark Act of 1946''). The PTO's use of
its funds, therefore, would be subject only to the restrictions
in its enabling law and in the relevant provisions of the
Government Corporation Control Act and other laws specifically
applicable to wholly owned government corporations. The
Comptroller General no longer would certify the Office's
obligations and expenditures. The Office would retain this
authority. This method of operation is appropriate since the
Office's funds derive from its own revenues and receipts, not
from taxpayer funds.
Subsection (b)(12) authorizes the PTO to retain and use of
all of the revenues, receipts, and other monies that arise from
activities of the Office for the operations of the Office,
subject to oversight provisions of the Act, and the Government
Corporation Control Act. Subsection (b)(12) clarifies that the
Office's funding is derived principally from fees paid for the
Office's services, which are set by Congress. Accordingly,
Congress directly controls the budget of the PTO. Revenues are
not derived from appropriated, general taxpayer funds. This
statement recognizes current conditions of the Patent and
Trademark Office. Since fiscal year 1993, the Office has relied
upon user fees for all of its revenues. Except for restrictions
on required surcharge fees under the provisions of section
10101 of the Omnibus Budget Reconciliation Act of 1990 (35
U.S.C. Sec. 41 note), all funding is available to the Office
for the conduct of its affairs. The authority granted to the
PTO in this charter is consistent with that prevailing prior to
incorporation under this Act, excepting certain restrictions
associated with the appropriation and apportionment processes.
Exemption from the apportionment process affords flexibility to
the PTO in the management of its financial resources to enhance
operating efficiencies.
Subsection (b)(13) gives the PTO the priority of the
United States in connection with the payment of any debts from
bankrupt, insolvent, and decedents estates.
Subsection (b)(14) authorizes the PTO to accept gifts or
donations of services and property. This provision mirrors
those of 12 other Executive agencies and currently applies to
the Patent and Trademark Office. The requirements of, and
regulations establishing standards for ethical conduct for
executive branch employees under Appendix 5 of title 5, United
States Code, including those regarding the acceptance of gifts,
will continue to apply to officers and employees of the PTO as
will the provisions of Chapter 11 of Title 18 of the United
States Code.
Subsection (b)(15) authorizes the PTO to execute any legal
instruments necessary and appropriate for the exercise of its
powers and authorities. Such execution shall conform to the
bylaws, rules and regulations established by the Office for the
exercise of such powers and authorities.
Subsection (b)(16) authorizes the PTO, either by contract
or through self-insurance, to provide for liability insurance
and insurance against loss in connection with any of its
property, other assets, or operations.
Under subsection (c), the provisions of the bill will not
render null and void those pending request-for-proposal let or
contract regarding the leasing of space to the PTO already
approved by the General Services Administration.
Section 113.--Organization and Management
This section amends section 3 of title 35, United States
Code, substituting new language. Subsection (a)(1) vests the
management of the PTO in a Director of Patents and Trademarks
(the ``Director'') who is appointed by the President, by and
with the advice and consent of the Senate. The Director must be
a person who, by reason of knowledge of patent or trademark law
and management experience, is specially qualified to manage the
Office. While it is the intent of the Act that the PTO and the
Director control the policies, practices and operation of the
Office in accordance with Presidential and Congressional
direction and expectations, it is also the intent of the Act
that whomever the President appoints, that individual be
uniquely qualified to manage a government corporation that
performs the important and essential function of granting and
issuing of patents and registering trademarks.
Subsection (a)(2) establishes the duties of the Director
to include the managing and directing of the PTO, which
includes the granting and issuing of patents and the
registration of trademarks. Those duties are to be performed in
a fair, impartial and equitable manner. This responsibility
includes the establishment of the organization of the Office,
the number and types of its offices and the filling thereof,
ensuring equitable term and other properties inherent in
patents issued by the Office, and the definition of the duties
assigned to employees and officers of the Office. The Director
is charged with advising the President, through the Secretary
of Commerce, regarding all activities the Office undertakes on
treaties and executive agreements entered into by the United
States or that are related to cooperative programs with
authorities of foreign governments regarding the granting of
patents and the registration of trademarks. In addition, the
Director is to recommend to the President, through the
Secretary of Commerce, any changes in the law or in policy that
might improve U.S. citizens abilities to secure and enforce
patent rights and trademark rights in the United States and
abroad.
On issues involving the operation of the Office, the
Director is to consult with the Management Advisory Board (the
``Advisory Board''), established in section 5 of title 35,
United States Code (35 U.S.C. Sec. 5). The Director also shall
consult with the Advisory Board before submitting budget
proposals to the Office of Management and Budget, before
changing patent or trademark regulations, and before proposing
to Congress that it change patent and trademark user fees. The
Management Advisory Board is advisory only. While it must be
consulted for input to allow the Director to make informed
decisions, it does not control any decisions to be made by the
Director.
A program for identifying national security positions and
providing for appropriate security clearances must be
established by the Director in consultation with the Director
of the Office of Personnel Management.
Subsection (a)(3) sets the Director's term at 5 years and
whatever time thereafter is required for a successor to be
appointed and confirmed and actually assume the office. The
number of terms an individual may serve as Director is not
limited. The 5-year term ensures the continuity of the
management of the Office, and is intended to foster the
selection of a non-political appointee who is qualified to
manage the detailed operations of the Office and to look after
the integrity of the examination process.
Subsection (a)(4) requires that before assuming office,
the Director take an oath to discharge faithfully the duties of
the Director as the head of an agency of the United States.
Subsection (a)(5) sets the Director s compensation at the
rate of basic pay in effect for level III of the Executive
Schedule under section 5314 of title 5, United States Code (5
U.S.C. Sec. 5313).
Subsection (a)(6) permits removal of the Director by the
President.
Subsection (a)(7) requires the Director to designate an
officer of the PTO who will be vested with authority to act as
Director in the event of absence or incapacity of the Director.
This assures the continuity of management of the Office.
Subsection (b) deals with the officers and employees of the
PTO other than the Director. Subsection (b)(1) requires the
Director to appoint a Commissioner for Patents and a
Commissioner for Trademarks, whose terms are coextensive with
the Director s term. Each person is to have had demonstrated
experience in the field of law for which he or she will be
responsible. The Commissioner for Patents and the Commissioner
for Trademarks are to advise the Director on all activities of
the Office that affect the administration of the section of the
Office for which that Commissioner is responsible.
Subsection (b)(2) requires the Director to appoint
officers, employees (including attorneys) and agents whom the
Director deems necessary to carry out the functions of the
Office. Finally, the subsection authorizes the Director to
define the authority and duties of the Office's officers and
employees and to delegate the powers required to carry out
those duties. Subsection (b)(2) also makes it clear that it is
Congress s intent that no administrative or statutory
limitations on the number of positions or the number of
personnel are to apply to the PTO and that none of the
positions or personnel of the Office are to be taken into
account in applying any such limitation to other departments
and agencies of the United States Government.
Subsection (c) explicitly states that officers and
employees of the PTO are subject to the provisions of Title 5
of the U.S. Code relating to federal employees, including
section 2302 of title 5. This means that the civil service
protection guarantees for the federal workforce (title 5) will
continue to apply to the PTO, and that PTO employees cannot be
coerced to indulge in proscribed political activity as federal
employees (section 2302).
Subsection (d) provides for the continuation of all labor
agreements that are in effect on the day before the effective
date of the Act. Should any of the unions representing PTO
employees not have a labor agreement in effect on that date,
terms and conditions of employment shall continue unless and
until changed by the Office or as otherwise set forth in the
Act.
Subsection (e)(1) provides that all officers and employees
of the current Patent and Trademark Office will become officers
and employees of the United States Patent and Trademark Office
established in this Act on the effective date of the Act,
without a break in service. In addition, Subsection (e)(2) sets
forth the conditions under which certain individuals employed
by the Department of Commerce shall be transferred to the
Office on the effective date of the Act. Any amount of sick or
annual leave and compensatory time accumulated under title 5,
United States Code, before the effective date of the Act by
employees covered in subsection (e)(3) will become obligations
of the Office.
Subsection (f)(1) requires the President, on or after
enactment of the Act, to appoint an individual to serve as
Director until the date on which a Director qualifies and is
chosen under subsection (a). The President may make only one
such appointment pursuant to subsection (f)(1).
Subsections (f)(2)(A) and (B) permit the individual serving
as the Assistant Commissioner for Patents on the day before the
effective date of the Act to serve as the Commissioner for
Patents until the date upon which a Commissioner for Patents is
appointed under Subsection (b). Similarly, the individual
serving as Assistant Commissioner for Trademarks on the day
before the effective date of the Act may serve as the
Commissioner for Trademarks until the date on which a
Commissioner for Trademarks is appointed under subsection (b).
Section 114.--Management Advisory Board
Section 114 adds a new section 5 to title 35, United States
Code, to establish a Management Advisory Board for the PTO.
Section (a)(1) specifies that the Board shall be comprised of
twelve members. Four of the members are to be appointed by the
President, four by the Speaker of the House of Representatives,
and four by the Majority Leader of the Senate. No more than
three of the four members appointed by each appointing
authority may be members of the same political party.
Subsection (a)(2) sets the term of the Advisory Board s
members at four years and no member may serve more than a
single term. During the first appointment, each of the
appointing authorities shall appoint one member for a term of
one year, one for a term of two years, one for a term of three
years, and one for a full term of four years.
Subsection (a)(3) requires that the President designate a
member of the Advisory Board to serve as Chair for a term of
three years.
Subsection (a)(4) requires that the appointment of members
to the Advisory Board be made within three months of the
effective date of the Act. Vacancies must be filled within
three months of their occurrence.
Subsection (a)(5) specifies that vacancies on the Advisory
Board are to be filled in the same way the original
appointments were made. Those members appointed to fill a
vacancy of a member who did not complete his or her term of
appointment shall serve only for the remainder of that term.
Members may continue to serve after their term expires until a
successor is appointed.
Subsection (a)(6) requires that the Chair designate members
of the Advisory Board to serve on a committee concerned with
patent operations and a committee concerned with trademark
operations. The members of these committees are to be
responsible for the duties identified in subsection (e) in
connection with patent operations and trademark operations,
respectively.
Subsection (b) requires that those persons appointed to be
members of the Advisory Board be citizens of the United States.
The members are to be chosen so that they reflect the interests
of diverse users of the PTO. Among those chosen as members of
the Advisory Board are to be individuals who have substantial
experience and achievement in corporate finance and in
management.
Subsection (c) makes the members of the Advisory Board
special government employees within the meaning of section 202
of title 18, United States Code (18 U.S.C. Sec. 202). Advisory
Board members, therefore, will be subject to certain ethics
laws governing representation of others before the United
States during and following employment and participation in
matters in which the party has a financial interest, as
provided in sections 203, 205, 207, 208, and 209 of title 18.
Subsection (d) authorizes the Chair to call meetings of the
Advisory Board and to establish the agenda for the meeting.
Subsection (e) requires the Advisory Board to review the
policies, goals, performance, budget, and user fees of the PTO
and to provide advice to the Director on these matters. In
addition, the Advisory Board is required to submit an annual
report on the matters which it reviews to the President and to
the Committees on the Judiciary of the Senate and the House of
Representatives within 60 days of the end of the fiscal year. A
copy of that report must be published in the PTO's Official
Gazette.
Subsection (f) authorizes compensation for the members of
the Advisory Board for each day (including travel time) during
which they are attending meetings or conferences of the
Advisory Board or are otherwise engaged in work on behalf of
the Advisory Board. The rate of pay at which the members may be
compensated is the daily equivalent of the annual rate of basic
pay in effect for level III of the Executive Schedule under
section 5314 of title 5. In addition, the subsection authorizes
travel expenses, including per diem in lieu of subsistence for
periods when the members must be away from their homes and
regular places of business, as provided in section 5703 of
title 5, United States Code.
Subsection (g) requires the PTO to provide members of the
Advisory Board with access to records and information in the
Office, except for personnel or other privileged information
and information concerning patent applications required to be
kept in confidence by section 122.
Section 115.--Conforming Amendments
Subsection (a) repeals section 6 of title 35, United States
Code (35 U.S.C. Sec. 6), along with the heading for that
section in the table of contents for Chapter 1 of title 35. The
duties that were assigned the Director under section 6 are
replaced by the provisions of Sections 112 and 113 of this Act.
Section 31 of title 35, United States Code (35 U.S.C.
Sec. 31) and the heading for that section in the table of
contents for chapter 3 are also repealed. The authority for
issuing regulations and rules governing the recognition and
conduct of agents, attorneys, or other persons representing
applicants and other parties before the Office are replaced by
the provisions of Section 112(b) of this Act.
Section 116.--Trademark Trial and Appeal Board
This section amends section 17 of the Act of July 5, 1946
(commonly referred to as the Trademark Act of 1946'') (15
U.S.C. Sec. 1067) to require, in subsection (a), that in every
case of interference, opposition to registration, application
to register as a lawful concurrent user, or application to
cancel the registration of a mark, the Director shall give
notice to all parties and direct that the matter be decided by
a Trademark Trial and Appeal Board.
Subsection (b) specifies that the Board will include the
Director, the Commissioner for Patents, the Commissioner for
Trademarks, and administrative trademark judges who have been
appointed by the Director.
Section 117.--Board of Patent Appeals and Interferences
This section amends section 7 of title 35, United States
Code (35 U.S.C. Sec. 7) to provide for a Board of Patent
Appeals and Interferences in the PTO, composed of the Director,
the Commissioner for Patents, the Commissioner for Trademarks,
and the administrative patent judges. The administrative patent
judges are to have competent legal knowledge and scientific
ability.
Subsection (b) assigns to the Board of Patent Appeals and
Interferences responsibility for reviewing written appeals from
adverse decisions of examiners upon applications for patents
and for determining priority and patentability of invention in
interferences declared under section 135(a) of title 35, United
States Code (35 U.S.C. Sec. 135(a)). The decisions are to be
made by panels of the Board, composed of at least three
members, designated by the Director. Subsection (b) also limits
the authority to grant rehearings to the Board itself.
Section 118.--Suits by and Against the Office
This section inserts a new section 7 to title 35, and
provides for the renumbering of the existing sections.
Subsection (a) of the new section 7 requires that any
action against the PTO must arise under Federal law.
Jurisdiction over civil actions by or against the Office is
vested with the Federal courts.
Pursuant to Subsection (b), the PTO is deemed an agency for
the purposes of Section 516 of title 28. This means that,
except as otherwise authorized by other law, the Department of
Justice, under the direction of the Attorney General, is
responsible for any conduct of litigation to which the PTO may
be a party or in which it has an interest.
Subsection (c) expressly prohibits certain legal
processes, such as attachments, garnishment, liens, or similar
processes from being issued against the PTO's property. This
protection is currently available to the property of the United
States under the Office's custody or control. This is necessary
to protect Office property and prevent interference with the
day-to-day operation of the patent and trademark examination
systems. Although the Office has waived its sovereign immunity,
that waiver is limited and should not be construed as allowing
relief in any proceeding against the Office's property. This
protection against interference with important governmental
operations is customary for wholly owned government
corporations.
Section 119.--Annual Report of Director
This section amends renumbered section 14 of title 35,
United States Code (35 U.S.C. Sec. 14) to require the Director
to prepare and submit to the Congress an annual financial and
management report using the requirements under section 9106 of
title 31, United States Code (31 U.S.C.Sec. 9106). The required
report to Congress should not be deemed to replace the report
of the PTO required under Sec. 9106 and a second report will
accordingly need to be filed by the Director.
Section 120.--Suspension or Exclusion from Practice
This section amends section 32 of title 35, United States
Code (35 U.S.C. Sec. 32) to authorize the Director to designate
any attorney who is an officer or employee of the PTO to
conduct any hearing in connection with any suspension or
exclusion from practice before the Office.
Section 121.--Funding
This section amends section 42 of title 35, United States
Code (35 U.S.C. Sec. 42)(a) and provides that the Office be
paid all fees collected for services performed or materials
furnished.
Section 42(b) provides that the PTO shall have the use of
its moneys for the functions of the Office, subject to approval
in appropriations acts, and that moneys not used to carry out
the functions of the Office shall be kept as cash on hand or on
deposit, invested in obligations of the United States or
guaranteed by the United States, or in obligations or other
instruments which are lawful investments for fiduciary, trust,
or public funds. Specific language determines that fees
available to the Director under title 35 shall be used for
processing patent applications as well as other services and
materials deemed necessary by the Office; fees available under
the Trademark Act of 1946, 15 U.S.C. 1113, shall be used only
and exclusively for the processing of trademark registration
applications, services and materials.
Section 42(c) provides that the Office may borrow from the
Secretary of Treasury and that such borrowing will be treated
as a public-debt transaction of the United States. All
borrowing shall be subject to advance approval in
appropriations Acts of the Congress and cannot exceed amounts
in such Acts. Any borrowing under this subsection shall be
repaid only from fees paid to the Office and surcharges
appropriated by the Congress.
Section 122.--Extension of Surcharges in Patent Fees
Section 122 prevents the diversion of user fees paid to the
United States Patent and Trademark Office to other taxpayer-
funded agencies, without harming the budget, so that the PTO
can continue to operate effectively for the benefit of those it
serves.
The Patent and Trademark Office is funded totally through
the payment of application and user fees. Taxpayer support for
the operations of the Office was eliminated in 1990 with the
passage of the Omnibus Budget Reconciliation Act. The Act
imposed a massive fee increase (referred to as a ``surcharge'')
on America's inventors and industry in order to replace
taxpayer support the Office was then receiving. The revenues
generated by this surcharge, $119 million, which constitute
approximately 20% of the PTO s operating budget, are placed
into a surcharge account. The PTO is required to request of the
Appropriations Committees that they be allowed to use these
surcharge revenues in this account to support the 20% of its
operations these revenues represent. It was anticipated in 1990
that Congress would routinely grant the PTO permission to use
the surcharge revenue since it was generated originally from
fees paid by users of the patent and trademark systems to
support the cost of those systems.
The user fees paid into the surcharge account have become a
target of opportunity to fund other, unrelated, taxpayer-funded
government programs. The diversion of surcharge revenues, a
significant portion of the operating budget of the PTO, has
grown considerably over the past six years to the detriment and
sound functioning of our nation s patent and trademark systems.
Beginning with the diversion of $8 million in 1992, Congress
has increasingly redirected a larger share of the surcharge
revenue, reaching a record level of $54 million in the current
year. In total, over the past six fiscal years, over $142
million has been diverted from the PTO, which has had a
debilitating impact on the Patent and Trademark Office.
This section is revenue neutral. It does not increase an
expenditure of taxpayer revenues which would increase the
deficit. It would merely permit the PTO to use all of the
patent and trademark fees it receives to examine patent and
trademark applications, to grant patents and to register
trademarks. It does this by placing the fees generated by the
surcharge mandated by the Omnibus Budget Reconciliation Act of
1990 into the same category as the other user fees paid by
patent and trademark applicants. Specifically, it characterize
these fees as ``offsetting collections'' rather than
``offsetting receipts'' so that all of the fees collected could
be used for the purposes for which they were paid.
Section 123.--Transfers
Subsection (a) transfers the functions, powers, and duties
of the Patent and Trademark Office and the Department of
Commerce with respect to the granting and issuing of patents
and the registration of trademarks to the United States Patent
and Trademark Office. The purpose of this section is to assure
that the Office has the legal authority to perform all of the
Office's functions and execute the laws that apply to the PTO.
Subsection (b) transfers to the PTO, on the effective date
of the Act, all assets, liabilities, contracts, property,
records, and unexpended and unobligated balances of
appropriations, authorizations, allocations, and other funds
and other items, employed, held, used, arising from, available
to, or to be made available to the Department of Commerce,
including any funds set aside for accounts receivable that are
related to functions, powers, and duties that are vested in the
PTO by this title.
SUBTITLE B.--EFFECTIVE DATE; TECHNICAL AMENDMENTS
Section 131.--Effective Date
This section makes the title and amendments made by it
effective four months after the date of enactment of the Act.
Section 132.--Technical and Conforming Amendments
Subsection (a) makes conforming amendments to headings and
tables of contents in title 35, United States Code, reflecting
the amendments.
Subsection (b) makes conforming and technical changes to
statutes made applicable and inapplicable to the PTO, including
the Government Corporation Control Act and the Federal Property
and Administrative Services Act of 1949.
Subsection (b)(1) adds the PTO to the list of wholly owned
government corporations. Several subsections change references
to the ``Patent Office'' or the ``Patent and Trademark Office''
to the ``United States Patent and Trademark Office.'' Several
references to the ``Commissioner of Patents'' in several
statutes are changed to the ``Director of the U.S. Patent and
Trademark Office.'' Subsection (b)(4) codifies the terms
Administrative patent judge and Administrative trademark judge
in lieu of examiner-in-chief and members of the Trademark Trial
and Appeal Board. Subsection (b)(28) amends section 11 of the
Inspector General Act of 1978 (5 U.S.C. App.), to include the
PTO as a ``designated Federal entity,'' thereby authorizing the
Commissioner to appoint the Inspector General of the Office.
SUBTITLE C.--MISCELLANEOUS PROVISIONS
Subtitle C contains several provisions which allow for the
transfer of authority from the Patent and Trademark Office and
the Department of Commerce to the United States Patent and
Trademark Office established under this Act which are necessary
for its operation as a sovereign agency of the United States,
including references to the authority to operate, references in
legal documents, continuance of suits and proceedings,
administrative procedure and judicial review, transfer of
assets, delegation and assignment, and the Office of Management
and Budget's authority to oversee these transfers.
Title II.--EXAMINING PROCEDURE IMPROVEMENTS: PUBLICATION WITH
PROVISIONAL ROYALTIES; TERM EXTENSIONS; FURTHER EXAMINATION
Section 201.--Short Title
This section provides a short title: ``Examining Procedure
Improvements Act.''
Section 202.--Publication
This section amends section 122 of chapter 11 of title 35.
A new subsection (b), in subparagraph (1)(A), provides that
applications for patents, except applications for design
patents under Chapter 16 of title 35, provisional applications
filed under section 111(b) of title 35 and the exceptions noted
below, shall be published in accordance with procedures
determined by the Director, as soon as possible after the
passage of 18 months from the earliest filing date for which a
benefit is sought by the applicant under title 35. This
includes any claim to the right of priority in accordance with
sections 119, 365(a) and 365(b) of title 35 and any benefit of
an earlier filing date in accordance with sections 120, 121 and
365(c) of title 35. An application that is filed more than 18
months after the earliest filing date for which a benefit is
sought will be subject to immediate publication. Applications,
filed under the Patent Cooperation Treaty, that enter the
national stage in the United States will also be subject to
this publication requirement. The publication requirements of
this subsection are not intended to alter the practice accorded
to reissue applications. The exclusion of provisional
applications filed under section 111(b) of title 35 from the
publication requirement precludes the early publication of such
applications prior to the abandonment, by operation of law if
not converted to a non-provisional application (see Section
601), of such applications twelve months after filing. At the
request of an applicant, an application may be published
earlier than passage of 18 months.
Subparagraphs (1)(B) and (1)(C) of the new subsection (b)
also provide that the Director shall determine what information
is published and what information will be available after the
publication at 18 months. Decisions on making information
available between the date of publication and the date of issue
are final and nonreviewable.
Subsection (b)(2) provides certain exceptions to the
publication requirement in subsection (b)(1). Subparagraph
(b)(2)(A) provides that applications that are no longer pending
will not be published. Subparagraph (b)(2)(B) provides that
applications subject to secrecy orders pursuant to section 181
of title 35 will not be published.
Subparagraph (b)(2)(C) provides an exception for
applicants who file only in the United States. Upon the request
of an applicant at the time of filing, publication will not
take place until 3 months after the Director makes a
notification to the applicant under section 132 of title 35.
This exception does not include applications filed pursuant to
section 363 of title 35, applications asserting priority under
sections 119 or 365(a) of title 35 or applications asserting
the benefit of an earlier application under sections 120, 121,
or 365(c) of title 35. Further, in a request for treatment
under this subparagraph, an applicant must certify that the
application was not and will not be the subject of an
application filed in a foreign country. If an applicant wishes
to withdraw his request to receive the exception provided in
this paragraph because he later decides to file outside the
United States, but before receiving a notification under
Sec. 132, he may do so. The Director may establish appropriate
procedures and fees for making a request in accordance with
this subparagraph.
Subsection (c) establishes that the provisions of this
section shall not operate to create any new opportunity for
pre-issuance opposition and that the Director may establish
appropriate procedures to ensure that this section does not
create any new opportunity for pre-issuance opposition that did
not exist prior to the adoption of this section. The
publication of applications at 18 months should not operate to
allow third parties an opportunity to oppose an applicant's
application. As under current law, the process of issuing a
patent must be a process that involves only the applicant and
the PTO.
Section 203.--Time for Claiming Benefit of Earlier Filing Date
This section allows the Director to require the early
submission of a priority claim under section 119 of title 35 or
the early submission of an amendment containing a specific
reference to an earlier filed application under section 120 of
title 35.
Section 119 of title 35 is amended, in subsection (b), by
deleting time limits and adding a basis for establishing a
waiver of claims for priority. Thus, the Director is authorized
to promulgate rules establishing time periods during the
pendency of an application within which a right to priority may
be established. The failure of the applicant to file a timely
claim for priority may be considered a waiver of any such
claim, and the Director may require a certified copy of an
original foreign application, specification or drawing and a
translation in English if necessary.
Section 120 of title 35 is similarly amended by allowing
the Director to determine the time period during the pendency
of an application within which an amendment containing a
specific reference to an earlier filed application must be
submitted. Additionally, the Commissioner may consider the
failure to timely submit such an amendment as a waiver of any
benefit under this section and to establish procedures,
including the payment of a surcharge, to accept late
submissions under this section.
Section 204.--Provisional Rights
This section amends section 154 of title 35 by adding a new
subsection (d), entitled ``PROVISIONAL RIGHTS.''
Paragraph (d)(1) provides that a patent shall include the
right to obtain a reasonable royalty from any person who makes,
uses, offers for sale, sells, or imports in the United States
the invention as claimed in the published patent application
between the time it is published and the time the patent is
issued. Subsection (d)(1) further requires that the alleged
misappropriator must have had actual notice of the published
patent application from the application owner who is alleging
misappropriation and, where necessary, a translation of an
international application into the English language.
Subsection (d)(2) provides that the right to obtain a
reasonable royalty under this section shall be available only
if the invention claimed in the patent is substantially
identical to the invention as claimed in the published patent
application. That is, at least one infringed claim in the
published patent application must be substantially identical to
at least one claim in the patent in order to obtain a
reasonable royalty under this section. The requirement for
``substantial identity'' in this section is based, by analogy,
upon the decisional law for establishing intervening rights
under the reissue statute. In section 252 of title 35, the term
``identical'' has, heretofore, been used without qualification,
but the courts have interpreted that term to encompass claims
that are ``substantially identical.'' Slimfold Mfg. Co., Inc.
v. Kinkead Industries, Inc., 810 F.2d 1113, 1 USPQ2d 1563 (Fed.
Cir. 1987). That standard has been adopted here for provisional
rights and has now been explicitly codified in section 252 of
title 35 by a conforming amendment. No change in the law of
intervening rights is intended by that conforming amendment and
it is intended that same standard be applied in the context of
provisional rights.
The ``invention as claimed in the published application''
is defined by the claims present in the patent application on
the date of publication or as amended thereafter. The claims in
the Patent and Trademark Office publication, as the nature,
format, and content of that document is determined in
accordance with the requirement of section 122(b) of title 35,
do not necessarily limit the right to obtain a reasonable
royalty under this section as the claims in the application may
have been amended as of the date of publication or thereafter.
In any event, proper notice of those claims upon which a claim
for reasonable royalty is based must have been given during the
period in which provisional rights are available.
Subsection (d)(3) provides that the right to obtain a
reasonable royalty shall be available only in an action brought
within 6 years after a patent is issued and shall not be
affected by the duration of the period beginning on the date of
publication of an application and ending on the date a patent
is issued. This provision is included to make clear that the
time limitation on damages set forth in section 286 of title 35
shall not affect the ability to recover a reasonable royalty
for the entire period of time from publication until issue even
though that period may, itself, exceed six years. However, the
new subsection further provides that the right to obtain a
reasonable royalty for that period, however long, shall be
available only within six years of issue of the patent.
Subsection (d)(4) provides that the right to obtain a
reasonable royalty based upon the publication under the Patent
Cooperation Treaty of an international application designating
the United States shall commence from the date that the Patent
and Trademark Office receives a copy of the international
publication of the international application, or, if the
publication under the treaty of the international application
is in a language other than English, from the date that the PTO
receives a translation of the international application in the
English language. These requirements are in accord with the
requirements in Article 29 of the Patent Cooperation Treaty
that may be imposed by national law.
Section 205.--Prior Art Effect of Published Applications
This section amends section 102 of title 35 to provide a
prior art effect for applications published pursuant to new
subsection 122(b) and international applications published
under the Patent Cooperation Treaty and expands the prior art
effect of patents based upon applications filed under the
Patent Cooperation Treaty.
To that end, subsection 102 (e) of title 35 is amended to
include, as prior art, in paragraph (e)(1), inventions
described in an application for patent, published pursuant to
subsection 122(b) of title 35, by another filed in the United
States before the invention thereof by the applicant for
patent. The effective date as prior art for inventions
described in application for patent which is only published
pursuant to subsection 122(b) will be the date the application
is actually filed in the United States, and not any filing date
to which it might be entitled under the Paris Convention for
the Protection of Industrial Property or the Patent Cooperation
Treaty. Amended Subsection 102(e) also provides that an
international application filed under the Patent Cooperation
Treaty shall have the effect of a national application
published under section 122(b) of title 35 only if the
international application designates the United States and is
published under Article 21(2)(a) of the Patent Cooperation
Treaty in the English language. Amended subsection 102(e) of
title 35 continues to include, as prior art, in paragraph
(e)(2), inventions described in a patent granted on an
application for patent by another filed in the United States
before the invention by the applicant for patent, but deletes
the language extending to a prior art effect to a patent
granted on an international application filed by another under
the Patent Cooperation Treaty. This is no longer necessary in
view of the extension of a prior art effect to the underlying
published application pursuant to paragraph (e)(1).
Section 206.--Cost Recovery for Publication
The Director shall recover the cost of early publication by
the amendment made in section 202 by adjusting the filing,
issue, and maintenance fees under title 35, United States Code,
by charging a separate publication fee, or by any combination
of these methods.
Section 207.--Conforming Changes
Sections 11 of title 35, United States Code, is amended by
inserting ``and published applications for patents'' after
``Patents.''
Section 12 is amended in the section caption by inserting
``and applications'' after ``patents'' and by inserting ``and
published applications for patents'' after ``patents.''
Section 13 is amended in the section caption by inserting
``and applications'' after ``patents'' and by inserting ``and
published applications for patents'' after ``patents.''
The items relating to sections 12 and 13 in the table of
sections for chapter 1 are each amended by inserting ``and
applications'' after ``patents.''
The table of sections for chapter 11 of title 35, United
States Code, is amended in the item relating to section 122 by
inserting ``; publication of patent applications'' after
``applications.''
The table of sections for chapter 14 of title 35, United
States Code, is amended in the item relating to section 154 by
inserting ``; provisional rights'' after ``patent.''
Section 181 of title 35, United States Code, is amended in
the first paragraph by inserting ``by the publication of an
application or'' after ``disclosure'' and ``the publication of
an application or'' after ``withhold.'' The second paragraph is
amended by inserting ``by the publication of an application
or'' after ``disclosure of an invention.'' The third paragraph
is amended by inserting ``by the publication of the application
or'' after ``disclosure of the invention.'' Further, the third
paragraph is amended by inserting ``the publication of the
application or'' after ``withhold.'' Still further, the fourth
paragraph is amended by inserting ``the publication of an
application or'' after ``and'' in the first sentence.
Section 252 of title 35 is amended in the first
undesignated paragraph by inserting ``substantially'' before
``identical'' each place it appears. This change, referred to
above in the discussion relating to provisional rights in
Section 204, is not intended to change the law of intervening
rights but rather is intended only to codify existing
decisional law.
Section 284 of title 35 is amended by adding at the end of
the second paragraph the following: ``Increased damages under
this paragraph shall not apply to provisional rights under
section 154(d) of this title.'' This amendment has been made
because the willfulness necessary for the award of increased
damages cannot exist in the context of provisional rights
because the fact of infringement cannot be determined until a
patent has issued. That is, there can be no willful
infringement in the period for which provisional rights may be
available because ``infringement'' within that period can only
be defined by the terms of the patented claims that are, of
course, not available until a patent issues.
Section 374 of title 35 is amended such that the
publication under Patent Cooperation Treaty, of an
international application designating the United States shall
confer the same rights and shall have the same effect under
this title as an application for patent published under section
122(b) of this title, except as provided in section 102(e) and
154(d) of title 35.
