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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-178
_______________________________________________________________________


 
                    BIOTECHNOLOGICAL PROCESS PATENTS

                                _______


 July 11, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                        [To accompany H.R. 587]
    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 587) to amend title 35, United States Code, with 
respect to patents on biotechnological processes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.
                           TABLE OF CONTENTS

Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     7
Committee Consideration..........................................     7
Committee Oversight Findings.....................................     7
Committee on Government Reform and Oversight.....................     8
New Budget Authority and Tax Expenditures........................     8
Congressional Budget Office Estimate.............................     8
Inflationary Impact Statement....................................     8
Section-by-Section Analysis and Discussion.......................     9
    Sec. 101.....................................................     9
    Sec. 102.....................................................     9
    Sec. 103.....................................................    10
Changes in Existing Law Made by the Bill, as Reported............    10
                          Purpose and Summary

    The purpose of H.R. 587 is to provide for a modified 
examination of biotechnological process patents. Under the 
provisions of H.R. 587 a biotechnological process will not have 
to undergo a separate review of nonobviousness under certain 
conditions. If the process uses or produces a patentable 
composition of matter, the process will be determined 
nonobvious for the purpose of examination of biotechnological 
process claims. The expedited review will resolve the delays 
and inconsistent determinations faced by biotechnological 
process patent applicants under present PTO practices without 
harm to the basic principles of patentability.

