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106th Congress                                            Rept. 106-287
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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


 
               AMERICAN INVENTORS PROTECTION ACT OF 1999

                                _______


 August 3, 1999.--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. 1907]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 1907) to amend title 35, United States Code, to 
provide enhanced protection for inventors and innovators, 
protect patent terms, reduce patent litigation, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill as amended do 
pass.Table of Contents for Reports:

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
The Amendment..............................................           2
Purpose and Summary........................................          30
Background and Need for the Legislation....................          31
Hearings...................................................          33
Committee Consideration....................................          33
Committee Oversight Findings...............................          33
Committee on Government Reform Findings....................          34
New Budget Authority and Tax Expenditures..................          34
Congressional Budget Office Cost Estimate..................          34
Constitutional Authority Statement.........................          39
Section-by-Section Analysis................................          39
Changes in Existing Law Made by the Bill, as Reported......          70

    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 ``American Inventors Protection Act of 
1999''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

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

                       TITLE I--INVENTORS' RIGHTS

Sec. 101. Short title.
Sec. 102. Invention promotion services.
Sec. 103. Effective date.

                    TITLE II--FIRST INVENTOR DEFENSE

Sec. 201. Short title.
Sec. 202. Defense to patent infringement based on earlier inventor.
Sec. 203. Effective date and applicability.

                    TITLE III--PATENT TERM GUARANTEE

Sec. 301. Short title.
Sec. 302. Patent term guarantee authority.
Sec. 303. Continued examination of patent applications.
Sec. 304. Technical clarification.
Sec. 305. Effective date.

 TITLE IV--UNITED STATES PUBLICATION OF PATENT APPLICATIONS PUBLISHED 
                                 ABROAD

Sec. 401. Short title.
Sec. 402. Publication.
Sec. 403. Time for claiming benefit of earlier filing date.
Sec. 404. Provisional rights.
Sec. 405. Prior art effect of published applications.
Sec. 406. Cost recovery for publication.
Sec. 407. Conforming amendments.
Sec. 408. Effective date.

                TITLE V--PATENT LITIGATION REDUCTION ACT

Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Report to Congress.
Sec. 506. Estoppel effect of reexamination.
Sec. 507. Effective date.

                 TITLE VI--PATENT AND TRADEMARK OFFICE

Sec. 601. Short title.

         Subtitle A--United States Patent and Trademark Office

Sec. 611. Establishment of Patent and Trademark Office.
Sec. 612. Powers and duties.
Sec. 613. Organization and management.
Sec. 614. Personnel flexibility.
Sec. 615. Public Advisory Committees.
Sec. 616. Patent and Trademark Office funding.
Sec. 617. Conforming amendments.
Sec. 618. Trademark Trial and Appeal Board.
Sec. 619. Board of Patent Appeals and Interferences.
Sec. 620. Annual report of Director.
Sec. 621. Suspension or exclusion from practice.
Sec. 622. Pay of Director.

            Subtitle B--Effective Date; Technical Amendments

Sec. 631. Effective date.
Sec. 632. Technical and conforming amendments.

                  Subtitle C--Miscellaneous Provisions

Sec. 641. References.
Sec. 642. Exercise of authorities.
Sec. 643. Savings provisions.
Sec. 644. Transfer of assets.
Sec. 645. Delegation and assignment.
Sec. 646. Authority of Director of the Office of Management and Budget 
with respect to functions transferred.
Sec. 647. Certain vesting of functions considered transfers.
Sec. 648. Availability of existing funds.
Sec. 649. Definitions.

               TITLE VII--MISCELLANEOUS PATENT PROVISIONS

Sec. 701. Provisional applications.
Sec. 702. International applications.
Sec. 703. Certain limitations on damages for patent infringement not 
applicable.
Sec. 704. Electronic filing.
Sec. 705. Study and report on biological deposits in support of 
biotechnology patents.
Sec. 706. Prior invention.
Sec. 707. Prior art exclusion for certain commonly assigned patents.

                       TITLE I--INVENTORS' RIGHTS

SEC. 101. SHORT TITLE.

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

SEC. 102. INVENTION PROMOTION SERVICES.

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

               ``CHAPTER 5--INVENTION PROMOTION 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 promoter.
``59. Rule of construction.

``Sec. 51. Definitions

    ``For purposes of this chapter--
            ``(1) the term `contract for invention promotion services' 
        means a contract by which an invention promoter undertakes 
        invention promotion services for a customer;
            ``(2) the term `customer' means any person, firm, 
        partnership, corporation, or other entity who enters into a 
        financial relationship or 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, except when that person performs any 
                act described in subparagraph (B) or (C) of paragraph 
                (4); and
            ``(4) the term `invention promotion 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, offering to license or 
                sell, 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 
                promotion services.

``Sec. 52. Contracting requirements

    ``(a) In General.--(1) Every contract for invention promotion 
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, the identity and address of such party shall be disclosed by 
such party's agent and such party shall be considered a customer for 
purposes of this chapter.
    ``(b) Requirements of Invention Promoter.--The invention promoter 
shall--
            ``(1) state in a written document, at the time a customer 
        enters into a contract forinvention promotion services, whether 
        the usual business practice of the invention promoter 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 promoter, 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 
                invention promoter.
    ``(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 promotion services by 
sending a written letter to the invention promoter 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 
promoter 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 promoter or to a 
third party for the benefit of the invention promoter, without regard 
to the date or dates appearing in such instrument, shall be deemed 
payment received by the invention promoter on the date received for 
purposes of this section.