Section 208.--Patent Term Extension Authority
Section 208 amends Sec. 154(b) of title 35 to provide
patent term compensation for those diligent patent applicants
who experience delays beyond their control in the process of
getting their patents issued or who have not received a final
decision within three years of filing. Section 154(b)(1)(A)(I)
provides that a patent applicant will receive compensation for
any time lost due to an interference proceeding under
Sec. 135(a) of title 35. Section 154(b)(1)(A)(ii) provides that
a patent applicant will receive compensation for any time lost
due to the imposition of a secrecy order pursuant to Sec. 181
of title 35. Section 154(b)(1)(A)(iii) provides that a patent
applicant will receive compensation for any time lost due to
appellate review by the Board of Patent Appeals and
Interferences or by a federal court where the patent was issued
pursuant to a decision in the review reversing an adverse
determination of patentability. Section 154(b)(1)(A)(iv)
provides that a patent applicant will receive compensation for
any time lost due to an ``unusual administrative delay'' by the
PTO in issuing the patent. Section 154(b)(1)(A)(v) provides
that any time beyond three years from filing should be deemed
to be unusual administrative delay, guaranteeing 17 years of
patent term for applicants, as long as the applicant is
diligent. Applicants may not purposely delay their application
beyond three years by filing spurious appeals or using other
dilatory tactics.
``Unusual administrative delay'' is strictly defined to
impose an objective time clock on the PTO in issuing a patent.
Any time the PTO takes in excess of the stated minimums is
automatically and fully compensated. An unusual administrative
delay is defined as the failure of the PTO to: (I) make a
notification of the rejection of any claim for a patent or any
objection or argument under section 132 of this or give or mail
a written notice of allowance under section 151 of title 35 not
later than fourteen months after the date on which the
application was filed; (ii) respond to a reply under section
132 of this title or to an appeal taken under section 134 of
this title not later than four months after the date on which
the reply was filed or the appeal was taken; (iii) act on an
application not later than four months after the date of a
decision by the Board of Patent Appeals and Interferences under
sections 134 or 135 of this title or a decision by a Federal
court under sections 141, 145, or 146 of this title where
allowable claims remain in an application; (iv) issue a patent
not later than four months after the date on which the issue
fee was paid under section 151 of this title and all
outstanding requirements were satisfied; or (v) issue a patent
within three years after the filing date of the application in
the United States if the applicant has not obtained further
limited examination of the application under section 209 of the
Examining Procedure Improvements Act, has responded to all
rejections, objections, arguments, or other requests from the
PTO within two months after they are made, has not benefitted
from an extension of patent term, has not sought or obtained
appellate review by the Board of Patent Appeals or by a Federal
Court, or has not requested ant delay in the processing of the
application by the Patent and Trademark Office.
The constraint upon the PTO in section 154(b)(1)(B)(I),
does not imply that a written notice of allowance under section
151 of title 35 must be given or mailed not later than 14
months after the date on which the application in issue was
filed. Rather, this constraint could be satisfied if a
notification of the rejection of any claim for a patent or any
objection or argument under section 132 of title 35 is made not
later than 14 months after the date on which the application in
issue was filed.
Section 154(b)(2)(A) provides that the total duration for
extensions granted under subsections (I) and (ii) of
Sec. 154(b)(1)(B) shall not be limited and that the total
duration for extensions granted under subsections (iii) or (iv)
or both shall not exceed ten years. Section 154(b)(2)(A) also
provides that overlapping delays should not be double counted.
Section 154(b)(2)(B) provides that extensions will not be
granted where the patent applicant fails to take reasonable
efforts to conclude prosecution of the application. The few
applicants who engage in intentional or unjustifiable delay
tactics will not be rewarded for such behavior. The PTO is
required to prescribe the regulations necessary to carry out
the mandate of this subsection. Section 154(b)(2)(C) provides
that no patent the term of which has been disclaimed beyond a
specified day may be extended under this section beyond the
expiration date specified in the disclaimer. The ``reasonable
efforts'' clause is an effort to avoid the submarine patent
problem. The intent of the Committee is that only the most
egregious and obvious delay tactics will go unrewarded by this
provision.
In prescribing regulations to carry out the provisions of
this section, the PTO should ensure that in those cases where
an appeal of an adverse determination of patentability is filed
or an interference is declared, the extension to be granted for
a successful appeal or for the interference proceeding should
be equal to the time from filing or declaration until an
applicant is notified of the conclusion of the proceeding. The
regulations should also provide that a patent applicant who
exercises reasonable efforts is eligible for one form or
another of term compensation throughout the prosecution of the
application. That is, there should be no time period where a
diligent patent applicant may lose term for reasons beyond his
or her control without an opportunity for compensation.
The Committee has received comments regarding the
provisions in section 154(b) of title 35 allowing for
extensions of patent terms for successful appellate review. The
Committee believes that the language contained in section 154,
as well as the corresponding language incorporated into H.R.
400, adequately establishes the basis to provide compensation
when the issuance of a patent is delayed by virtue of an appeal
which results in a reversal of an adverse determination of
patentability.
The language should not be viewed in a mechanistic way.
Even though an application wins on some relevant issue, the
Board of Patent Appeals and Interferences or the Court of
Appeals for the Federal Circuit can ``affirm'' a rejection. In
certain such cases, the applicant may be entitled to term
extension. Only where an applicant does not prevail on any
determination should no extension be provided for lost patent
term.
To ensure an equitable application of the provisions
providing for term extension for delays due to appellate
review, the Patent and Trademark Office should look carefully
at the substance of each particular case and not arbitrarily
deny any extension of term simply because an application was
not immediately ready for patent grant following an action by
the Board or the Court. For example, where the Court reversed
the PTO s decision to not consider an affidavit to overcome a
rejection and remanded the case to the PTO to consider the
merits of the affidavit as in In re Alton, 37 U.S.P.Q 2d. 1577,
the subsequent issuance of a patent based on the review of the
affidavit would constitute a situation where patent term
extension for the period of the review would be appropriate.
Similarly, in a case where the Board reverses an examiner s
rejection, but issues a new rejection which the applicant is
able to overcome in subsequent prosecution by, for example,
submission of a Rule 131 affidavit, the applicant should
receive an extension equal to the period of appellate review.
Another situation could be where the Board or the Court
affirms a rejection on very narrow grounds that are
subsequently overcome by a minor amendment which the applicant
clearly would have known to submit had not it faced a broader
and improper rejection by the examiner. In such a situation,
the issuance of the patent can be said to have been a result of
the reversal of the examiner s broad rejection. Finally, where
the Office withdraws an appeal after it had been pending for a
long time before the Board or the court on the basis that a
minor amendment would obviate the original rejection and place
the case in condition for allowance, an extension would equally
be appropriate.
In establishing rules to implement the provisions allowing
for patent term extensions for successful appeals,
interferences, secrecy orders, and unusual administrative
delays, the PTO should make every effort to ensure the
applicants whose patents are unfairly delayed receive
appropriate extensions. At the same time, the Office should be
ver watchful to ensure that its procedures do not admit of the
manipulation which Congress intended to stop with the adoption
of a term measured from filing.
Section 209.--Further Examination of Patent Applications
This section mandates that the Director prescribe
regulations to provide for the further limited reexamination of
an application for patent and provides the Director the
authority to establish appropriate fees for such further
limited reexamination and to provide a 50 percent reduction on
such fees for small entities that qualify for reduced fees
under section 41(h)(1) of title 35. This section is intended to
simplify the continued prosecution of patent applications after
a final rejection has been entered, extending to all
applications the transitional practice introduced in P.L. 103-
465, section 532(a)(2).
Section 210.--Last Day of Pendency of Provisional Application
This section amends section 119(e) of title 35 by providing
that if the day that is 12 months after the filing date of a
provisional application falls on a Saturday, Sunday, or Federal
holiday within the District of Columbia, the period of pendency
of the provisional application shall be extended to the next
succeeding business day. This amendment is intended to address
and resolve the so-called ``last day trap'' for provisional
applications. Because the requirement for filing a non-
provisional application that claims priority of a provisional
application under section 119(e) of title 35 relies upon both
copendency and action taking, the remedy of section 21(b) of
title 35 is not available for the filing of that non-
provisional application and an applicant may be confronted with
this ``last day trap.'' This amendment resolves this problem.
Section 211.--Reporting Requirement
Section 211 requires the PTO to report to Congress by April
1, 2001, and every year thereafter, on the impact of that
publication of applications has on independent inventors.
Section 212.--Effective Date
Sections 202 through 207, and the amendments made by those
sections, shall take effect on April 1, 1998, and shall apply
to all applications filed under 35 U.S.C. Sec. 111 on or after
that date and all applications complying with 35 U.S.C.
Sec. 371 that resulted from international applications filed on
or after that date. Sections 204 and 205 shall also apply to
international applications designating the United States that
are filed on or after April 1, 1998.
Sections 208 through 210, and the amendments made by those
sections, shall take effect on the date of enactment of the Act
and, except for design patent applications filed under chapter
16 of title 35, shall apply to any application filed on or
after June 8, 1995.
Title III.--Protection for Prior Domestic Users of Patented
Technologies
This title provides a defense to patent infringement based
on prior use of a patented invention in certain circumstances.
The bill clarifies the rights of a party who had used an
invention (a ``prior user'') vis-a-vis a party that
subsequently patents the invention. Under this title, a person,
who prior to the effective filing date of a patent, has been
commercially using the claimed invention or has made effective
and serious preparation for commercial use of such an
invention, will have a defense if that party is charged with
patent infringement based on the prior use. The provisions of
this title will permit the prior user to continue the use of
the invention even though it is claimed in a subsequently
granted patent.
Section 301.--Short Title
This section provides that the title may be cited as the
``Protection for Prior Domestic Commercial and Research Users
of Patented Technologies Act.''
Section 302.--Defense to Patent Infringement Based on Prior
Domestic Commercial or Research Use
This section adds a new section 273 to Chapter 28 of title
35, United States Code, which establishes a defense to a claim
of patent infringement where a person has ``commercially'' used
or made serious preparations to use commercially an invention
that later becomes the subject matter of a patent issued to
another. Such commercial use or preparation for commercial use
must have occurred at least one year prior to the earliest
effective filing date to which the subject matter at issue is
entitled.
Subsection (a) of the newly added section 273 defines the
terms ``commercially used,'' ``commercially use,'' and
``commercial use'' to mean that the subject matter actually
claimed in the subsequently granted patent has, in fact, been
used in the United States in the design, testing, or production
of a product or service that is used in commerce in the United
States. Commercial use does not require that the invention
itself be publicly disclosed or that it be in any way publicly
accessible.
The subsection defines commercial use to include regular
use in laboratory research. This means regularly used in
laboratory research in the United States, whether or not the
subject matter at issue is accessible or known to the public.
The subsection also defines ``used in commerce'' and ``use in
commerce'' as meaning that an actual sale or other commercial
transfer of the claimed invention has taken place or that an
actual sale or other commercial transfer of a product or
service resulting from the use of the invention has taken
place. Determining whether an activity would constitute
commercial use should be construed to include activities that
individuals in a particular industry would consider commercial
in nature. For example, sale of a software product that
consists of a license authorizing the copying and use of a
computer program and providing terms regarding proprietary
information embedded in the program, in conjunction with a copy
of the object code representing the compiled computer program
on a computer readable medium, would be viewed as ``commercial
use'' under subsection 273(a)(3).
The ``effective filing date'' of a patent is defined in
subparagraph 273(a)(4) as the actual filing date of the
application in the United States or, if such an earlier filing
date is claimed, the earlier filing date claimed, and to which
the subject matter is entitled, under section 119, 120, or 365.
Subsection (b) of Section 273 provides that a prior user
of a patented invention will not be liable as an infringer
under section 271 of title 35 if certain requirements are met.
The prior user, acting in good faith, must have commercially
used the invention, as defined by one or more claims of the
patent being asserted against the prior user, in the United
States or made effective and serious preparation for its
commercial use prior to the effective filing date. It is
important to recognize that the prior user right is a defense
that can be asserted in response to a claim of infringement.
The prior user right is not a license under the patent and,
therefore, does not create an obligation to pay a royalty or
other compensation to the patent holder.
Subparagraph (b)(2) makes it clear that a party who
purchases the subject matter claimed in a patent, or a product
or service produced using the subject matter claimed in a
patent from a person entitled to assert prior user rights in
connection under this section, would not be liable to the
patent owner for patent infringement any more than the party
would be if he had purchased from the patent owner. One who has
the right to assert a prior user defense would be able to sell
the subject matter claimed in a patent or the product or
service produced using that subject matter without liability to
the patent owner for patent infringement. It follows that, if
the prior user's activities were not infringing, the purchaser
of the products or services resulting from those non-infringing
activities would not be liable for using that which was
purchased.
Subsection (c)(1) of new Section 273 makes it clear that
the prior user defense is not available to a person who derived
the subject matter on which the defense is claimed from the
patentee or from one in privity with the patentee. The prior
user does not have to be a prior inventor in order to assert a
defense based on prior use. Prior user rights may be claimed
whether the party asserting the right conceived the invention
or a third party conceived the invention, so long as the
technology that is the basis of the prior use defense was not
obtained directly or indirectly from the patentee.
Subparagraph (c)(2) provides that the prior user defense
does not have the effect of a general license under the patent.
The right extends only to what was actually in commercial use
by the prior user, or had been used by the prior user in the
design, testing, or production in the United States of a
product or service which is used in commerce. Variations in the
quantity or volume of the prior use are protected by the right
as are improvements in the claimed subject matter that do not
infringe additional claimed subject matter of the patent. In
other words, if the prior user must infringe additional claims
of the patent in order to implement an improvement in the
claimed subject matter, the prior user would not be able to
rely on the defense provided in this section. To determine
whether an alteration in the ``commercial use'' would infringe
additional claims of a patent, one should first determine which
claims of the patent would have been infringed by the original
prior use but for the operation of section 273(b). If the prior
user alters its activities after the filing date of the patent
application in a way that would infringe claims other than
those identified above, the prior user will be liable for
patent infringement with respect to those additional claims.
It is not the intent of the legislation to limit the prior
use defense only to instances in which actual commercial use
can be demonstrated. Under subsection (c)(3), the defense would
also be available to a prior user who can prove that he or she
has actually reduced the subsequently patented invention to
practice, has made a significant investment or a substantial
portion of the total investment necessary to use the subject
matter, and has made a commercial transaction in the United
States in connection with the preparation to use the subject
matter. In addition, the person must have completed in diligent
fashion the remainder of the activities and investments needed
to commercially use the subject matter. These latter activities
can have taken place after the effective filing date of the
patent application so long as they are pursued diligently.
Subsection (c)(4) makes it clear that the burden of proof
is on the person asserting the defense. The prior user must
provide evidence to establish each of the conditions precedent
to the defense. To prove that the necessary investment has
taken place, the party asserting the defense must show that
substantial investment was made in equipment, testing,
advertising, or other preparation for commercializing the
invention. Documentation and commercialization plans must be
sufficiently developed and in sufficient detail to prove the
rights claimed. For example, in the pharmaceutical industry,
evidence that a prospective new drug had been cleared for
clinical trials prior to the effective filing date would be
sufficient to show effective and serious preparation. In the
chemical industry, effective and serious preparation would
require evidence proving that a substantial investment had been
made, for example, in reactors or process equipment designed to
employ or manufacture the invention. Evidence of actions that
amount merely to conceiving the invention, development of the
invention on a laboratory, experimental, or reduction of an
invention to practice, without evidence of subsequent efforts
to use the invention commercially and to make the necessary
investments to commercialize the invention, would not be
adequate to satisfy the test for effective and serious
preparation.
Subsection (c)(5) provides that the defense of prior use is
not available if a person has abandoned commercial use of the
subject matter. Regardless of the degree of commercial use or
serious and effective preparation which might have occurred at
an earlier point in time, a defense based on prior user rights
may not be invoked if such commercial use was in a state of
abandonment, or abandoned after the effective filing date. If
the prior use is abandoned after the effective filing date, it
is the intent of this section that the prior user right shall
be a defense to infringement for the time of commercial use
between the effective filing date and abandonment. As the term
is used in connection with this legislation, abandonment refers
to cessation of use with no intent to resume. Certain
activities, however, are naturally periodic or cyclical.
Intervals of non-use between such periodic activities such as
seasonal factors or reasonable intervals between contracts,
shall not be considered abandonment so long as there is no
positive corroborating evidence of abandonment.
Subsection (c)(6) makes clear that the ability to assert a
right of prior use is a personal right and cannot be licensed,
assigned, or transferred to any other person except to the
patentee, or as part of the assignment or transfer, in good
faith, of the entire enterprise or business to which the
defense relates. This subsection is intended to permit a
business to continue to use the subject matter related to the
defense in circumstances in which there has been a good faith
transfer of the entire enterprise or business but to prohibit
any attempt to sell or license the defense itself.
Subsection (c)(7) provides that, to assert a defense of
prior use, a person, or someone in privity with that person,
must have been using the subject matter commercially or have
reduced the subject matter to practice more than one year prior
to the effective filing date of the patent.
Subsection (d) is intended to ensure that the defense is
raised only in circumstances in which its assertion is
reasonable. The subsection requires that a court find the case
exceptional and award attorney's fees under section 285 of
title 35, United States Code, if the defense is pleaded by a
person who is found to infringe a patent and who fails to show
a reasonable basis for asserting the defense.
Subsection (e) provides that a patent cannot be deemed to
be invalid under section 102 or 103 of title 35 solely because
a defense is established under section 273(b). Any
determination under section 102 or 103 must be established
separately, although evidence used to establish a defense of
prior use could be used in connection with establishing
invalidity under those sections.
Subsection (b) of section 302 of the Act amends the table
of sections at the beginning of chapter 28 of title 35 to add
the heading for section 273, ``Prior domestic commercial or
research use; defense to infringement.''
Section 303.--Effective Date and Applicability
This section makes the amendments provided for in title III
effective on the date of enactment of the Act. The section
specifies, however, that the amendments shall not apply to any
action for infringement pending on the date of enactment or to
any subject matter for which an adjudication of infringement,
including any consent judgment, was made before the date of
enactment.
TITLE IV.--ENHANCED PROTECTION OF INVENTORS RIGHTS
Section 401.--Short Title
This section provides that the title may be cited as the
``Enhanced Protection of Inventors' Rights Act.''
Section 402.--Invention Development Services
This section adds a new chapter 5 to Part I of title 35,
United States Code, consisting of sections 51 through 59.
Invention development companies can be of great assistance to
independent inventors providing a single source to evaluate an
invention, assist in developing its technical potential, assist
in obtaining protection for it, and assist in promoting it in
order to license or sell it. While many invention developers
are legitimate, the unscrupulous ones take advantage of
untutored inventors, asking for large sums of money up front
for which they provide no real service in return. This new
section provides a much needed tool for independent inventors
to use if they are the target of the predatory practices of
unscrupulous invention development companies.
New section 51 of title 35 defines the terms used in the
chapter. The terms used in the chapter are defined broadly in
order to ensure that organizations that would prey upon
inventors cannot escape the reach of the chapter merely by
using titles and business descriptions artfully. Subsection
(3), however, excepts from the definition of ``invention
promoter'' departments and agencies of the Federal, state, and
local governments; any nonprofit, charitable, scientific, or
educational organizations qualified under applicable State laws
or described under section 170(b)(1)(A) of the Internal Revenue
Code of 1986; or any person registered and in good standing
with the U.S. Patent and Trademark Office (PTO) who is acting
within the scope of his or her registration to practice before
the PTO.
The Committee is in agreement that the exclusion provided
for in Sec. 51(3)(c) does not totally exempt patent attorneys
from regulation under the act. The exception provides that any
person registered to practice before the Patent and Trademark
Office is exempt from regulation when acting within the scope
of that person's registration to practice before the Patent and
Trademark Office. However, the Committee recognizes that patent
attorneys may provide services which fall outside the scope of
their registration to practice before the Patent and Trademark
Office and within the definition of invention development
services. Whenever a patent attorney engages in conduct
described in Sec. 51(4)(B) and (C), he or she will be subject
to the provisions of this act.
Sec. 51(4) defines the term invention development services
to mean, with respect to an invention by a customer, any act
involved in evaluating the invention to determine its
protectability as some form of intellectual property, other
than evaluation by a person licensed by a state to practice law
who is acting within the scope of the license; evaluating the
invention to determine its commercial potential by any person
for purposes other than providing venture capital; or
marketing, brokering, licensing, selling, or promoting the
invention or a product or service in which the invention is
incorporated or used, except that the display only of an
invention at a trade show or exhibit shall not be considered to
be invention development services.
New subsection 52(a) requires that contracts for invention
development services be in writing and that a copy of the
signed contract be provided to the customer at the time he or
she enters into the contract. Even in the event the contract is
entered into on behalf of a third party, that third party is to
be treated as a customer and the provisions of the chapter
apply.
Subsection 52(b) requires invention developers to provide
to customers at the time a contract is entered into a written
document stating whether the developer customarily seeks more
than one contract in connection with an invention and seeks to
perform services in connection with an invention in 1 or more
phases, using 1 or more contracts governing the performance at
each phase. In addition, invention developers must provide the
customer with a copy of the written contract together with a
summary, in writing, describing the developer's usual business
practices, including the customary terms in contracts and the
approximate amount of the usual fees or other consideration
that the customer will be charged for each service provided by
the invention developer.
Subsection 52(c) provides the customer with the right to
terminate a contract for invention development services by
sending a letter to the invention developer stating the
customer's intent to cancel. This right may not be waived in
the contract for invention development services. To execute the
right to terminate, the customer must send the letter within
five business days after both the customer and the invention
developer execute the invention development contract. It is the
intention of the Congress to give the customer a ``cooling
off'' period in which the customer can effectively change his
or her mind. The delivery of a promissory note, check, bill of
exchange, or other negotiable instrument to the invention
developer or a third party for the benefit of the invention
developer is deemed payment received by the invention developer
on the date received, even though the date or dates in such
instruments differ from the date of receipt.
New section 53(a) of title 35 requires that every contract
for invention development services include a cover sheet with
the notice included in the legislation in legible, bold-face
type of not less than 12-point size, explaining the right of
termination; giving information regarding the number of
inventions evaluated by the invention developer and stating the
number of those evaluated positively and the number negatively;
advising the customer that assigning rights to the invention
developer can allow sale or other disposal of the invention by
the latter without sharing the profits; advising the customer
of the number of customers who have contracted for services
with the invention developer in the prior five years and how
many of them have earned more than the cost of the services due
to the performance of the invention developer; informing the
customer of the invention development companies with which the
invention developer's officer have been affiliated in the
previous ten years to enable the customer to check out the
reputations of these companies; and encouraging the customer to
consult an attorney before entering in the contract and
advising that rights can be lost by proceeding pro se before
the PTO.
Subsection 53(b) requires that the cover notice, in
addition to the obligatory text, include the name, primary
office address, and local office address of the invention
developer. The subsection prohibits inclusion of other matter.
Subsection 53(c) allows the invention developer to delete
from the total number of customers who have contracted with the
organization provided for in subsection 53(a) the customers who
have purchased trade show services, research, advertising, or
other non-marketing services from the invention developer. The
invention developer also need not include those who have
defaulted in their payments under invention development
contracts.
Subsection 54 of title 35 requires the invention developer
to provide each customer who has contracted for invention
development services a written report at least once every three
months during the term of the contract. The report must
describe fully, clearly, and concisely, the services performed
by the invention developer on behalf of the customer during the
report period and the services to be performed, giving the
names of the persons who will perform those services. The
report must include the name and address of each person, firm,
corporation, or other entity to whom the invention that is the
subject matter of the contract has been disclosed, the reason
for the disclosure, and the nature of the disclosure. Where
more than one person has been contacted in a particular
corporation or entity, it will suffice to include the name and
address of one of the people contacted and of the corporation
or entity. Copies of all responses received as a result of the
disclosure must be provided. The purpose of this section is to
ensure that the customer is kept fully informed of the services
being performed on his or her behalf and the results of those
services so that the customer may take appropriate action if
they are not receiving the service required under the contract.
New subsection 55(a) requires that all contracts for
invention development services include, in bold-face type of
not less than 12-point type: the terms and conditions of
payment and the contract termination rights required by section
52; a statement making it clear that the contract is not
executed until the customer makes a payment to the invention
developer and, therefore, the customer can avoid executing the
contract by not making such a payment; a complete, clear, and
concise description of the specific acts and services that the
invention developer is to perform for the customer; a clear
statement indicating whether the invention developer is going
to construct, sell, or distribute any prototypes, models, or
devices embodying the customer's invention and, if so, how
many; the full name and principal place of business developer
and, to the extent known at the time the contract is entered
into, the name and principal place of business of any parent,
subsidiary, agent, independent contractor, and any affiliated
company or person who will perform any service or act that the
invention developer has undertaken to perform for the customer;
a statement of any estimation or projection of customer
earnings resulting from the invention that has been given
orally or in writing by the invention developer or anyone on
behalf of the invention developer, and a full description of
the data on which that estimation or projection was based; the
name and address of the organization or person who is to be the
custodian of all the records and correspondence related to the
contracted for invention development services and an
unequivocal statement acknowledging that the invention
developer is required to maintain all such records and
correspondence for the customer for at least two years
following the expiration of the invention development services
contract; and a statement of the time schedule for performance
of the invention development services with an estimated date by
which the performance of services is expected to be completed.
It is the intent of this legislation that the invention
developer ensure that all material information be provided to
the customer so that the customer can make an informed decision
in entering into any contract for development services.
Subsection 55(b) makes it clear that, if the invention
developer has discretion regarding the nature of the specific
acts and services the invention developer is to perform for the
customer, as those acts and services are described in the
contract, the invention developer will be deemed to be a
fiduciary with all corresponding obligations with respect to
the customer.
Subsection 55(c) requires that, within 7 days of written
notice to the invention developer or the custodian of records
and correspondence identified in the contract for invention
development services, such custodian must make available to the
customer or the customer s representative for review and
copying all records and correspondence related to the invention
development contract. The review and copying shall take place
on the invention developer s premises during normal business
hours and any fees for copying shall be reasonable.
Subsection 56(a) authorizes the customer to declare void
any contract for invention development services that does not
conform to the requirements of chapter 5 of Part I of title 35,
United States Code. In addition, the subsection authorizes the
customer to void any contract entered into in reliance on any
false, fraudulent, or misleading information, representation,
notice, or advertisement of the invention developer that is
material where the contract provides for filing an application
to obtain a utility, design, or plant patent. An exception
exists where the contract makes it clear that the filing of
such application will be done by an agent or attorney
registered to practice before the PTO and such filing is, in
fact, performed by such agent or attorney. Finally, subsection
56(a) makes void and unenforceable any waiver by a customer of
any provision required by chapter 4.
Subsection 56(b) establishes a civil cause of action
against any invention developer who injures a customer through
a violation of any of the obligations of chapter 5 or through
any false or fraudulent statement, representation, or omission
of material fact by the invention developer, or any person
acting on behalf of the invention developer, or through failure
of the invention developer to make all the disclosures required
under the chapter. In such a civil action, the customer may
recover from the invention developer, or any officers,
directors, or partners of such developer, reasonable costs,
attorneys' fees, and the greater of $5000 or the amount of
actual damages sustained by the customer. Subsection (b)(2)
authorizes the court to increase damages in egregious cases to
an amount not to exceed 3 times the amount awarded as statutory
or actual damages.
Subsection 56(c) establishes a rebuttable presumption of
injury in the event of any substantial violation of chapter 5
by an invention developer or of execution of an invention
development services contract by a customer in reliance on any
false or fraudulent statements, representations, or material
omissions by the invention developer or any person acting on
behalf of the invention developer.
Subsection 57(a) requires the Director of the PTO to retain
all complaints submitted to the PTO regarding invention
developers, together with any responses by invention developers
to those complaints, and to make such complaints and responses
available to the public.
Subsection 57(b) authorizes the Director to request from
Federal and State agencies copies of any complaints relating to
invention development services they have received and to
include those complaints in the records maintained by the PTO
regarding invention development services.
Section 58 provides that making false or misleading
statements or representations to a customer, omitting any
material fact in a communication with a customer or failing to
make all the disclosures required by chapter 5 is a misdemeanor
and authorizes a fine of not more than $10,000 for each such
offense.
Section 59 makes it clear that the provisions of chapter 5
are not to be construed to affect any other obligation, right,
or remedy that is provided under any other Federal or State
law.
Section 403.--Technical and Conforming Amendment
This section amends the table of chapters of Part I of
title 35, United States Code to add a heading for chapter 5.
Section 404.--Effective Date
This section specifies that the title and the amendments
made by it will be effective 60 days after the date of
enactment of the Act.
TITLE V.--IMPROVED REEXAMINATION PROCEDURES
Section 501.--Short Title
This section provides a short title: ``Improved
Reexamination Procedures Act.''
Section 502.--Definitions
This section amends 35 U.S.C. Sec. 100 to add a definition
for the term ``third- party requester''. A third-party
requester is defined as a person requesting reexamination under
35 U.S.C. Sec. 302 who is not the patent owner.
Section 503.--Reexamination Procedures
This section amends the reexamination procedures set forth
in chapter 302 of title 35, United States Code, to broaden the
basis for, and scope of, reexamination to increase third-party
requester participation in reexamination procedures and appeals
and to preclude reexamination in certain circumstances.
Subsection (a) amends 35 U.S.C. Sec. 302 to provide an
additional basis for a patent owner or a third party to request
reexamination. The additional basis is that a substantial new
question of patentability exists for any claim of a patent due
to a lack of compliance of that claim with the requirements of
35 U.S.C. Sec. 112 except for the requirement to set forth the
best mode of carrying out the invention. It also requires that
the request identify the real party in interest.
Subsection (b) amends each subsection of 35 U.S.C.
Sec. 303. Subsection (b) amends 35 U.S.C. Sec. 303(a) to
provide an additional basis for determining whether a
substantial new question of patentability exists in Director-
initiated reexaminations, namely the failure of one or more
claims of a patent to comply with the requirements of 35 U.S.C.
Sec. 112 other than the best mode requirement. Reexamination of
a new question of patentability may involve reconsideration of
patents and publications considered during the original
examination, the examination of a reissue patent or an earlier
concluded prior reexamination. Such patents and publications
may be considered alone or in combination with patents and
publications not previously considered. Although a new question
of patentability can be raised by the same patents and printed
publications previously considered by the Office, a new
question cannot be based solely on an issue that has already
been decided by the Office.
Subsection (b) amends 35 U.S.C. Sec. 303(b) by substituting
the term third-party requester for the phrase person requesting
reexamination. Subsection (b) amends 35 U.S.C. Sec. 303(c) by
removing the phrase that no substantial new question of
patentability has been raised from the first sentence of this
subsection. This change clarifies that all determinations of
the Director under subsection (a) (e.g., that a substantial new
question of patentability has or has not been raised) are
nonappealable. This amendment codifies existing case law which
provides that a positive determination by the Director that a
substantial new question of patentability has been raised is
nonappealable. The phrase ``that no new question of
patentability has been raised'' is added to the second sentence
of this subsection to clarify that refunds may be made for
negative determinations. Review of negative determinations
should remain available for both patent owner requesters and
third- party requesters by petition to the Director under 37
C.F.R. Sec. 1.181, as currently provided for in 37 C.F.R.
Sec. 1.515(c).
Subsection (c) amends 35 U.S.C. Sec. 304 to provide that
the initial PTO action on the merits of a reexamination may
accompany the order granting the reexamination request. This
amendment also deletes provisions that allow the patent owner
to file a preliminary statement, which must be served on any
third-party requester, and may allow the third-party requester
to file a reply to the patent owner's statement. These changes
are made in view of the procedure in subsection (d) of this
Section.
Subsection (d) amends the first sentence of 35 U.S.C.
Sec. 305 by deleting the reference to the procedures of 35
U.S.C. Sec. 304 relating to the patent owner statement and
third-party requester reply, which are deleted by subsection
(c) of this Section. Subsection (d) also amends 35 U.S.C.
Sec. 305 to simplify the authority of a patent owner to amend
the patent or any of its claims or to present new claims. The
change permits a patent owner to amend an existing claim or to
add a new claim for any reason once a reexamination proceeding
has been established. The change does not alter the prohibition
imposed by the third sentence of Sec. 305 against amendments or
new claims that would enlarge the scope of the claims relative
to the claims in the patent as originally issued. Subsection
(d) then designates the existing provisions of 35 U.S.C.
Sec. 305, so modified, as subsection 305(a). Reexamination of a
new question of patentability may involve reconsideration of
patents and publications considered during the original
examination, the examination of a reissue patent, or an earlier
concluded prior reexamination. Such patents and publications
may be considered alone or in combination with patents and
publications not previously considered. Although a new question
of patentability can be raised by the same patents and printed
publications previously considered by the Office, a new
question cannot be based solely on an issue that has already
been decided by the Office.
Subsection (d) also amends 35 U.S.C. Sec. 305 to add a new
subsection, Sec. 305(b), to address reexamination proceedings
based on a request from a third-party requester. The new
Sec. 305(b)(2) requires that any document filed by either the
patent owner or a third-party requester be served on all other
parties to the reexamination proceeding, with the exception of
the request for reexamination. The new Sec. 305(b)(2) provides
that a third-party requester may submit one set of written
comments to the office in reply to a response by the patent
owner to any Office action. The written reply must be limited
to issues covered by the Office action or raised in the patent
owner s response thereto. This subsection provides that the
third party must submit the comments within a reasonable
period, such period to be not less than one month from the date
of service by the patent owner of its response to any Office
action.