                Background and Need for the Legislation

    Patents can be granted on any invention that is included 
within the statutory subject matter provisions, including 
processes under 35 U.S.C. Sec. 101.\1\ A patent on an invention 
gives the patent owner the right to exclude others from making, 
using or selling that invention. A process patent may be 
obtained for a new method of use or new method of making a 
product. A process patent can be infringed if the process is 
used in making any product or used in any manner covered by the 
process patent. If a patent is obtained on a product, the owner 
of the patent can prevent the manufacture, the sale or the 
importation of that particular product in the United States. 
The owner of a United States patent cannot prevent the 
manufacture or sale of that patented product in another 
country, unless a patent is obtained in that country.
    \1\ 35 U.S.C. Sec. 101 states: ``Whoever invents of discovers any 
new and useful process, machine, manufacture, or composition of matter, 
or any new and useful improvement thereof, may obtain a patent 
therefor, subject to the conditions and requirements of this title.''
---------------------------------------------------------------------------
    It is not uncommon to seek a product patent with process 
claims relating to the same invention. A process can be 
described in simple terms such as a new method of draining 
swamps to more complex processes detailing the exact steps that 
take place when a starting material is pasteurized, 
pressurized, radiated or subjected to other procedures. Product 
and process patents claims are each subject to examination 
under the same principles of patent law, including examining 
criteria such as novelty, nonobviousness, and usefulness.
    If a patent containing process claims is granted on the 
manufacturing process or development process of a particular 
product, then the owner of the patent also can prevent the 
manufacture or sale of a product made using that process. Under 
the provisions of the Process Patent Amendments Act of 1988, 
the process owner also can prevent importation of the product 
if the product is made overseas using the patented process.\2\ 
A patent may be obtained on the starting materials or materials 
used in a process but unless a patent on the process is 
obtained (or a patent on the final product), the final product 
could be produced overseas and imported back into the United 
States for sale without infringing the patent on the materials 
used in the process.
    \2\ The Process Patent Amendments Act of 1988 was contained in The 
Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418 
(1988) and is found at 35 U.S.C. Sec. 271(g): ``Whoever without 
authority imports into the United States or sells or uses within the 
United States a product which is made by a process patented in the 
United States shall be liable as an infringer, if the importation, 
sale, or use of the product occurs during the term of such process 
patent. In an action for infringement of a process patent no remedy may 
be granted for infringement on account of the noncommercial use or 
retail sale of a product unless there is no adequate remedy under this 
title for infringement on account of the importation or other use or 
sale of that product. A product which is made by a patented process 
will, for purposes of this title, not be considered to be so made 
after--(1) it is materially changed by subsequent processes; or (2) it 
becomes a trivial and nonessential component of another product.''
    A problem arises in those situations in which the final 
product produced by a process may not be patentable. Without a 
patent on the final product or a patent on the process, the 
original developer of the product cannot take advantage either 
of basic product patent protection or the process patent 
protection permitted under the Process Patent Amendments Act of 
1988.\3\
    \3\ The amendments were intended to provide protection to domestic 
U.S. process patent holders against foreign companies using the U.S. 
patented process overseas and importing the resulting product into the 
U.S. without any recourse by the process patent owner for infringement.
---------------------------------------------------------------------------
    Under present patent law, an owner of a product patent can 
prevent others in the United States from using or making a 
patented product even in the absence of a process patent. The 
value of the process patent is the ability to prevent others 
from importing a non-patentable product that was made by use of 
a protected process. The value of the process patent is the 
ability to prevent others from importing a non-patentable 
product that was made by use of a protected process.
    H.R. 587 and related predecessor bills were developed as a 
result of two conflicting and irreconcilable decisions issued 
by the Court of Appeals for the Federal Circuit, In re Durden, 
763 F. 2d 1406 (Fed. Cir. 1985) and In re Pleuddemann, 910 F. 
2d 823 (Fed. Cir. 1990).
    In re Durden concerned a process patent claim which had 
been rejected by the PTO. The case involved a chemical process. 
The applicants for the patent argued on appeal that while 
individual process steps were obvious, the use of a novel and 
nonobvious starting material and the production of a new and 
nonobvious product meant that the process should be patentable. 
The Court concluded that the use of a new starting material 
and/or the development of a patented product did not 
automatically ensure the nonobviousness of a process or the 
grant of a process patent. The Court noted that if every 
process using a new or novel material was granted a patent, 
then simple processes such as dissolving or heating would be 