``Sec. 53. Standard provisions for cover notice

    ``(a) Contents.--Every contract for invention promotion 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 PROMOTER 
FOR COMMERCIAL POTENTIAL IN THE PAST FIVE (5) YEARS IS XXXXX. OF THAT 
NUMBER, XXXXX RECEIVED POSITIVE EVALUATIONS AND XXXXX RECEIVED NEGATIVE 
EVALUATIONS.
    `IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO THE 
INVENTION PROMOTER, THE INVENTION PROMOTER 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 PROMOTER IN THE PAST FIVE (5) YEARS IS XXXXX. THE TOTAL 
NUMBER OF CUSTOMERS KNOWN BY THIS INVENTION PROMOTER TO HAVE RECEIVED, 
BY VIRTUE OF THIS INVENTION PROMOTER'S PERFORMANCE, AN AMOUNT OF MONEY 
IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION PROMOTER 
IS XXXXXXX. AS A RESULT OF THE EFFORTS OF THIS INVENTION PROMOTER, 
XXXXX NUMBER OF CUSTOMERS HAVE RECEIVED LICENSE AGREEMENTS FOR THEIR 
INVENTIONS.
    `THE OFFICERS OF THIS INVENTION PROMOTER HAVE COLLECTIVELY OR 
INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN (10) YEARS WITH THE 
FOLLOWING INVENTION PROMOTION COMPANIES: (LIST THE NAMES AND ADDRESSES 
OF ALL PREVIOUS INVENTION PROMOTION 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 WHICH RESULTED IN REGULATORY SANCTIONS OR OTHER 
CORRECTIVE ACTIONS.
    `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 promoter, 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 
PROMOTER 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 
promoter, nor with respect to customers who have defaulted in their 
payment to the invention promoter.

``Sec. 54. Reports to customer required

    ``With respect to every contract for invention promotion services, 
the invention promoter 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 promotion 
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 the initial payment to the invention 
        promoter;
            ``(3) a full, clear, and concise description of the 
        specific acts or services that the invention promoter 
        undertakes to perform for the customer;
            ``(4) a statement as to whether the invention promoter 
        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 promoter 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 promoter 
        undertakes to perform for the customer;
            ``(6) if any oral or written representation of estimated or 
        projected customer earnings is given by the invention promoter 
        (or any agent, employee, officer, director, partner, or 
        independent contractor of such invention promoter), 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 
        promotion services, and a statement that the invention promoter 
        is required to maintain all records and correspondence relating 
        to performance of the invention promotion 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 promotion services, including an 
        estimated date in which such performance is expected to be 
        completed.
    ``(b) Invention Promoter as Fiduciary.--To the extent that the 
description of the specific acts or services affords discretion to the 
invention promoter with respect to what specific acts or services shall 
be performed, the invention promoter 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 promoter's 
premises during normal business hours.

``Sec. 56. Remedies

    ``(a) In General.--(1) Any contract for invention promotion 
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 promotion services entered into in 
reliance upon any material false, fraudulent, or misleading 
information, representation, notice, or advertisement of the invention 
promoter (or any agent, employee, officer, director, partner, or 
independent contractor of such invention promoter) 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 promotion 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 promoter offers to perform or performs such act through 
aperson 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 promoter or by any material false or 
fraudulent statement or representation, or any omission of material 
fact, by an invention promoter (or any agent, employee, director, 
officer, partner, or independent contractor of such invention promoter) 
or by failure of an invention promoter to make all the disclosures 
required under this chapter, may recover in a civil action against the 
invention promoter (or the officers, directors, or partners of such 
invention promoter) in addition to reasonable costs and attorneys' 
fees, 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, taking into account past 
complaints made against the invention promoter that resulted in 
regulatory sanctions or other corrective actions based on those record 
compiled by the Director under section 57.
    ``(c) Rebuttable Presumption of Injury.--For purposes of this 
section, substantial violation of any provision of this chapter by an 
invention promoter or execution by the customer of a contract for 
invention promotion services in reliance on any material false or 
fraudulent statements 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 promoters publicly available, together with any 
response of the invention promoters.
    ``(b) Request for Complaints.--The Director may request complaints 
relating to invention promotion 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 promoters.

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

    ``Whoever, in providing invention promotion 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. 103. 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 II--FIRST INVENTOR DEFENSE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``First Inventor Defense Act''.

SEC. 202. DEFENSE TO PATENT INFRINGEMENT BASED ON EARLIER INVENTOR.

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

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

    ``(a) Definitions.--For purposes of this section--
            ``(1) the terms `commercially used' and `commercial use' 
        mean use of a process or method in the United States or the use 
        of a process or method in the design, testing, or production in 
        the United States of a product or service, so long as such use 
        is in connection with an actual arm's-length sale or other 
        arm's-length commercial transfer of a product or service, 
        whether or not the subject matter at issue is accessible to or 
        otherwise known to the public, except that the subject matter 
        for which commercial marketing or use is subject to a 
        premarketing regulatory review period during which the safety 
        or efficacy of the subject matter is established, including any 
        period specified in section 156(g), shall be deemed 
        `commercially used' and in `commercial use' during such 
        regulatory review period;
            ``(2) in the case of activities performed by a nonprofit 
        research laboratory, or nonprofit entity such as a university, 
        research center, or hospital, a use for which the public is the 
        intended beneficiary shall be considered to be a use described 
        in paragraph (1), except that the use--
                    ``(A) may be asserted as a defense under this 
                section only for continued use by and in the laboratory 
                or nonprofit entity; and
                    ``(B) may not be asserted as a defense with respect 
                to any subsequent commercialization or use outside such 
                laboratory or nonprofit entity;
            ``(3) the term `process or method' means `process' as 
        defined in section 100(b), and includes any invention that 
        produces a useful end product or service which has been or 
        could have been claimed in a patent in the form of a process; 
        and
            ``(4) the `effective filing date' of a patent is the 
        earlier of the actual filing date of the application for the 
        patent or the filing date of any earlier United States, 
        foreign, or international application to which the subject 
        matter at issue is entitled under section 119, 120, or 365 of 
        this title.
    ``(b) Defense to Infringement.--.
            ``(1) In general.--It shall be a defense to an action for 
        infringement under section 271 of this title with respect to 
        any subject matter that would otherwise infringe one or more 
        claims asserting a process or method in the patent being 
        asserted against a person, if such person had, acting in good 
        faith, actually reduced the subject matter to practice at least 
        one year before the effective filing date of such patent, and 
        commercially used the subject matter before the effective 
        filing date of such patent.
            ``(2) Exhaustion of right.--The sale or other disposition, 
        of a product or service produced by a patented process or 
        method, by a person entitled to assert a defense under this 
        section with respect to that product or service shall exhaust 
        the patent owner's rights under the patent to the extent such 
        rights would have been exhausted had such sale or other 
        disposition been made by the patent owner.
            ``(3) Limitations and qualifications of defense.--The 
        defense to infringement under this section is subject to the 
        following:
                    ``(A) Patent.--A person may not assert the defense 
                under this section unless the invention for which the 
                defense is asserted is for a process or method, the 
                exclusive purpose of which is to produce a useful end 
                product or service.
                    ``(B) Derivation.--A person may not assert the 
                defense under this section if the subject matter on 
                which the defense is based was derived from the 
                patentee or persons in privity with the patentee.
                    ``(C) Not a general license.--The defense asserted 
                by a person under this section is not a general license 
                under all claims of the patent at issue, but extends 
                only to the specific subject matter claimed in the 
                patent with respect to which the person can assert a 
                defense under this chapter, except that the defense 
                shall also extend to variations in the quantity or 
                volume of use of the claimed subject matter, and to 
                improvements in the claimed subject matter that do not 
                infringe additional specifically claimed subject matter 
                of the patent.
            ``(4) Burden of proof.--A person asserting the defense 
        under this section shall have the burden of establishing the 
        defense by clear and convincing evidence.
            ``(5) Abandonment of use.--A person who has abandoned 
        commercial use of subject matter may not rely on activities 
        performed before the date of such abandonment in establishing a 
        defense under this section with respect to actions taken after 
        the date of such abandonment.
            ``(6) Personal defense.--The defense under this section may 
        be asserted only by the person who performed the acts necessary 
        to establish the defense and, except for any transfer to the 
        patent owner, the right to assert the defense shall not be 
        licensed or assigned or transferred to another person except as 
        an ancillary and subordinate part of a good faith assignment or 
        transfer for other reasons of the entire enterprise or line of 
        business to which the defense relates.
            ``(7) Limitation on sites.--A defense under this section, 
        when acquired as part of a good faith assignment or transfer of 
        an entire enterprise or line of business to which the defense 
        relates, may only be asserted for uses at sites where the 
        subject matter that would otherwise infringe one or more of the 
        claims is in use before the later of the effective filing date 
        of the patent or the date of the assignment or transfer of such 
        enterprise or line of business.
            ``(8) Unsuccessful assertion of defense.--If the defense 
        under this section is pleaded by a person who is found to 
        infringe the patent and who subsequently fails to demonstrate a 
        reasonable basis for asserting the defense, the court shall 
        find the case exceptional for the purpose of awarding 
        attorney's fees under section 285 of this title.
            ``(9) Invalidity.--A patent shall not be deemed to be 
        invalid under section 102 or 103 of this title solely because a 
        defense is raised or established under this section.''.
    (b) Conforming Amendment.--The table of sections at the beginning 
of chapter 28 of title 35, United States Code, is amended by adding at 
the end the following new item:

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

SEC. 203. 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 III--PATENT TERM GUARANTEE

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Patent Term Guarantee Act''.

SEC. 302. PATENT TERM GUARANTEE AUTHORITY.

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

SEC. 303. CONTINUED EXAMINATION OF PATENT APPLICATIONS.

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

SEC. 304. TECHNICAL CLARIFICATION.

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

SEC. 305. EFFECTIVE DATE.

    (a) Sections 302 and 304.--The amendments made by sections 302 and 
304 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 the date of the enactment of this Act.
    (b) Section 303.--The amendments made by section 303 shall take 
effect 6 months after the date of the enactment of this Act.

 TITLE IV--UNITED STATES PUBLICATION OF PATENT APPLICATIONS PUBLISHED 
                                 ABROAD

SEC. 401. SHORT TITLE.

    This title may be referred to as the ``Publication of Foreign Filed 
Applications Act''.

SEC. 402. PUBLICATION.

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

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

    ``(a) Confidentiality.--Except as provided in subsection (b), 
applications for patents shall be kept in confidence by the Patent and 
Trademark Office and no information concerning any such application 
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) United States Publication of Applications Published Abroad.--
            ``(1) In general.--(A) Subject to paragraph (2), each 
        application for patent, except applications for design patents 
        filed under chapter 16 and provisional applications filed under 
        section 111(b), shall be published, in accordance with 
        procedures determined by the Director, promptly upon the 
        expiration of a period of 18 months after 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) Pursuant to this title and 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 
        under section 181 shall not be published.
            ``(C)(i) If an applicant, upon filing, makes a request that 
        an application not be published pursuant to paragraph (1), and 
        states in such request that the invention disclosed in the 
        application has not been the subject of an application filed in 
        another country, or under a multilateral international 
        agreement, that requires publication of applications 18 months 
        after filing, the application shall not be published as 
        provided in paragraph (1).
            ``(ii) An applicant may rescind a request made under clause 
        (i) at any time.
            ``(iii) An applicant who has made a request under clause 
        (i) but who subsequently files, in a foreign country or under a 
        multilateral international agreement specified in clause (i), 
        an application directed to the invention disclosed in the 
        application filed in the Patent and Trademark Office, shall 
        notify the Director of such filing not later than 45 days after 
        the date of the filing of such foreign or international 
        application. A failure of the applicant to provide such notice 
        within the prescribed period shall result in the application 
        being regarded as abandoned, unless it is shown to the 
        satisfaction of the Director that the delay in submitting the 
        notice was unintentional.
            ``(iv) If a notice is made pursuant to clause (iii), or the 
        applicant rescinds a request pursuant to clause (ii), the 
        Director shall publish the application on or as soon as is 
        practical after the date that is specified in clause (i).
            ``(v) If an applicant has filed applications in one or more 
        foreign countries, directly or through a multilateral 
        international agreement, and such foreign filed applications 
        corresponding to an application filed in the Patent and 
        Trademark Office or the description of the invention in such 
        foreign filed applications is less extensive than the 
        application or description of the invention in the application 
        filed in the Patent and Trademark Office, the applicant may 
        submit a redacted copy of the application filed in the Patent 
        and Trademark Office eliminating any part or description of the 
        invention in such application that is not also contained in any 
        of the corresponding applications filed in a foreign country. 
        The Director may only publish the redacted copy of the 
        application unless the redacted copy of the application is not 
        received within 16 months after the earliest effective filing 
        date for which a benefit is sought under this title. The 
        provisions of section 154(d) shall not apply to a claim if the 
        description of the invention published in the redacted 
        application filed under this clause with respect to the claim 
        does not enable a person skilled in the art to make and use the 
        subject matter of the claim.
    ``(c) Protest and Pre-Issuance Opposition.--The Director shall 
establish appropriate procedures to ensure that no protest or other 
form of pre-issuance opposition to the grant of a patent on an 
application may be initiated after publication of the application 
without the express written consent of the applicant.''.
    (b) Study by GAO.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of applicants for patents who file 
        only in the United States during the 3-year period beginning on 
        the effective date of this title.
            (2) Contents.--The study conducted under paragraph (1) 
        shall--
                    (A) consider the number of such applicants for 
                patent in relation to the number of applicants who file 
                in the United States and outside the United States;
                    (B) examine how many domestic-only filers request 
                at the time of filing not to be published;
                    (C) examine how many such filers rescind that 
                request or later choose to file abroad; and
                    (D) examine the manner of entity seeking an 
                application and any correlation that may exist between 
                such manner and publication of patent applications.
            (3) Report to judiciary committees.--The Comptroller 
        General shall submit to the Committees on the Judiciary of the 
        House of Representatives and the Senate the results of the 
        study conducted under this subsection.