Additionally, subsection (d) designates the last sentence
of existing 35 U.S.C. Sec. 305 as 35 U.S.C. Sec. 305(c), and
amends this sentence by providing an exception to the ``special
dispatch'' requirement where so provided by the Director for
good cause.
While no statutory provision is added by this Act to
address interviews conducted before the examiner during
reexamination, it is intended that the Office, through
rulemaking, will provide third-party requesters the right to
participate in any examiner interview initiated by the patent
owner or by the examiner, and that such interviews will be
conducted under controlled conditions before the examiner and
an additional, more senior, Office representative. The third
party should not be permitted to initiate examiner interviews.
Subsection (e) amends 35 U.S.C. Sec. 306 by designating the
current provisions relating to appeal rights of the patent
owner as subsection 306(a) and by making amendments thereto,
and by adding two new subsections, 306(b) and 306(c), to
provide third-party requesters with appeal rights and to create
an estoppel effect, respectively.
Subsection 306(a) provides the patent owner with a right to
be a party to any appeal taken by a third-party requester
pursuant to subsection 306(b). In addition, subsection 306(a)
is amended to remove the availability of review under 35 U.S.C.
Sec. 145, while maintaining the availability of review under 35
U.S.C. Sec. 134 and 35 U.S.C. Sec. Sec. 141-144. By this
amendment, patent owners dissatisfied with a decision of the
Board of Patent Appeals and Interferences in a reexamination
proceeding would no longer be permitted to file a civil action
against the Director in the U.S. District Court for the
District of Columbia, but could continue to appeal such
decision to the U.S. Court of Appeals for the Federal Circuit.
Subsection 306(b) provides third-party requesters with
appeal rights that parallel those provided to patent owners.
Under subsection 306(b), third-party requesters may appeal any
final decision favorable to the patentability of any original
or proposed amended or new claim of the patent under the
provisions of 35 U.S.C. Sec. 134. They may also seek court
review under 35 U.S.C. Sec. Sec. 141-144, and may be a party to
any appeal taken by the patent owner, subject to the provisions
of 35 U.S.C. Sec. 306(c).
Subsection 306(c)(1) provides that a third-party requester
who files an appeal or participates as a party to an appeal by
the patent owner under the provisions of 35 U.S.C.
Sec. Sec. 141-144, is estopped from later asserting, in any
forum, the invalidity of any claim determined to be patentable
on appeal on any ground which the third- party requester raised
or could have raised during the reexamination proceedings,
including the request for reexamination. Subsection 306(c)(2)
provides that a third- party requester is deemed not to have
participated as a party to an appeal by the patent owner
unless, within twenty days after the patent owner has filed
notice of appeal, the third-party requester files notice with
the Director electing to participate.
Subsection (f)(1) adds a new section, 35 U.S.C. Sec. 308,
having two subsections, 308(a) and 308(b). This new section
prohibits reexamination in two circumstances, notwithstanding
any other reexamination provision. First, section 308(a)
provides that, once an order for reexamination of a patent has
been issued under section 35 U.S.C. Sec. 304, neither the
patent owner nor a third-party requester may file a subsequent
request for reexamination of the patent until a reexamination
certificate is issued and published under section 35 U.S.C.
Sec. 307, unless authorized by the Director.
Second, Sec. 308(b) provides that once a judgment has been
entered against a party to a civil action arising in whole or
in part under 28 U.S.C. Sec. 1338 that the party has not
sustained its burden of proving the invalidity of any patent
claims in suit, then neither that party nor its privies may
thereafter request reexamination of any such patent claim on
the basis of issues which that party or its privies raised or
could have raised in that action. A reexamination requested by
such a party or by a party in privity with such a party on the
basis of such issues may not be maintained by the Office. This
provision avoids the potential for inconsistent treatment by
the Office of patent claims in a reexamination after a final
judicial determination of validity that the same patent claims
are not valid. Sec. 308(b) applies to any action that could be
brought under Sec. 1338 regardless of whether that section is
formally cited in the complaint.
Subsection (f)(2) amends the table of sections for chapter
30 of title 35, United States Code, to add the section heading,
``308. Reexamination Prohibited.'' for the new section added by
subsection 503(f)(1) of this Act.
Subsection (g) requires the Director to submit a report to
Congress within four years after the effective date which
evaluates whether the reexamination proceedings established
under the amendments are inequitable to any parties, and if so,
the report should contain recommendations to remove the
inequities.
Section 504.--Conforming Amendments
Subsection (a) amends 35 U.S.C. Sec. 6(b) to authorize the
Board to review decisions of examiners upon written appeal of a
patent owner or a third-party requester in reexamination
proceedings.
Subsection (b) amends 35 U.S.C. Sec. 41(a)(7) to provide
the authority for the Director to accept the filing of an
unintentionally delayed response by the patent owner in a
reexamination proceeding and for charging a fee for such
filing.
Subsection (c) amends 35 U.S.C. Sec. 134 to provide for
review of examiner decisions by the Board in reexamination
proceedings upon written appeal by a patent owner or by a
third-party requester. Specifically, subsection (b) amends 35
U.S.C. Sec. 134 by designating the existing provisions as
subsection 134(a) and by adding two new subsections, designated
as subsections 134(b) and 134(c). Subsection 134(b) permits a
patent owner in a reexamination proceeding to appeal to the
Board from the final rejection of any claim by the primary
examiner, having once paid the fee for such appeal. Subsection
134(c) permits third-party requesters to appeal to the Board
from the final decision of the primary examiner favorable to
the patentability of any original or proposed amended or new
claim of a patent, having once paid the fee for such appeal.
Subsection (d) amends 35 U.S.C. Sec. 141 to permit patent
owners and third-party requesters dissatisfied with the final
decision in an appeal under 35 U.S.C. Sec. 134 to appeal to the
Court of Appeals for the Federal Circuit.
Subsection (e) amends 35 U.S.C. Sec. 143 to require the
Director to make submissions to the court in reexamination
cases, as well as in ex parte cases. Currently, this section
only requires such submissions in ex parte cases. This
amendment would require the Director to make submissions to the
court in reexamination cases even when they are not ex parte,
but rather involve a third-party requester.
Subsection (f) amends 35 U.S.C. Sec. 145 to conform to the
amendments made to 35 U.S.C. Sec. 134. Specifically, this
section amends Sec. 145 to provide that appeals under Sec. 145
may only be initiated by patent applicants, and not by a patent
owner or a third-party requester who is a participant in a
reexamination proceeding.
Section 505.--Effective Date
This section provides that this title and the amendments
made by this title shall take effect six months after the date
of enactment of this Act, and that they shall apply only to
those reexamination requests that are filed on or after that
date.
TITLE VI.--MISCELLANEOUS IMPROVEMENTS
Section 601.--Provisional Applications
This section amends section 111(b)(5) of title 35 to
enhance the attractiveness of filing provisional applications
by providing a basis for converting provisional applications to
non-provisional applications. A basis for converting non-
provisional applications to provisional applications is already
provided. This enhancement is provided in subsection 111(b)(5)
by providing that notwithstanding the absence of a claim, upon
timely request and as prescribed by the Director, a provisional
application may be treated as an application filed under
subsection (a) of section 111. Further, the amendment provides
that if no such request is made, the provisional application
shall be regarded as abandoned 12 months after the filing date
of such application and shall not be subject to revival
thereafter. Accordingly, a provisional application could be
converted to a non-provisional application, be subjected to
examination and, depending upon the outcome of the examination
process, ultimately lead to the issue of a patent. This
amendment would be effective upon enactment and would apply to
provisional applications filed on or after June 8, 1995.
Section 602.--International Applications
Section 119(a) has been amended to permit persons, who
filed an application for patent first in a WTO member country,
to claim the right of priority in a subsequent patent
application filed in the United States, even if such country
does not yet afford similar privileges on the basis of
applications filed in the United States. This amendment was
made in conformity with the requirements of Articles 1 and 2 of
the TRIPS Agreement. These Articles require that WTO member
countries apply the substantive provisions of the Paris
Convention for the Protection of Industrial Property to other
WTO member countries. As, however, some WTO member countries
are not yet members of the Paris Convention, and as developing
countries are permitted periods of up to 10 years before
complying with all provisions of the TRIPS Agreement, they are
not required to extend the right of priority to other WTO
member countries until such time.
In subsection (b), the term ``foreign intellectual property
authority'' has been substituted for ``patent office of the
foreign country'' to clarify that regional patent offices are
included, as well as international organizations acting as
receiving offices under the Patent Cooperation Treaty.
Subsection (f) has been added to section 119 to provide for
the right of priority in the United States on the basis of an
application for a plant breeder's right first filed in a WTO
member country or in a UPOV Contracting Party. Many foreign
countries provide only a sui generis system of protection for
plant varieties. Because section 119 presently addresses only
patents and inventors' certificates, applicants from those
countries are technically unable to base a priority claim on a
foreign application for a plant breeder's right when seeking
plant patent or utility protection for a plant variety in this
country.
Subsection (g) has been added to section 119 to define the
terms ``WTO member country'' and ``UPOV Contracting Party.''
Section 603.--Plant Patents
Subsection (a) of Section 603 allows for the patenting of
tuber propagated plants.
Subsection (b) of Section 603 corrects a flaw in the
wording of 35 U.S.C. Sec. 163 to clarify that a plant patent
includes the right to exclude others from using, offering for
sale, selling, or importing both the entire plant and any of
its parts.
Section 604.--Electronic Filing
Section 604 amends Sec. 22 of title 35 to make it clear
that the PTO can receive information in an electronic format.
Section 605.--Divisional Applications
This section designates the existing text of section 121
of title 35 as subsection (a) and adds subsections (b) and (c),
to permit an applicant who is subject to a restriction
requirement to have the Director examine more than one
independent and distinct invention in the application. A
request to examine more than one invention in an application is
an alternative to filing a divisional application for each
invention in excess of one as permitted in existing section 121
of title 35.
Subsection (b) specifies that a request to examine more
than one invention in an application must be accompanied by an
examination fee equal to the filing fees that would have
applied if the invention had been presented in separate
applications. Subsection (b) requires the Patent and Trademark
Office to meet the time limits set forth in section
154(b)(1)(B) of title 35 for each of the inventions for which
the applicant pays the examination fee within two months after
the requirement for restriction. Failure to meet the time
limits will be treated as an unusual administrative delay and
the term of the patent will be extended for the period of the
delay. Where at the request of an applicant under subsection
(b) the Patent and Trademark Office examines more than one
invention in an application, it may issue a separate patent for
each invention determined to be patentable. Subsection (c)
specifies that the applicant is entitled to a refund of
examination fees if a requirement for restriction is determined
to be improper.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italics, existing law in which no change is proposed
is shown in roman):
TITLE 35, UNITED STATES CODE
Part Sec.
Patent and Trademark Office.....................................1]
United States Patent and Trademark Office........................1
* * * * * * *
[PART I--PATENT AND TRADEMARK OFFICE]
PART I--UNITED STATES PATENT AND TRADEMARK OFFICE
Chap. Sec.
[1. Establishment, Officers, Functions............................ 1]
1. Establishment, Officers and Employees, Functions............... 1
* * * * * * *
5. Invention Development Services................................. 51
* * * * * * *
[CHAPTER 1--ESTABLISHMENT, OFFICERS, FUNCTIONS
[Sec.
[1. Establishment.
[2. Seal.
[3. Officers and employees.
[4. Restrictions on officers and employees as to interest in patents.
[6. Duties of Commissioner.
[7. Board of Patent Appeals and Interferences.
[8. Library.
[9. Classification of patents.
[11. Publications.
[10. Certified copies of records.
[12. Exchange of copies of patents with foreign countries.
[13. Copies of patents for public libraries.
[14. Annual report to Congress.]
CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS
Sec.
1. Establishment.
2. Powers and duties.
3. Officers and employees.
4. Restrictions on officers and employees as to interest in patents.
5. Patent and Trademark Office Management Advisory Board.
6. Board of Patent Appeals and Interferences.
7. Suits by and against the Office.
8. Library.
9. Classification of patents.
10. Certified copies of records.
11. Publications.
12. Exchange of copies of patents and applications with foreign
countries.
13. Copies of patents and applications for public libraries.
14. Annual report to Congress.
[Sec. 1. Establishment
[The Patent and Trademark Office shall continue as an office
in the Department of Commerce, where records, books, drawings,
specifications, and other papers and things pertaining to
patents and to trademark registrations shall be kept and
preserved, except as otherwise provided by law.
[Sec. 2. Seal
[The Patent and Trademark Office shall have a seal with which
letters patent, certificates of trade-mark registrations, and
papers issued from the Office shall be authenticated.
[Sec. 3. Officers and employees
[(a) There shall be in the Patent and Trademark Office a
Commissioner of Patents and Trademarks, a Deputy Commissioner,
two Assistant Commissioners, and examiners-in-chief appointed
under section 7 of this title. The Deputy Commissioner, or, in
the event of a vacancy in that office, the Assistant
Commissioner senior in date of appointment shall fill the
office of Commissioner during a vacancy in that office until
the Commissioner is appointed and takes office. The
Commissioner of Patents and Trademarks, the Deputy
Commissioner, and the Assistant Commissioners shall be
appointed by the President, by and with the advice and consent
of the Senate. The Secretary of Commerce, upon the nomination
of the Commissioner, in accordance with law shall appoint all
other officers and employees.
[(b) The Secretary of Commerce may vest in himself the
functions of the Patent and Trademark Office and its officers
and employees specified in this title and may from time to time
authorize their performance by any other officer or employee.
[(c) The Secretary of Commerce is authorized to fix the per
annum rate of basic compensation of each examiner-in-chief in
the Patent and Trademark Office at not in excess of the maximum
scheduled rate provided for positions in grade 17 of the
General Schedule of the Classification Act of 1949, as amended.
[(d) The Commissioner of Patents and Trademarks shall be an
Assistant Secretary of Commerce and shall receive compensation
at the rate prescribed by law for Assistant Secretaries of
Commerce.
[(e) The members of the Trademark Trial and Appeal Board of
the Patent and Trademark Office shall each be paid at a rate
not to exceed the maximum rate of basic pay payable for GS-16
of the General Schedule under section 5332 of title 5.]
Sec. 1. Establishment
(a) Establishment.--The United States Patent and Trademark
Office is established as a wholly owned Government corporation
subject to chapter 91 of title 31, separate from any department
of the United States, and shall be an agency of the United
States under the policy direction of the Secretary of Commerce.
For purposes of internal management, the United States Patent
and Trademark Office shall be a corporate body not subject to
direction or supervision by any department of the United
States, except as otherwise provided in this title.
(b) Offices.--The United States Patent and Trademark Office
shall maintain its principal office in the metropolitan
Washington, D.C. area, for the service of process and papers
and for the purpose of carrying out its functions. The United
States Patent and Trademark Office shall be deemed, for
purposes of venue in civil actions, to be a resident of the
district in which its principal office is located, except where
jurisdiction is otherwise provided by law. The United States
Patent and Trademark Office may establish satellite offices in
such other places as it considers necessary and appropriate in
the conduct of its business.
(c) Reference.--For purposes of this title, the United States
Patent and Trademark Office shall also be referred to as the
``Office'' and the ``Patent and Trademark Office''.
Sec. 2. Powers and duties
(a) In General.--The United States Patent and Trademark
Office, under the policy direction of the Secretary of
Commerce--
(1) shall be responsible for the granting and issuing
of patents and the registration of trademarks;
(2) may conduct studies, programs, or exchanges of
items or services regarding domestic and international
law of patents, trademarks, and other matters, the
administration of the Office, or any function vested in
the Office by law, including programs to recognize,
identify, assess, and forecast the technology of
patented inventions and their utility to industry;
(3)(A) may authorize or conduct studies and programs
cooperatively with foreign patent and trademark offices
and international organizations, in connection with
patents, trademarks, and other matters; and
(B) with the concurrence of the Secretary of State,
may authorize the transfer of not to exceed $100,000 in
any year to the Department of State for the purpose of
making special payments to international
intergovernmental organizations for studies and
programs for advancing international cooperation
concerning patents, trademarks, and other matters; and
(4) shall be responsible for disseminating to the
public information with respect to patents and
trademarks.
The special payments under paragraph (3)(B) shall be in
addition to any other payments or contributions to
international organizations described in paragraph (3)(B) and
shall not be subject to any limitations imposed by law on the
amounts of such other payments or contributions by the United
States Government.
(b) Specific Powers.--The Office--
(1) shall have perpetual succession;
(2) shall adopt and use a corporate seal, which shall
be judicially noticed and with which letters patent,
certificates of trademark registrations, and papers
issued by the Office shall be authenticated;
(3) may sue and be sued in its corporate name and be
represented by its own attorneys in all judicial and
administrative proceedings, subject to the provisions
of section 7;
(4) may indemnify the Director, and other officers,
attorneys, agents, and employees (including members of
the Management Advisory Board established in section 5)
of the Office for liabilities and expenses incurred
within the scope of their employment;
(5) may adopt, amend, and repeal bylaws, rules,
regulations, and determinations, which--
(A) shall govern the manner in which its
business will be conducted and the powers
granted to it by law will be exercised;
(B) shall be made after notice and
opportunity for full participation by
interested public and private parties;
(C) shall facilitate and expedite the
processing of patent applications, particularly
those which can be filed, stored, processed,
searched, and retrieved electronically, subject
to the provisions of section 122 relating to
the confidential status of applications;
(D) may govern the recognition and conduct of
agents, attorneys, or other persons
representing applicants or other parties before
the Office, and may require them, before being
recognized as representatives of applicants or
other persons, to show that they are of good
moral character and reputation and are
possessed of the necessary qualifications to
render to applicants or other persons valuable
service, advice, and assistance in the
presentation or prosecution of their
applications or other business before the
Office; and
(E) recognize the public interest in
continuing to safeguard broad access to the
United States patent system through the reduced
fee structure for small entities under section
41(h)(1) of this title;
(6) may acquire, construct, purchase, lease, hold,
manage, operate, improve, alter, and renovate any real,
personal, or mixed property, or any interest therein,
as it considers necessary to carry out its functions;
(7)(A) may make such purchases, contracts for the
construction, maintenance, or management and operation
of facilities, and contracts for supplies or services,
without regard to the provisions of the Federal
Property and Administrative Services Act of 1949 (40
U.S.C. 471 and following), the Public Buildings Act (40
U.S.C. 601 and following), and the Stewart B. McKinney
Homeless Assistance Act (42 U.S.C. 11301 and
following); and
(B) may enter into and perform such purchases and
contracts for printing services, including the process
of composition, platemaking, presswork, silk screen
processes, binding, microform, and the products of such
processes, as it considers necessary to carry out the
functions of the Office, without regard to sections 501
through 517 and 1101 through 1123 of title 44;
(8) may use, with their consent, services, equipment,
personnel, and facilities of other departments,
agencies, and instrumentalities of the Federal
Government, on a reimbursable basis, and cooperate with
such other departments, agencies, and instrumentalities
in the establishment and use of services, equipment,
and facilities of the Office;
(9) may obtain from the Administrator of General
Services such services as the Administrator is
authorized to provide to other agencies of the United
States, on the same basis as those services are
provided to other agencies of the United States;
(10) may, when the Director determines that it is
practicable, efficient, and cost-effective to do so,
use, with the consent of the United States and the
agency, government, or international organization
concerned, the services, records, facilities, or
personnel of any State or local government agency or
instrumentality or foreign government or international
organization to perform functions on its behalf;
(11) may determine the character of and the necessity
for its obligations and expenditures and the manner in
which they shall be incurred, allowed, and paid,
subject to the provisions of this title and the Act of
July 5, 1946 (commonly referred to as the ``Trademark
Act of 1946'');
(12) may retain and use all of its revenues and
receipts, including revenues from the sale, lease, or
disposal of any real, personal, or mixed property, or
any interest therein, of the Office, including for
research and development and capital investment,
subject to the provisions of section 10101 of the
Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41
note);
(13) shall have the priority of the United States
with respect to the payment of debts from bankrupt,
insolvent, and decedents' estates;
(14) may accept monetary gifts or donations of
services, or of real, personal, or mixed property, in
order to carry out the functions of the Office;
(15) may execute, in accordance with its bylaws,
rules, and regulations, all instruments necessary and
appropriate in the exercise of any of its powers; and
(16) may provide for liability insurance and
insurance against any loss in connection with its
property, other assets, or operations either by
contract or by self-insurance.
(c) Construction.--Nothing in this section shall be construed
to nullify, void, cancel, or interrupt any pending request-for-
proposal let or contract issued by the General Services
Administration for the specific purpose of relocating or
leasing space to the United States Patent and Trademark Office.
Sec. 3. Officers and employees
(a) Director.--
(1) In general.--The management of the United States
Patent and Trademark Office shall be vested in a
Director of the United States Patent and Trademark
Office (in this title referred to as the ``Director''),
who shall be a citizen of the United States and who
shall be appointed by the President, by and with the
advice and consent of the Senate. The Director shall be
a person who, by reason of professional background and
experience in patent or trademark law, is especially
qualified to manage the Office.
(2) Duties.--
(A) In general.--The Director shall be
responsible for the management and direction of
the Office, including the issuance of patents
and the registration of trademarks, and shall
perform these duties in a fair, impartial, and
equitable manner.
(B) Advising the president.--The Director
shall advise the President, through the
Secretary of Commerce, of all activities of the
Office undertaken in response to obligations of
the United States under treaties and executive
agreements, or which relate to cooperative
programs with those authorities of foreign
governments that are responsible for granting
patents or registering trademarks. The Director
shall also recommend to the President, through
the Secretary of Commerce, changes in law or
policy which may improve the ability of United
States citizens to secure and enforce patent
rights or trademark rights in the United States
or in foreign countries.
(C) Consulting with the management advisory
board.--The Director shall consult with the
Management Advisory Board established in
section 5 on a regular basis on matters
relating to the operation of the Office, and
shall consult with the Advisory Board before
submitting budgetary proposals to the Office of
Management and Budget or changing or proposing
to change patent or trademark user fees or
patent or trademark regulations.
(D) Security clearances.--The Director, in
consultation with the Director of the Office of
Personnel Management, shall maintain a program
for identifying national security positions and
providing for appropriate security clearances.
(3) Term.--The Director shall serve a term of 5
years, and may continue to serve after the expiration
of the Director's term until a successor is appointed
and assumes office. The Director may be reappointed to
subsequent terms.
(4) Oath.--The Director shall, before taking office,
take an oath to discharge faithfully the duties of the
Office.
(5) Compensation.--The Director shall receive
compensation at the rate of pay in effect for level III
of the Executive Schedule under section 5314 of title 5
and, in addition, may receive as a bonus, an amount
which would raise the Director's total compensation to
not more than the equivalent of the level of the rate
of pay in effect for level I of the Executive Schedule
under section 5312 of title 5, based upon an evaluation
by the Secretary of Commerce of the Director's
performance as defined in an annual performance
agreement between the Director and the Secretary. The
annual performance agreement shall incorporate
measurable goals as delineated in an annual performance
plan agreed to by the Director and the Secretary.
(6) Removal.--The Director may be removed from office
by the President. The President shall provide
notification of any such removal to both Houses of
Congress.
(7) Designee of director.--The Director shall
designate an officer of the Office who shall be vested
with the authority to act in the capacity of the
Director in the event of the absence or incapacity of
the Director.
(b) Officers and Employees of the Office.--
(1) Commissioners.--The Director shall appoint a
Commissioner for Patents and a Commissioner for
Trademarks for terms that shall expire on the date on
which the Director's term expires. The Commissioner for
Patents shall be a person with demonstrated experience
in patent law and the Commissioner for Trademarks shall
be a person with demonstrated experience in trademark
law. The Commissioner for Patents and the Commissioner
for Trademarks shall be the principal policy and
management advisers to the Director on all aspects of
the activities of the Office that affect the
administration of patent and trademark operations,
respectively.
(2) Other officers and employees.--The Director
shall--
(A) appoint such officers, employees
(including attorneys), and agents of the Office
as the Director considers necessary to carry
out the functions of the Office; and
(B) define the authority and duties of such
officers and employees and delegate to them
such of the powers vested in the Office as the
Director may determine.
The Office shall not be subject to any administratively
or statutorily imposed limitation on positions or
personnel, and no positions or personnel of the Office
shall be taken into account for purposes of applying
any such limitation.
(c) Continued Applicability of Title 5.--Officers and
employees of the Office shall be subject to the provisions of
title 5 relating to Federal employees. Section 2302 of title 5
applies to the Office, notwithstanding subsection (a)(2)(B)(i)
of such section.
(d) Adoption of Existing Labor Agreements.--The Office shall
adopt all labor agreements which are in effect, as of the day
before the effective date of the Patent and Trademark Office
Modernization Act, with respect to such Office (as then in
effect).
(e) Carryover of Personnel.--
(1) From pto.--Effective as of the effective date of
the Patent and Trademark Office Modernization Act, all
officers and employees of the Patent and Trademark
Office on the day before such effective date shall
become officers and employees of the Office, without a
break in service.
(2) Other personnel.--Any individual who, on the day
before the effective date of the Patent and Trademark
Office Modernization Act, is an officer or employee of
the Department of Commerce (other than an officer or
employee under paragraph (1)) shall be transferred to
the Office if--
(A) such individual serves in a position for
which a major function is the performance of
work reimbursed by the Patent and Trademark
Office, as determined by the Secretary of
Commerce;
(B) such individual serves in a position that
performed work in support of the Patent and
Trademark Office during at least half of the
incumbent's work time, as determined by the
Secretary of Commerce; or
(C) such transfer would be in the interest of
the Office, as determined by the Secretary of
Commerce in consultation with the Director.
Any transfer under this paragraph shall be effective as
of the same effective date as referred to in paragraph
(1), and shall be made without a break in service.
(3) Accumulated leave.--The amount of sick and annual
leave and compensatory time accumulated under title 5
before the effective date described in paragraph (1),
by those becoming officers or employees of the Office
pursuant to this subsection, are obligations of the
Office.
(f) Transition Provisions.--
(1) Interim appointment of director.--On or after the
effective date of the Patent and Trademark Office
Modernization Act, the President shall appoint an
individual to serve as the Director until the date on
which a Director qualifies under subsection (a). The
President shall not make more than one such appointment
under this subsection.
(2) Continuation in office of certain officers.--(A)
The individual serving as the Assistant Commissioner
for Patents on the day before the effective date of the
Patent and Trademark Office Modernization Act may serve
as the Commissioner for Patents until the date on which
a Commissioner for Patents is appointed under
subsection (b).
(B) The individual serving as the Assistant
Commissioner for Trademarks on the day before the
effective date of the Patent and Trademark Office
Modernization Act may serve as the Commissioner for
Trademarks until the date on which a Commissioner for
Trademarks is appointed under subsection (b).
* * * * * * *
Sec. 5. Patent and Trademark Office Management Advisory Board
(a) Establishment of Management Advisory Board.--
(1) Appointment.--The United States Patent and
Trademark Office shall have a Management Advisory Board
(hereafter in this title referred to as the ``Advisory
Board'') of 12 members, 4 of whom shall be appointed by
the President, 4 of whom shall be appointed by the
Speaker of the House of Representatives, and 4 of whom
shall be appointed by the majority leader of the
Senate. Not more than 3 of the 4 members appointed by
each appointing authority shall be members of the same
political party.
(2) Terms.--Members of the Advisory Board shall be
appointed for a term of 4 years each, except that of
the members first appointed by each appointing
authority, 1 shall be for a term of 1 year, 1 shall be
for a term of 2 years, and 1 shall be for a term of 3
years. No member may serve more than 1 term.
(3) Chair.--The President shall designate the chair
of the Advisory Board, whose term as chair shall be for
3 years.
(4) Timing of appointments.--Initial appointments to
the Advisory Board shall be made within 3 months after
the effective date of the Patent and Trademark Office
Modernization Act, and vacancies shall be filled within
3 months after they occur.
(5) Vacancies.--Vacancies shall be filled in the
manner in which the original appointment was made under
this subsection. Members appointed to fill a vacancy
occurring before the expiration of the term for which
the member's predecessor was appointed shall be
appointed only for the remainder of that term. A member
may serve after the expiration of that member's term
until a successor is appointed.
(6) Committees.--The Chair shall designate members of
the Advisory Board to serve on a committee on patent
operations and on a committee on trademark operations
to perform the duties set forth in subsection (e) as
they relate specifically to the Office's patent
operations, and the Office's trademark operations,
respectively.
(b) Basis for Appointments.--Members of the Advisory Board
shall be citizens of the United States who shall be chosen so
as to represent the interests of diverse users of the United
States Patent and Trademark Office, and shall include
individuals with substantial background and achievement in
corporate finance and management.
(c) Applicability of Certain Ethics Laws.--Members of the
Advisory Board shall be special Government employees within the
meaning of section 202 of title 18.
(d) Meetings.--The Advisory Board shall meet at the call of
the chair to consider an agenda set by the chair.
(e) Duties.--The Advisory Board shall--
(1) review the policies, goals, performance, budget,
and user fees of the United States Patent and Trademark
Office, and advise the Director on these matters; and
(2) within 60 days after the end of each fiscal year,
prepare an annual report on the matters referred to in
paragraph (1), transmit the report to the President and
the Committees on the Judiciary of the Senate and the
House of Representatives, and publish the report in the
Patent and Trademark Office Official Gazette.
(f) Compensation.--Members of the Advisory Board shall be
compensated for each day (including travel time) during which
they are attending meetings or conferences of the Advisory
Board or otherwise engaged in the business of the Advisory
Board, at the rate which is the daily equivalent of the annual
rate of basic pay in effect for level III of the Executive
Schedule under section 5314 of title 5, and while away from
their homes or regular places of business they may be allowed
travel expenses, including per diem in lieu of subsistence, as
authorized by section 5703 of title 5.
(g) Access to Information.--Members of the Advisory Board
shall be provided access to records and information in the
United States Patent and Trademark Office, except for personnel
or other privileged information and information concerning
patent applications required to be kept in confidence by
section 122.
[Sec. 6. Duties of Commissioner
[(a) The Commissioner, under the direction of the Secretary
of Commerce, shall superintend or perform all duties required
by law respecting the granting and issuing of patents and the
registration of trademarks; shall have the authority to carry
on studies, programs, or exchanges of items or services
regarding domestic and international patent and trademark law
or the administration of the Patent and Trademark Office,
including programs to recognize, identify, assess and forecast
the technology of patented inventions and their utility to
industry; and shall have charge of property belonging to the
Patent and Trademark Office. He may, subject to the approval of
the Secretary of Commerce, establish regulations, not
inconsistent with law, for the conduct of proceedings in the
Patent and Trademark Office.
[(b) The Commissioner, under the direction of the Secretary
of Commerce, may, in coordination with the Department of State,
carry on programs and studies cooperatively with foreign patent
offices and international intergovernmental organizations, or
may authorize such programs and studies to be carried on, in
connection with the performance of duties stated in subsection
(a) of this section.
[(c) The Commissioner, under the direction of the Secretary
of Commerce, may, with the concurrence of the Secretary of
State, transfer funds appropriated to the Patent and Trademark
Office, not to exceed $100,000 in any year, to the Department
of State for the purpose of making special payments to
international intergovernmental organizations for studies and
programs for advancing international cooperation concerning
patents, trademarks, and related matters. These special
payments may be in addition to any other payments or
contributions to the international organization and shall not
be subject to any limitations imposed by law on the amounts of
such other payments or contributions by the Government of the
United States.
[Sec. 7. Board of Patent Appeals and Interferences
[(a) The examiners-in-chief shall be persons of competent
legal knowledge and scientific ability, who shall be appointed
to the competitive service. The Commissioner, the Deputy
Commissioner, the Assistant Commissioners, and the examiners-
in-chief shall constitute the Board of Patent Appeals and
Interferences.
[(b) The Board of Patent Appeals and Interferences shall, on
written appeal of an applicant, review adverse decisions of
examiners upon applications for patents and shall determine
priority and patentability of invention in interferences
declared under section 135(a) of this title. Each appeal and
interference shall be heard by at least three members of the
Board of Patent Appeals and Interferences, who shall be
designated by the Commissioner. Only the Board of Patent
Appeals and Interferences has the authority to grant
rehearings.
[(c) Whenever the Commissioner considers it necessary, in
order to keep current the work of the Board of Patent Appeals
and Interferences, the Commissioner may designate any patent
examiner of the primary examiner grade or higher, having the
requisite ability, to serve as examiner-in-chief for periods
not exceeding six months each. An examiner so designated shall
be qualified to act as a member of the Board of Patent Appeals
and Interferences. Not more than one of the members of the
Board of Patent Appeals and Interferences hearing an appeal or
determining an interference may be an examiner so designated.
The Secretary of Commerce is authorized to fix the pay of each
designated examiner-in-chief in the Patent and Trademark Office
at not to exceed the maximum rate of basic pay payable for
grade GS-16 of the General Schedule under section 5332 of title
5. The rate of basic pay of each individual designated
examiner-in-chief shall be adjusted, at the close of the period
for which that individual was designated to act as examiner-in-
chief, to the rate of basic pay which that individual would
have been receiving at the close of such period if such
designation had not been made.]