patentable when using a new compound.\4\
    \4\ In re Durden, 763 F. 2d 1406, 1410 (Fed. Cir. 1985)
---------------------------------------------------------------------------
    Following this case, there were complaints from various 
industry groups that the PTO was automatically rejecting 
process claims under circumstances similar to In re Durden. In 
the subsequent case of In re Pleuddemann, the Court emphasized 
that In re Durden was not to be read as a ``per se'' rule 
against patenting old processes using new starting materials or 
producing new products. The Court stated that each invention 
had to be viewed as a whole and considered on its individual 
facts.\5\
    \5\ In re Pleuddeman, 910 F. 2d 823, 828 (Fed. Cir. 1990).
    In holding of In re Pleuddemann, the Court distinguished In 
re Durden on the grounds that the fact situation there involved 
a process of ``making'', and In re Pleuddemann involved a 
process of ``using.'' \6\ The Court did not specifically 
overrule In re Durden but relied on the distinction of 
``using'' versus ``making.'' The distinction between the two 
types of processes was lost on many and caused others to 
manipulate phrasing in developing patent applications to ensure 
that processes were ``using'' instead of ``making.'' At two 
different hearings during the 103d Congress of the then 
Subcommittee on Intellectual Property and Judicial 
Administration, testimony was provided which indicated that in 
several cases the patent applicant had originally written a 
claim as a ``making'' process. After the examiner rejected the 
claims on the basis of In re Durden, the claims were rewritten 
as a ``using'' claim and were approved by the examiner.\7\
    \6\ Id., at 827.
    \7\ Legislative Hearing during 103d Congress on H.R. 4307, before 
the Subcommittee on Intellectual Property and Judicial Administration 
of the House Committee on the Judiciary, 103d Cong., 2d Sess. (May 5, 
1994) (Testimony of Lisa J. Raines); Amending Title 35, United States 
Code, With Respect to Patents on Certain Processes, Hearing on H.R. 
760, before the Subcommittee on Intellectual Property and Judicial 
Administration of the House Committee On The Judiciary, 103d Cong., 1st 
Sess., Serial No. 32 (June 9, 1993) (Testimony of George W. Enbright, 
p. 42; Testimony of Steven M. Odre, p. 51).
---------------------------------------------------------------------------
    The holdings in In re Durden and In re Pleuddemann have led 
to inconsistent practices by the PTO in the examination of 
applications for process patents. The result has been that some 
process patents have been granted without any delay or 
controversy while other applications, similar in nature, have 
been rejected or required to be defended at length with the 
patent examiner.\8\
    \8\ Legislative Hearing during 103d Congress on H.R. 4307, supra 
(Testimony of Lisa J. Raines); Amending Title 35, United States Code, 
With Respect To Patents On Certain Processes, Hearing on H.R. 760, 
supra (Testimony of George W. Enbright, p. 42).
---------------------------------------------------------------------------
    Legislation was developed as a response to a perceived 
failure on the part of PTO to grant process patents based on 
the In re Durden decision and the resulting importation problem 
due to the inability of inventors to obtain process patents.\9\ 
While the holdings of In re Durden and In re Pleuddemann have 
been applied generally, the resulting problems were considered 
to affect particularly biotechnology applications because of 
the nature of the products produced. In the case of 
biotechnology products, the final product is a naturally 
occurring substance despite the fact that it has never been 
able to be produced before in commercially viable 
quantities.\10\
    \9\ Legislative Hearing during 103d Congress on H.R. 4307, supra 
(Testimony of Lisa J. Raines); Amending Title 35, United States Code, 
With Respect To Patents on Certain Processes, Hearing on H.R. 760, 
supra (Testimony of George W. Enbright, p. 42).
    \10\ Legislative Hearing during 103d Congress on H.R. 4307, supra 
(Testimony of Lisa J. Raines); Amending Title 35, United States Code, 
With Respect To Patents On Certain Processes, Hearing on H.R. 760, 
supra (Testimony of Michael Kirk, p. 22; Testimony of George W. 
Enbright, p. 41).
    The final unpatentable product is often developed or 
synthesized through the use of a ``host cell'' that has been 
genetically altered in a way to produce the final product in 
large quantities. The host cell is usually patentable. The 
issue is whether the process, by which the final product is 
produced, also can be patented.
    Since the host cell is patented, the host cell cannot be 
used in the United States without the patent owner's permission 
and no products can be produced in the United States from that 
host cell. Without a United States process patent, however, the 
host cell can be taken offshore and used to make the final 
product. The final product produced from the host cell can be 
imported back into the United States for commercial sale. The 
owner of the patented host cell has no recourse because there 
is no ``use'' of the patented host cell in the United States 
and thus no infringement. Since there is no patent on the 
process by which the final product was produced, the 
importation of the product cannot be challenged.
    Clearly, obtaining a process patent could solve the 
importation problem for the biotechnology industry. H.R. 587 is 
necessitated by the difficulty of obtaining timely and adequate 
process patent protection under present court rulings and PTO 
interpretation.
    The approach taken in H.R. 587 is industry specific, as 
were some prior bills designed to take care of the problem. 