SEC. 403. 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, identifying the foreign application by 
specifying its application number, country, and the day, month, and 
year of its filing, is filed in the Patent and Trademark Office at such 
time during the pendency of the application as required by the 
Director.
    ``(2) The Director may consider the failure of the applicant to 
file a timely claim for priority as a waiver of any such claim. The 
Director may establish procedures, including the payment of a 
surcharge, to accept an unintentionally delayed claim under this 
section.
    ``(3) The Director may require a certified copy of the original 
foreign application, specification, and drawings upon which it is 
based, a translation if not in the English language, and such other 
information as the Director considers necessary. Any such certification 
shall be made by the foreign intellectual property authority in which 
the foreign application was filed and show the date of the application 
and of the filing of the specification and other papers.''.
    (b) In the United States.--Section 120 of title 35, United States 
Code, is amended by adding at the end the following: ``The Director may 
determine the time period during the pendency of the application within 
which an amendment containing the specific reference to the earlier 
filed application is submitted. 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 unintentionally late 
submissions of amendments under this section.''.

SEC. 404. 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), or in the case of an 
        international application filed under the treaty defined in 
        section 351(a) designating the United States under Article 
        21(2)(a) of such treaty, the date of publication of the 
        application, and ending on the date the patent is issued--
                    ``(A)(i) makes, uses, offers for sale, or sells in 
                the United States the invention as claimed in the 
                published patent application or imports such an 
                invention into the United States; or
                    ``(ii) if the invention as claimed in the published 
                patent application is a process, uses, offers for sale, 
                or sells in the United States or imports into the 
                United States products made by that process as claimed 
                in the published patent application; and
                    ``(B) had actual notice of the published patent 
                application, and in a case in which the right arising 
                under this paragraph is based upon an international 
                application designating the United States that is 
                published in a language other than English, a 
                translation of the international application into the 
                English language.
            ``(2) Right based on substantially identical inventions.--
        The right under paragraph (1) to obtain a reasonable royalty 
        shall not be available under this subsection unless the 
        invention as claimed in the patent is substantially identical 
        to the invention as claimed in the published patent 
        application.
            ``(3) time limitation on obtaining a reasonable royalty.--
        The right under paragraph (1) to obtain a reasonable royalty 
        shall be available only in an action brought not later than 6 
        years after the patent is issued. The right under paragraph (1) 
        to obtain a reasonable royalty shall not be affected by the 
        duration of the period described in paragraph (1).
            ``(4) Requirements for international applications.--
                    ``(A) Effective date.--The right under paragraph 
                (1) to obtain a reasonable royalty based upon the 
                publication under the treaty defined in section 351(a) 
                of an international application designating the United 
                States shall commence on the date on which the Patent 
                and Trademark Office receives a copy of the publication 
                under the treaty of the international application, or, 
                if the publication under the treaty of the 
                international application is in a language other than 
                English, on the date on which the Patent and Trademark 
                Office receives a translation of the international 
                application in the English language.
                    ``(B) Copies.--The Director may require the 
                applicant to provide a copy of the international 
                application and a translation thereof.
            ``(5) Issuance of patents on individual claims.--If the 
        Director in a notification to the applicant under section 132 
        indicates that one or more claims of a published application 
        are allowable, the applicant may request the issuance of a 
        patent incorporating those claims. The applicant may continue 
        prosecution of the remaining claims as provided in chapter 12 
        of this title. Any subsequently allowed claims may be 
        incorporated into the patent or issued in a separate patent, in 
        accordance with regulations adopted by the Director. The 
        Director may establish appropriate fees to cover the costs of 
        incorporating any additional claims into the patent or issuing 
        a separate patent.''.

SEC. 405. 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)(A) an application for patent, published pursuant to 
        section 122(b), by another filed in the United States before 
        the invention by the applicant for patent, except that an 
        international application filed under the treaty defined in 
        section 351(a) shall have the effect under this subsection of a 
        national application published under section 122(b) only if the 
        international application designating the United States was 
        published under Article 21(2)(a) of such treaty in the English 
        language, or
            ``(B) a patent granted on an application for patent by 
        another filed in the United States before the invention by the 
        applicant for patent, except that a patent shall not be deemed 
        filed in the United States for the purposes of this subsection 
        based on the filing of an international application filed under 
        the treaty defined in section 351(a), or''.

SEC. 406. 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 402 by charging a separate publication fee after notice of 
allowance is given pursuant to section 151 of title 35, United States 
Code.

SEC. 407. CONFORMING AMENDMENTS.

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

SEC. 408. EFFECTIVE DATE.

    This title and the amendments made by this title, shall take effect 
on the date that is 1 year after the date of the enactment of this Act 
and shall apply to all applications filed under section 111 of title 
35, United States Code, on or after that date, and all applications 
complying with section 371 of title 35, United States Code, that 
resulted from international applications filed on or after that date. 
The amendments made by sections 404 and 405 shall apply to any such 
application voluntarily published by the applicant under procedures 
established under this title that is pending on the date that is 1 year 
after the date of enactment of this Act. The amendment made by section 
404 shall also apply to international applications designating the 
United States that are filed on or after the date that is 1 year after 
the date of the enactment of this Act.