Sec. 6. Board of Patent Appeals and Interferences
(a) Establishment and Composition.--There shall be in the
United States Patent and Trademark Office a Board of Patent
Appeals and Interferences. The Director, the Commissioner for
Patents, the Commissioner for Trademarks, and the
administrative patent judges shall constitute the Board. The
administrative patent judges shall be persons of competent
legal knowledge and scientific ability who are appointed by the
Director.
(b) Duties.--The Board of Patent Appeals and Interferences
shall, on written appeal of an applicant, review adverse
decisions of examiners upon applications for patents and shall
determine priority and patentability of invention in
interferences declared under section 135(a). \1\ Each appeal
and interference shall be heard by at least 3 members of the
Board, who shall be designated by the Director. Only the Board
of Patent Appeals and Interferences may grant rehearings.
---------------------------------------------------------------------------
\1\ Effective 6 months after the date of the enactment of this Act
the first sentence of section 6(b) will be amended to read as follows:
``The Board of Patent Appeals and Interferences shall, on written
appeal of an applicant, or a patent owner or a third-party requester in
a reexamination proceeding, review adverse decisions of examiners upon
applications for patents and decisions of examiners in reexamination
proceedings, and shall determine priority and patentability of
invention in interferences declared under section 135(a) of this
title.''.
---------------------------------------------------------------------------
Sec. 7. Suits by and against the Office
(a) Actions Under United States Law.--Any civil action or
proceeding to which the United States Patent and Trademark
Office is a party is deemed to arise under the laws of the
United States. The Federal courts shall have exclusive
jurisdiction over all civil actions by or against the Office.
(b) Representation by the Department of Justice.--The United
States Patent and Trademark Office shall be deemed an agency of
the United States for purposes of section 516 of title 28.
(c) Prohibition on Attachment, Liens, Etc.--No attachment,
garnishment, lien, or similar process, intermediate or final,
in law or equity, may be issued against property of the Office.
Sec. 8. Library
The [Commissioner] Director shall maintain a library of
scientific and other works and periodicals, both foreign and
domestic, in the Patent and Trademark Office to aid the
officers in the discharge of their duties.
Sec. 9. Classification of patents
The [Commissioner] Director may revise and maintain the
classification by subject matter of United States letters
patent, and such other patents and printed publications as may
be necessary or practicable, for the purpose of determining
with readiness and accuracy the novelty of inventions for which
applications for patent are filed.
Sec. 10. Certified copies of records
The [Commissioner] Director may furnish certified copies of
specifications and drawings of patents issued by the Patent and
Trademark Office, and of other records available either to the
public or to the person applying therefor.
Sec. 11. Publications
(a) The [Commissioner] Director may print, or cause to be
printed, the following:
1. Patents and published applications for patents, including
specifications and drawings, together with copies of the same.
The Patent and Trademark Office may print the headings of the
drawings for patents for the purpose of photolithography.
* * * * * * *
(b) The [Commissioner] Director may exchange any of the
publications specified in items 3, 4, 5, and 6 of subsection
(a) of this section for publications desirable for the use of
the Patent and Trademark Office.
Sec. 12. Exchange of copies of patents and applications with foreign
countries
The [Commissioner] Director may exchange copies of
specifications and drawings of United States patents and
published applications for patents for those of foreign
countries.
Sec. 13. Copies of patents and applications for public libraries
The [Commissioner] Director may supply printed copies of
specifications and drawings of patents and published
applications for patents to public libraries in the United
States which shall maintain such copies for the use of the
public, at the rate for each year's issue established for this
purpose in section 41(d) of this title.
[Sec. 14. Annual report to Congress
[The Commissioner shall report to Congress annually the
moneys received and expended, statistics concerning the work of
the Office, and other information relating to the Office as may
be useful to the Congress or the public.]
Sec. 14. Annual report to Congress
The Director shall report to the Congress, not later than 180
days after the end of each fiscal year, the moneys received and
expended by the Office, the purposes for which the moneys were
spent, the quality and quantity of the work of the Office, and
other information relating to the Office. The report under this
section shall also meet the requirements of section 9106 of
title 31, to the extent that such requirements are not
inconsistent with the preceding sentence. The report required
under this section shall not be deemed to be the report of the
United States Patent and Trademark Office under section 9106 of
title 31, and the Director shall file a separate report under
such section.
CHAPTER 2--PROCEEDINGS IN THE PATENT AND TRADEMARK OFFICE
* * * * * * *
Sec. 21. Filing date and day for taking action
(a) The [Commissioner] Director may by rule prescribe that
any paper or fee required to be filed in the Patent and
Trademark Office will be considered filed in the Office on the
date on which it was deposited with the United States Postal
Service or would have been deposited with the United States
Postal Service but for postal service interruptions or
emergencies designated by the [Commissioner] Director.
* * * * * * *
Sec. 22. Printing of papers filed
The [Commissioner] Director may require papers filed in the
Patent and Trademark Office to be [printed or typewritten]
printed, typewritten, or on an electronic medium.
Sec. 23. Testimony in Patent and Trademark Office cases
The [Commissioner] Director may establish rules for taking
affidavits and depositions required in cases in the Patent and
Trademark Office. Any officer authorized by law to take
depositions to be used in the courts of the United States, or
of the State where he resides, may take such affidavits and
depositions.
* * * * * * *
Sec. 25. Declaration in lieu of oath
(a) The [Commissioner] Director may by rule prescribe that
any document to be filed in the Patent and Trademark Office and
which is required by any law, rule, or other regulation to be
under oath may be subscribed to by a written declaration in
such form as the [Commissioner] Director may prescribe, such
declaration to be in lieu of the oath otherwise required.
* * * * * * *
Sec. 26. Effect of defective execution
Any document to be filed in the Patent and Trademark Office
and which is required by any law, rule, or other regulation to
be executed in a specified manner may be provisionally accepted
by the [Commissioner] Director despite a defective execution,
provided a properly executed document is submitted within such
time as may be prescribed.
CHAPTER 3--PRACTICE BEFORE PATENT AND TRADEMARK OFFICE
Sec.
[31. Regulations for agents and attorneys.]
* * * * * * *
[Sec. 31. Regulations for agents and attorneys
[The Commissioner, subject to the approval of the Secretary
of Commerce, may prescribe regulations governing the
recognition and conduct of agents, attorneys, or other persons
representing applicants or other parties before the Patent and
Trademark Office, and may require them, before being recognized
as representatives of applicants or other persons, to show that
they are of good moral character and reputation and are
possessed of the necessary qualifications to render to
applicants or other persons valuable service, advice, and
assistance in the presentation or prosecution of their
applications or other business before the Office.]
Sec. 32. Suspension or exclusion from practice
The [Commissioner] Director may, after notice and opportunity
for a hearing, suspend or exclude, either generally or in any
particular case, from further practice before the Patent and
Trademark Office, any person, agent, or attorney shown to be
incompetent or disreputable, or guilty of gross misconduct, or
who does not comply with the regulations established under
section 31 of this title, or who shall, by word, circular,
letter, or advertising, with intent to defraud in any manner,
deceive, mislead, or threaten any applicant or prospective
applicant, or other person having immediate or prospective
business before the Office. The reasons for any such suspension
or exclusion shall be duly recorded. The Director shall have
the discretion to designate any attorney who is an officer or
employee of the United States Patent and Trademark Office to
conduct the hearing required by this section. The United States
District Court for the District of Columbia, under such
conditions and upon such proceedings as it by its rules
determines, may review the action of the [Commissioner]
Director upon the petition of the person so refused recognition
or so suspended or excluded.
CHAPTER 4--PATENT FEES; FUNDING; SEARCH SYSTEMS
* * * * * * *
Sec. 41. Patent fees; patent and trademark search systems
(a) The [Commissioner] Director shall charge the following
fees:
(1) * * *
* * * * * * *
[(7) On filing each petition for the revival of an
unintentionally abandoned application for a patent or
for the unintentionally delayed payment of the fee for
issuing each patent, $820, unless the petition is filed
under section 133 or 151 of this title, in which case
the fee shall be $78.]
(7) On filing each petition for the revival of an
unintentionally abandoned application for a patent, for
the unintentionally delayed payment of the fee for
issuing each patent, or for an unintentionally delayed
response by the patent owner in a reexamination
proceeding, $1,250, unless the petition is filed under
section 133 or 151 of this title, in which case the fee
shall be $110.
(8) For petitions for 1-month extensions of time to
take actions required by the [Commissioner] Director in
an application--
(A) [On] on filing a first petition, $78;
(B) on filing a second petition, $172; and
(C) on filing a third petition or subsequent
petition, $340.
* * * * * * *
For the purpose of computing fees, a multiple dependent claim
as referred to in section 112 of this title or any claim
depending therefrom shall be considered as separate dependent
claims in accordance with the number of claims to which
reference is made. Errors in payment of the additional fees may
be rectified in accordance with regulations of the
[Commissioner] Director.
(b) The [Commissioner] Director shall charge the following
fees for maintaining in force all patents based on applications
filed on or after December 12, 1980:
(1) 3 years and 6 months after grant, $650.
(2) 7 years and 6 months after grant, $1,310.
(3) 11 years and 6 months after grant, $1,980.
Unless payment of the applicable maintenance fee is received in
the Patent and Trademark Office on or before the date the fee
is due or within a grace period of six months thereafter, the
patent will expire as of the end of such grace period. The
[Commissioner] Director may require the payment of a surcharge
as a condition of accepting within such six-month grace period
the late payment of an applicable maintenance fee. No fee will
be established for maintaining a design or plant patent in
force.
(c)(1) The [Commissioner] Director may accept the payment of
any maintenance fee required by subsection (b) of this section
which is made within twenty-four months after the six-month
grace period if the delay is shown to the satisfaction of the
[Commissioner] Director to have been unintentional, or at any
time after the six-month grace period if the delay is shown to
the satisfaction of the [Commissioner] Director to have been
unavoidable. The [Commissioner] Director may require the
payment of a surcharge as a condition of accepting payment of
any maintenance fee after the six-month grace period. If the
[Commissioner] Director accepts payment of a maintenance fee
after the six-month grace period, the patent shall be
considered as not having expired at the end of the grace
period.
* * * * * * *
(d) The [Commissioner] Director shall establish fees for all
other processing, services, or materials relating to patents
not specified in this section to recover the estimated average
cost to the Office of such processing, services, or materials,
except that the [Commissioner] Director shall charge the
following fees for the following services:
(1) For recording a document affecting title, $40 per
property.
(2) For each photocopy, $.25 per page.
(3) For each black and white copy of a patent, $3.
The yearly fee for providing a library specified in section 13
of this title with uncertified printed copies of the
specifications and drawings for all patents in that year shall
be $50.
(e) The [Commissioner] Director may waive the payment of any
fee for any service or material related to patents in
connection with an occasional or incidental request made by a
department or agency of the Government, or any officer thereof.
The [Commissioner] Director may provide any applicant issued a
notice under section 132 of this title with a copy of the
specifications and drawings for all patents referred to in that
notice without charge.
(f) The fees established in subsections (a) and (b) of this
section may be adjusted by the [Commissioner] Director on
October 1, 1992, and every year thereafter, to reflect any
fluctuations occurring during the previous 12 months in the
Consumer Price Index, as determined by the Secretary of Labor.
Changes of less than 1 per centum may be ignored.
(g) No fee established by the [Commissioner] Director under
this section shall take effect until at least 30 days after
notice of the fee has been published in the Federal Register
and in the Official Gazette of the Patent and Trademark Office.
(h)(1) Fees charged under subsection (a) or (b) shall be
reduced by 50 percent with respect to their application to any
small business concern as defined under section 3 of the Small
Business Act, and to any independent inventor or nonprofit
organization as defined in regulations issued by the
[Commissioner] Director of Patents and Trademarks.
(2) With respect to its application to any entity described
in paragraph (1), any surcharge or fee charged under subsection
(c) or (d) shall not be higher than the surcharge or fee
required of any other entity under the same or substantially
similar circumstances.
(i)(1) The [Commissioner] Director shall maintain, for use by
the public, paper or microform collections of United States
patents, foreign patent documents, and United States trademark
registrations arranged to permit search for and retrieval of
information. The [Commissioner] Director may not impose fees
directly for the use of such collections, or for the use of the
public patent or trademark search rooms or libraries.
(2) The [Commissioner] Director shall provide for the full
deployment of the automated search systems of the Patent and
Trademark Office so that such systems are available for use by
the public, and shall assure full access by the public to, and
dissemination of, patent and trademark information, using a
variety of automated methods, including electronic bulletin
boards and remote access by users to mass storage and retrieval
systems.
(3) The [Commissioner] Director may establish reasonable fees
for access by the public to the automated search systems of the
Patent and Trademark Office. If such fees are established, a
limited amount of free access shall be made available to users
of the systems for purposes of education and training. The
[Commissioner] Director may waive the payment by an individual
of fees authorized by this subsection upon a showing of need or
hardship, and if such a waiver is in the public interest.
(4) The [Commissioner] Director shall submit to the Congress
an annual report on the automated search systems of the Patent
and Trademark Office and the access by the public to such
systems. The [Commissioner] Director shall also publish such
report in the Federal Register. The [Commissioner] Director
shall provide an opportunity for the submission of comments by
interested persons on each such report.
[Sec. 42. Patent and Trademark Office funding
[(a) All fees for services performed by or materials
furnished by the Patent and Trademark Office will be payable to
the Commissioner.
[(b) All fees paid to the Commissioner and all appropriations
for defraying the costs of the activities of the Patent and
Trademark Office will be credited to the Patent and Trademark
Office Appropriation Account in the Treasury of the United
States.
[(c) Revenues from fees shall be available to the
Commissioner to carry out, to the extent provided in
appropriation Acts, the activities of the Patent and Trademark
Office. Fees available to the Commissioner under section 31 of
the Trademark Act of 1946 may be used only for the processing
of trademark registrations and for other activities, services,
and materials relating to trademarks and to cover a
proportionate share of the administrative costs of the Patent
and Trademark Office.
[(d) The Commissioner may refund any fee paid by mistake or
any amount paid in excess of that required.
[(e) The Secretary of Commerce shall, on the day each year on
which the President submits the annual budget to the Congress,
provide to the Committees on the Judiciary of the Senate and
the House of Representatives--
[(1) a list of patent and trademark fee collections
by the Patent and Trademark Office during the preceding
fiscal year;
[(2) a list of activities of the Patent and Trademark
Office during the preceding fiscal year which were
supported by patent fee expenditures, trademark fee
expenditures, and appropriations;
[(3) budget plans for significant programs, projects,
and activities of the Office, including out-year
funding estimates;
[(4) any proposed disposition of surplus fees by the
Office; and
[(5) such other information as the committees
consider necessary.]
Sec. 42. Patent and Trademark Office funding
(a) Fees Payable to the Office.--All fees for services
performed by or materials furnished by the United States Patent
and Trademark Office shall be payable to the Office.
(b) Use of Moneys.--Moneys from fees shall be available to
the United States Patent and Trademark Office to carry out, to
the extent provided in appropriations Acts, the functions of
the Office. Moneys of the Office not otherwise used to carry
out the functions of the Office shall be kept in cash on hand
or on deposit, or invested in obligations of the United States
or guaranteed by the United States, or in obligations or other
instruments which are lawful investments for fiduciary, trust,
or public funds. Fees available to the Office under this title
shall be used for the processing of patent applications and for
other services and materials relating to patents. Fees
available to the Office under section 31 of the Act of July 5,
1946 (commonly referred to as the ``Trademark Act of 1946''; 15
U.S.C. 1113), shall be used only for the processing of
trademark registrations and for other services and materials
relating to trademarks.
(c) Borrowing Authority.--The United States Patent and
Trademark Office is authorized to issue from time to time for
purchase by the Secretary of the Treasury its debentures,
bonds, notes, and other evidences of indebtedness (hereafter in
this subsection referred to as ``obligations'') to assist in
financing its activities. Borrowing under this subsection shall
be subject to prior approval in appropriations Acts. Such
borrowing shall not exceed amounts approved in appropriations
Acts. Any borrowing under this subsection shall be repaid only
from fees paid to the Office and surcharges appropriated by the
Congress. Such obligations shall be redeemable at the option of
the Office before maturity in the manner stipulated in such
obligations and shall have such maturity as is determined by
the Office with the approval of the Secretary of the Treasury.
Each such obligation issued to the Treasury shall bear interest
at a rate not less than the current yield on outstanding
marketable obligations of the United States of comparable
maturity during the month preceding the issuance of the
obligation as determined by the Secretary of the Treasury. The
Secretary of the Treasury shall purchase any obligations of the
Office issued under this subsection and for such purpose the
Secretary of the Treasury is authorized to use as a public-debt
transaction the proceeds of any securities issued under chapter
31 of title 31, and the purposes for which securities may be
issued under that chapter are extended to include such purpose.
Payment under this subsection of the purchase price of such
obligations of the United States Patent and Trademark Office
shall be treated as public debt transactions of the United
States.
CHAPTER 5--INVENTION DEVELOPMENT SERVICES
Sec.
51. Definitions.
52. Contracting requirements.
53. Standard provisions for cover notice.
54. Reports to customer required.
55. Mandatory contract terms.
56. Remedies.
57. Records of complaints.
58. Fraudulent representation by an invention developer.
59. Rule of construction.
Sec. 51. Definitions
For purposes of this chapter--
(1) the term ``contract for invention development
services'' means a contract by which an invention
developer undertakes invention development services for
a customer;
(2) the term ``customer'' means any person, firm,
partnership, corporation, or other entity who is
solicited by, seeks the services of, or enters into a
contract with an invention promoter for invention
promotion services;
(3) the term ``invention promoter'' means any person,
firm, partnership, corporation, or other entity who
offers to perform or performs for, or on behalf of, a
customer any act described under paragraph (4), but
does not include--
(A) any department or agency of the Federal
Government or of a State or local government;
(B) any nonprofit, charitable, scientific, or
educational organization, qualified under
applicable State law or described under section
170(b)(1)(A) of the Internal Revenue Code of
1986; or
(C) any person duly registered with, and in
good standing before, the United States Patent
and Trademark Office acting within the scope of
that person's registration to practice before
the Patent and Trademark Office; and
(4) the term ``invention development services''
means, with respect to an invention by a customer, any
act involved in--
(A) evaluating the invention to determine its
protectability as some form of intellectual
property, other than evaluation by a person
licensed by a State to practice law who is
acting solely within the scope of that person's
professional license;
(B) evaluating the invention to determine its
commercial potential by any person for purposes
other than providing venture capital; or
(C) marketing, brokering, licensing, selling,
or promoting the invention or a product or
service in which the invention is incorporated
or used, except that the display only of an
invention at a trade show or exhibit shall not
be considered to be invention development
services.
Sec. 52. Contracting requirements
(a) In General.--(1) Every contract for invention development
services shall be in writing and shall be subject to the
provisions of this chapter. A copy of the signed written
contract shall be given to the customer at the time the
customer enters into the contract.
(2) If a contract is entered into for the benefit of a third
party, such party shall be considered a customer for purposes
of this chapter.
(b) Requirements of Invention Developer.--The invention
developer shall--
(1) state in a written document, at the time a
customer enters into a contract for invention
development services, whether the usual business
practice of the invention developer is to--
(A) seek more than 1 contract in connection
with an invention; or
(B) seek to perform services in connection
with an invention in 1 or more phases, with the
performance of each phase covered in 1 or more
subsequent contracts; and
(2) supply to the customer a copy of the written
document together with a written summary of the usual
business practices of the invention developer,
including--
(A) the usual business terms of contracts;
and
(B) the approximate amount of the usual fees
or other consideration that may be required
from the customer for each of the services
provided by the developer.
(c) Right of Customer To Cancel Contract.--(1)
Notwithstanding any contractual provision to the contrary, a
customer shall have the right to terminate a contract for
invention development services by sending a written letter to
the invention developer stating the customer's intent to cancel
the contract. The letter of termination must be deposited with
the United States Postal Service on or before 5 business days
after the date upon which the customer or the invention
developer executes the contract, whichever is later.
(2) Delivery of a promissory note, check, bill of exchange,
or negotiable instrument of any kind to the invention developer
or to a third party for the benefit of the invention developer,
without regard to the date or dates appearing in such
instrument, shall be deemed payment received by the invention
developer on the date received for purposes of this section.
Sec. 53. Standard provisions for cover notice
(a) Contents.--Every contract for invention development
services shall have a conspicuous and legible cover sheet
attached with the following notice imprinted in boldface type
of not less than 12-point size:
``YOU HAVE THE RIGHT TO TERMINATE THIS CONTRACT. TO
TERMINATE THIS CONTRACT, YOU MUST SEND A WRITTEN LETTER
TO THE COMPANY STATING YOUR INTENT TO CANCEL THIS
CONTRACT. THE LETTER OF TERMINATION MUST BE DEPOSITED
WITH THE UNITED STATES POSTAL SERVICE ON OR BEFORE FIVE
(5) BUSINESS DAYS AFTER THE DATE ON WHICH YOU OR THE
COMPANY EXECUTE THE CONTRACT, WHICHEVER IS LATER.
``THE TOTAL NUMBER OF INVENTIONS EVALUATED BY THE
INVENTION DEVELOPER FOR COMMERCIAL POTENTIAL IN THE
PAST FIVE (5) YEARS IS __________. OF THAT NUMBER,
__________ RECEIVED POSITIVE EVALUATIONS AND __________
RECEIVED NEGATIVE EVALUATIONS.
``IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE
INVENTION TO THE INVENTION DEVELOPER, THE INVENTION
DEVELOPER MAY HAVE THE RIGHT TO SELL OR DISPOSE OF THE
INVENTION WITHOUT YOUR CONSENT AND MAY NOT HAVE TO
SHARE THE PROFITS WITH YOU.
``THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED
WITH THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS
IS __________. THE TOTAL NUMBER OF CUSTOMERS KNOWN BY
THIS INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF
THIS INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF
MONEY IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO
THIS INVENTION DEVELOPER IS ______________.
``THE OFFICERS OF THIS INVENTION DEVELOPER HAVE
COLLECTIVELY OR INDIVIDUALLY BEEN AFFILIATED IN THE
LAST TEN (10) YEARS WITH THE FOLLOWING INVENTION
DEVELOPMENT COMPANIES: (LIST THE NAMES AND ADDRESSES OF
ALL PREVIOUS INVENTION DEVELOPMENT COMPANIES WITH WHICH
THE PRINCIPAL OFFICERS HAVE BEEN AFFILIATED AS OWNERS,
AGENTS, OR EMPLOYEES). YOU ARE ENCOURAGED TO CHECK WITH
THE UNITED STATES PATENT AND TRADEMARK OFFICE, THE
FEDERAL TRADE COMMISSION, YOUR STATE ATTORNEY GENERAL'S
OFFICE, AND THE BETTER BUSINESS BUREAU FOR ANY
COMPLAINTS FILED AGAINST ANY OF THESE COMPANIES.
``YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY OF
YOUR OWN CHOOSING BEFORE SIGNING THIS CONTRACT. BY
PROCEEDING WITHOUT THE ADVICE OF AN ATTORNEY REGISTERED
TO PRACTICE BEFORE THE UNITED STATES PATENT AND
TRADEMARK OFFICE, YOU COULD LOSE ANY RIGHTS YOU MIGHT
HAVE IN YOUR IDEA OR INVENTION.''.
(b) Other Requirements for Cover Notice.--The cover notice
shall contain the items required under subsection (a) and the
name, primary office address, and local office address of the
invention developer, and may contain no other matter.
(c) Disclosure of Certain Customers Not Required.--The
requirement in the notice set forth in subsection (a) to
include the ``TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED
WITH THE INVENTION DEVELOPER IN THE PAST FIVE (5) YEARS'' need
not include information with respect to customers who have
purchased trade show services, research, advertising, or other
nonmarketing services from the invention developer, nor with
respect to customers who have defaulted in their payments to
the invention developer.
Sec. 54. Reports to customer required
With respect to every contract for invention development
services, the invention developer shall deliver to the customer
at the address specified in the contract, at least once every 3
months throughout the term of the contract, a written report
that identifies the contract and includes--
(1) a full, clear, and concise description of the
services performed to the date of the report and of the
services yet to be performed and names of all persons
who it is known will perform the services; and
(2) the name and address of each person, firm,
corporation, or other entity to whom the subject matter
of the contract has been disclosed, the reason for each
such disclosure, the nature of the disclosure, and
complete and accurate summaries of all responses
received as a result of those disclosures.
Sec. 55. Mandatory contract terms
(a) Mandatory Terms.--Each contract for invention development
services shall include in boldface type of not less than 12-
point size--
(1) the terms and conditions of payment and contract
termination rights required under section 52;
(2) a statement that the customer may avoid entering
into the contract by not making a payment to the
invention developer;
(3) a full, clear, and concise description of the
specific acts or services that the invention developer
undertakes to perform for the customer;
(4) a statement as to whether the invention developer
undertakes to construct, sell, or distribute one or
more prototypes, models, or devices embodying the
invention of the customer;
(5) the full name and principal place of business of
the invention developer and the name and principal
place of business of any parent, subsidiary, agent,
independent contractor, and any affiliated company or
person who it is known will perform any of the services
or acts that the invention developer undertakes to
perform for the customer;
(6) if any oral or written representation of
estimated or projected customer earnings is given by
the invention developer (or any agent, employee,
officer, director, partner, or independent contractor
of such invention developer), a statement of that
estimation or projection and a description of the data
upon which such representation is based;
(7) the name and address of the custodian of all
records and correspondence relating to the contracted
for invention development services, and a statement
that the invention developer is required to maintain
all records and correspondence relating to performance
of the invention development services for such customer
for a period of not less than 2 years after expiration
of the term of such contract; and
(8) a statement setting forth a time schedule for
performance of the invention development services,
including an estimated date in which such performance
is expected to be completed.
(b) Invention Developer as Fiduciary.--To the extent that the
description of the specific acts or services affords discretion
to the invention developer with respect to what specific acts
or services shall be performed, the invention developer shall
be deemed a fiduciary.
(c) Availability of Information.--Records and correspondence
described under subsection (a)(7) shall be made available after
7 days written notice to the customer or the representative of
the customer to review and copy at a reasonable cost on the
invention developer's premises during normal business hours.
Sec. 56. Remedies
(a) In General.--(1) Any contract for invention development
services that does not comply with the applicable provisions of
this chapter shall be voidable at the option of the customer.
(2) Any contract for invention development services entered
into in reliance upon any material false, fraudulent, or
misleading information, representation, notice, or
advertisement of the invention developer (or any agent,
employee, officer, director, partner, or independent contractor
of such invention developer) shall be voidable at the option of
the customer.
(3) Any waiver by the customer of any provision of this
chapter shall be deemed contrary to public policy and shall be
void and unenforceable.
(4) Any contract for invention development services which
provides for filing for and obtaining utility, design, or plant
patent protection shall be voidable at the option of the
customer unless the invention developer offers to perform or
performs such act through a person duly registered to practice
before, and in good standing with, the Patent and Trademark
Office.
(b) Civil Action.--(1) Any customer who is injured by a
violation of this chapter by an invention developer or by any
material false or fraudulent statement or representation, or
any omission of material fact, by an invention developer (or
any agent, employee, director, officer, partner, or independent
contractor of such invention developer) or by failure of an
invention developer to make all the disclosures required under
this chapter, may recover in a civil action against the
invention developer (or the officers, directors, or partners of
such invention developer) in addition to reasonable costs and
attorneys' fees, the greater of--
(A) $5,000; or
(B) the amount of actual damages sustained by the
customer.
(2) Notwithstanding paragraph (1), the court may increase
damages to not more than 3 times the amount awarded.
(c) Rebuttable Presumption of Injury.--For purposes of this
section, substantial violation of any provision of this chapter
by an invention developer or execution by the customer of a
contract for invention development services in reliance on any
material false or fraudulentstatements or representations or
omissions of material fact shall establish a rebuttable presumption of
injury.
Sec. 57. Records of complaints
(a) Release of Complaints.--The Director shall make all
complaints received by the United States Patent and Trademark
Office involving invention developers publicly available,
together with any response of the invention developers.
(b) Request for Complaints.--The Director may request
complaints relating to invention development services from any
Federal or State agency and include such complaints in the
records maintained under subsection (a), together with any
response of the invention developers.
Sec. 58. Fraudulent representation by an invention developer
Whoever, in providing invention development services,
knowingly provides any false or misleading statement,
representation, or omission of material fact to a customer or
fails to make all the disclosures required under this chapter,
shall be guilty of a misdemeanor and fined not more than
$10,000 for each offense.
Sec. 59. Rule of construction
Except as expressly provided in this chapter, no provision of
this chapter shall be construed to affect any obligation,
right, or remedy provided under any other Federal or State law.
PART II--PATENTABILITY OF INVENTIONS AND GRANT OF PATENTS
* * * * * * *
CHAPTER 10--PATENTABILITY OF INVENTIONS
* * * * * * *
Sec. 100. Definitions
When used in this title unless the context otherwise
indicates--
(a) * * *
* * * * * * *
(e) The term ``third-party requester'' means a person
requesting reexamination under section 302 of this title who is
not the patent owner.
* * * * * * *
Sec. 102. Conditions for patentability; novelty and loss of right to
patent
A person shall be entitled to a patent unless--
(a) * * *
* * * * * * *
[(e) the invention was described in a patent granted on an
application for patent by another filed in the United States
before the invention thereof by the applicant for patent, or on
an international application by another who has fulfilled the
requirements of paragraphs (1), (2), and (4) of section 371(c)
of this title before the invention thereof by the applicant for
patent, or]
(e) the invention was described in--
(1) an application for patent, published pursuant to
section 122(b) of this title, by another filed in the
United States before the invention by the applicant for
patent, except that an international application filed
under the treaty defined in section 351(a) of this
title shall have the effect under this subsection of a
national application published under section 122(b) of
this title only if the international application
designating the United States was published under
Article 21(2)(a) of such treaty in the English
language, or
(2) a patent granted on an application for patent by
another filed in the United States before the invention
by the applicant for patent, or
* * * * * * *
CHAPTER 11--APPLICATION FOR PATENT
Sec.
111. Application.
* * * * * * *
122. Confidential status of applications; publication of patent
applications.
Sec. 111. Application
(a) In General.--
(1) Written application.--An application for patent
shall be made, or authorized to be made, by the
inventor, except as otherwise provided in this title,
in writing to the [Commissioner] Director.
* * * * * * *
(4) Failure to submit.--Upon failure to submit the
fee and oath within such prescribed period, the
application shall be regarded as abandoned, unless it
is shown to the satisfaction of the [Commissioner]
Director that the delay in submitting the fee and oath
was unavoidable or unintentional. The filing date of an
application shall be the date on which the
specification and any required drawing are received in
the Patent and Trademark Office.
(b) Provisional Application.--
(1) Authorization.--A provisional application for
patent shall be made or authorized to be made by the
inventor, except as otherwise provided in this title,
in writing to the [Commissioner] Director. Such
application shall include--
(A) a specification as prescribed by the
first paragraph of section 112 of this title;
and
(B) a drawing as prescribed by section 113 of
this title.
* * * * * * *
(3) Fee.--(A) The application must be accompanied by
the fee required by law.
(B) The fee may be submitted after the specification
and any required drawing are submitted, within such
period and under such conditions, including the payment
of a surcharge, as may be prescribed by the
[Commissioner] Director.
(C) Upon failure to submit the fee within such
prescribed period, the application shall be regarded as
abandoned, unless it is shown to the satisfaction of
the [Commissioner] Director that the delay in
submitting the fee was unavoidable or unintentional.
* * * * * * *
[(5) Abandonment.--The provisional application shall
be regarded as abandoned 12 months after the filing
date of such application and shall not be subject to
revival thereafter.]
(5) Abandonment.--Notwithstanding the absence of a
claim, upon timely request and as prescribed by the
Director, a provisional application may be treated as
an application filed under subsection (a). If no such
request is made, the provisional application shall be
regarded as abandoned 12 months after the filing date
of such application and shall not be subject to revival
thereafter.
(6) Other basis for provisional application.--Subject
to all the conditions in this subsection and section
119(e) of this title, and as prescribed by the
[Commissioner] Director, an application for patent
filed under subsection (a) may be treated as a
provisional application for patent.
* * * * * * *
Sec. 113. Drawings
The applicant shall furnish a drawing where necessary for the
understanding of the subject matter sought to be patented. When
the nature of such subject matter admits of illustration by a
drawing and the applicant has not furnished such a drawing, the
[Commissioner] Director may require its submission within a
time period of not less than two months from the sending of a
notice thereof. Drawings submitted after the filing date of the
application may not be used (i) to overcome any insufficiency
of the specification due to lack of an enabling disclosure or
otherwise inadequate disclosure therein, or (ii) to supplement
the original disclosure thereof for the purpose of
interpretation of the scope of any claim.
Sec. 114. Models, specimens
The [Commissioner] Director may require the applicant to
furnish a model of convenient size to exhibit advantageously
the several parts of his invention.
When the invention relates to a composition of matter, the
[Commissioner] Director may require the applicant to furnish
specimens or ingredients for the purpose of inspection or
experiment.