Although industry specific legislation, particularly in the 
context of patent law, is generally not favored, considerable 
opposition to a more comprehensive solution proposed by other 
predecessor bills, such as H.R. 4307, made their enactment 
unlikely. As a result of concerns raised by certain industries 
as to the impact of a broad change in patent law, the 
applicability of H.R. 587 has been limited to biotechnological 
processes only. The computer industry, the electronics industry 
and others previously raised questions as to the ability of 
certain patent owners to secure patents that would have such 
extensive coverage that public domain processes would be 
combined with new products to obtain patent coverage to the 
detriment of the industry.\11\ The chemical industry also 
raised questions as to the scope and potential infringement of 
patents issued under the revised examination process proposed 
in H.R. 4307, as introduced, and as amended.
    \11\ Legislative Hearing during 103rd Congress on H.R. 4307, supra 
(Testimony of Roger S. Smith; testimony of Richard G. Waterman); 
Amending Title 35, United States Code, With Respect To Patents On 
Certain Processes, Hearing on H.R. 760, supra (Testimony of Robert A. 
Armitage, p. 70).
    The legislation impacts only one element of patentability 
of biotechnological processes--the element of nonobviousness. 
There is no guarantee of patentability if the process claim 
satisfies the special nonobviousness provisions of the revised 
Sec. 103. The process must still satisfy all other requirements 
of patentability, including the utility requirement under 35 
U.S.C. Sec. 101 and the enabling provisions of 35 U.S.C. 
Sec. 112 which require sufficient description provisions of the 
invention and claims, described in ``full, clear and concise, 
and exact terms,'' so that other skilled in the art can use the 
process. Process claims patented pursuant to the proposed 
revisions of Sec. 103 would not enjoy greater protection than 
process claims granted under present law.
    Resolution of this problem will provide both certainty for 
patent applicants in the field of biotechnology and protection 
against foreign competition. Once process patents are awarded, 
foreign companies will not be able to take advantage of the 
inability of the United States manufacturer to obtain a product 
patent. There is no question, as some opponents have argued, 
that, in many cases, a product patent provides better 
protection than a process patent against foreign manufacture 
and importation of the product into the United States. However, 
if a product patent is unobtainable because of the nature of 
the final product, it is essential that some other protection 
be afforded. In the opinion of the Committee, the appropriate 
protection is a process patent and the infringement protection 
pursuant to 35 U.S.C. Sec. 271(g) against importation of 
products resulting from foreign use of the patented process.
    The unpredictability of the patent examination process has 
become a critical problem for development of new technologies, 
such as biotechnology. With a mitigation of uncertainty, that 
industry can now better assess the chances and risks associated 
with the patent application process. The granting of a process 
patent will no longer depend on the chance of the wording of a 
claim or the preference of an examiner in applying the holding 
of In re Durden versus the holding of In re Pleuddemann.
    H.R. 587 is in no way intended to reduce or eliminate any 
requirements of the patent laws of the United States other than 
providing, upon election of an applicant, that a 
biotechnological process using or resulting in a composition of 
matter found upon examination to be novel and nonobvious, shall 
likewise be found nonobvious.
    It is intended that biotechnological processes using or 
resulting in a composition of matter, otherwise patentable to 
the applicant, be entitled to full patent protection including 
the benefits of enforcement, specifically of 35 U.S.C. 
Sec. 271(g). It is not intended by this bill that applicants be 
given the right to extend patent claims to all upstream or 
downstream processes leading to or resulting from use of the 
patented composition of matter in a way that would create 
infringement liability on parties not making or using the 
patented composition of matter, except as is already provided 
under existing law for infringement.
    There are presently two cases being considered by the U.S. 
Court of Appeals for the Federal Circuit which may have a 
bearing on the matter considered in H.R. 587.\12\ The Court 
still has not issued opinions in these cases which might 
resolve the perceived inconsistencies of the two previous 
opinions of the Court, In re Durden and In re Pleuddemann. The 
two cases were argued in November 1992. There has been no 
indication when the Court might issue the decisions. In any 
event, it is by no means certain that the two cases will 
resolve the underlying issues. On the other hand, because H.R. 
587 is restricted to biotechnological processes, its enactment 
would not moot these cases, as they involve chemical processes.
    \12\ In re Ochiai, No. 92-1446 (Fed. Cir. filed July 22, 1992); In 
re Brouwer, No. 92-1225 (Fed. Cir. filed March 11, 1992).
---------------------------------------------------------------------------
    The PTO testified before the Subcommittee that it does not 
believe it can resolve the problem administratively because of 
the two seemingly conflicting Court opinions.\13\
    \13\ Legislative Hearing on H.R. 587, before the Subcommittee on 
Courts and Intellectual Property of the House Committee on the 
Judiciary, 104th Cong., 1st Session (March 29, 1995).
---------------------------------------------------------------------------