                TITLE V--PATENT LITIGATION REDUCTION ACT

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Patent Litigation Reduction 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) Citation of Prior Art.--Section 301 of title 35, United States 
Code, is amended to read as follows:

``Sec. 301. Citation of prior art

    ``Any person at any time may cite to the Office in writing prior 
art consisting of patents or printed publications which that person 
believes to have a bearing on the patentability of any claim of a 
particular patent. If the person explains in writing the pertinency and 
manner of applying such prior art to at least one claim of the patent, 
the citation of such prior art and the explanation thereof will become 
a part of the official file of the patent.''.
    (b) Request for Reexamination.--Section 302 of title 35, United 
States Code, is amended to read as follows:

``Sec. 302. Request for reexamination

    ``(a) In General.--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.
    ``(b) Requirements.--The request shall--
            ``(1) be in writing, include the identity of the real party 
        in interest, and be accompanied by payment of a reexamination 
        fee established by the Director under section 41; and
            ``(2) set forth the pertinency and manner of applying cited 
        prior art to every claim for which reexamination is requested.
    ``(c) Copy.--Unless the requesting person is the owner of the 
patent, the Director promptly shall send a copy of the request to the 
owner of record of the patent.''.
    (c) 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 section 302, the Director shall 
determine whether a substantial new question of patentability affecting 
any claim of the patent concerned is raised by the request, with or 
without consideration of other patents or printed publications. On the 
Director's initiative, and any time, the Director may determine whether 
a substantial new question of patentability is raised by patents and 
publications.
    ``(b) Record.--A record of the Director's determination under 
subsection (a) shall be placed in the official file of the patent, and 
a copy shall be promptly given or mailed to the owner of record of the 
patent and to the third-party requester, if any.
    ``(c) Final Decision.--A determination by the Director 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.''.
    (d) 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 section 303(a), the Director 
finds that a substantial new question of patentability affecting a 
claim of a patent is raised, the determination shall include an order 
for 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.''.
    (e) 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, except as 
provided for under this section. 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. In addition, the third-party requester shall 
receive a copy of any communication sent by the Office to the patent 
owner concerning the patent subject to the reexamination proceeding.
    ``(3) Each time that the patent owner files a response to an action 
on the merits from the Patent and Trademark Office, the third-party 
requester shall have one opportunity to file written comments 
addressing issues raised by the action of the Office or the patent 
owner's response thereto, if those written comments are received by the 
Office within 30 days after the date of service of the patent owner's 
response.
    ``(c) Special Dispatch.--Unless otherwise provided by the Director 
for good cause, all 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.''.
    (f) 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, and 
        may appeal under the provisions of sections 141 through 144, 
        with respect to any decision adverse to the patentability of 
        any original or proposed amended or new claim of the patent; 
        and
            ``(2) may be a party to any appeal taken by a third-party 
        requester under subsection (b).
    ``(b) Third-Party Requester.--A third-party requester may--
            ``(1) appeal under the provisions of section 134, and may 
        appeal under the provisions of sections 141 through 144, with 
        respect to any final decision favorable to the patentability of 
        any original or proposed amended or new claim of the patent; or
            ``(2) be a party to any appeal taken by the patent owner, 
        subject to subsection (c).
    ``(c) Civil Action.--A third-party requester whose request for a 
reexamination results in an order under section 304 is estopped from 
asserting at a later time, in any civil action arising in whole or in 
part under section 1338 of title 28, the invalidity of any claim 
finally determined to be valid and patentable on any ground which the 
third-party requester raised or could have raised during the 
reexamination proceedings. This subsection does not prevent the 
assertion of invalidity based on newly discovered prior art unavailable 
to the third-party requester and the Patent and Trademark Office at the 
time of the reexamination proceedings.''.
    (g) Reexamination Prohibited; Stay of Litigation.--
            (1) In general.--Chapter 30 of title 35, United States 
        Code, is amended by adding at the end the following new 
        sections:

``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, neither the patent owner nor the third-party 
requester, if any, nor privies of either, may file a subsequent request 
for reexamination of the patent until a reexamination certificate is 
issued and published under section 307, unless authorized by the 
Director.
    ``(b) Final Decision.--Once a final decision has been entered 
against a party in a civil action arising in whole or in part under 
section 1338 of title 28 that the party has not sustained its burden of 
proving the invalidity of any patent claim in suit or if a final 
decision in a reexamination proceeding instituted by a third-party 
requester is favorable to the patentability of any original or proposed 
amended or new claim of the patent then neither that party nor its 
privies may thereafter request 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, and a 
reexamination requested by that party or its privies on the basis of 
such issues may not thereafter be maintained by the Office, 
notwithstanding any other provision of this chapter. This subsection 
does not prevent the assertion of invalidity based on newly discovered 
prior art unavailable to the third-party requester and the Patent and 
Trademark Office at the time of the reexamination proceedings.

``Sec. 309. Stay of litigation

    ``Once an order for reexamination of a patent has been issued under 
section 304, the patent owner may obtain a stay of any pending 
litigation which involves an issue of patentability of any claims of 
the patent which are the subject of the reexamination order, unless the 
court before which such litigation is pending determines that a stay 
would not serve the interests of justice.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 30 of title 35, United States Code, is 
        amended to read as follows:

   ``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 Director.
``304. Reexamination order by Director.
``305. Conduct of reexamination proceedings.
``306. Appeal.
``307. Certificate of patentability, unpatentability, and claim 
cancellation.
``308. Reexamination prohibited.
``309. Stay of litigation.''.

SEC. 504. CONFORMING AMENDMENTS.

    (a) Patent Fees; Patent Search Systems.--Section 41(a)(7) of title 
35, United States Code, is amended to read as follows:
            ``(7) On filing each petition for the revival of an 
        unintentionally abandoned application for a patent, for the 
        unintentionally delayed payment of the fee for issuing each 
        patent, or for an unintentionally delayed response by the 
        patent owner in a reexamination proceeding, $1,210, unless the 
        petition is filed under section 133 or 151 of this title, in 
        which case the fee shall be $110.''.
    (b) Appeal to the Board of 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.''.
    (c) Appeal to Court of Appeals for the Federal Circuit.--Section 
141 of title 35, United States Code, is amended by adding the following 
after the second sentence: ``A patent owner or third-party requester in 
a reexamination proceeding dissatisfied with the final decision in an 
appeal to the Board of Patent Appeals and Interferences under section 
134 may appeal the decision only to the United States Court of Appeals 
for the Federal Circuit.''.
    (d) Proceedings on Appeal.--Section 143 of title 35, United States 
Code, is amended by amending the third sentence to read as follows: 
``In ex parte and reexamination cases, the Director shall submit to the 
court in writing the grounds for the decision of the Patent and 
Trademark Office, addressing all the issues involved in the appeal.''.
    (e) Civil Action To Obtain Patent.--Section 145 of title 35, United 
States Code, is amended in the first sentence by inserting ``(a)'' 
after ``section 134''.