* * * * * * *
Sec. 116. Inventors
* * * * * * *
If a joint inventor refuses to join in an application for
patent or cannot be found or reached after diligent effort, the
application may be made by the other inventor on behalf of
himself and the omitted inventor. The [Commissioner] Director,
on proof of the pertinent facts and after such notice to the
omitted inventor as he prescribes, may grant a patent to the
inventor making the application, subject to the same rights
which the omitted inventor would have had if he had been
joined. The omitted inventor may subsequently join in the
application.
Whenever through error a person is named in an application
for patent as the inventor, or through error an inventor is not
named in an application, and such error arose without any
deceptive intention on his part, the [Commissioner] Director
may permit the application to be amended accordingly, under
such terms as he prescribes.
* * * * * * *
Sec. 118. Filing by other than inventor
Whenever an inventor refuses to execute an application for
patent, or cannot be found or reached after diligent effort, a
person to whom the inventor has assigned or agreed in writing
to assign the invention or who otherwise shows sufficient
proprietary interest in the matter justifying such action, may
make application for patent on behalf of and as agent for the
inventor on proof of the pertinent facts and a showing that
such action is necessary to preserve the rights of the parties
or to prevent irreparable damage; and the [Commissioner]
Director may grant a patent to such inventor upon such notice
to him as the [Commissioner] Director deems sufficient, and on
compliance with such regulations as he prescribes.
Sec. 119. Benefit of earlier filing date; right of priority
(a) An application for patent for an invention filed in this
country by any person who has, or whose legal representatives
or assigns have, previously regularly filed an application for
a patent for the same invention in a foreign country which
affords similar privileges in the case of applications filed in
the United States or to citizens of the United States, or in a
WTO member country, shall have the same effect as the same
application would have if filed in this country on the date on
which the application for patent for the same invention was
first filed in such foreign country, if the application in this
country is filed within twelve months from the earliest date on
which such foreign application was filed; but no patent shall
be granted on any application for patent for an invention which
had been patented or described in a printed publication in any
country more than one year before the date of the actual filing
of the application in this country, or which had been in public
use or on sale in this country more than one year prior to such
filing.
[(b) No application for patent shall be entitled to this
right of priority unless a claim therefor and a certified copy
of the original foreign application, specification and drawings
upon which it is based are filed in the Patent and Trademark
Office before the patent is granted, or at such time during the
pendency of the application as required by the Commissioner not
earlier than six months after the filing of the application in
this country. Such certification shall be made by the patent
office of the foreign country in which filed and show the date
of the application and of the filing of the specification and
other papers. The Commissioner may require a translation of the
papers filed if not in the English language and such other
information as he deems necessary.]
(b)(1) No application for patent shall be entitled to this
right of priority unless a claim is filed in the Patent and
Trademark Office, at such time during the pendency of the
application as is required by the Director, that identifies the
foreign application by specifying its application number, the
country in or for which the application was filed, and the date
of its filing.
(2) The Director may consider the failure of the applicant to
file a timely claim for priority as a waiver of any such claim,
and may require the payment of a surcharge as a condition of
accepting an untimely claim during the pendency of the
application.
(3) The Director may require a certified copy of the original
foreign application, specification, and drawings upon which it
is based, a translation if not in the English language, and
such other information as the Director considers necessary. Any
such certification shall be made by the intellectual property
authority in the foreign country in which the foreign
application was filed and show the date of the application and
of the filing of the specification and other papers.
* * * * * * *
(e)(1) * * *
* * * * * * *
(3) If the day that is 12 months after the filing date of a
provisional application falls on a Saturday, Sunday, or Federal
holiday within the District of Columbia, the period of pendency
of the provisional application shall be extended to the next
succeeding business day.
(f) Applications for Plant Breeder's Rights.--Applications
for plant breeder's rights filed in a WTO member country (or in
a UPOV Contracting Party) shall have the same effect for the
purpose of the right of priority under subsections (a) through
(c) of this section as applications for patents, subject to the
same conditions and requirements of this section as apply to
applications for patents.
(g) Definitions.--As used in this section--
(1) the term ``WTO member country'' has the same
meaning as the term is defined in section 104(b)(2) of
this title; and
(2) the term ``UPOV Contracting Party'' means a
member of the International Convention for the
Protection of New Varieties of Plants.
Sec. 120. Benefit of earlier filing date in the United States
An application for patent for an invention disclosed in the
manner provided by the first paragraph of section 112 of this
title in an application previously filed in the United States,
or as provided by section 363 of this title, which is filed by
an inventor or inventors named in the previously filed
application shall have the same effect, as to such invention,
as though filed on the date of the prior application, if filed
before the patenting or abandonment of or termination of
proceedings on the first application or on an application
similarly entitled to the benefit of the filing date of the
first application and if it contains or is amended to contain a
specific reference to the earlier filed application. No
application shall be entitled to the benefit of an earlier
filed application under this section unless an amendment
containing the specific reference to the earlier filed
application is submitted at such time during the pendency of
the application as is required by the Commissioner. The
Director may consider the failure to submit such an amendment
within that time period as a waiver of any benefit under this
section. The Director may establish procedures, including the
payment of a surcharge, to accept unavoidably late submissions
of amendments under this section.
Sec. 121. Divisional applications
(a) If two or more independent and distinct inventions are
claimed in one application, the [Commissioner] Director may
require the application to be restricted to one of the
inventions. If the other invention is made the subject of a
divisional application which complies with the requirements of
section 120 of this title it shall be entitled to the benefit
of the filing date of the original application. A patent
issuing on an application with respect to which a requirement
for restriction under this section has been made, or on an
application filed as a result of such a requirement, shall not
be used as a reference either in the Patent and Trademark
Office or in the courts against a divisional application or
against the original application or any patent issued on either
of them, if the divisional application is filed before the
issuance of the patent on the other application. If a
divisional application is directed solely to subject matter
described and claimed in the original application as filed, the
[Commissioner] Director may dispense with signing and execution
by the inventor. The validity of a patent shall not be
questioned for failure of the [Commissioner] Director to
require the application to be restricted to one invention.
(b) In a case in which restriction is required on the ground
that two or more independent and distinct inventions are
claimed in an application, the applicant shall be entitled to
submit an examination fee and request examination for each
independent and distinct invention in excess of one. The
examination fee shall be equal to the filing fee, including
excess claims fees, that would have applied had the claims
corresponding to the asserted independent and distinct
inventions been presented in a separate application for patent.
For each of the independent and distinct inventions in excess
of one for which the applicant pays an examination fee within
two months after the requirement for restriction, the Director
shall cause an examination to be made and a notification of
rejection or written notice of allowance provided to the
applicant within the time period specified in section
154(b)(1)(B)(i) of this title for the original application.
Failure to meet this or any other time limit set forth in
section 154(b)(1)(B) of this title shall be treated as an
unusual administrative delay under section 154(b)(1)(A)(iv) of
this title.
(c) An applicant who requests reconsideration of a
requirement for restriction under this section and submits
examination fees pursuant to such requirement shall, if the
requirement is determined to be improper, be entitled to a
refund of any examination fees determined to have been paid
pursuant to the requirement.
[Sec. 122. Confidential status of applications
[Applications for patents shall be kept in confidence by the
Patent and Trademark Office and no information concerning the
same given without authority of the applicant or owner unless
necessary to carry out the provisions of any Act of Congress or
in such special circumstances as may be determined by the
Commissioner.]
Sec. 122. Confidential status of applications; publication of patent
applications
(a) Confidentiality.--Except as provided in subsection (b),
applications for patents shall be kept in confidence by the
Patent and Trademark Office and no information concerning
applications for patents shall be given without authority of
the applicant or owner unless necessary to carry out the
provisions of an Act of Congress or in such special
circumstances as may be determined by the Director.
(b) Publication.--
(1) In general.--(A) Subject to paragraph (2), each
application for patent, except applications for design
patents filed under chapter 16 of this title and
provisional applications filed under section 111(b) of
this title, shall be published, in accordance with
procedures determined by the Director, promptly after
the expiration of a period of 18 months from the
earliest filing date for which a benefit is sought
under this title. At the request of the applicant, an
application may be published earlier than the end of
such 18-month period.
(B) No information concerning published patent
applications shall be made available to the public
except as the Director determines.
(C) Notwithstanding any other provision of law, a
determination by the Director to release or not to
release information concerning a published patent
application shall be final and nonreviewable.
(2) Exceptions.--(A) An application that is no longer
pending shall not be published.
(B) An application that is subject to a secrecy order
pursuant to section 181 of this title shall not be
published.
(C)(i) Upon the request of the applicant at the time
of filing, the application shall not be published in
accordance with paragraph (1) until 3 months after the
Director makes a notification to the applicant under
section 132 of this title.
(ii) Applications filed pursuant to section 363 of
this title, applications asserting priority under
section 119 or 365(a) of this title, and applications
asserting the benefit of an earlier application under
section 120, 121, or 365(c) of this title shall not be
eligible for a request pursuant to this subparagraph.
(iii) In a request under this subparagraph, the
applicant shall certify that the invention disclosed in
the application was not and will not be the subject of
an application filed in a foreign country.
(iv) The Director may establish appropriate
procedures and fees for making a request under this
subparagraph.
(D)(i) In a case in which an applicant, after making
a request under subparagraph (C)(i), determines to file
an application in a foreign country, the applicant
shall notify the Director promptly. The application
shall then be published in accordance with the
provisions of paragraph (1).
(ii) The Director may establish appropriate fees to
cover the costs of processing notifications under
clause (i), including the costs of any special handling
of applications resulting from the initial request
under subparagraph (C)(i).
(c) Pre-Issuance Opposition.--The provisions of this section
shall not operate to create any new opportunity for pre-
issuance opposition. The Director may establish appropriate
procedures to ensure that this section does not create any new
opportunity for pre-issuance opposition.
CHAPTER 12--EXAMINATION OF APPLICATION
Sec. 131. Examination of application
The [Commissioner] Director shall cause an examination to be
made of the application and the alleged new invention; and if
on such examination it appears that the applicant is entitled
to a patent under the law, the [Commissioner] Director shall
issue a patent therefor.
Sec. 132. Notice of rejection; reexamination
Whenever, on examination, any claim for a patent is rejected,
or any objection or requirement made, the [Commissioner]
Director shall notify the applicant thereof, stating the
reasons for such rejection, or objection or requirement,
together with such information and references as may be useful
in judging of the propriety of continuing the prosecution of
his application; and if after receiving such notice, the
applicant persists in his claim for a patent, with or without
amendment, the application shall be reexamined. No amendment
shall introduce new matter into the disclosure of the
invention.
Sec. 133. Time for prosecuting application
Upon failure of the applicant to prosecute the application
within six months after any action therein, of which notice has
been given or mailed to the applicant, or within such shorter
time, not less than thirty days, as fixed by the [Commissioner]
Director in such action, the application shall be regarded as
abandoned by the parties thereto, unless it be shown to the
satisfaction of the [Commissioner] Director that such delay was
unavoidable.
[Sec. 134. Appeal to the Board of Patent Appeals and Interferences
[An applicant for a patent, any of whose claims has been
twice rejected, may appeal from the decision of the primary
examiner to the Board of Patent Appeals and Interferences,
having once paid the fee for such appeal.]
Sec. 134. Appeal to the Board of Patent Appeals and Interferences
(a) Patent Applicant.--An applicant for a patent, any of
whose claims has been twice rejected, may appeal from the
decision of the primary examiner to the Board of Patent Appeals
and Interferences, having once paid the fee for such appeal.
(b) Patent Owner.--A patent owner in a reexamination
proceeding may appeal from the final rejection of any claim by
the primary examiner to the Board of Patent Appeals and
Interferences, having once paid the fee for such appeal.
(c) Third-Party.--A third-party requester may appeal to the
Board of Patent Appeals and Interferences from the final
decision of the primary examiner favorable to the patentability
of any original or proposed amended or new claim of a patent,
having once paid the fee for such appeal.
Sec. 135. Interferences
(a) Whenever an application is made for a patent which, in
the opinion of the [Commissioner] Director, would interfere
with any pending application, or with any unexpired patent, an
interference may be declared and the [Commissioner] Director
shall give notice of such declaration to the applicants, or
applicant and patentee, as the case may be. The Board of Patent
Appeals and Interferences shall determine questions of priority
of the inventions and may determine questions of patentability.
Any final decision, if adverse to the claim of an applicant,
shall constitute the final refusal by the Patent and Trademark
Office of the claims involved, and the [Commissioner] Director
may issue a patent to the applicant who is adjudged the prior
inventor. A final judgment adverse to a patentee from which no
appeal or other review has been or can be taken or had shall
constitute cancellation of the claims involved in the patent,
and notice of such cancellation shall be endorsed on copies of
the patent distributed after such cancellation by the Patent
and Trademark Office.
(b)(1) A claim which is the same as, or for the same or
substantially the same subject matter as, a claim of an issued
patent may not be made in any application unless such a claim
is made prior to one year [from the date on which the patent
was granted] after the date on which the patent is granted and
the applicant makes a prima facie showing of prior invention.
(2) A claim which is the same as, or for the same or
substantially the same subject matter as, a claim of a
published application may be made in an application filed after
the published application is published only if the claim is
made prior to one year after the date on which the published
application is published and the applicant of the later filed
application makes a prime facie showing of prior invention.
(c) Any agreement or understanding between parties to an
interference, including any collateral agreements referred to
therein, made in connection with or in contemplation of the
termination of the interference, shall be in writing and a true
copy thereof filed in the Patent and Trademark Office before
the termination of the interference as between the said parties
to the agreement or understanding. If any party filing the same
so requests, the copy shall be kept separate from the file of
the interference, and made available only to Government
agencies on written request, or to any person on a showing of
good cause. Failure to file the copy of such agreement or
understanding shall render permanently unenforceable such
agreement or understanding and any patent of such parties
involved in the interference or any patent subsequently issued
on any application of such parties so involved. The
[Commissioner] Director may, however, on a showing of good
cause for failure to file within the time prescribed, permit
the filing of the agreement or understanding during the six-
month period subsequent to the termination of the interference
as between the parties to the agreement or understanding.
The [Commissioner] Director shall give notice to the parties
or their attorneys of record, a reasonable time prior to said
termination, of the filing requirement of this section. If the
[Commissioner] Director gives such notice at a later time,
irrespective of the right to file such agreement or
understanding within the six-month period on a showing of good
cause, the parties may file such agreement or understanding
within sixty days of the receipt of such notice.
Any discretionary action of the [Commissioner] Director under
this subsection shall be reviewable under section 10 of the
Administrative Procedure Act.
(d) Parties to a patent interference, within such time as may
be specified by the [Commissioner] Director by regulation, may
determine such contest or any aspect thereof by arbitration.
Such arbitration shall be governed by the provisions of title 9
to the extent such title is not inconsistent with this section.
The parties shall give notice of any arbitration award to the
[Commissioner] Director, and such award shall, as between the
parties to the arbitration, be dispositive of the issues to
which it relates. The arbitration award shall be unenforceable
until such notice is given. Nothing in this subsection shall
preclude the [Commissioner] Director from determining
patentability of the invention involved in the interference.
CHAPTER 13--REVIEW OF PATENT AND TRADEMARK OFFICE DECISIONS
Sec. 141. Appeal to Court of Appeals for the Federal Circuit
[An applicant dissatisfied with the decision in an appeal to
the Board of Patent Appeals and Interferences under section 134
of this title may appeal the decision to the United States
Court of Appeals for the Federal Circuit.] An applicant, a
patent owner, or a third-party requester, dissatisfied with the
final decision in an appeal to the Board of Patent Appeals and
Interferences under section 134 of this title, may appeal the
decision to the United States Court of Appeals for the Federal
Circuit. By filing such an appeal the applicant waives his or
her right to proceed under section 145 of this title. A party
to an interference dissatisfied with the decision of the Board
of Patent Appeals and Interferences on the interference may
appeal the decision to the United States Court of Appeals for
the Federal Circuit, but such appeal shall be dismissed if any
adverse party to such interference, within twenty days after
the appellant has filed notice of appeal in accordance with
section 142 of this title, files notice with the [Commissioner]
Director that the party elects to have all further proceedings
conducted as provided in section 146 of this title. If the
appellant does not, within thirty days after the filing of such
notice by the adverse party, file a civil action under section
146, the decision appealed from shall govern the further
proceedings in the case.
Sec. 142. Notice of appeal
When an appeal is taken to the United States Court of Appeals
for the Federal Circuit, the appellant shall file in the Patent
and Trademark Office a written notice of appeal directed to the
[Commissioner] Director, within such time after the date of the
decision from which the appeal is taken as the [Commissioner]
Director prescribes, but in no case less than 60 days after
that date.
Sec. 143. Proceedings on appeal
With respect to an appeal described in section 142 of this
title, the [Commissioner] Director shall transmit to the United
States Court of Appeals for the Federal Circuit a certified
list of the documents comprising the record in the Patent and
Trademark Office. The court may request that the [Commissioner]
Director forward the original or certified copies of such
documents during pendency of the appeal. [In an ex parte case,
the Commissioner shall submit to the court in writing the
grounds for the decision of the Patent and Trademark Office,
addressing all the issues involved in the appeal.] In ex parte
and reexamination cases, the Director shall submit to the court
in writing the grounds for the decision of the United States
Patent and Trademark Office, addressing all the issues involved
in the appeal. The court shall, before hearing an appeal, give
notice of the time and place of the hearing to the
[Commissioner] Director and the parties in the appeal.
Sec. 144. Decision on appeal
The United States Court of Appeals for the Federal Circuit
shall review the decision from which an appeal is taken on the
record before the Patent and Trademark Office. Upon its
determination the court shall issue to the [Commissioner]
Director its mandate and opinion, which shall be entered of
record in the Patent and Trademark Office and shall govern the
further proceedings in the case.
Sec. 145. Civil action to obtain patent
An applicant dissatisfied with the decision of the Board of
Patent Appeals and Interferences in an appeal under section
134(a) of this title may, unless appeal has been taken to the
United States Court of Appeals for the Federal Circuit, have
remedy by civil action against the [Commissioner] Director in
the United States District Court for the District of Columbia
if commenced within such time after such decision, not less
than sixty days, as the [Commissioner] Director appoints. The
court may adjudge that such applicant is entitled to receive a
patent for his invention, as specified in any of his claims
involved in the decision of the Board of Patent Appeals and
Interferences, as the facts in the case may appear and such
adjudication shall authorize the [Commissioner] Director to
issue such patent on compliance with the requirements of law.
All the expenses of the proceedings shall be paid by the
applicant.
Sec. 146. Civil action in case of interference
Any party to an interference dissatisfied with the decision
of the Board of Patent Appeals and Interferences on the
interference, may have remedy by civil action, if commenced
within such time after such decision, not less than sixty days,
as the [Commissioner] Director appoints or as provided in
section 141 of this title, unless he has appealed to the United
States Court of Appeals for the Federal Circuit, and such
appeal is pending or has been decided. In such suits the record
in the Patent and Trademark Office shall be admitted on motion
of either party upon the terms and conditions as to costs,
expenses, and the further cross-examination of the witnesses as
the court imposes, without prejudice to the right of the
parties to take further testimony. The testimony and exhibits
of the record in the Patent and Trademark Office when admitted
shall have the same effect as if originally taken and produced
in the suit.
Such suit may be instituted against the party in interest as
shown by the records of the Patent and Trademark Office at the
time of the decision complained of, but any party in interest
may become a party to the action. If there be adverse parties
residing in a plurality of districts not embraced within the
same state, or an adverse party residing in a foreign country,
the United States District Court for the District of Columbia
shall have jurisdiction and may issue summons against the
adverse parties directed to the marshal of any district in
which any adverse party resides. Summons against adverse
parties residing in foreign countries may be served by
publication or otherwise as the court directs. The
[Commissioner] Director shall not be a necessary party but he
shall be notified of the filing of the suit by the clerk of the
court in which it is filed and shall have the right to
intervene. Judgment of the court in favor of the right of an
applicant to a patent shall authorize the [Commissioner]
Director to issue such patent on the filing in the Patent and
Trademark Office of a certified copy of the judgment and on
compliance with the requirements of law.
CHAPTER 14--ISSUE OF PATENT
Sec.
151. Issue of patent.
* * * * * * *
154. Contents and term of patent; provisional rights.
* * * * * * *
Sec. 151. Issue of patent
* * * * * * *
If any payment required by this section is not timely made,
but is submitted with the fee for delayed payment and the delay
in payment is shown to have been unavoidable, it may be
accepted by the [Commissioner] Director as though no
abandonment or lapse had ever occurred.
* * * * * * *
Sec. 153. How issued
Patents shall be issued in the name of the United States of
America, under the seal of the Patent and Trademark Office, and
shall be signed by the [Commissioner] Director or have his
signature placed thereon and attested by an officer of the
Patent and Trademark Office designated by the [Commissioner]
Director, and shall be recorded in the Patent and Trademark
Office.
Sec. 154. Contents and term of patent; provisional rights
(a) * * *
[(b) Term Extension.--
[(1) Interference delay or secrecy orders.--If the
issue of an original patent is delayed due to a
proceeding under section 135(a) of this title, or
because the application for patent is placed under an
order pursuant to section 181 of this title, the term
of the patent shall be extended for the period of
delay, but in no case more than 5 years.
[(2) Extension for appellate review.--If the issue of
a patent is delayed due to appellate review by the
Board of Patent Appeals and Interferences or by a
Federal court and the patent is issued pursuant to a
decision in the review reversing an adverse
determination of patentability, the term of the patent
shall be extended for a period of time but in no case
more than 5 years. A patent shall not be eligible for
extension under this paragraph if it is subject to a
terminal disclaimer due to the issue of another patent
claiming subject matter that is not patentably distinct
from that under appellate review.
[(3) Limitations.--The period of extension referred
to in paragraph (2)--
[(A) shall include any period beginning on
the date on which an appeal is filed under
section 134 or 141 of this title, or on which
an action is commenced under section 145 of
this title, and ending on the date of a final
decision in favor of the applicant;
[(B) shall be reduced by any time
attributable to appellate review before the
expiration of 3 years from the filing date of
the application for patent; and
[(C) shall be reduced for the period of time
during which the applicant for patent did not
act with due diligence, as determined by the
Commissioner.
[(4) Length of extension.--The total duration of all
extensions of a patent under this subsection shall not
exceed 5 years.]
(b) Term Extension.--
(1) Basis for patent term extension.--
(A) Delay.--Subject to the limitations set
forth in paragraph (2), if the issue of an
original patent is delayed due to--
(i) a proceeding under section 135(a)
of this title, including any appeal
under section 141, or any civil action
under section 146, of this title,
(ii) the imposition of an order
pursuant to section 181 of this title,
(iii) appellate review by the Board
of Patent Appeals and Interferences or
by a Federal court in a case in which
the patent was issued pursuant to a
decision in the review reversing an
adverse determination of patentability,
or
(iv) an unusual administrative delay
by the Patent and Trademark Office in
issuing the patent,
the term of the patent shall be extended for
the period of delay.
(B) Administrative delay.--For purposes of
subparagraph (A)(iv), an unusual administrative
delay by the Patent and Trademark office is the
failure to--
(i) make a notification of the
rejection of any claim for a patent or
any objection or argument under section
132 of this title or give or mail a
written notice of allowance under
section 151 of this title not later
than 14 months after the date on which
the application was filed;
(ii) respond to a reply under section
132 of this title or to an appeal taken
under section 134 of this title not
later than 4 months after the date on
which the reply was filed or the appeal
was taken;
(iii) act on an application not later
than 4 months after the date of a
decision by the Board of Patent Appeals
and Interferences under section 134 or
135 of this title or a decision by a
Federal court under section 141, 145,
or 146 of this title in a case in which
allowable claims remain in an
application;
(iv) issue a patent not later than 4
months after the date on which the
issue fee was paid under section 151 of
this title and all outstanding
requirements were satisfied; or
(v) issue a patent within 3 years
after the filing date of the
application in the United States, if
the applicant--
(I) has not obtained further
limited examination of the
application under section 209
of the Examining Procedure
Improvements Act;
(II) has responded to all
rejections, objections,
arguments, or other requests of
the Patent and Trademark Office
within 3 months after the date
on which they are made;
(III) has not benefitted from
an extension of patent term
under clause (i), (ii) or (iii)
of paragraph (1)(A);
(IV) has not sought or
obtained appellate review by
the Board of Patent Appeals and
Interferences or by a Federal
Court other than in a case in
which the patent was issued
pursuant to a decision in the
review reversing an adverse
determination of patentability;
and
(V) has not requested any
delay in the processing of the
application by the Patent and
Trademark Office.
(2) Limitations.--(A) The total duration of any
extensions granted pursuant to either clause (iii) or
(iv) of paragraph (1)(A) or both such clauses shall not
exceed 10 years. To the extent that periods of delay
attributable to grounds specified in paragraph (1)
overlap, the period of any extension granted under this
subsection shall not exceed the actual number of days
the issuance of the patent was delayed.
(B) The period of extension of the term of a patent
under this subsection shall be reduced by a period
equal to the time in which the applicant failed to
engage in reasonable efforts to conclude prosecution of
the application. The Director shall prescribe
regulations establishing the circumstances that
constitute a failure of an applicant to engage in
reasonable efforts to conclude processing or
examination of an application in order to ensure that
applicants are appropriately compensated for any delays
by the Patent and Trademark Office in excess of the
time periods specified in paragraph (1)(B).
(C) No patent the term of which has been disclaimed
beyond a specified date may be extended under this
section beyond the expiration date specified in the
disclaimer.
(3) Procedures.--The Director shall prescribe
regulations establishing procedures for the
notification of patent term extensions under this
subsection and procedures for contesting patent term
extensions under this subsection.
* * * * * * *
(d) Provisional Rights.--
(1) In general.--In addition to other rights provided
by this section, a patent shall include the right to
obtain a reasonable royalty from any person who, during
the period beginning on the date of publication of the
application for such patent pursuant to section 122(b)
of this title, or in the case of an international
application filed under the treaty defined in section
351(a) of this title designating the United States
under Article 21(2)(a) of such treaty, the date of
publication of the application, and ending on the date
the patent is issued--
(A)(i) makes, uses, offers for sale, or sells
in the United States the invention as claimed
in the published patent application or imports
such an invention into the United States; or
(ii) if the invention as claimed in the
published patent application is a process,
uses, offers for sale, or sells in the United
States or imports into the United States
products made by that process as claimed in the
published patent application; and
(B) had actual notice of the published patent
application and, where the right arising under
this paragraph is based upon an international
application designating the United States that
is published in a language other than English,
a translation of the international application
into the English language.
(2) Right based on substantially identical
inventions.--The right under paragraph (1) to obtain a
reasonable royalty shall not be available under this
subsection unless the invention as claimed in the
patent is substantially identical to the invention as
claimed in the published patent application.
(3) Time limitation on obtaining a reasonable
royalty.--The right under paragraph (1) to obtain a
reasonable royalty shall be available only in an action
brought not later than 6 years after the patent is
issued. The right under paragraph (1) to obtain a
reasonable royalty shall not be affected by the
duration of the period described in paragraph (1).
(4) Requirements for international applications.--The
right under paragraph (1) to obtain a reasonable
royalty based upon the publication under the treaty
defined in section 351(a) of this title of an
international application designating the United States
shall commence from the date that the Patent and
Trademark Office receives a copy of the publication
under such treaty of the international application, or,
if the publication under the treaty of the
international application is in a language other than
English, from the date that the Patent and Trademark
Office receives a translation of the international
application in the English language. The Director may
require the applicant to provide a copy of the
international publication of the international
application and a translation thereof.
Sec. 155. Patent term extension
Notwithstanding the provisions of section 154, the term of a
patent which encompasses within its scope a composition of
matter or a process for using such composition shall be
extended if such composition or process has been subjected to a
regulatory review by the Federal Food and Drug Administration
pursuant to the Federal Food, Drug, and Cosmetic Act leading to
the publication of regulation permitting the interstate
distribution and sale of such composition or process and for
which there has thereafter been a stay of regulation of
approval imposed pursuant to section 409 of the Federal Food,
Drug, and Cosmetic Act which stay was in effect on January 1,
1981, by a length of time to be measured from the date such
stay of regulation of approval was imposed until such
proceedings are finally resolved and commercial marketing
permitted. The patentee, his heirs, successors or assigns shall
notify the [Commissioner of Patents and Trademarks] Director
within ninety days of the date of enactment of this section or
the date the stay of regulation of approval has been removed,
whichever is later, of the number of the patent to be extended
and the date the stay was imposed and the date commercial
marketing was permitted. On receipt of such notice, the
[Commissioner] Director shall promptly issue to the owner of
record of the patent a certificate of extension, under seal,
stating the fact and length of the extension and identifying
the composition of matter or process for using such composition
to which such extension is applicable. Such certificate shall
be recorded in the official file of each patent extended and
such certificate shall be considered as part of the original
patent, and an appropriate notice shall be published in the
Official Gazette of the Patent and Trademark Office.
Sec. 155A. Patent term restoration
(a) * * *
* * * * * * *
(c) The patentee of any patent described in subsection (a) of
this section shall, within ninety days after the date of
enactment of this section, notify the [Commissioner of Patents
and Trademarks] Director of the number of any patent so
extended. On receipt of such notice, the [Commissioner]
Director shall confirm such extension by placing a notice
thereof in the official file of such patent and publishing an
appropriate notice of such extension in the Official Gazette of
the Patent and Trademark Office.
Sec. 156. Extension of patent term
(a) * * *
* * * * * * *
(d)(1) To obtain an extension of the term of a patent under
this section, the owner of record of the patent or its agent
shall submit an application to the [Commissioner] Director.
Except as provided in paragraph (5), such an application may
only be submitted within the sixty-day period beginning on the
date the product received permission under the provision of law
under which the applicable regulatory review period occurred
for commercial marketing or use. The application shall
contain--
(A) * * *
* * * * * * *
(C) information to enable the [Commissioner] Director
to determine under subsections (a) and (b) the
eligibility of a patent for extension and the rights
that will be derived from the extension and information
to enable the [Commissioner] Director and the Secretary
of Health and Human Services or the Secretary of
Agriculture to determine the period of the extension
under subsection (g);
* * * * * * *
(E) such patent or other information as the
[Commissioner] Director may require.
(2)(A) Within 60 days of the submittal of an application for
extension of the term of a patent under paragraph (1), the
[Commissioner] Director shall notify--
(i) * * *
* * * * * * *
of the extension application and shall submit to the Secretary
who is so notified a copy of the application. Not later than 30
days after the receipt of an application from the
[Commissioner] Director, the Secretary receiving the
application shall review the dates contained in the application
pursuant to paragraph (1)(C) and determine the applicable
regulatory review period, shall notify the [Commissioner]
Director of the determination, and shall publish in the Federal
Register a notice of such determination.
(B)(i) If a petition is submitted to the Secretary making the
determination under subparagraph (A), not later than 180 days
after the publication of the determination under subparagraph
(A), upon which it may reasonably be determined that the
applicant did not act with due diligence during the applicable
regulatory review period, the Secretary making the
determination shall, in accordance with regulations promulgated
by such Secretary, determine if the applicant acted with due
diligence during the applicable regulatory review period. The
Secretary making the determination shall make such
determination not later than 90 days after the receipt of such
a petition. For a drug product, device, or additive subject to
the Federal Food, Drug, and Cosmetic Act or the Public Health
Service Act, the Secretary may not delegate the authority to
make the determination prescribed by this clause to an office
below the Office of the [Commissioner] Director of Food and
Drugs. For a product subject to the Virus-Serum-Toxin Act, the
Secretary of Agriculture may not delegate the authority to make
the determination prescribed by this clause to an office below
the office of the Assistant Secretary for Marketing and
Inspection Services.
(ii) The Secretary making a determination under clause (i)
shall notify the [Commissioner] Director of the determination
and shall publish in the Federal Register a notice of such
determination together with the factual and legal basis for
such determination. Any interested person may request, within
the 60-day period beginning on the publication of a
determination, the Secretary making the determination to hold
an informal hearing on the determination. If such a request is
made within such period, such Secretary shall hold such hearing
not later than 30 days after the date of the request, or at the
request of the person making the request, not later than 60
days after such date. The Secretary who is holding the hearing
shall provide notice of the hearing to the owner of the patent
involved and to any interested person and provide the owner and
any interested person an opportunity to participate in the
hearing. Within 30 days after the completion of the hearing,
such Secretary shall affirm or revise the determination which
was the subject of the hearing and shall notify the
[Commissioner] Director of any revision of the determination
and shall publish any such revision in the Federal Register.
* * * * * * *
(4) An application for the extension of the term of a patent
is subject to the disclosure requirements prescribed by the
[Commissioner] Director.
(5)(A) If the owner of record of the patent or its agent
reasonably expects that the applicable regulatory review period
described in paragraph (1)(B)(ii), (2)(B)(ii), (3)(B)(ii),
(4)(B)(ii), or (5)(B)(ii) of subsection (g) that began for a
product that is the subject of such patent may extend beyond
the expiration of the patent term in effect, the owner or its
agent may submit an application to the [Commissioner] Director
for an interim extension during the period beginning 6 months,
and ending 15 days, before such term is due to expire. The
application shall contain--
(i) * * *
* * * * * * *
(iii) information to enable the [Commissioner]
Director to determine under subsection (a)(1), (2), and
(3) the eligibility of a patent for extension;
* * * * * * *
(v) such patent or other information as the
[Commissioner] Director may require.