                               Conclusion

    The extended history of H.R. 587 and related legislation 
speaks to the need to have the inconsistency existing in case 
law and in PTO examination procedures resolved. Testimony over 
several Congresses has amply illustrated the difficulties faced 
by patent applicants in satisfying the dictates of two 
seemingly inconsistent Court opinions, In re Durden and In re 
Pleuddemann. The inability of the PTO to make changes 
administratively and the lack of direction from the Court makes 
Congress the appropriate forum to address this matter.
    The award of patent protection ensures a greater degree of 
protection for businesses in the United States. Biotechnology 
companies are faced with competition form overseas companies 
who derive the benefits from the innovations and investments of 
American companies without any of the risks. A resolution of 
the examination practices for biotechnological processes that 
are linked to patentable compositions of matter would ensure 
that United States manufacturers can better protect the 
extensive investment made in research and development.

                                Hearings

    The Committees' Subcommittees on Courts and Intellectual 
Property held one day of hearings related to the issues 
contained in H.R. 587. The hearing was held on March 29, 1995. 
Testimony was received from the following four witnesses: Mr. 
H. Dieter Hoinkes, Senior Counsel, Office of Legislative and 
International Affairs, Patent and Trademark Office, United 
States Department of Commerce; Mr. Henry Linsert, Chairman and 
Chief Executive Officer, Martek Biosciences Corporation, 
Columbia, Maryland; Michele Cimbala, Ph.D. and J.D., Partner, 
Sterne, Kessler, Goldstein and Fox; and Mr. Steven Odre, Senior 
Vice President, Amgen Incorporated, Thousand Oaks, California 
with additional material submitted by Biotechnology Industry 
Organization (Bio).
    The Subcommittee on Intellectual Property and Judicial 
Administration held a hearing on a related bill, H.R. 4307 on 
May 5, 1994. The witnesses at the hearing were Mr. Michael 
Kirk, Administrator for Legislation and International Affairs, 
Patent and Trademark Office, United States Department of 
Commerce; Mr. Gerald Mossinghoff, President, Pharmaceutical 
Research and Manufacturers of America (formerly known as 
Pharmaceutical Manufacturers Association); Ms. Lisa Raines, 
Vice President, Government Relations, Genzyme Corporation; 
testifying on behalf of the Biotechnology Industry 
Organization; Mr. Roger Smith, Assistant General Counsel, IBM 
Corporation; and Mr. Richard Waterman, General Patent Counsel, 
Dow Chemical Company.
    A hearing on related legislation, H.R. 760 was held by the 
Subcommittee on Intellectual Property and Judicial 
Administration on June 9, 1993. The witnesses at the hearing 
were The Honorable Rick Boucher, Congressman, 9th District, 
Virginia; The Honorable Dennis DeConcini, Senator, Arizona; Mr. 
Michael Kirk, Acting Commissioner, United States Patent and 
Trademark Office, United States Department of Commerce; Mr. G. 
Kirk Raab, Chief Executive Officer, Genentech, Inc., testifying 
on behalf of the Biotechnology Industry Organization (formerly 
known as the Industrial Biotechnology Association and the 
Association of Biotechnology Companies); Mr. Steven M. Odre, 
Vice-President for Intellectual Property, Amgen, Inc.; Mr. 
William L. LaFuze, President, American Intellectual Property 
Law Association; and Mr. Robert Armitage, testifying on behalf 
of the Intellectual Property Owners, Inc. and on behalf of the 
National Association of Manufacturers.

                        Committee Consideration

    On May 16, 1995 the Subcommittee on Courts and Intellectual 
Property met in open session and ordered reported the bill H.R. 
587, by a voice vote, a quorum being present. On June 7, 1995 
the Committee met in open session and ordered reported the bill 
H.R. 587 without amendment by a voice vote, a quorum being 
present.

                      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 finding 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 Hearings

    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)(B) 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)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 587, 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, June 15, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 587, a bill to amend title 35, United States 
Code, with respect to applications for process patents, as 
ordered reported by the House Committee on the Judiciary on 
June 7, 1995. CBO estimates that enactment of H.R. 587 would 
result in no significant costs to the federal government and in 
no costs to state and local governments. Enacting H.R. 587 
would not affect direct spending or receipts. Therefore, pay-
as-you-go procedures would not apply to the bill.
    H.R. 587 would expand the definition of a non-obvious 
process for purposes of considering the patentability of 
biotechnological processes. The bill also would remove the 
presumption of validity for a biotechnological process patent 
if its approval was based on a product patent that was later 
said to be invalid.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John Webb.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that H.R. 587 
will have no significant impact on prices and costs in the 
national economy.

                      Section-by-Section Analysis

   sec. 101. conditions for patentability; nonobvious subject matter

    Section 101 adds a clarifying standard to 35 U.S.C. 
Sec. 103. Section 103 requires that for a patent to be 
obtained, the subject matter must be nonobvious. Under 
Sec. 103, if the ``subject matter as a whole would have been 
obvious at the time the invention was made * * *.'' a patent 
cannot be granted.
    The section provides that an application with a 
biotechnological process claim which is linked to a patentable 
composition of matter will be considered nonobvious under 
Sec. 103. If a patentable composition of matter is either 
produced by a biotechnological process or used as part of that 
process, the process claims will be considered nonobvious.
    The examination of the process claims will proceed under 
the revised provisions of Sec. 103 if the applicant for a 
patent elects in a timely fashion to proceed under the new 
subsection.
    For a biotechnological patent application to be considered 
nonobvious under the proposed revision of Sec. 103, there are 
several conditions which must be met. First, the claims to the 
process and the patentable composition of matter, to which the 
process is linked, must be contained in the same application or 
have the same effective filing date. Second, the patentable 
composition of matter and the process must be owned by the same 
person or be subject to an obligation of assignment to the same 
person. Third, the composition of matter used or resulting from 
the process sought to be patented must be novel under Sec. 102, 
must be nonobvious on its own merits and must, in all other 
ways, be patentable.
    If process claims are granted under this standard, they 
must appear in the same patent containing the claims to the 
patentable composition of matter used or made by the process. 
If there are two different patents issued for the composition 
of matter and for the biotechnological process claims relating 
to the composition of matter, the process patent must expire on 
the same date as the patent on the composition of matter, 
notwithstanding the statutory patent term set pursuant to 35 
U.S.C. Sec. 154.
    To ensure that the term ``biotechnological process'' is not 
misinterpreted, a definition is provided that specifies these 
processes as being methods of using a product produced either 
by organisms that were genetically altered or otherwise induced 
to express characteristics not naturally associated with them, 
by cell fusion procedures, or by a composition of both.