SEC. 505. REPORT TO CONGRESS.

    Not later than 5 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. 506. ESTOPPEL EFFECT OF REEXAMINATION.

    Any party who requests a reexamination under section 302 of title 
35, United States Code, is estopped from challenging at a later time, 
in any civil action, any fact determined during the process of such 
reexamination. If this section is held to be unenforceable, the 
enforceability of the rest of this title or of this Act shall not be 
denied as a result.

SEC. 507. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
on the date that is 1 year after the date of the enactment of this Act 
and shall apply to all reexamination requests filed on or after such 
date.

                 TITLE VI--PATENT AND TRADEMARK OFFICE

SEC. 601. SHORT TITLE.

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

         Subtitle A--United States Patent and Trademark Office

SEC. 611. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE.

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

``Sec. 1. Establishment

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

SEC. 612. POWERS AND DUTIES.

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

``Sec. 2. Powers and duties

    ``(a) In General.--The United States Patent and Trademark Office, 
subject to the policy direction of the Secretary of Commerce--
            ``(1) shall be responsible for the granting and issuing of 
        patents and the registration of trademarks; and
            ``(2) shall be responsible for disseminating to the public 
        information with respect to patents and trademarks.
    ``(b) Specific Powers.--The Office--
            ``(1) shall adopt and use a seal of the Office, which shall 
        be judicially noticed and with which letters patent, 
        certificates of trademark registrations, and papers issued by 
        the Office shall be authenticated;
            ``(2) may establish regulations, not inconsistent with law, 
        which--
                    ``(A) shall govern the conduct of proceedings in 
                the Office;
                    ``(B) shall be made 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;
                    ``(E) shall recognize the public interest in 
                continuing to safeguard broad access to the United 
                States patent system through the reduced fee structure 
                for small entities under section 41(b)(1) of this 
                title; and
                    ``(F) provide for the development of a performance-
                based process that includes quantitative and 
                qualitative measures and standards for evaluating cost-
                effectiveness and is consistent with the principles of 
                impartiality and competitiveness;
            ``(3) may acquire, construct, purchase, lease, hold, 
        manage, operate, improve, alter, and renovate any real, 
        personal, or mixed property, or any interest therein, as it 
        considers necessary to carry out its functions;
            ``(4)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation of 
        facilities, and contracts for supplies or services, without 
        regard to the provisions of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 471 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;
            ``(5) may use, with their consent, services, equipment, 
        personnel, and facilities of other departments, agencies, and 
        instrumentalities of the Federal Government, on a reimbursable 
        basis, and cooperate with such other departments, agencies, and 
        instrumentalities in the establishment and use of services, 
        equipment, and facilities of the Office;
            ``(6) may, when the Director determines that it is 
        practicable, efficient, and cost-effective to do so, use, with 
        the consent of the United States and the agency, 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;
            ``(7) may retain and use all of its revenues and receipts, 
        including revenues from the sale, lease, or disposal of any 
        real, personal, or mixed property, or any interest therein, of 
        the Office;
            ``(8) in coordination with the Under Secretary of Commerce 
        for International Trade, shall promote exports of goods and 
        services of the United States industries that rely on 
        intellectual property;
            ``(9) shall advise the President, through the Secretary of 
        Commerce, on national and certain international intellectual 
        property policy issues;
            ``(10) shall advise Federal departments and agencies on 
        matters of intellectual property policy in the United States 
        and intellectual property protection in other countries;
            ``(11) shall provide guidance, as appropriate, with respect 
        to proposals by agencies to assist foreign governments and 
        international intergovernmental organizations on matters of 
        intellectual property protection;
            ``(12) may conduct programs, studies, or exchanges of items 
        or services regarding domestic and international intellectual 
        property law and the effectiveness of intellectual property 
        protection domestically and throughout the world;
            ``(13)(A) shall advise the Secretary of Commerce on 
        programs and studies relating to intellectual property policy 
        that are conducted, or authorized to be conducted, 
        cooperatively with foreign intellectual property offices and 
        international intergovernmental organizations; and
            ``(B) may conduct programs and studies described in 
        subparagraph (A); and
            ``(14)(A) in coordination with the Department of State, may 
        conduct programs and studies cooperatively with foreign 
        intellectual property offices and international 
        intergovernmental organizations; and
            ``(B) with the concurrence of the Secretary of State, may 
        authorize the transfer of not to exceed $100,000 in any year to 
        the Department of State for the purpose of making special 
        payments to international intergovernmental organizations for 
        studies and programs for advancing international cooperation 
        concerning patents, trademarks, and other matters.
    ``(c) Clarification of Specific Powers.--(1) The special payments 
under paragraph (14)(B) shall be in addition to any other payments or 
contributions to international organizations described in paragraph 
(14)(B) and shall not be subject to any limitations imposed by law on 
the amounts of such other payments or contributions by the United 
States Government.
    ``(2) Nothing in subsection (b) shall derogate from the duties of 
the Secretary of State or from the duties of the United States Trade 
Representative as set forth in section 141 of the Trade Act of 1974 (19 
U.S.C. 2171).
    ``(3) Nothing in subsection (b) shall derogate from the duties and 
functions of the Register of Copyrights or otherwise alter current 
authorities relating to copyright matters.
    ``(4) In exercising the Director's powers under paragraphs (3) and 
(4)(A) of subsection (b), the Director shall consult with the 
Administrator of General Services.
    ``(d) Construction.--Nothing in this section shall be construed to 
nullify, void, cancel, or interrupt any pending request-for-proposal 
let or contract issued by the General Services Administration for the 
specific purpose of relocating or leasing space to the United States 
Patent and Trademark Office.''.

SEC. 613. ORGANIZATION AND MANAGEMENT.