(B) If the [Commissioner] Director determines that, except
for permission to market or use the product commercially, the
patent would be eligible for an extension of the patent term
under this section, the [Commissioner] Director shall publish
in the Federal Register a notice of such determination,
including the identity of the product under regulatory review,
and shall issue to the applicant a certificate of interim
extension for a period of not more than 1 year.
* * * * * * *
(E) Any interim extension granted under this paragraph shall
terminate at the end of the 60-day period beginning on the date
on which the product involved receives permission for
commercial marketing or use, except that, if within that 60-day
period the applicant notifies the [Commissioner] Director of
such permission and submits any additional information under
paragraph (1) of this subsection not previously contained in
the application for interim extension, the patent shall be
further extended, in accordance with the provisions of this
section--
(i) * * *
* * * * * * *
(F) The rights derived from any patent the term of which is
extended under this paragraph shall, during the period of
interim extension--
(i) * * *
* * * * * * *
(iii) in the case of a patent which claims a method
of manufacturing a product, be limited to the method of
manufacturing as used to make the product then under
regulatory review.
(e)(1) A determination that a patent is eligible for
extension may be made by the [Commissioner] Director solely on
the basis of the representations contained in the application
for the extension. If the [Commissioner] Director determines
that a patent is eligible for extension under subsection (a)
and that the requirements of paragraphs (1) through (4) of
subsection (d) have been complied with, the [Commissioner]
Director shall issue to the applicant for the extension of the
term of the patent a certificate of extension, under seal, for
the period prescribed by subsection (c). Such certificate shall
be recorded in the official file of the patent and shall be
considered as part of the original patent.
(2) If the term of a patent for which an application has been
submitted under subsection (d)(1) would expire before a
certificate of extension is issued or denied under paragraph
(1) respecting the application, the [Commissioner] Director
shall extend, until such determination is made, the term of the
patent for periods of up to one year if he determines that the
patent is eligible for extension.
* * * * * * *
(h) The [Commissioner] Director may establish such fees as
the [Commissioner] Director determines appropriate to cover the
costs to the Office of receiving and acting upon applications
under this section.
Sec. 157. Statutory invention registration
(a) Notwithstanding any other provision of this title, the
[Commissioner] Director is authorized to publish a statutory
invention registration containing the specification and
drawings of a regularly filed application for a patent without
examination if the applicant--
(1) meets the requirements of section 112 of this
title;
(2) has complied with the requirements for printing,
as set forth in regulations of the [Commissioner]
Director;
(3) waives the right to receive a patent on the
invention within such period as may be prescribed by
the [Commissioner] Director; and
(4) pays application, publication, and other
processing fees established by the [Commissioner]
Director.
If an interference is declared with respect to such an
application, a statutory invention registration may not be
published unless the issue of priority of invention is finally
determined in favor of the applicant.
* * * * * * *
(c) A statutory invention registration published pursuant to
this section shall have all of the attributes specified for
patents in this title except those specified in section 183 and
sections 271 through 289 of this title. A statutory invention
registration shall not have any of the attributes specified for
patents in any other provision of law other than this title. A
statutory invention registration published pursuant to this
section shall give appropriate notice to the public, pursuant
to regulations which the [Commissioner] Director shall issue,
of the preceding provisions of this subsection. The invention
with respect to which a statutory invention certificate is
published is not a patented invention for purposes of section
292 of this title.
* * * * * * *
CHAPTER 15--PLANT PATENTS
* * * * * * *
Sec. 161. Patents for plants
Whoever invents or discovers and asexually reproduces any
distinct and new variety of plant, including cultivated sports,
mutants, hybrids, and newly found seedlings, other than [a
tuber propagated plant or] a plant found in an uncultivated
state, may obtain a patent therefor, subject to the conditions
and requirements of this title.
The provisions of this title relating to patents for
inventions shall apply to patents for plants, except as
otherwise provided.
* * * * * * *
Sec. 163. Grant
[In the case of a plant patent the grant shall be of the
right to exclude others from asexually reproducing the plant or
selling or using the plant so reproduced.] In the case of a
plant patent, the grant shall include the right to exclude
others from asexually reproducing the plant, and from using,
offering for sale, or selling the plant so reproduced, or any
of its parts, throughout the United States, or from importing
the plant so reproduced, or any parts thereof, into the United
States.
Sec. 164. Assistance of Department of Agriculture
The President may by Executive order direct the Secretary of
Agriculture, in accordance with the requests of the
[Commissioner] Director, for the purpose of carrying into
effect the provisions of this title with respect to plants (1)
to furnish available information of the Department of
Agriculture, (2) to conduct through the appropriate bureau or
division of the Department research upon special problems, or
(3) to detail to the [Commissioner] Director officers and
employees of the Department.
* * * * * * *
CHAPTER 17--SECRECY OF CERTAIN INVENTIONS AND FILING APPLICATIONS IN
FOREIGN COUNTRY
* * * * * * *
Sec. 181. Secrecy of certain inventions and withholding of patent
Whenever publication or disclosure by the publication of an
application or by the grant of a patent on an invention in
which the Government has a property interest might, in the
opinion of the head of the interested Government agency, be
detrimental to the national security, the [Commissioner]
Director upon being so notified shall order that the invention
be kept secret and shall withhold the publication of the
application or the grant of a patent therefor under the
conditions set forth hereinafter.
Whenever the publication or disclosure of an invention by the
publication of an application or by the granting of a patent,
in which the Government does not have a property interest,
might, in the opinion of the [Commissioner] Director, be
detrimental to the national security, he shall make the
application for patent in which such invention is disclosed
available for inspection to the Atomic Energy Commission, the
Secretary of Defense, and the chief officer of any other
department or agency of the Government designated by the
President as a defense agency of the United States.
Each individual to whom the application is disclosed shall
sign a dated acknowledgment thereof, which acknowledgment shall
be entered in the file of the application. If, in the opinion
of the Atomic Energy Commission, the Secretary of a Defense
Department, or the chief officer of another department or
agency so designated, the publication or disclosure of the
invention by the publication of the application or by the
granting of a patent therefor would be detrimental to the
national security, the Atomic Energy Commission, the Secretary
of a Defense Department, or such other chief officer shall
notify the [Commissioner] Director and the [Commissioner]
Director shall order that the invention be kept secret and
shall withhold the publication of the application or the grant
of a patent for such period as the national interest requires,
and notify the applicant thereof. Upon proper showing by the
head of the department or agency who caused the secrecy order
to be issued that the examination of the application might
jeopardize the national interest, the [Commissioner] Director
shall thereupon maintain the application in a sealed condition
and notify the applicant thereof. The owner of an application
which has been placed under a secrecy order shall have a right
to appeal from the order to the Secretary of Commerce under
rules prescribed by him.
An invention shall not be ordered kept secret and the
publication of an application or the grant of a patent withheld
for a period of more than one year. The [Commissioner] Director
shall renew the order at the end thereof, or at the end of any
renewal period, for additional periods of one year upon
notification by the head of the department or the chief officer
of the agency who caused the order to be issued that an
affirmative determination has been made that the national
interest continues so to require. An order in effect, or
issued, during a time when the United States is at war, shall
remain in effect for the duration of hostilities and one year
following cessation of hostilities. An order in effect, or
issued, during a national emergency declared by the President
shall remain in effect for the duration of the national
emergency and six months thereafter. The [Commissioner]
Director may rescind any order upon notification by the heads
of the departments and the chief officers of the agencies who
caused the order to be issued that the publication or
disclosure of the invention is no longer deemed detrimental to
the national security.
Sec. 182. Abandonment of invention for unauthorized disclosure
The invention disclosed in an application for patent subject
to an order made pursuant to section 181 of this title may be
held abandoned upon its being established by the [Commissioner]
Director that in violation of said order the invention has been
published or disclosed or that an application for a patent
therefor has been filed in a foreign country by the inventor,
his successors, assigns, or legal representatives, or anyone in
privity with him or them, without the consent of the
[Commissioner] Director. The abandonment shall be held to have
occurred as of the time of violation. The consent of the
[Commissioner] Director shall not be given without the
concurrence of the heads of the departments and the chief
officers of the agencies who caused the order to be issued. A
holding of abandonment shall constitute forfeiture by the
applicant, his successors, assigns, or legal representatives,
or anyone in privity with him or them, of all claims against
the United States based upon such invention.
* * * * * * *
PART III--PATENTS AND PROTECTION OF PATENT RIGHTS
* * * * * * *
CHAPTER 25--AMENDMENT AND CORRECTION OF PATENTS
* * * * * * *
Sec. 251. Reissue of defective patents
Whenever any patent is, through error without any deceptive
intention, deemed wholly or partly inoperative or invalid, by
reason of a defective specification or drawing, or by reason of
the patentee claiming more or less than he had a right to claim
in the patent, the [Commissioner] Director shall, on the
surrender of such patent and the payment of the fee required by
law, reissue the patent for the invention disclosed in the
original patent, and in accordance with a new and amended
application, for the unexpired part of the term of the original
patent. No new matter shall be introduced into the application
for reissue.
The [Commissioner] Director may issue several reissued
patents for distinct and separate parts of the thing patented,
upon demand of the applicant, and upon payment of the required
fee for a reissue for each of such reissued patents.
* * * * * * *
Sec. 252. Effect of reissue
The surrender of the original patent shall take effect upon
the issue of the reissued patent, and every reissued patent
shall have the same effect and operation in law, on the trial
of actions for causes thereafter arising, as if the same had
been originally granted in such amended form, but in so far as
the claims of the original and reissued patents are
substantially identical, such surrender shall not affect any
action then pending nor abate any cause of action then
existing, and the reissued patent, to the extent that its
claims are substantially identical with the original patent,
shall constitute a continuation thereof and have effect
continuously from the date of the original patent.
* * * * * * *
Sec. 254. Certificate of correction of Patent and Trademark Office
mistake
Whenever a mistake in a patent, incurred through the fault of
the Patent and Trademark Office, is clearly disclosed by the
records of the Office, the [Commissioner] Director may issue a
certificate of correction stating the fact and nature of such
mistake, under seal, without charge, to be recorded in the
records of patents. A printed copy thereof shall be attached to
each printed copy of the patent, and such certificate shall be
considered as part of the original patent. Every such patent,
together with such certificate, shall have the same effect and
operation in law on the trial of actions for causes thereafter
arising as if the same had been originally issued in such
corrected form. The [Commissioner] Director may issue a
corrected patent without charge in lieu of and with like effect
as a certificate of correction.
Sec. 255. Certificate of correction of applicant's mistake
Whenever a mistake of a clerical or typographical nature, or
of minor character, which was not the fault of the Patent and
Trademark Office, appears in a patent and a showing has been
made that such mistake occurred in good faith, the
[Commissioner] Director may, upon payment of the required fee,
issue a certificate of correction, if the correction does not
involve such changes in the patent as would constitute new
matter or would require re-examination. Such patent, together
with the certificate, shall have the same effect and operation
in law on the trial of actions for causes thereafter arising as
if the same had been originally issued in such corrected form.
Sec. 256. Correction of named inventor
Whenever through error a person is named in an issued patent
as the inventor, or through error an inventor is not named in
an issued patent and such error arose without any deceptive
intention on his part, the [Commissioner] Director may, on
application of all the parties and assignees, with proof of the
facts and such other requirements as may be imposed, issued a
certificate correcting such error.
The error of omitting inventors or naming persons who are not
inventors shall not invalidate the patent in which such error
occurred if it can be corrected as provided in this section.
The court before which such matter is called in question may
order correction of the patent on notice and hearing of all
parties concerned and the [Commissioner] Director shall issue a
certificate accordingly.
* * * * * * *
CHAPTER 27--GOVERNMENT INTERESTS IN PATENTS
* * * * * * *
Sec. 267. Time for taking action in Government applications
Notwithstanding the provisions of sections 133 and 151 of
this title, the [Commissioner] Director may extend the time for
taking any action to three years, when an application has
become the property of the United States and the head of the
appropriate department or agency of the Government has
certified to the [Commissioner] Director that the invention
disclosed therein is important to the armament or defense of
the United States.
CHAPTER 28--INFRINGEMENT OF PATENTS
Sec.
271. Infringement of patent.
272. Temporary presence in the United States.
273. Prior domestic commercial or research use; defense to
infringement.
* * * * * * *
Sec. 273. Prior domestic commercial or research use; defense to
infringement
(a) Definitions.--For purposes of this section--
(1) the terms ``commercially used'', ``commercially
use'', and ``commercial use'' mean the use in the
United States in commerce or the use in the design,
testing, or production in the United States of a
product or service which is used in commerce, whether
or not the subject matter at issue is accessible to or
otherwise known to the public;
(2) in the case of activities performed by a
nonprofit research laboratory, or nonprofit entity such
as a university, research center, or hospital, a use
for which the public is the intended beneficiary shall
be considered to be a use described in paragraph (1) if
the use is limited to activity that occurred within the
laboratory or nonprofit entity or by persons in privity
with that laboratory or nonprofit entity before the
effective filing date of the application for patent at
issue, except that the use--
(A) may be asserted as a defense under this
section only by the laboratory or nonprofit
entity; and
(B) may not be asserted as a defense with
respect to any subsequent use by any entity
other than such laboratory, nonprofit entity,
or persons in privity;
(3) the terms ``used in commerce'', and ``use in
commerce'' mean that there has been an actual sale or
other arm's-length commercial transfer of the subject
matter at issue or that there has been an actual sale
or other arm's-length commercial transfer of a product
or service resulting from the use of the subject matter
at issue; and
(4) the ``effective filing date'' of a patent is the
earlier of the actual filing date of the application
for the patent or the filing date of any earlier United
States, foreign, or international application to which
the subject matter at issue is entitled under section
119, 120, or 365 of this title.
(b) Defense to Infringement.--(1) A person shall not be
liable as an infringer under section 271 of this title with
respect to any subject matter that would otherwise infringe one
or more claims in the patent being asserted against such
person, if such person had, acting in good faith, commercially
used the subject matter before the effective filing date of
such patent.
(2) The sale or other disposition of the subject matter of a
patent by a person entitled to assert a defense under this
section with respect to that subject matter shall exhaust the
patent owner's rights under the patent to the extent such
rights would have been exhausted had such sale or other
disposition been made by the patent owner.
(c) Limitations and Qualifications of Defense.--The defense
to infringement under this section is subject to the following:
(1) Derivation.--A person may not assert the defense
under this section if the subject matter on which the
defense is based was derived from the patentee or
persons in privity with the patentee.
(2) Not a general license.--The defense asserted by a
person under this section is not a general license
under all claims of the patent at issue, but extends
only to the subject matter claimed in the patent with
respect to which the person can assert a defense under
this chapter, except that the defense shall also extend
to variations in the quantity or volume of use of the
claimed subject matter, and to improvements in the
claimed subject matter that do not infringe additional
specifically claimed subject matter of the patent.
(3) Effective and serious preparation.--With respect
to subject matter that cannot be commercialized without
a significant investment of time, money, and effort, a
person shall be deemed to have commercially used the
subject matter if--
(A) before the effective filing date of the
patent, the person actually reduced the subject
matter to practice in the United States,
completed a significant portion of the total
investment necessary to commercially use the
subject matter, and made an arm's-length
commercial transaction in the United States in
connection with the preparation to use the
subject matter; and
(B) thereafter the person diligently
completed the remainder of the activities and
investments necessary to commercially use the
subject matter, and promptly began commercial
use of the subject matter, even if such
activities were conducted after the effective
filing date of the patent.
(4) Burden of proof.--A person asserting the defense
under this section shall have the burden of
establishing the defense.
(5) Abandonment of use.--A person who has abandoned
commercial use of subject matter may not rely on
activities performed before the date of such
abandonment in establishing a defense under subsection
(b) with respect to actions taken after the date of
such abandonment.
(6) Personal defense.--The defense under this section
may only be asserted by the person who performed the
acts necessary to establish the defense and, except for
any transfer to the patent owner, the right to assert
the defense shall not be licensed or assigned or
transferred to another person except in connection with
the good faith assignment or transfer of the entire
enterprise or line of business to which the defense
relates.
(7) One-year limitation.--A person may not assert a
defense under this section unless the subject matter on
which the defense is based had been commercially used
or actually reduced to practice more than one year
prior to the effective filing date of the patent by the
person asserting the defense or someone in privity with
that person.
(d) Unsuccessful Assertion of Defense.--If the defense under
this section is pleaded by a person who is found to infringe
the patent and who subsequently fails to demonstrate a
reasonable basis for asserting the defense, the court shall
find the case exceptional for the purpose of awarding
attorney's fees under section 285 of this title.
(e) Invalidity.--A patent shall not be deemed to be invalid
under section 102 or 103 of this title solely because a defense
is established under this section.
CHAPTER 29--REMEDIES FOR INFRINGEMENT OF PATENT, AND OTHER ACTIONS
* * * * * * *
Sec. 282. Presumption of validity; defenses
* * * * * * *
In actions involving the validity or infringement of a patent
the party asserting invalidity or noninfringement shall give
notice in the pleadings or otherwise in writing to the adverse
party at least thirty days before the trial, of the country,
number, date, and name of the patentee of any patent, the
title, date, and page numbers of any publication to be relied
upon as anticipation of the patent in suit or, except in
actions in the United States Court of Federal Claims, as
showing the state of the art, and the name and address of any
person who may be relied upon as the prior inventor or as
having prior knowledge of or as having previously used or
offered for sale the invention of the patent in suit. In the
absence of such notice proof of the said matters may not be
made at the trial except on such terms as the court requires.
Invalidity of the extension of a patent term or any portion
thereof under section 156 of this title because of the material
failure--
(1) by the applicant for the extension, or
(2) by the [Commissioner] Director,
to comply with the requirements of such section shall be a
defense in any action involving the infringement of a patent
during the period of the extension of its term and shall be
pleaded. A due diligence determination under section 156(d)(2)
is not subject to review in such an action.
* * * * * * *
Sec. 284. Damages
* * * * * * *
When the damages are not found by a jury, the court shall
assess them. In either event the court may increase the damages
up to three times the amount found or assessed. Increased
damages under this paragraph shall not apply to provisional
rights under section 154(d) of this title.
* * * * * * *
Sec. 290. Notice of patent suits
The clerks of the courts of the United States, within one
month after the filing of an action under this title shall give
notice thereof in writing to the [Commissioner] Director,
setting forth so far as known the names and addresses of the
parties, name of the inventor, and the designating number of
the patent upon which the action has been brought. If any other
patent is subsequently included in the action he shall give
like notice thereof. Within one month after the decision is
rendered or a judgment issued the clerk of the court shall give
notice thereof to the [Commissioner] Director. The
[Commissioner] Director shall, on receipt of such notices,
enter the same in the file of such patent.
* * * * * * *
CHAPTER 30--PRIOR ART CITATIONS TO OFFICE AND REEXAMINATION OF PATENTS
Sec.
301. Citation of prior art.
302. Request for reexamination.
303. Determination of issue by [Commissioner] Director.
304. Reexamination order by [Commissioner] Director.
* * * * * * *
308. Reexamination prohibited.
* * * * * * *
Sec. 302. Request for reexamination
Any person at any time may file a request for reexamination
by the Office of any claim of a patent on the basis of any
prior art cited under the provisions of section 301 of this
title. The request must be in writing and must be accompanied
by payment of a reexamination fee established by the
[Commissioner of Patents] Director pursuant to the provisions
of section 41 of this title. The request must set forth the
pertinency and manner of applying cited prior art to every
claim for which reexamination is requested. Unless the
requesting person is the owner of the patent, the
[Commissioner] Director promptly will send a copy of the
request to the owner of record of the patent.
Sec. 303. Determination of issue by [Commissioner] Director
(a) Within three months following the filing of a request for
reexamination under the provisions of section 302 of this
title, the [Commissioner] Director will determine whether a
substantial new question of patentability affecting any claim
of the patent concerned is raised by the request, with or
without consideration of other patents or printed publications.
On his own initiative, and any time, the [Commissioner]
Director may determine whether a substantial new question of
patentability is raised by patents and publications discovered
by him or cited under the provisions of section 301 of this
title.
(b) A record of the [Commissioner's] Director's determination
under subsection (a) of this section will be placed in the
official file of the patent, and a copy promptly will be given
or mailed to the owner of record of the patent and to the
person requesting reexamination, if any.
(c) A determination by the [Commissioner] Director pursuant
to subsection (a) of this section that no substantial new
question of patentability has been raised will be final and
nonappealable. Upon such a determination, the [Commissioner]
Director may refund a portion of the reexamination fee required
under section 302 of this title.
* * * * * * *
Sec. 307. Certificate of patentability, unpatentability, and claim
cancellation
(a) In a reexamination proceeding under this chapter, when
the time for appeal has expired or any appeal proceeding has
terminated, the [Commissioner] Director will issue and publish
a certificate canceling any claim of the patent finally
determined to be unpatentable, confirming any claim of the
patent determined to be patentable, and incorporating in the
patent any proposed amended or new claim determined to be
patentable.
* * * * * * *
=======================================================================
Note.--The amendments made to the following sections shall
take effect on the date that is 6 months after the date of
enactment of this Act and shall apply to all reexamination
requests filed on or after such date:
[Sec. 302. Request for reexamination
[Any person at any time may file a request for reexamination
by the Office of any claim of a patent on the basis of any
prior art cited under the provisions of section 301 of this
title. The request must be in writing and must be accompanied
by payment of a reexamination fee established by the
Commissioner of Patents pursuant to the provisions of section
41 of this title. The request must set forth the pertinency and
manner of applying cited prior art to every claim for which
reexamination is requested. Unless the requesting person is the
owner of the patent, the Commissioner promptly will send a copy
of the request to the owner of record of the patent.
[Sec. 303. Determination of issue by Commissioner
[(a) Within three months following the filing of a request
for reexamination under the provisions of section 302 of this
title, the Commissioner will determine whether a substantial
new question of patentability affecting any claim of the patent
concerned is raised by the request, with or without
consideration of other patents or printed publications. On his
own initiative, and any time, the Commissioner may determine
whether a substantial new question of patentability is raised
by patents and publications discovered by him or cited under
the provisions of section 301 of this title.
[(b) A record of the Commissioner's determination under
subsection (a) of this section will be placed in the official
file of the patent, and a copy promptly will be given or mailed
to the owner of record of the patent and to the person
requesting reexamination, if any.
[(c) A determination by the Commissioner pursuant to
subsection (a) of this section that no substantial new question
of patentability has been raised will be final and
nonappealable. Upon such a determination, the Commissioner may
refund a portion of the reexamination fee required under
section 302 of this title.
[Sec. 304. Reexamination order by Commissioner
[If, in a determination made under the provisions of
subsection 303(a) of this title, the Commissioner finds that a
substantial new question of patentability affecting any claim
of a patent is raised, the determination will include an order
for reexamination of the patent for resolution of the question.
The patent owner will be given a reasonable period, not less
than two months from the date a copy of the determination is
given or mailed to him, within which he may file a statement on
such question, including any amendment to his patent and new
claim or claims he may wish to propose, for consideration in
the reexamination. If the patent owner files such a statement,
he promptly will serve a copy of it on the person who has
requested reexamination under the provisions of section 302 of
this title. Within a period of two months from the date of
service, that person may file and have considered in the
reexamination a reply to any statement filed by the patent
owner. That person promptly will serve on the patent owner a
copy of any reply filed.
[Sec. 305. Conduct of reexamination proceedings
[After the times for filing the statement and reply provided
for by section 304 of this title have expired, reexamination
will be conducted according to the procedures established for
initial examination under the provisions of sections 132 and
133 of this title. In any reexamination proceeding under this
chapter, the patent owner will be permitted to propose any
amendment to his patent and a new claim or claims thereto, in
order to distinguish the invention as claimed from the prior
art cited under the provisions of section 301 of this title, or
in response to a decision adverse to the patentability of a
claim of a patent. No proposed amended or new claim enlarging
the scope of a claim of the patent will be permitted in a
reexamination proceeding under this chapter. All reexamination
proceedings under this section, including any appeal to the
Board of Patent Appeals and Interferences, will be conducted
with special dispatch within the Office.
[Sec. 306. Appeal
[The patent owner involved in a reexamination proceeding
under this chapter may appeal under the provisions of section
134 of this title, and may seek court review under the
provisions of sections 141 to 145 of this title, with respect
to any decision adverse to the patentability of any original or
proposed amended or new claim of the patent.]
Sec. 302. Request for reexamination
Any person at any time may file a request for reexamination
by the Office of a patent on the basis of any prior art cited
under the provisions of section 301 of this title or on the
basis of the requirements of section 112 of this title other
than the requirement to set forth the best mode of carrying out
the invention. The request must be in writing, must include the
identity of the real party in interest, and must be accompanied
by payment of a reexamination fee established by the Director
pursuant to the provisions of section 41 of this title. The
request must set forth the pertinency and manner of applying
cited prior art to every claim for which reexamination is
requested or the manner in which the patent specification or
claims fail to comply with the requirements of section 112 of
this title. Unless the requesting person is the owner of the
patent, the Director promptly shall send a copy of the request
to the owner of record of the patent.
Sec. 303. Determination of issue by Director
(a) Reexamination.--Not later than 3 months after the filing
of a request for reexamination under the provisions of section
302 of this title, the Director shall determine whether a
substantial new question of patentability affecting any claim
of the patent concerned is raised by the request, with or
without consideration of other patents or printed publications.
On the Director's initiative, at any time, the Director may
determine whether a substantial new question of patentability
is raised by any other patent or publication or by the failure
of the patent specification or claims of a patent to comply
with the requirements of section 112 of this title other than
the best mode requirement described in section 302.
(b) Record.--A record of the Director's determination under
subsection (a) shall be placed in the official file of the
patent, and a copy shall be promptly given or mailed to the
owner of record of the patent and to the third-party requester,
if any.
(c) Final Decision.--A determination by the Director pursuant
to subsection (a) shall be final and nonappealable. Upon a
determination that no substantial new question of patentability
has been raised, the Director may refund a portion of the
reexamination fee required under section 302 of this title.
Sec. 304. Reexamination order by Director
If, in a determination made under the provisions of section
303(a) of this title, the Director finds that a substantial new
question of patentability affecting a claim of a patent is
raised, the determination shall include an order for
reexamination of the patent for resolution of the question. The
order may be accompanied by the initial action of the Patent
and Trademark Office on the merits of the reexamination
conducted in accordance with section 305 of this title.
Sec. 305. Conduct of reexamination proceedings
(a) In General.--Subject to subsection (b), reexamination
shall be conducted according to the procedures established for
initial examination under the provisions of sections 132 and
133 of this title. In any reexamination proceeding under this
chapter, the patent owner shall be permitted to propose any
amendment to the patent and a new claim or claims, except that
no proposed amended or new claim enlarging the scope of the
claims of the patent shall be permitted.
(b) Response.--(1) This subsection shall apply to any
reexamination proceeding in which the order for reexamination
is based upon a request by a third-party requester.
(2) With the exception of the reexamination request, any
document filed by either the patent owner or the third-party
requester shall be served on the other party.
(3) If the patent owner files a response to any action on the
merits by the Patent and Trademark Office, the third-party
requester shall have 1 opportunity to file written comments
within a reasonable period not less than 1 month after the date
of service of the patent owner's response. Written comments
provided under this paragraph shall be limited to issues
covered by action of the Patent and Trademark Office or the
patent owner's response.
(c) Special Dispatch.--Unless otherwise provided by the
Director for good cause, all reexamination proceedings under
this section, including any appeal to the Board of Patent
Appeals and Interferences, shall be conducted with special
dispatch within the Office.
Sec. 306. Appeal
(a) Patent Owner.--The patent owner involved in a
reexamination proceeding under this chapter--
(1) may appeal under the provisions of section 134 of
this title, and may appeal under the provisions of
sections 141 through 144 of this title, with respect to
any decision adverse to the patentability of any
original or proposed amended or new claim of the
patent; and
(2) may be a party to any appeal taken by a third-
party requester pursuant to subsection (b) of this
section.
(b) Third-Party Requester.--A third-party requester in a
reexamination proceeding--
(1) may appeal under the provisions of section 134 of
this title, and may appeal under the provisions of
sections 141 through 144 of this title, with respect to
any final decision in the reexamination proceeding that
is favorable to the patentability of any original or
proposed amended or new claim of the patent; and
(2) may be a party to any appeal taken by the patent
owner with respect to a decision in the reexamination
proceeding, subject to subsection (c) of this section.
(c) Participation as Party.--(1) A third-party requester who,
under the provisions of sections 141 through 144 of this title,
files a notice of appeal, or who participates as a party to an
appeal by the patent owner, with respect to a reexamination
proceeding, is estopped from asserting at a later time, in any
forum, the invalidity of any claim determined to be patentable
on that appeal on any ground which the third-party requester
raised or could have raised during the reexamination
proceeding. This subsection does not prevent the assertion of
invalidity based on newly discovered prior art unavailable to
the third-party requester and the Patent and Trademark Office
at the time of the reexamination proceeding.
(2) For purposes of paragraph (1), a third-party requester is
deemed not to have participated as a party to an appeal by the
patent owner unless, not later than 20 days after the patent
owner has filed a notice of appeal, the third-party requester
files notice with the Commissioner electing to participate.
* * * * * * *
Sec. 308. Reexamination prohibited
(a) Order for Reexamination.--Notwithstanding any provision
of this chapter, once an order for reexamination of a patent
has been issued under section 304 of this title, neither the
patent owner nor the third-party requester, if any, nor privies
of either, may, unless authorized by the Director, file a
subsequent request for reexamination of the patent until a
certificate relating to that reexamination proceeding is issued
and published under section 307 of this title.
(b) Final Decision.--Once a final decision has been entered
against a party in a civil action arising in whole or in part
under section 1338 of title 28 that the party has not sustained
its burden of proving the invalidity of any patent claim in
suit, or if a final decision in a reexamination proceeding
instituted by a third-party requester is favorable to the
patentability or any original or proposed amended or new claim
of the patent and such decision is not appealed by the third-
party requester under section 306(b), then neither that party
nor its privies may thereafter request reexamination of any
such patent claim on the basis of issues which that party or
its privies raised or could have raised in such civil action or
reexamination proceeding. This subsection does not prevent the
assertion of invalidity based on newly discovered prior art
unavailable to the party or privies and the Office at the time
of the civil action or reexamination proceeding, as the case
may be.
=======================================================================
PART IV--PATENT COOPERATION TREATY
* * * * * * *
CHAPTER 35--DEFINITIONS
* * * * * * *
Sec. 351. Definitions
When used in this part unless the context otherwise
indicates--
(a) The term ``treaty'' means the Patent Co-operation Treaty
done at Washington, on June 19, 1970.
(b) The term ``Regulations'', when capitalized, means the
Regulations under the treaty, done at Washington on the same
date as the treaty. The term ``regulations'', when not
capitalized, means the regulations established by the
[Commissioner] Director under this title.
* * * * * * *
CHAPTER 36--INTERNATIONAL STAGE
Sec. 361. Receiving Office
(a) * * *
* * * * * * *
(d) The international fee, and the transmittal and search
fees prescribed under section 376(a) of this part, shall either
be paid on filing of an international application or within
such later time as may be fixed by the [Commissioner] Director.
Sec. 362. International Searching Authority and International
Preliminary Examining Authority
(a) * * *
(b) The handling fee, preliminary examination fee, and any
additional fees due for international preliminary examination
shall be paid within such time as may be fixed by the
[Commissioner] Director.
* * * * * * *
Sec. 364. International stage: Procedure
(a) * * *
(b) An applicant's failure to act within prescribed time
limits in connection with requirements pertaining to a pending
international application may be excused upon a showing
satisfactory to the [Commissioner] Director of unavoidable
delay, to the extent not precluded by the treaty and the
Regulations, and provided the conditions imposed by the treaty
and the Regulations regarding the excuse of such failure to act
are complied with.
Sec. 365. Right of priority; benefit of the filing date of a prior
application
(a) * * *
* * * * * * *
(c) In accordance with the conditions and requirements of
section 120 of this title, an international application
designating the United States shall be entitled to the benefit
of the filing date of a prior national application or a prior
international application designating the United States, and a
national application shall be entitled to the benefit of the
filing date of a prior international application designating
the United States. If any claim for the benefit of an earlier
filing date is based on a prior international application which
designated but did not originate in the United States, the
[Commissioner] Director may require the filing in the Patent
and Trademark Office of a certified copy of such application
together with a translation thereof into the English language,
if it was filed in another language.
* * * * * * *
Sec. 367. Actions of other authorities: Review
(a) Where a Receiving Office other than the Patent and
Trademark Office has refused to accord an international filing
date to an international application designating the United
States or where it has held such application to be withdrawn
either generally or as to the United States, the applicant may
request review of the matter by the [Commissioner] Director, on
compliance with the requirements of and within the time limits
specified by the treaty and the Regulations. Such review may
result in a determination that such application be considered
as pending in the national stage.