              sec. 102. presumption of validity; defenses

    This section amends 35 U.S.C. Sec. 282 which elaborates on 
the validity of each patent and patent claim. Since a 
biotechnological process claim examined under the terms of 
Sec. 103(b)(1) is linked to a patentable composition of matter 
for a determination of nonobviousness, if a claim for such 
composition of matter is held invalid, the process to which it 
is linked, shall no longer be entitled to rely on the claim for 
a presumption of nonobviousness.

                        sec. 103. effective date

    The Act and the amendments made by the Act shall take 
effect on the date of enactment and will apply to any patent 
application filed on or after the date of enactment and any 
patent applications pending on the date of enactment.
         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 II--PATENTABILITY OF INVENTIONS AND GRANT OF PATENTS

          * * * * * * *

                CHAPTER 10--PATENTABILITY OF INVENTIONS

          * * * * * * *

Sec. 103. Conditions for patentability; non-obvious subject matter

  (a) A patent may not be obtained though the invention is not 
identically disclosed or described as set forth in section 102 
of this title, if the differences between the subject matter 
sought to be patented and the prior art are such that the 
subject matter as a whole would have been obvious at the time 
the invention was made to a person having ordinary skill in the 
art to which said subject matter pertains. Patentability shall 
not be negatived by the manner in which the invention was made.
  (b)(1) Notwithstanding subsection (a), and upon timely 
election by the applicant for patent to proceed under this 
subsection, a ``biotechnological process'' using or resulting 
in a composition of matter that is novel under section 102 and 
nonobvious under subsection (a) of this section shall be 
considered nonobvious if--
          (A) claims to the process and the composition of 
        matter are contained in either the same application for 
        patent or in separate applications having the same 
        effective filing date; and
          (B) the composition of matter, and the process at the 
        time it was invented, were owned by the same person or 
        subject to an obligation of assignment to the same 
        person.
  (2) A patent issued on a process under paragraph (1)--
          (A) shall also contain the claims to the composition 
        of matter used in or made by that process, or
          (B) shall, if such composition of matter is claimed 
        in another patent, be set to expire on the same date as 
        such other patent, notwithstanding section 154.
  (3) For purposes of paragraph (1), the term 
``biotechnological process'' means--
          (A) a process of genetically altering or otherwise 
        inducing a single- or multi-celled organism to--
                  (i) express an exogenous nucleotide sequence,
                  (ii) inhibit, eliminate, augment, or alter 
                expression of an endogenous nucleotide 
                sequence, or
                  (iii) express a specific physiological 
                characteristic not naturally associated with 
                said organism;
          (B) cell fusion procedures yielding a cell line that 
        expresses a specific protein, such as a monoclonal 
        antibody; and
          (C) a method of using a product produced by a process 
        defined by (A) or (B), or a combination of (A) and (B).
  (c) Subject matter developed by another person, which 
qualifies as prior art only under subsection (f) or (g) of 
section 102 of this title, shall not preclude patentability 
under this section where the subject matter and the claimed 
invention were, at the time the invention was made, owned by 
the same person or subject to an obligation of assignment to 
the same person.
          * * * * * * *

           PART III--PATENTS AND PROTECTION OF PATENT RIGHTS

          * * * * * * *

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

          * * * * * * *

Sec. 282. Presumption of validity; defenses

  A patent shall be presumed valid. Each claim of a patent 
(whether in independent, dependent, or multiple dependent form) 
shall be presumed valid independently of the validity of other 
claims; dependent or multiple dependent claims shall be 
presumed valid even though dependent upon an invalid claim. The 
burden of establishing invalidity of a patent or any claim 
thereof shall rest on the party asserting such invalidity. 
Notwithstanding the preceding sentence, if a claim to a 
composition of matter is held invalid and that claim was the 
basis of a determination of nonobviousness under section 
103(b)(1), the process shall no longer be considered nonobvious 
solely on the basis of section 103(b)(1).
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