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

``Sec. 3. Officers and employees

    ``(a) Under Secretary and Director.--
            ``(1) In general.--The powers and duties of the United 
        States Patent and Trademark Office shall be vested in an Under 
        Secretary of Commerce and Director of the United States Patent 
        and Trademark Office (in this title referred to as the 
        `Director'), who shall be a citizen of the United States and 
        who shall be appointed by the President, by and with the advice 
        and consent of the Senate. The Director shall be a person who 
        has a professional background and experience in patent or 
        trademark law the Director shall be responsible for providing 
        policy direction and management supervision for the Office.
            ``(2) Duties.--
                    ``(A) In general.--The Director shall be 
                responsible for the supervision 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) Consulting with the public advisory 
                committees.--The Director shall consult with the Patent 
                Public Advisory Committee established in section 5 on a 
                regular basis on matters relating to the patent 
                operations of the Office, shall consult with the 
                Trademark Public Advisory Committee established in 
                section 5 on a regular basis on matters relating to the 
                trademark operations of the Office, and shall consult 
                with the respective Public Advisory Committee before 
                submitting budgetary proposals to the Office of 
                Management and Budget or changing or proposing to 
                change patent or trademark user fees or patent or 
                trademark regulations, as the case may be.
                    ``(C) 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) Oath.--The Director shall, before taking office, take 
        an oath to discharge faithfully the duties of the Office.
            ``(4) Compensation.--In addition to the Director's pay as 
        prescribed in section 5314 of title 5, the Director may receive 
        a bonus in an amount up to, but not in excess of, 50 percent of 
        the Director's annual rate of pay, 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 organization and individual goals in key 
        operational areas as delineated in an annual performance plan 
        agreed to by the Director and the Secretary and made public in 
        the annual report of the Director. Payment of a bonus under 
        this paragraph may be made to the Director only to the extent 
        that such payment does not cause the Director's total aggregate 
        compensation in a calendar year to equal or exceed the amount 
        of the salary of the President under section 102 of title 3.
            ``(5) Removal.--The Director may be removed from office by 
        the President. The President shall provide notification of any 
        such removal to both Houses of Congress.
    ``(b) Officers and Employees of the Office.--
            ``(1) Deputy under secretary and deputy director.--The 
        Director shall appoint a Deputy Under Secretary of Commerce and 
        Deputy Director of the United States Patent and Trademark 
        Office who shall be vested with the authority to act in the 
        capacity of the Director in the event of the absence or 
        incapacity of the Director. The Deputy Under Secretary and 
        Deputy Director of the United States Patent and Trademark 
        Office shall be a citizen of the United States who has a 
        professional background and experience in patent or trademark 
        law.
            ``(2) Commissioners.--
                    ``(A) Appointment and duties.--The Secretary of 
                Commerce shall appoint a Commissioner for Patents and a 
                Commissioner for Trademarks. The Commissioner for 
                Patents shall be a citizen of the United States with 
                demonstrated management ability and professional 
                background and experience in patent law and serve for a 
                term of 5 years. The Commissioner for Trademarks shall 
                be a citizen of the United States with demonstrated 
                management ability and professional background and 
                experience in trademark law and serve for a term of 5 
                years. The Commissioner for Patents and the 
                Commissioner for Trademarks shall serve as the chief 
                operating officers for the operations of the Office 
                relating to patents and trademarks, respectively, and 
                shall be responsible for the management and direction 
                of all aspects of the activities of the Office that 
                affect the administration of patent and trademark 
                operations, respectively. The Secretary may reappoint a 
                Commissioner to subsequent terms of 5 years as long as 
                the performance of the Commissioner as set forth in the 
                performance agreement in subparagraph (B) is 
                satisfactory.
                    ``(B) Salary and performance agreement.--The 
                Commissioners shall be paid an annual rate of basic pay 
                not to exceed the maximum rate of basic pay for the 
                Senior Executive Service established under section 5382 
                of title 5, United States Code, including any 
                applicable locality-based comparability payment that 
                may be authorized under section 5304(h)(2)(C) of title 
                5. The compensation of the Commissioners shall be 
                considered for purposes of section 207(c)(2)(A) of 
                title 18, United States Code, to be the equivalent of 
                that described under clause (ii) of section 
                207(c)(2)(A) of title 18. In addition, the 
                Commissioners may receive a bonus in an amount of up 
                to, but not in excess of, 50 percent of the 
                Commissioner's annual rate of basic pay, based upon an 
                evaluation by the Secretary of Commerce, acting through 
                the Director, of the Commissioners' performance as 
                defined in an annual performance agreement between the 
                Commissioners and the Secretary. The annual performance 
                agreements shall incorporate measurable organization 
                and individual goals in key operational areas as 
                delineated in an annual performance plan agreed to by 
                the Commissioners and the Secretary. Payment of a bonus 
                under this subparagraph may be made to the 
                Commissioners only to the extent that such payment does 
                not cause the Commissioners' total aggregate 
                compensation in a calendar year to equal or exceed the 
                amount of the salary of the President under section 102 
                of title 3.
                    ``(C) Removal.--The Commissioners may be removed 
                from office by the Secretary for misconduct or 
                nonsatisfactory performance under the performance 
                agreement described in subparagraph (B). The Secretary 
                shall provide notification of any such removal to both 
                Houses of Congress.
            ``(3) Other officers and employees.--The Director shall--
                    ``(A) appoint such officers, employees (including 
                attorneys), and agents of the Office as the Director 
                considers necessary to carry out the functions of the 
                Office; and
                    ``(B) define the title, authority, and duties of 
                such officers and employees and delegate to them such 
                of the powers vested in the Office as the Director may 
                determine.
        The Office shall not be subject to any administratively or 
        statutorily imposed limitation on positions or personnel, and 
        no positions or personnel of the Office shall be taken into 
        account for purposes of applying any such limitation.
            ``(4) Training of examiners.--The Patent and Trademark 
        Office shall develop an incentive program to retain as 
        employees patent and trademark examiners of the primary 
        examiner grade or higher who are eligible for retirement, for 
        the sole purpose of training patent and trademark examiners.
    ``(c) Continued Applicability of Title 5.--Officers and employees 
of the Office shall be subject to the provisions of title 5 relating to 
Federal employees.
    ``(d) Adoption of Existing Labor Agreements.--The Office shall 
adopt all labor agreements which are in effect, as of the day before 
the effective date of the Patent and Trademark Office Efficiency Act, 
with respect to such Office (as then in effect).
    ``(e) Carryover of Personnel.--
            ``(1) From pto.--Effective as of the effective date of the 
        Patent and Trademark Office Efficiency Act, all officers and 
        employees of the Patent and Trademark Office on the day before 
        such effective date shall become officers and employees of the 
        Office, without a break in service.
            ``(2) Other personnel.--Any individual who, on the day 
        before the effective date of the Patent and Trademark Office 
        Efficiency Act, is an officer or employee of the Department of 
        Commerce (other than an officer or employee under paragraph 
        (1)) shall be transferred to the Office, as necessary to carry 
        out the purposes of this Act, if--
                    ``(A) such individual serves in a position for 
                which a major function is the performance of work 
                reimbursed by the Patent and Trademark Office, as 
                determined by the Secretary of Commerce;
                    ``(B) such individual serves in a position that 
                performed work in support of the Patent and Trademark 
                Office during at least half of the incumbent's work 
                time, as determined by the Secretary of Commerce; or
                    ``(C) such transfer would be in the interest of the 
                Office, as determined by the Secretary of Commerce in 
                consultation with the Director.
        Any transfer under this paragraph shall be effective as of the 
        same effective date as referred to in paragraph (1), and shall 
        be made without a break in service.
            ``(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 Efficiency 
        Act, the President shall appoint an individual to serve as the 
        Director until the date on which a Director qualifies under 
        subsection (a). The President shall not make more than one such 
        appointment under this subsection.
            ``(2) Continuation in office of certain officers.--(A) The 
        individual serving as the Assistant Commissioner for Patents on 
        the day before the effective date of the Patent and Trademark 
        Office Efficiency Act may serve as the Commissioner for Patents 
        until the date on which a Commissioner for Patents is appointed 
        under subsection (b).
            ``(B) The individual serving as the Assistant Commissioner 
        for Trademarks on the day before the effective date of the 
        Patent and Trademark Office Efficiency Act may serve as the 
        Commissioner for Trademarks until the date on which a 
        Commissioner for Trademarks is appointed under subsection 
        (b).''.