* * * * * * *
CHAPTER 37--NATIONAL STAGE
* * * * * * *
Sec. 371. National stage: Commencement
(a) * * *
* * * * * * *
(d) The requirements with respect to the national fee
referred to in subsection (c)(1), the translation referred to
in subsection (c)(2), and the oath or declaration referred to
in subsection (c)(4) of this section shall be complied with by
the date of the commencement of the national stage or by such
later time as may be fixed by the [Commissioner] Director. The
copy of the international application referred to in subsection
(c)(2) shall be submitted by the date of the commencement of
the national stage. Failure to comply with these requirements
shall be regarded as abandonment of the application by the
parties thereof, unless it be shown to the satisfaction of the
[Commissioner] Director that such failure to comply was
unavoidable. The payment of a surcharge may be required as a
condition of accepting the national fee referred to in
subsection (c)(1) or the oath or declaration referred to in
subsection (c)(4) of this section if these requirements are not
met by the date of the commencement of the national stage. The
requirements of subsection (c)(3) of this section shall be
complied with by the date of the commencement of the national
stage, and failure to do so shall be regarded as a cancellation
of the amendments to the claims in the international
application made under article 19 of the treaty. The
requirement of subsection (c)(5) shall be complied with at such
time as may be fixed by the [Commissioner] Director and failure
to do so shall be regarded as cancellation of the amendments
made under article 34(2)(b) of the treaty
* * * * * * *
Sec. 372. National stage: Requirements and procedure
(a) * * *
(b) In case of international applications designating but not
originating in, the United States--
(1) the [Commissioner] Director may cause to be
reexamined questions relating to form and contents of
the application in accordance with the requirements of
the treaty and the Regulations;
(2) the [Commissioner] Director may cause the
question of unity of invention to be reexamined under
section 121 of this title, within the scope of the
requirements of the treaty and the Regulations; and
(3) the [Commissioner] Director may require a
verification of the translation of the international
application or any other document pertaining to the
application if the application or other document was
filed in a language other than English.
* * * * * * *
[Sec. 374. Publication of international application: Effect
[The publication under the treaty of an international
application shall confer no rights and shall have no effect
under this title other than that of a printed publication.]
Sec. 374. Publication of international application: Effect
The publication under the treaty defined in section 351(a) of
this title of an international application designating the
United States shall confer the same rights and shall have the
same effect under this title as an application for patent
published under section 122(b), except as provided in sections
102(e) and 154(d) of this title.
Sec. 375. Patent issued on international application: Effect
(a) A patent may be issued by the [Commissioner] Director
based on an international application designating the United
States, in accordance with the provisions of this title.
Subject to section 102(e) of this title, such patent shall have
the force and effect of a patent issued on a national
application filed under the provisions of chapter 11 of this
title.
* * * * * * *
Sec. 376. Fees
(a) The required payment of the international fee and the
handling fee, which amounts are specified in the Regulations,
shall be paid in United States currency. The Patent and
Trademark Office shall charge a national fee as provided in
section 41(a), and may also charge the following fees:
(1) * * *
* * * * * * *
(5) Such other fees as established by the
[Commissioner] Director.
(b) The amounts of fees specified in subsection (a) of this
section, except the international fee and the handling fee,
shall be prescribed by the [Commissioner] Director. He may
refund any sum paid by mistake or in excess of the fees so
specified, or if required under the treaty and the Regulations.
The [Commissioner] Director may also refund any part of the
search fee, the national fee, the preliminary examination fee,
and any additional fees, where he determines such refund to be
warranted.
* * * * * * *
----------
ACT OF JULY 5, 1946
(Commonly Referred to as the Trademark Act of 1946)
* * * * * * *
TITLE I--THE PRINCIPAL REGISTER
Section 1. (a) * * *
(1) * * *
(A) a written application, in such form as
may be prescribed by the [Commissioner]
Director, verified by the applicant, or by a
member of the firm or an officer of the
corporation or association applying, specifying
applicant's domicile and citizenship, the date
of applicant's first use of the mark, the date
of applicant's first use of the mark in
commerce, the goods in connection with which
the mark is used and the mode or manner in
which the mark is used in connection with such
goods, and including a statement to the effect
that the person making the verification
believes himself, or the firm, corporation, or
association in whose behalf he makes the
verification, to be the owner of the mark
sought to be registered, that the mark is in
use in commerce, and that no other person,
firm, corporation, or association, to the best
of his knowledge and belief, has the right to
use such mark in commerce either in the
identical form thereof or in such near
resemblance thereto as to be likely, when used
on or in connection with the goods of such
other person, to cause confusion, or to cause
mistake, or to deceive: Provided, That in the
case of every application claiming concurrent
use the applicant shall state exceptions to his
claim of exclusive use in which he shall
specify, to the extent of his knowledge, any
concurrent use by others, the goods in
connection with which and the areas in which
each concurrent use exists, the periods of each
use, and the goods and area for which the
applicant desires registration;
* * * * * * *
(C) such number of specimens or facsimiles of
the mark as used as may be required by the
[Commissioner] Director.
(2) * * *
(3) By complying with such rules or regulations, not
inconsistent with law, as may be prescribed by the
[Commissioner] Director.
(b) * * *
(1) * * *
(A) a written application, in such form as
may be prescribed by the [Commissioner]
Director, verified by the applicant, or by a
member of the firm or an officer of the
corporation or association applying, specifying
applicant's domicile and citizenship,
applicant's bona fide intention to use the mark
in commerce, the goods on or in connection with
which the applicant has a bona fide intention
to use the mark and the mode or manner in which
the mark is intended to be used on or in
connection with such goods, including a
statement to the effect that the person making
the verification believes himself or herself,
or the firm, corporation, or association in
whose behalf he or she makes the verification,
to be entitled to use the mark in commerce, and
that no other person, firm, corporation, or
association, to the best of his or her
knowledge and belief, has the right to use such
mark in commerce either in the identical form
of the mark or in such near resemblance to the
mark as to be likely, when used on or in
connection with the goods of such other person,
to cause confusion, or to cause mistake, or to
deceive; however, except for applications filed
pursuant to section 44, no mark shall be
registered until the applicant has met the
requirements of subsection (d) of this section;
and
(B) * * *
(2) * * *
(3) By complying with such rules or regulations, not
inconsistent with law, as may be prescribed by the
[Commissioner] Director.
* * * * * * *
(d)(1) Within six months after the date on which the notice
of allowance with respect to a mark is issued under section
13(b)(2) to an applicant under subsection (b) of this section,
the applicant shall file in the Patent and Trademark Office,
together with such number of specimens or facsimiles of the
mark as used in commerce as may be required by the
[Commissioner] Director and payment of the prescribed fee, a
verified statement that the mark is in use in commerce and
specifying the date of the applicant's first use of the mark in
commerce, those goods or services specified in the notice of
allowance on or in connection with which the mark is used in
commerce, and the mode or manner in which the mark is used on
or in connection with such goods or services. Subject to
examination and acceptance of the statement of use, the mark
shall be registered in the Patent and Trademark Office, a
certificate of registration shall be issued for those goods or
services recited in the statement of use for which the mark is
entitled to registration, and notice of registration shall be
published in the Official Gazette of the Patent and Trademark
Office. Such examination may include an examination of the
factors set forth in subsections (a) through (e) of section 2.
The notice of registration shall specify the goods or services
for which the mark is registered.
(2) The [Commissioner] Director shall extend, for one
additional 6-month period, the time for filing the statement of
use under paragraph (1), upon written request of the applicant
before the expiration of the 6-month period provided in
paragraph (1). In addition to an extension under the preceding
sentence, the [Commissioner] Director may, upon a showing of
good cause by the applicant, further extend the time for filing
the statement of use under paragraph (1) for periods
aggregating not more than 24 months, pursuant to written
request of the applicant made before the expiration of the last
extension granted under this paragraph. Any request for an
extension under this paragraph shall be accompanied by a
verified statement that the applicant has a continued bona fide
intention to use the mark in commerce and specifying those
goods or services identified in the notice of allowance on or
in connection with which the applicant has a continued bona
fide intention to use the mark in commerce. Any request for an
extension under this paragraph shall be accompanied by payment
of the prescribed fee. The [Commissioner] Director shall issue
regulations setting forth guidelines for determining what
constitutes good cause for purposes of this paragraph.
(3) The [Commissioner] Director shall notify any applicant
who files a statement of use of the acceptance or refusal
thereof and, if the statement of use is refused, the reasons
for the refusal. An applicant may amend the statement of use.
* * * * * * *
(e) If the applicant is not domiciled in the United State he
shall designate by a written document filed in the Patent and
Trademark Office the name and address of some person resident
in the United States on whom may be served notices or process
in proceedings affecting the mark. Such notices or process may
be served upon the person so designated by leaving with him or
mailing to him a copy thereof at the address specified in the
last designation so filed. If the person so designated cannot
be found at the address given in the last designation, such
notice or process may be served upon the [Commissioner]
Director.
marks registrable on the principal register
Sec. 2. * * *
* * * * * * *
(d) Consists of or comprises a mark which so resembles a mark
registered in the Patent and Trademark Office, or a mark or
trade name previously used in the United States by another and
not abandoned, as to be likely, when used on or in connection
with the goods of the applicant, to cause confusion, or to
cause mistake, or to deceive: Provided, That if the
[Commissioner] Director determines that confusion, mistake, or
deception is not likely to result from the continued use by
more than one person of the same or similar marks under
conditions and limitations as to the mode or place of use of
the marks or the goods on or in connection with which such
marks are used, concurrent registrations may be issued to such
persons when they have become entitled to use such marks as a
result of their concurrent lawful use in commerce prior to (1)
the earliest of the filing dates of the applications pending or
of any registration issued under this Act; (2) July 5, 1947, in
the case of registrations previously issued under the Act of
March 3, 1881, or February 20, 1905, and continuing in full
force and effect on that date; or (3) July 5, 1947, in the case
of applications filed under the Act of February 20, 1905, and
registered after July 5, 1947. Use prior to the filing date of
any pending application or a registration shall not be required
when the owner of such application or registration consents to
the grant of a concurrent registration to the applicant.
Concurrent registrations may also be issued by the
[Commissioner] Director when a court of competent jurisdiction
has finally determined that more than one person is entitled to
use the same or similar marks in commerce. In issuing
concurrent registrations, the [Commissioner] Director shall
prescribe conditions and limitations as to the mode or place of
use of the mark or the goods on or in connection with which
such mark is registered to the respective persons.
* * * * * * *
(f) Except as expressly excluded in paragraphs (a), (b), (c),
(d), and (e)(3) of this section, nothing herein shall prevent
the registration of a mark used by the applicant which has
become distinctive of the applicant's goods in commerce. The
[Commissioner] Director may accept as prima facie evidence that
the mark has become distinctive, as used on or in connection
with the applicant's goods in commerce, proof of substantially
exclusive and continuous use thereof as a mark by the applicant
in commerce for the five years before the date on which the
claim of distinctiveness is made. Nothing in this section shall
prevent the registration of a mark which, when used on or in
connection with the goods of the applicant, is primarily
geographically deceptively misdescriptive of them, and which
became distinctive of the applicant's goods in commerce before
the date of the enactment of the North American Free Trade
Agreement Implementation Act.
* * * * * * *
Sec. 6. (a) The [Commissioner] Director may require the
applicant to disclaim an unregistrable component of a mark
otherwise registrable. An applicant may voluntarily disclaim a
component of a mark sought to be registered.
* * * * * * *
certificates
Sec. 7. (a) Certificates of registration of marks registered
upon the principal register shall be issued in the name of the
United States of America, under the seal of the Patent and
Trademark Office, and shall be signed by the [Commissioner]
Director or have his signature placed thereon, and a record
thereof shall be kept in the Patent Office.. The registration
shall reproduce the mark, and state that the mark is registered
on the principal register under this Act, the date of the first
use of the mark, the date of the first use of the mark in
commerce, the particular goods or services for which it is
registered, the number and date of the registration, the term
thereof, the date on which the application for registration was
received in the Patent and Trademark Office, and any conditions
and limitations that may be imposed in the registration.
* * * * * * *
(d) A certificate of registration of a mark may be issued to
the assignee of the applicant, but the assignment must first be
recorded in the Patent and Trademark Office. In case of change
of ownership the [Commissioner] Director shall, at the request
of the owner and upon a proper showing and the payment of the
prescribed fee, issue to such assignee a new certificate of
registration of the said mark in the name of such assignee, and
for the unexpired part of the original period.
(e) Upon application of the registrant the [Commissioner]
Director may permit any registration to be surrendered for
cancellation, and upon cancellation appropriate entry shall be
made in the records of the Patent and Trademark Office. Upon
application of the registrant and payment of the prescribed
fee, the [Commissioner] Director for good cause may permit any
registration to be amended or to be disclaimed in part:
Provided, That the amendment or disclaimer does not alter
materially the character of the mark. Appropriate entry shall
be made in the records of the Patent and Trademark Office and
upon the certificate of registration or, if said certificate is
lost or destroyed, upon a certified copy thereof.
(f) Copies of any records, books, papers, or drawings
belonging to the Patent and Trademark Office relating to marks,
and, copies of registrations, when authenticated by the seal of
the Patent and Trademark Office and certified by the
[Commissioner] Director, or in his name by an employee of the
Office duly designated by the [Commissioner] Director, shall be
evidence in all cases wherein the originals would be evidence;
and any person making application therefore and paying the
prescribed fee shall have such copies.
(g) Whenever a material mistake in a registration, incurred
through the fault of the Patent and Trademark Office, is
clearly disclosed by the records of the Office a certificate
stating the fact and nature of such mistake shall be issued
without charge and recorded and a printed copy thereof shall be
attached to each printed copy of the registration and such
corrected registration shall thereafter have the same effect as
if the same had been originally issued in such corrected form,
or in the discretion of the [Commissioner] Director a new
certificate of registration may be issued without charge. All
certificates of correction heretofore issued in accordance with
the rules of the Patent and Trademark Office and the
registrations to which they are attached shall have the same
force and effect as if such certificates and their issue had
been specifically authorized by statute.
(h) Whenever a mistake has been made in a registration and a
showing has been made that such mistake occurred in good faith
through the fault of the applicant, the [Commissioner] Director
is authorized to issue a certificate of correction or, in his
discretion, a new certificate upon the payment of the
prescribed fee: Provided, That the correction does not involve
such changes in the registration as to require republication of
the mark.
duration
Sec. 8. (a) Each certificate of registration shall remain in
force for ten years: Provided, That the registration of any
mark under the provisions of this Act shall be canceled by the
[Commissioner] Director at the end of six years following its
date, unless within one year next preceding the expiration of
such six years the registrant shall file in the Patent and
Trademark Office an affidavit setting forth those goods or
services recited in the registration on or in connection with
which the mark is in use in commerce and attaching to the
affidavit a specimen or facsimile showing current use of the
mark, or showing that any nonuse is due to special
circumstances which excuse such nonuse and is not due to any
intention to abandon the mark. Special notice of the
requirement for such affidavit shall be attached to each
certificate of registration.
(b) Any registration published under the provisions of
subsection (c) of section 12 of this Act shall be canceled by
the [Commissioner] Director at the end of six years after the
date of such publication unless within one year next preceding
the expiration of such six years the registrant shall file in
the Patent and Trademark Office an affidavit showing that said
mark is in use in commerce or showing that its nonuse is due to
special circumstances which excuse such nonuse and is not due
to any intention to abandon the mark.
(c) The [Commissioner] Director shall notify any registrant
who files either of the above-prescribed affidavits of his
acceptance or refusal thereof and, if a refusal, the reasons
therefore.
Sec. 9. (a) * * *
(b) If the [Commissioner] Director refuses to renew the
registration, he shall notify the registrant of his refusal and
the reasons therefor.
* * * * * * *
publication
Sec. 12. (a) Upon the filing of an application for
registration and payment of the prescribed fee, the
[Commissioner] Director shall refer the application to the
examiner in charge of the registration of marks, who shall
cause an examination to be made and, if on such examination it
shall appear that the applicant is entitled to registration, or
would be entitled to registration upon the acceptance of the
statement of use required by section 1(d) of this Act, the
[Commissioner] Director shall cause the mark to be published in
the Official Gazette of the Patent and Trademark Office:
Provided, That in the case of an applicant claiming concurrent
use, or in the case of an application to be placed in an
interference as provided for in section 16 of this Act, the
mark, if otherwise registrable, may be published subject to the
determination of the rights of the parties to such proceedings.
(b) If the applicant is found not entitled to registration,
the examiner shall advise the applicant thereof and of the
reasons therefor. The applicant shall have a period of six
months in which to reply or amend his application, which shall
then be reexamined. This procedure may be repeated until (1)
the examiner finally refuses registration of the mark or (2)
the applicant fails for a period of six months to reply or
amend or appeal, whereupon the application shall be deemed to
have been abandoned, unless it can be shown to the satisfaction
of the [Commissioner] Director that the delay in responding was
unavoidable, whereupon such time may be extended.
(c) A registrant of a mark registered under the provisions of
the Act of March 3, 1881, or the Act of February 20, 1905, may,
at any time prior to the expiration of the registration
thereof, upon the payment of the prescribed fee file with the
[Commissioner] Director an affidavit setting forth those goods
stated in the registration on which said mark is in use in
commerce and that the registrant claims the benefits of this
Act for said mark. The [Commissioner] Director shall publish
notice thereof with a reproduction of said mark in the Official
Gazette, and notify the registrant of such publication and of
the requirement for the affidavit of use or nonuse as provided
for in subsection (b) of section 8 of this Act. Marks published
under this subsection shall not be subject to the provisions of
section 13 of this Act.
opposition
Sec. 13. (a) Any person who believes that he would be damaged
by the registration of a mark upon the principal register may,
upon payment of the prescribed fee, file an opposition in the
Patent and Trademark Office, stating the grounds therefor,
within thirty days after the publication under subsection (a)
of section 12 of this Act of the mark sought to be registered.
Upon written request prior to the expiration of the thirty-day
period, the time for filing opposition shall be extended for an
additional thirty days, and further extensions of time for
filing opposition may be granted by the [Commissioner] Director
for good cause when requested prior to the expiration of an
extension. The Commissioner shall notify the applicant of each
extension of the time for filing opposition. An opposition may
be amended under such conditions as may be prescribed by the
[Commissioner] Director.
* * * * * * *
Sec. 15. Except on a ground for which application to cancel
may be filed at any time under paragraphs (3) and (5) of
section 14 of this Act, and except to the extent, if any, to
which the use of a mark registered on the principal register
infringes a valid right acquired under the law of any State or
Territory by use of a mark or trade name continuing from a date
prior to the date of registration under this Act of such
registered mark, the right of the registrant to use such
registered mark in commerce for the goods or services on or in
connection with which such registered mark has been in
continuous use for five consecutive years subsequent to the
date of such registration and is still in use in commerce,
shall be incontestable: Provided, That--
(1) * * *
* * * * * * *
(3) an affidavit is filed with the [Commissioner]
Director within one year after the expiration of any
such five-year period setting forth those goods or
services stated in the registration on or in connection
with which such mark has been in continuous use for
such five consecutive years and is still in use in
commerce, and the other matters specified in paragraphs
(1) and (2) of this section; and
(4) no incontestable right shall be acquired in a
mark which is the generic name for the goods or
services or a portion thereof, for which it is
registered.
Subject to the conditions above specified in this section,
the incontestable right with reference to a mark registered
under this Act shall apply to a mark registered under the Act
of March 3, 1881, or the Act of February 20, 1905, upon the
filing of the required affidavit with the [Commissioner]
Director within one year after the expiration of any period of
five consecutive years after the date of publication of a mark
under the provisions of subsection (c) of section 12 of this
Act.
The [Commissioner] Director shall notify any registrant who
files the above-prescribed affidavit of the filing thereof.
interference
Sec. 16. Upon petition showing extraordinary circumstances,
the [Commissioner] Director may declare that an interference
exists when application is made for the registration of a mark
which so resembles a mark previously registered by another, or
for the registration of which another has previously made
application, as to be likely when used on or in connection with
the goods or services of the applicant to cause confusion or
mistake or to deceive. No interference shall be declared
between an application and the registration of a mark the right
to the use of which has become incontestable.
[Sec. 17. In every case of interference, opposition to
registration, application to register as a lawful concurrent
user, or application to cancel the registration of a mark, the
Commissioner shall give notice to all parties and shall direct
a Trademark Trial and Appeal Boards, to determine and decide
the respective rights of registration.
[The Trademark Trail and Appeal Board shall include the
Commissioner, the Deputy Commissioner, the Assistant
Commissioners, and members appointed by the Commissioner.
Employees of the Patent and Trademark Office and other persons,
all of whom shall be competent in trademark law, shall be
eligible for appointment as members. Each case shall be heard
by at least three members of the Board, the members hearing
such case to be designated by the Commissioner.]
Sec. 17. (a) In every case of interference, opposition to
registration, application to register as a lawful concurrent
user, or application to cancel the registration of a mark, the
Director shall give notice to all parties and shall direct a
Trademark Trial and Appeal Board to determine and decide the
respective rights of registration.
(b) The Trademark Trial and Appeal Board shall include the
Director, the Commissioner for Patents, the Commissioner for
Trademarks, and administrative trademark judges who are
appointed by the Director.
Sec. 18. In such proceedings the [Commissioner] Director may
refuse to register the opposed mark, may cancel the
registration, in whole or in part, may modify the application
or registration by limiting the goods or services specified
therein, may otherwise restrict or rectify with respect to the
register the registration of a registered mark, may refuse to
register any or all of several interfering marks, or may
register the mark or marks for the person or persons entitled
thereto, as the rights of the parties hereunder may be
established in the proceedings; Provided, That in the case of
the registration of any mark based on concurrent use, the
[Commissioner] Director shall determine and fix the conditions
and limitations provided for in subsection (d) of section 2 of
this Act. However, no final judgment shall be entered in favor
of an applicant under section 1(b) before the mark is
registered, if such applicant cannot prevail without
establishing constructive use pursuant to section 7(c).
* * * * * * *
Sec. 21. (a)(1) An applicant for registration of a mark,
party to an interference proceeding, party to an opposition
proceeding, party to an application to register as a lawful
concurrent user, party to a cancellation proceeding, a
registrant who has filed an affidavit as provided in section 8,
or an applicant for renewal, who is dissatisfied with the
decision of the [Commissioner] Director or Trademark Trail and
Appeal Board, may appeal to the United States Court of Appeals
for the Federal Circuit thereby waiving his right to proceed
under subsection (b) of this section: Provided, That such
appeal shall be dismissed if any adverse party to the
proceeding, other than the [Commissioner] Director, shall,
within twenty days after the appellant has filed notice of
appeal according to paragraph (2) of this subsection, files
notice with the [Commissioner] Director that he elects to have
all further proceedings conducted as provided in subsection (b)
of this section. Thereupon the appellant shall have thirty days
thereafter within which to file a civil action under subsection
(b) of this section, in default of which the decision appealed
from shall govern the further proceedings in the case.
(2) When an appeal is taken to the United States Court of
Appeals for the Federal Circuit, the appellant shall file in
the Patent and Trademark Office a written notice of appeal
directed to the [Commissioner] Director, within such time after
the date of the decision from which the appeal is taken as the
[Commissioner] Director prescribes, but in no case less than 60
days after that date.
(3) The [Commissioner] Director shall transmit to the United
States Court of Appeals for the Federal Circuit a certified
list of the documents comprising the record in the Patent and
Trademark Office. The court may request that the [Commissioner]
Director forward the original or certified copies of such
documents during pendency of the appeal. In an ex parte case,
the [Commissioner] Director shall submit to that court a brief
explaining the grounds for the decision of the Patent and
Trademark Office, addressing all the issues involved in the
appeal. The court shall, before hearing an appeal give notice
of the time and place of the hearing to the [Commissioner]
Director and the parties in the appeal.
(4) The United States Court of Appeals for the Federal
Circuit shall review the decision from which the appeal is
taken on the record before the Patent and Trademark Office.
Upon its determination the court shall issue its mandate and
opinion to the [Commissioner] Director, which shall be entered
of record in the Patent and Trademark Office and shall govern
the further proceedings in the case. However, no final judgment
shall be entered in favor of an applicant under section 1(b)
before the mark is registered, if such applicant cannot prevail
without establishing constructive use pursuant to section 7(c).
(b)(1) Whenever a person authorized by subsection (a) of this
section to appeal to the United States Court of Appeals for the
Federal Circuit is dissatisfied with the decision of the
[Commissioner] Director or Trademark Trail and Appeal Board,
said person may, unless appeal has been taken to said United
States Court of Appeals for the Federal Circuit, have remedy by
a civil action if commenced within such time after such
decision, not less than sixty days, as the [Commissioner]
Director appoints or as provided in subsection (a) of this
section. The court may adjudge that an applicant is entitled to
a registration upon the application involved, that a
registration involved should be canceled, or such other matter
as the issues in the proceeding require, as the facts in the
case may appear. Such adjudication shall authorize the
[Commissioner] Director to take any necessary action, upon
compliance with the requirements of law. However, no final
judgment shall be entered in favor of an applicant under
section 1(b) before the mark is registered, if such applicant
cannot prevail without establishing constructive use pursuant
to section 7(c).
(2) The [Commissioner] Director shall not be made a party to
an inter partes proceeding under this subsection, but he shall
be notified of the filing of the complaint by the clerk of the
court in which it is filed and shall have the right to
intervene in the action.
(3) In any case where there is no adverse party, a copy of
the complaint shall be served on the [Commissioner] Director,
and, unless the court finds the expenses to be unreasonable,
all the expenses of the proceeding shall be paid by the party
bringing the case, whether the final decision is in favor of
such party or not. In suits brought hereunder, the record in
the Patent and Trademark Office shall be admitted on motion of
any party, upon such terms and conditions as to costs,
expenses, and the further cross-examination of the witnesses as
the court imposes, without prejudice to the right of any party
to take further testimony. The testimony and exhibits of the
record in the Patent and Trademark Office, when admitted, shall
have the same effect as if originally taken and produced in the
suit.
* * * * * * *
TITLE II--THE SUPPLEMENTAL REGISTER
Sec. 23. (a) In addition to the principal register, the
[Commissioner] Director shall keep a continuation of the
register provided in paragraph (b) of section 1 of the Act of
March 19, 1920, entitled ``An Act to give effect to certain
provisions of the convention for the protection of trade-marks
and commercial names, made and signed in the city of Buenos
Aires, in the Argentine Republic, August 20, 1910, and for
other purposes'', to be called the supplemental register. All
marks capable of distinguishing applicant's goods or services
and not registrable on the principal register herein provided,
except those declared to be unregistrable under subsections
(a), (b), (c), (d), and (e)(3) of section 2 of this Act, which
are in lawful use in commerce by the owner thereof, on or in
connection with any goods or services may be registered on the
supplemental register upon the payment of the prescribed fee
and compliance with the provisions of subsections (a) and (e)
of section 1 so far as they are applicable. Nothing in this
section shall prevent the registration on the supplemental
register of a mark, capable of distinguishing the applicant's
goods or services and not registrable on the principal register
under this Act, that is declared to be unregistrable under
section 2(e)(3), if such mark has been in lawful use in
commerce by the owner thereof, on or in connection with any
goods or services, since before the date of the enactment of
the North American Free Trade Agreement Implementation Act.
(b) Upon the filing of an application for registration on the
supplemental register and payment of the prescribed fee the
[Commissioner] Director shall refer the application to the
examiner in charge of the registration of marks, who shall
cause an examination to be made and if on such examination it
shall appear that the applicant is entitled to registration,
the registration shall be granted. If the applicant is found
not entitled to registration the provisions of subsection (b)
of section 12 of this Act shall apply.
* * * * * * *
cancellation
Sec. 24. Marks for the supplemental register shall not be
published for or be subject to opposition, but shall be
published on registration in the Official Gazette of the Patent
and Trademark Office. Whenever any person believes that he is
or will be damaged by the registration of a mark on this
register he may at any time, upon payment of the prescribed fee
and the filing of a petition stating the ground therefor, apply
to the [Commissioner] Director to cancel such registration. The
[Commissioner] Director shall refer such application to the
Trademark Trail and Appeal Board, which shall give notice
thereof to the registrant. If it is found after a hearing
before the Board which that the registrant is not entitled to
registration, or that the mark has been abandoned, the
registration shall be canceled by the [Commissioner] Director.
However, no final judgment shall be entered in favor of an
applicant under section (1)(b) before the mark is registered,
if such applicant cannot prevail without establishing
constructive use pursuant to section 7(c).
* * * * * * *
TITLE IV--CLASSIFICATION
Sec. 30. The [Commissioner] Director may establish a
classification of goods and services, for convenience of Patent
and Trademark Office administration, but not to limit or extend
the applicant's or registrant's rights. The applicant may apply
to register a mark for any or all of the goods or services on
or in connection with which he or she is using or has a bona
fide intention to use the mark in commerce: Provided, That if
the [Commissioner] Director by regulation permits the filing of
an application for the registration of a mark for goods or
services which fall within a plurality of classes, a fee
equaling the sum of the fees for filing an application in each
class shall be paid, and the [Commissioner] Director may issue
a single certificate of registration for such mark.
TITLE V--FEES AND CHARGES
Sec. 31. Fees
(a) The [Commissioner] Director will establish fees for the
filing and processing of an application for the registration of
a trademark or other mark and for all other services performed
by and materials furnished by the Patent and Trademark Office
related to trademarks and other marks. However, no fee for the
filing or processing of an application for the registration of
a trademark or other mark or for the renewal or assignment of a
trademark or other mark will be adjusted more than once every
three years. No fee established under this section will take
effect prior to sixty days following notice in the Federal
Register.
(b) The [Commissioner] Director may waive the payment of any
fee for any service or material related to trademarks or other
marks in connection with an occasional request made by a
department or agency of the Government, or any officer thereof.
The Indian Arts and Crafts Board will not be charged any fee to
register Government trademarks of genuineness and quality for
Indian products or for products of particular Indian tribes and
groups.
* * * * * * *
Sec. 34. (a) * * *
* * * * * * *
(c) It shall be the duty of the clerks of such courts within
one month after the filing of any action, suit, or proceeding
involving a mark registered under the provisions of this Act to
give notice thereof in writing to the [Commissioner] Director
setting forth in order so far as known the names and addresses
of the litigants and the designating number or numbers of the
registration or registrations upon which the action, suit, or
proceeding has been brought, and in the event any other
registration be subsequently included in the action, suit, or
proceeding by amendment, answer, or other pleading, the clerk
shall give like notice thereof to the [Commissioner] Director,
and within one month after the judgment is entered or an appeal
is taken the clerk of the court shall give notice thereof to
the [Commissioner] Director, and it shall be the duty of the
[Commissioner] Director on receipt of such notice forthwith to
endorse the same upon the file wrapper of the said registration
or registrations and to incorporate the same as a part of the
contents of said file wrapper.
* * * * * * *
Sec. 37. In any action involving a registered mark the court
may determine the right to registration, order the cancellation
of registrations, in whole or in part, restore canceled
registrations, and otherwise rectify the register with respect
to the registrations of any party to the action. Decrees and
orders shall be certified by the court to the [Commissioner]
Director, who shall make appropriate entry upon the records of
the Patent and Trademark Office, and shall be controlled
thereby.
* * * * * * *
Sec. 41. The [Commissioner] Director shall make rules and
regulations, not inconsistent with law, for the conduct of
proceedings in the Patent and Trademark Office under this Act.
* * * * * * *
TITLE VIX--INTERNATIONAL CONVENTIONS
* * * * * * *
Sec. 44. (a) The [Commissioner] Director shall keep a
register of all marks communicated to him by the international
bureaus provided for by the conventions for the protection of
industrial property, trade-marks, trade and commercial names,
and the repression of unfair competition to which the United
States is or may become a party, and upon the payment of the
fees required by such conventions and the fees required in this
Act may place the marks so communicated upon such register.
This register shall show a facsimile of the mark or trade or
commercial name; the name, citizenship, and address of the
registrant; the number, date, and place of the first
registration of the mark, including the date on which
application for such registration was filed and granted and the
term of such registration; a list of goods or services to which
the mark is applied as shown by the registration in the country
of origin, and such other data as may be useful concerning the
mark. This register shall be a continuation of the register
provided in section 1(a) of the Act of March 19, 1920.
* * * * * * *
TITLE X--CONSTRUCTION AND DEFINITIONS
Sec. 45. In the construction of this Act, unless the contrary
is plainly apparent from the context--
The United States includes and embraces all territory which
is under its jurisdiction and control.
The word ``commerce'' means all commerce which may lawfully
be regulated by Congress.
* * * * * * *
[The term ``Commissioner'' means the Commissioner of Patents
and Trademarks.] The term ``Director'' means the Director of
the United States Patent and Trademark Office.
* * * * * * *
TITLE XI--REPEAL OF PREVIOUS ACTS
* * * * * * *
Sec. 47. (a) * * *
(b) In any case in which an appeal is pending before the
United States Court of Customs and Patent Appeals or any United
States Circuit Court of Appeals or the United States Court of
Appeals for the District of Columbia or the United States
Supreme Court at the effective date of this Act, the court, if
it be of the opinion that the provisions of this Act are
applicable to the subject matter of the appeal, may apply such
provision or may remand the case to the [Commissioner] Director
or to the district court for the taking of additional evidence
or a new trail or for reconsideration of the decision on the
record as made, as the appellate court may deem proper.
* * * * * * *
----------
SECTION 10101 OF THE OMNIBUS BUDGET RECONCILIATION ACT OF1990
[SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.
[(a) Surcharges.--There shall be a surcharge, during fiscal
years 1991 through 1998, on all fees authorized by subsections
(a) and (b) of section 41 of title 35, United States Code, in
order to ensure that the amounts specified in subsection (c)
are collected.
[(b) Use of Surcharges.--Notwithstanding section 3302 of
title 31, United States Code, beginning in fiscal year 1991,
all surcharges collected by the Patent and Trademark Office--
[(1) in fiscal year 1991--
[(A) shall be credited to a separate account
established in the Treasury and ascribed to the
Patent and Trademark Office activities in the
Department of Commerce as offsetting receipts,
and
[(B) of these surcharges, $91,000,000 shall
be available only to the Patent and Trademark
Office, to the extent provided in appropriation
Acts, and the additional surcharge receipts,
totalling $18,807,000, shall be available only
to the Patent and Trademark Office without
appropriation, for all authorized activities
and operations of the office, including all
direct and indirect costs of services provided
by the office,
[(2) in fiscal years 1992 through 1998--
[(A) shall be credited to a separate account
established in the Treasury and ascribed to the
Patent and Trademark Office activities in the
Department of Commerce as offsetting receipts,
and
[(B) shall be available only to the Patent
and Trademark Office, to the extent provided in
appropriation Acts, for all authorized
activities and operations of the office,
including all direct and indirect costs of
services provided by the office, and
[(3) shall remain available until expended.
[(c) Establishment of Surcharges.--In fiscal years 1991
through 1998, the Commissioner of Patents and Trademarks shall
establish surcharges under subsection (a), subject to the
provisions of section 553 of title 5, United States Code, in
order to ensure that the following amounts, but not more than
the following amounts, of patent and trademark user fees are
collected:
[(1) $109,807,000 in fiscal year 1991.
[(2) $95,000,000 in fiscal year 1992.
[(3) $99,000,000 in fiscal year 1993.
[(4) $103,000,000 in fiscal year 1994.
[(5) $107,000,000 in fiscal year 1995.
[(6) $111,000,000 in fiscal year 1996.
[(7) $115,000,000 in fiscal year 1997.
[(8) $119,000,000 in fiscal year 1998.
[(d) Repeal.--Section 105(a) of Public Law 100-703 (102 Stat.
4675) is repealed.
[(e) Report on Fees.--The Commissioner of Patents and
Trademarks shall study the structure of all fees collected by
the Patent and Trademark Office and, not later than May 1,
1991, shall submit to the Congress a report on all fees to be
collected by the office in fiscal years 1992 through 1995. The
report shall include a proposed schedule of fees that would
distribute the surcharges provided by subsection (a) among all
fees collected by the office, and recommendations for any
statutory changes that may be necessary to implement the
proposals contained in the report.]
SEC. 10101. PATENT AND TRADEMARK OFFICE USER FEES.
(a) Surcharges.--There shall be a surcharge on all fees
authorized by subsections (a) and (b) of section 41 of title
35, United States Code, in order to ensure that the amounts
specified in subsection (c) are collected.
(b) Use of Surcharges.--Notwithstanding section 3302 of title
31, United States Code, all surcharges collected by the Patent
and Trademark Office--
(1) shall be credited to a separate account
established in the Treasury and ascribed to the
activities of the United States Patent and Trademark
Office as offsetting collections,
(2) shall be collected by and available to the United
States Patent and Trademark Office for all authorized
activities and operations of the Office, including all
direct and indirect costs of services provided by the
office, and
(3) shall remain available until expended.
(c) Establishment of Surcharges.--The Director of the United
States Patent and Trademark Office shall establish surcharges
under subsection (a), subject to the provisions of section 553
of title 5, United States Code, in order to ensure that
$119,000,000, but not more than $119,000,000, are collected in
fiscal year 1999 and each fiscal year thereafter.
(d) Appropriations Act Required.--Notwithstanding subsections
(a) through (c), no fee established by subsection (a) shall be
collected nor shall be available for spending without prior
authorization in appropriations Acts.
----------
SECTION 9101 OF TITLE 31, UNITED STATES CODE
Sec. 9101. Definitions
In this chapter--
(1) * * *
* * * * * * *
(3) ``wholly owned Government corporation'' means--
(A) * * *
* * * * * * *
(R) the United States Patent and Trademark
Office.
----------
TITLE 5, UNITED STATES CODE
* * * * * * *
PART I--THE AGENCIES GENERALLY
* * * * * * *
CHAPTER 5--ADMINISTRATIVE PROCEDURE
* * * * * * *
SUBCHAPTER I--GENERAL PROVISIONS
Sec. 500. Administrative practice; general provisions
(a) * * *
* * * * * * *
(e) Subsections (b)-(d) of this section do not apply to
practice before the [Patent Office] United States Patent and
Trademark Office with respect to patent matters that continue
to be covered by chapter 3 (sections 31-33) of title 35.
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
Subpart D--Pay and Allowances
* * * * * * *
CHAPTER 51--CLASSIFICATION
* * * * * * *
Sec. 5102. Definitions; application
(a) * * *
* * * * * * *
(c) This chapter does not apply to--
(2) * * *
* * * * * * *
[(23) examiners-in-chief and designated examiners-in-
chief in the Patent and Trademark Office, Department of
Commerce;]
(23) administrative patent judges and designated
administrative patent judges in the United States
Patent and Trademark Office;
* * * * * * *
CHAPTER 53--PAY RATES AND SYSTEMS
* * * * * * *
SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES
* * * * * * *
Sec. 5316. Positions at level V
Level V of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the
rate determined with respect to such level under chapter 11 of
title 2, as adjusted by section 5318 of this title:
Administrator, Bonneville Power Administration,
Department of the Interior.
Administrator of the National Capital Transportation
Agency.
Associate Administrators of the Small Business
Administration (4).
* * * * * * *
[Commissioner of Patents, Department of Commerce.]
* * * * * * *
[Deputy Commissioner of Patents and Trademarks.
[Assistant Commissioner for Patents.
[Assistant Commissioner for Trademarks.]
Commissioner, Administration on Children, Youth, and
Families.
Director, Bureau of Transportation Statistics.
* * * * * * *
----------
SECTION 9 OF THE SMALL BUSINESS ACT
Sec. 9. (a) * * *
* * * * * * *
(p) STTR Policy Directive.--
(1) Issuance.--The Administrator shall issue a policy
directive for the general conduct of the STTR programs
within the Federal Government. Such policy directive
shall be issued after consultation with--
(A) * * *
[(B) the Commissioner of Patents and
Trademarks; and]
(B) the Director of the United States Patent
and Trademark Office; and
* * * * * * *
----------
ACT OF FEBRUARY 14, 1903
CHAP. 552.--An Act To establish the Department of Commerce and Labor.
* * * * * * *
bureaus in department
Sec. 12. The following named bureaus, administrations,
services, offices, and programs of the public service, an all
that pertains thereto, shall be under the jurisdiction and
subject to the control of the Secretary of Commerce:
[(a)] (1) National Oceanic and Atmospheric Administration;
[(b)] (2) United States Travel and Tourism Administration;
[(c)] (3) National Institute of Standards and Technology;
[(d) Patent and Trademark Office;]
[(e)] (4) Bureau of the Census;
[(f)] (5) United States Flre Administration; and
[(g)] (6) such other bureaus or other organizational units as
the Secretary of Commerce may from time to time establish in
accordance with law.
----------
SECTION 19 OF THE TENNESSEE VALLEY AUTHORITY ACT OF 1933
Sec. 19. The Corporation, as an instrumentality and agency of
the Government of the United States for the purpose of
executing its constitutional powers, shall have access to the
[Patent Office of the United States] United States Patent and
Trademark Office for the purpose of studying, ascertaining, and
copying all methods, formula, and scientific information (not
including access to pending applications for patents) necessary
to enable the Corporation to use and employ the most
efficacious and economical process for the production of fixed
nitrogen, or any essential ingredient of fertilizer, or any
method of improving and cheapening the production of
hydroelectric power, and any owner of a patent whose patent
rights may have been thus in any way copied, used, infringed,
or employed by the exercise of this authority by the
Corporation shall have as the exclusive remedy a cause of
action against the Corporation to be instituted and prosecuted
on the equity side of the appropriate district court of the
United States, for the recovery of reasonable compensation for
such infringement. The [Commissioner of Patents] Director of
the United States Patent and Trademark Office shall furnish to
the Corporation, at its request and without payment of fees,
copies of documents on file in his office: Provided, That the
benefits of this section shall not apply to any art, machine,
method of manufacture, or composition of matter, discovered or
invented by such employee during the time of his employment or
service with the Corporation or with the Government of the
United States.
----------
TRADE ACT OF 1974
TITLE I--NEGOTIATING AND OTHER AUTHORITY
* * * * * * *
CHAPTER 8--IDENTIFICATION OF MARKET BARRIERS AND CERTAIN UNFAIR TRADE
ACTIONS
* * * * * * *
SEC. 182. IDENTIFICATION OF COUNTRIES THAT DENY ADEQUATE PROTECTION, OR
MARKET ACCESS, FOR INTELLECTUAL PROPERTY RIGHTS.
(a) * * *
* * * * * * *
(b) Special Rules for Identifications.--
(1) * * *
* * * * * * *
(2) In identifying priority foreign countries under
subsection (a)(2), the Trade Representative shall--
(A) consult with the Register of Copyrights,
the [Commissioner of Patents and Trademarks]
Director of the United States Patent and
Trademark Office, other appropriate officers of
the Federal Government, and
* * * * * * *
TITLE III--RELIEF FROM UNFAIR TRADE PRACTICES
CHAPTER 1--ENFORCEMENT OF UNITED STATES RIGHTS UNDER TRADE AGREEMENTS
AND RESPONSE TO CERTAIN FOREIGN TRADE PRACTICES
* * * * * * *
SEC. 302. INITIATION OF INVESTIGATIONS.
(a) * * *
* * * * * * *
(b) Initiation of Investigation by Means Other Than
Petition.--
(1) * * *
(2)(A) * * *
* * * * * * *
(D) The Trade Representative shall, from time to
time, consult with the Register of Copyrights, the
[Commissioner of Patents and Trademarks] Director of
the United States Patent and Trademark Office, and
other appropriate officers of the Federal Government,
during any investigation initiated under this chapter
by reason of subparagraph (A).
* * * * * * *
----------
ACT OF APRIL 12, 1892
[No. 8.] Joint resolution to encourage the establishment and endowment
of institutions of learning at the national capital by defining the
policy of the Government with reference to the use of its literary and
scientific collections by students.
Whereas, large collections illustrative of the various arts
and sciences and facilitating literary and scientific research
have been accumulated by the action of Congress through a
series of years at the national capital; and
Whereas it was the original purpose of the Government thereby
to promote research and the diffusion of knowledge, and is now
the settled policy and present practice of those charged with
the care of these collections specially to encourage students
who devote their time to the investigation and study of any
branch of knowledge by allowing to them all proper use thereof;
and
Whereas it is represented that the enumeration of these
facilities and the formal statement of this policy will
encourage the establishment and endowment of institutions of
learning at the seat of Government, and promote the work of
education by attracting students to avail themselves of the
advantages aforesaid under the direction of competent
instructors: Therefore,
Resolved by the Senate and House of Representatives of the
United States of America, in Congress assembled, That the
facilities for research and illustration in the following and
any other Governmental collections now existing or hereafter to
be established in the city of Washington for the promotion of
knowledge shall be accessible, under such rules and
restrictions as the officers in charge of each collection may
prescribe, subject to such authority as is now or may hereafter
be permitted by law, to the scientific investigators and to
students of any institution of higher education now
incorporated or hereafter to be incorporated under the laws of
Congress or of the District of Columbia, to wit:
One. Of the Library of Congress.
Two. Of the National Museum.
Three. Of the [Patent Office] United States Patent and
Trademark Office.
* * * * * * *
----------
FEDERAL FOOD, DRUG, AND COSMETIC ACT
* * * * * * *
CHAPTER V--DRUGS AND DEVICES
Subchapter A--Drugs and Devices
* * * * * * *
new drugs
Sec. 505. (a) * * *
* * * * * * *
(m) For purposes of this section, the term ``patent'' means a
patent issued by the [Patent and Trademark Office of the
Department of Commerce] United States Patent and Trademark
Office.
* * * * * * *
new animal drugs
Sec. 512. (a) * * *
* * * * * * *
(o) For purposes of this section, the term ``patent'' means a
patent issued by the [Patent and Trademark Office of the
Department of Commerce] United States Patent and Trademark
Office.
* * * * * * *
CHAPTER VII--GENERAL AUTHORITY
Subchapter A--General Administrative Provisions
* * * * * * *
examinations and investigations
Sec. 702. (a) * * *
* * * * * * *
(d) The Secretary is authorized and directed, upon request
from the [Commissioner of Patents] Director of the United
States Patent and Trademark Office, to furnish full and
complete information with respect to such questions relating to
drugs as the Commissioner may submit concerning any patent
application. The Secretary is further authorized, upon receipt
of any such request, to conduct or cause to be conducted, such
research as may be required.
* * * * * * *
----------
SECTION 105 OF THE FEDERAL ALCOHOL ADMINISTRATION ACT
unfair competition and unlawful practices
Sec. 105. (a) * * *
* * * * * * *
(e) Labeling.--To sell or ship or deliver for sale or
shipment, or otherwise introduce in interstate or foreign
commerce, or to receive therein, or to remove from customs
custody for consumption, any distilled spirits, wine, or malt
beverages in bottles, unless such products are bottled,
packaged, and labeled in conformity with such regulations, to
be prescribed by the Administrator, with respect to packaging,
marking, branding, and labeling and size and fill of container
(1) as will prohibit deception of the consumer with respect to
such products or the quantity thereof and as will prohibit,
irrespective of falsity, such statements relating to age,
manufacturing processes, analyses, guarantees, and scientific
or irrelevant matters as the Adminstrator finds to be likely to
mislead the consumer; (2) as will provide the consumer with
adequate information as to the identity and quality of the
products, the alcoholic content thereof (except that statements
of, or statements likely to be considered as statements of,
alcoholic content of malt beverages are prohibited unless
required by State law and except that, in case of wines,
statements of alcoholic content shall be required only for
wines containing more than 14 per centum of alcohol by volume),
the net contents of the package, and the manufacturer or
bottler or importer of the product; (3) as will require an
accurate statement, in the case of distilled spirits (other
than cordials, liqueurs, and specialties) produced by blending
or rectification, if neutral spirits have been used in the
production thereof, informing the consumer of the percentage of
neutral spirits so used and of the name of the commodity from
which such neutral spirits have been distilled, or in case of
neutral spirits or of gin produced by a process of continuous
distillation, the name of the commodity from which distilled;
(4) as will prohibit statements on the label that are
disparaging of a competitor's products or are false,
misleading, obscene, or indecent; and (5) as will prevent
deception of the consumer by use of a trade or brand name that
is the name of any living individual of public prominence, or
existing private or public organization, or is a name that is
in simulation or is an abbreviation thereof, and as will
prevent the use of a graphic, pictorial, or emblematic
representation of any such individual or organization, if the
use of such name or representation is likely falsely to lead
the consumer to believe that the product has been indorsed,
made, or used by, or produced for, or under the supervision of,
or in accordance with the specifications of, such individual or
organization: Provided, That this clause shall not apply to the
use of the name of any person engaged in business as a
distiller, brewer, rectifier, blender, or other producer, or as
an importer, wholesaler, retailer, bottler, or warehouseman, of
distilled spirits, wine, or malt beverages, nor to the use by
any person of a trade or brand name used by him or his
predecessor in interest prior to the date of enactment of this
Act; including regulations requiring, at time of release from
customs custody, certificates issued by foreign governments
covering origin, age, and identity of imported products:
Provided further, That nothing herein nor any decision, ruling,
or regulation of any Department of the Government shall deny
the right of any person to use any trade name or brand of
foreign origin not presently effectively registered in the
[United States Patent Office] United States Patent and
Trademark Office which has been used by such person or
predecessors in the United States for a period of at least five
years last past, if the use of such name or brand is qualified
by the name of the locality in the United States in which the
product is produced, and, in the case of the use of such name
or brand on any label or in any advertisement, if such
qualification is as conspicuous as such name or brand.
* * * * * * *
----------
TITLE 28, UNITED STATES CODE
* * * * * * *
PART IV--JURISDICTION AND VENUE
* * * * * * *
CHAPTER 83--COURTS OF APPEALS
* * * * * * *
Sec. 1295. Jurisdiction of the United States Court of Appeals for the
Federal Circuit
(a) The United States Court of Appeals for the Federal
Circuit shall have exclusive jurisdiction--
(1) * * *
* * * * * * *
(4) of an appeal from a decision of--
(A) the Board of Patent Appeals and
Interferences of the United States Patent and
Trademark Office with respect to patent
applications and interferences, at the instance
of an applicant for a patent or any party to a
patent interference, and any such appeal shall
waive the right of such applicant or party to
proceed under section 145 or 146 of title 35;
(B) the [Commissioner of Patents and
Trademarks] Director of the United States
Patent and Trademark Office or the Trademark
Trial and Appeal Board with respect to
applications for registration of marks and
other proceedings as provided in section 21 of
the Trademark Act of 1946 (15 U.S.C. 1071); or
* * * * * * *
PART V--PROCEDURE
* * * * * * *
CHAPTER 115--EVIDENCE; DOCUMENTARY
* * * * * * *
Sec. 1744. Copies of [Patent Office] United States Patent and Trademark
Office documents, generally
Copies of letters patent or of any records, books, papers, or
drawings belonging to the [Patent Office] United States Patent
and Trademark Office and relating to patents, authenticated
under the seal of the [Patent Office] United States Patent and
Trademark Office and certified by the [Commissioner of Patents]
Director of the United States Patent and Trademark Office, or
by another officer of the [Patent Office] United States Patent
and Trademark Office authorized to do so by the [Commissioner]
Director, shall be admissible in evidence with the same effect
as the originals.
Any person making application and paying the required fee may
obtain such certified copies.
Sec. 1745. Copies of foreign patent documents
Copies of the specifications and drawings of foreign letters
patent, or applications for foreign letters patent, and copies
of excerpts of the official journals and other official
publications of foreign patent offices belonging to the [United
States Patent Office] United States Patent and Trademark
Office, certified in the manner provided by section 1744 of
this title are prima facie evidence of their contents and of
the dates indicated on their face.
* * * * * * *
CHAPTER 123--FEES AND COSTS
* * * * * * *
Sec. 1928. Patent infringement action; disclaimer not filed
Whenever a judgment is rendered for the plaintiff in any
patent infringement action involving a part of a patent and it
appears that the patentee, in his specifications, claimed to
be, but was not, the original and first inventor or discoverer
of any material or substantial part of the thing patented, no
costs shall be included in such judgment, unless the proper
disclaimer has been filed in the [Patent Office] United States
Patent and Trademark Office prior to the commencement of the
action.
* * * * * * *
----------
ATOMIC ENERGY ACT OF 1954
TITLE I--ATOMIC ENERGY
* * * * * * *
CHAPTER 13. PATENTS AND INVENTIONS
Sec. 151. Inventions Relating to Atomic Weapons, and Filing
of Reports.--
a. * * *
* * * * * * *
c. Any person who has made or hereafter makes any invention
or discovery useful in the production or utilization of special
nuclear material or atomic energy, shall file with the
Commission a report containing a complete description thereof
unless such invention or discovery is described in an
application for a patent filed with the [Commissioner of
Patents] Director of the United States Patent and Trademark
Office by such person within the time required for the filing
of such report. The report covering any such invention or
discovery shall be filed on or before the one hundred and
eightieth day after such person first discovers or first has
reason to believe that such invention or discovery is useful in
such production or utilization.
d. The [Commissioner of Patents] Director of the United
States Patent and Trademark Office shall notify the Commission
of all applications for patents heretofore or hereafter filed
which, in his opinion, disclose inventions or discoveries
required to be reported under subsection 151 c., and shall
provide the Commission access to all such applications.
* * * * * * *
Sec. 152. Inventions Made or Conceived During Commission
Contracts.--Any invention or discovery, useful in the
production or utilization of special nuclear material or atomic
energy, made or conceived in the course of or under any
contract, subcontract, or arrangement entered into with or for
the benefit of the Commission, regardless of whether the
contract, subcontract, or arrangement involved the expenditure
of funds by the Commission, shall be vested in, and be the
property of, the Commission, except that the Commission may
waive its claim to any such invention or discovery under such
circumstances as the Commission may deem appropriate,
consistent with the policy of this section. No patent for any
invention or discovery, useful in the production or utilization
of special nuclear material or atomic energy, shall be issued
unless the applicant files with the application, or within
thirty days after request therefor by the [Commissioner of
Patents] Director of the United States Patent and Trademark
Office (unless the Commission advises the [Commissioner of
Patents] Director of the United States Patent and Trademark
Office that its rights have been determined and that
accordingly no statement is necessary) a statement under oath
setting forth the full facts surrounding the making or
conception of the invention or discovery described in the
application and whether the invention or discovery was made or
conceived in the course of or under any contract, subcontract,
or arrangement entered into with or for the benefit of the
Commission, regardless of whether the contract, subcontract, or
arrangement involved the expenditure of funds by the
Commission. The [Commissioner of Patents] Director of the
United States Patent and Trademark Office shall as soon as the
application is otherwise in condition for allowance forward
copies of the application and the statement to the Commission.
The [Commissioner of Patents] Director of the United States
Patent and Trademark Office may proceed with the application
and issue the patent to the applicant (if the invention or
discovery is otherwise patentable) unless the Commission,
within 90 days after receipt of copies of the application and
statement, directs the [Commissioner of Patents] Director of
the United States Patent and Trademark Office to issue the
patent to the Commission (if the invention or discovery is
otherwise patentable) to be held by the Commission as the agent
of and on behalf of the United States.
If the Commission files such a direction with the
[Commissioner of Patents] Director of the United States Patent
and Trademark Office, and if the applicant's statement claims,
and the applicant still believes, that the invention or
discovery was not made or conceived in the course of or under
any contract, subcontract or arrangement entered into with or
for the benefit of the Commission entitling the Commission to
the title to the application or the patent the applicant may,
within 30 days after notification of the filing of such a
direction, request a hearing before the Board of Patent Appeals
and Interferences. The Board shall have the power to hear and
determine whether the Commission was entitled to the direction
filed with the [Commissioner of Patents] Director of the United
States Patent and Trademark Office. The Board shall follow the
rules and procedures established for interference cases and an
appeal may be taken by either the applicant or the Commission
from the final order of the Board to the United States Court of
Appeals for the Federal Circuit in accordance with the
procedures governing the appeals from the Board of Patent
Appeals and Interferences.
If the statement filed by the applicant should thereafter be
found to contain false material statements any notification by
the Commission that it has no objections to the issuance of a
patent to the applicant shall not be deemed in any respect to
constitute a waiver of the provisions of this section or of any
applicable civil or criminal statute, and the Commission may
have the title to the patent transferred to the Commission on
the records of the [Commissioner of Patents] Director of the
United States Patent and Trademark Office in accordance with
the provisions of this section. A determination of rights by
the Commission pursuant to a contractual provision or other
arrangement prior to the request of the [Commissioner of
Patents] Director of the United States Patent and Trademark
Office for the statement, shall be final in the absence of
false material statements or nondisclosure of material facts by
the applicant.
* * * * * * *
----------
SECTION 305 OF THE NATIONAL AERONAUTICS AND SPACE ACT OF 1958
property rights in inventions
Sec. 305. (a) * * *
* * * * * * *
(c) No patent may be issued to any applicant other than the
Administrator for any invention which appears to the
[Commissioner of Patents] Director of the United States Patent
and Trademark Office (hereafter in this section referred to as
the ``Director'', to have significant utility in the conduct of
aeronautical and space activities unless the applicant files
with the [Commissioner] Director, with the application or
within thirty days after request therefor by the [Commissioner]
Director, a written statement executed under oath setting forth
the full facts concerning the circumstances under which such
invention was made and stating the relationship (if any) of
such invention to the performance of any work under any
contract of the Administration. Copies of each such statement
and the application to which it relates shall be transmitted
forthwith by the [Commissioner] Director to the Administrator.
* * * * * * *
----------
SECTION 12 OF THE SOLAR HEATING AND COOLING DEMONSTRATION ACT OF 1974
dissemination of information and other actions to promote practical use
of solar heating and cooling technologies
Sec. 12. (a) The Secretary shall take all possible steps to
assure that full and complete information with respect to the
demonstrations and other activities conducted under this Act is
made available to Federal, State, and local authorities, the
building industry and related segments of the economy, the
scientific and technical community, and the public at large,
both during and after the close of the programs under this Act,
with the objective of promoting and facilitating to the maximum
extent feasible the early and widespread practical use of solar
energy for the heating and cooling of buildings throughout the
United States. In accordance with regulations prescribed under
section 16 such information shall be disseminated on a
coordinated basis by the Secretary, the Administrator, the
Director of the National Bureau of Standards, the Director, the
[Commissioner of the Patent Office] Director of the United
States Patent and Trademark Office, and other appropriate
Federal offices and agencies.
* * * * * * *
----------
TITLE 44, UNITED STATES CODE
* * * * * * *
CHAPTER 11--EXECUTIVE AND JUDICIARY PRINTING AND BINDING
* * * * * * *
Sec. 1111. Annual reports: time for furnishing manuscript and proofs to
Public Printer
The appropriations made for printing and binding may not be
used for an annual report or the accompanying documents unless
the manuscript and proof is furnished to the Public Printer in
the following manner:
manuscript of the documents accompanying annual
reports on or before February 1, each year;
manuscript of the annual report on or before February
15, each year;
complete revised proofs of the accompanying documents
on March 1, each year, and of the annual reports on
March 10, each year.
Annual reports and accompanying documents shall be printed,
made public, and available for distribution not later than
within the first five days after the assembling of each regular
session of Congress.
This section does not apply to the annual reports of the
Smithsonian Institution, [the Commissioner of Patents,] the
Comptroller of the Currency, or the Secretary of the Treasury.
* * * * * * *
Sec. 1114. Annual reports: number of copies for Congress
One thousand copies of the annual reports of the departments
to Congress shall be printed for the Senate, and two thousand
for the House of Representatives.
The usual number only of the reports of the Chief of
Engineers of the Army, [the Commissioner of Patents,] the
Commissioner of Internal Revenue, the report of the Chief
Signal Officer of the Department of the Army, and the Chief of
Ordnance shall be printed.
* * * * * * *
Sec. 1123. Binding materials; bookbinding for libraries
Binding for the departments of the Government shall be done
in plain sheep or cloth, except that record and account books
may be bound in Russia leather, sheep fleshers, and skivers,
when authorized by the head of a department. The libraries of
the several departments, the Library of Congress, the libraries
of the Surgeon General's Office, [the Patent Office,] and the
Naval Observatory may have books for the exclusive use of these
libraries bound in half Turkey, or material no more expensive.
* * * * * * *
CHAPTER 13--PARTICULAR REPORTS AND DOCUMENTS
Sec.
1301. Agriculture, Department of: report of Secretary.
* * * * * * *
[1337. Patent Office: publications authorized to be printed.
[1338. Patent Office: limitations and conditions concerning printing
and lithographing.]
* * * * * * *
[Sec. 1337. Patent Office: publications authorized to be printed
[The Commissioner of Patents, upon the requisition of the
Secretary of Commerce may cause to be printed:
[1. Patents issued.--The patents for inventions and designs
issued by the Patent Office, including grants, specifications,
and drawings, together with copies of them, and of patents
already issued, in the number needed for the business of the
office.
[2. Trade-marks and labels.--The certificates of trade-marks
and labels registered in the Patent Office, including
descriptions and drawings, together with copies of them, and of
trade-marks and labels previously registered, in the numbers
needed for the business of the office.
[3. Official Gazette.--The Official Gazette of the United
States Patent Office in numbers sufficient to supply all who
subscribe for it at $5 a year; also for exchange for other
scientific publications desirable for the use of the Patent
Office; also to supply one copy to each Senator and
Representative in Congress; with one hundred additional copies,
together with weekly, monthly, and annual indexes. The ``usual
number'' of the Official Gazette may not be printed.
[4. Report of Commissioner of Patents.--The annual report of
the Commissioner of Patents, not exceeding five hundred in
number, for distribution by him; the annual report of the
Commissioner of Patents to Congress, without the list of
patents, not exceeding one thousand five hundred in number, for
distribution by him; and the annual report of the Commissioner
of Patents to Congress, with the list of patents, five hundred
copies for sale by him, if needed, and in addition the ``usual
number'' only shall be printed.
[5. Rules of practice, laws, etc.--Pamphlet copies of the
rules of practice, and of the patent laws, and pamphlet copies
of the laws and rules relating to trade-marks and labels, and
circulars relating to the business of the office, all in
numbers as needed for the business of the office. The ``usual
number'' may not be printed.
[6. Decisions of Commissioner and courts.--Annual volumes of
the decisions of the Commissioner of Patents and of the United
States courts in patent cases, not exceeding one thousand five
hundred in number, of which the usual number shall be printed,
and for this purpose a copy of each shall be transmitted to
Congress promptly when prepared.
[7. Indexes.--Indexes to patents relating to electricity, and
indexes to foreign patents, in the numbers needed for the
business of the office. The ``usual number'' may not be
printed.
[Sec. 1338. Patent Office: limitations and conditions concerning
printing and lithographing
[Printing for the Patent Office making use of lithography or
photo-lithography, together with the plates, shall be
contracted for and performed under the direction of the
Commissioner of Patents, under limitations and conditions
prescribed by the Joint Committee on Printing, and other
printing for the Patent Office shall be done by the Public
Printer under limitations and conditions prescribed by the
Joint Committee on Printing. The entire work may be done at the
Government Printing Office when in the judgment of the Joint
Committee on Printing it is to the interest of the Government.]
* * * * * * *
----------
SECTION 10 OF THE TRADING WITH THE ENEMY ACT
Sec. 10. That nothing contained in this Act shall be held to
make unlawful any of the following Acts:
(a) * * *
* * * * * * *
(i) Whenever the publication of an invention by the granting
of a patent may in the opinion of the President, be detrimental
to the public safety or defense, or may assist the enemy or
endanger the successful prosecution of the war, he may order
that the invention be kept secret and withhold the grant of a
patent until the end of the war: Provided, That the invention
disclosed in the application for said patent may be held
abandoned upon it being established before or by the
[Commissioner of Patents] Director of the United States Patent
and Trademark Office that, in violation of said order, said
invention has been published or that an application for a
patent therefor has been filed in any other country, by the
inventor or his assigns or. legal representatives, without the
consent or approval of the commissioner or under a license of
the President.
When an applicant whose patent is withheld as herein provided
and who faithfully obeys the order of the President above
referred to shall tender his invention to the Government of the
United States for its use, he shall, if he ultimately receives
a patent, have the right to sue for compensation in the United
States Claims Court, such right to compensation to begin from
the date of the use of the invention by the Government.
----------
SECTION 11 OT THE INSPECTOR GENERAL ACT OF 1978
definitions
Sec. 11. As used in this Act--
(1) the term ``head of the establishment'' means the
Secretary of Agriculture, Commerce, Defense, Education,
Energy, Health and Human Services, Housing and Urban
Development, the Interior, Labor, State,
Transportation, or the Treasury; the Attorney General;
the Administrator of the Agency for International
Development, Environmental Protection, General
Services, National Aeronautics and Space, or Small
Business, or Veterans' Affairs; the Director of the
Federal Emergency Management Agency, the Office of
Personnel Management or the United States Information
Agency; the Chairman of the Nuclear Regulatory
Commission or the Railroad Retirement Board; the
Chairperson of the Thrift Depositor Protection
Oversight Board; the Chief Executive Officer of the
Corporation for National and Community Service; the
Administrator of the Community Development Financial
Institutions Fund; [and] the chief executive officer of
the Resolution Trust Corporation; [and] the Chairperson
of the Federal Deposit Insurance Corporation; [or] the
Commissioner of Social Security, Social Security
Administration; or the Director of the United States
Patent and Trademark Office as the case may be;
(2) the term ``establishment'' means the Department
of Agriculture, Commerce, Defense, Education, Energy,
Health and Human Services, Housing and Urban
Development, the Interior, Justice, Labor, State,
Transportation, or the Treasury; the Agency for
International Development, the Community Development
Financial Institutions Fund, the Environmental
Protection Agency, the Federal Emergency Management
Agency, the General Services Administration, the
National Aeronautics and Space Administration, the
Nuclear Regulatory Commission, the Office of Personnel
Management, the Railroad Retirement Board, the
Resolution Trust Corporation, the Federal Deposit
Insurance Corporation, the Small Business
Administration, the United States Information Agency,
the Corporation for National and Community Service,
[or] the Veterans' Administration, [or the Social
Security Administration] the Social Security
Administration, or the United States Patent and
Trademark Office; as the case may be;
* * * * * * *