SEC. 614. PUBLIC ADVISORY COMMITTEES.

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

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

    ``(a) Establishment of Public Advisory Committees.--
            ``(1) Appointment.--The United States Patent and Trademark 
        Office shall have a Patent Public Advisory Committee and a 
        Trademark Public Advisory Committee, each of which shall have 9 
        voting members who shall be appointed by the Secretary of 
        Commerce and serve at the pleasure of the Secretary of 
        Commerce. Members of each Public Advisory Committee shall be 
        appointed for a term of 3 years, except that of the members 
        first appointed, 3 shall be appointed for a term of 1 year, and 
        3 shall be appointed for a term of 2 years. In making 
        appointments to each Committee, the Secretary of Commerce shall 
        consider the risk of loss of competitive advantage in 
        international commerce or other harm to United States companies 
        as a result of such appointments.
            ``(2) Chair.--The Secretary shall designate a chair of each 
        Advisory Committee, whose term as chair shall be for 3 years.
            ``(3) Timing of appointments.--Initial appointments to each 
        Advisory Committee shall be made within 3 months after the 
        effective date of the Patent and Trademark Office Efficiency 
        Act. Vacancies shall be filled within 3 months after they 
        occur.
    ``(b) Basis for Appointments.--Members of each Advisory Committee--
            ``(1) shall be citizens of the United States who shall be 
        chosen so as to represent the interests of diverse users of the 
        Patent and Trademark Office with respect to patents, in the 
        case of the Patent Public Advisory Committee, and with respect 
        to trademarks, in the case of the Trademark Public Advisory 
        Committee;
            ``(2) shall include members who represent small and large 
        entity applicants located in the United States in proportion to 
        the number of applications filed by such members, but in no 
        case shall members who represent small entity patent 
        applicants, including small business concerns, independent 
        inventors, and nonprofit organizations, constitute less than 25 
        percent of the members of the Patent Public Advisory Committee; 
        and
            ``(3) shall include individuals with substantial background 
        and achievement in finance, management, labor relations, 
        science, technology, and office automation.
In addition to the voting members, each Advisory Committee shall 
include a representative of each labor organization recognized by the 
Patent and Trademark Office. Such representatives shall be nonvoting 
members of the Advisory Committee to which they are appointed.
    ``(c) Meetings.--Each Advisory Committee shall meet at the call of 
the chair to consider an agenda set by the Chair.
    ``(d) Duties.--Each Advisory Committee shall--
            ``(1) review the policies, goals, performance, budget, and 
        user fees of the Patent and Trademark Office with respect to 
        patents, in the case of the Patent Public Advisory Committee, 
        and with respect to Trademarks, in the case of the Trademark 
        Public Advisory Committee, and advise the Director on these 
        matters;
            ``(2) within 60 days after the end of each fiscal year--
                    ``(A) prepare an annual report on the matters 
                referred to in paragraph (1);
                    ``(B) transmit the report to the Secretary of 
                Commerce, the President, and the Committees on the 
                Judiciary of the Senate and the House of 
                Representatives; and
                    ``(C) publish the report in the Official Gazette of 
                the Patent and Trademark Office.
    ``(e) Compensation.--Each member of each Advisory Committee shall 
be compensated for each day (including travel time) during which such 
member is attending meetings or conferences of that Advisory Committee 
or otherwise engaged in the business of that Advisory Committee, at the 
rate which is the daily equivalent of the annual rate of basic pay in 
effect for level III of the Executive Schedule under section 5314 of 
title 5. While away from such member's home or regular place of 
business such member shall be allowed travel expenses, including per 
diem in lieu of subsistence, as authorized by section 5703 of title 5.
    ``(f) Access to Information.--Members of each Advisory Committee 
shall be provided access to records and information in the Patent and 
Trademark Office, except for personnel or other privileged information 
and information concerning patent applications required to be kept in 
confidence by section 122.
    ``(g) Applicability of Certain Ethics Laws.--Members of each 
Advisory Committee shall be special Government employees within the 
meaning of section 202 of title 18.
    ``(h) Inapplicability of Federal Advisory Committee Act.--The 
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to each 
Advisory Committee.
    ``(i) Open Meetings.--The meetings of each Advisory Committee shall 
be open to the public, except that each Advisory Committee may by 
majority vote meet in executive session when considering personnel or 
other information.''.

SEC. 615. PATENT AND TRADEMARK OFFICE FUNDING.

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

SEC. 616. 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. 617. 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. 618. BOARD OF PATENT APPEALS AND INTERFERENCES.

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

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

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

SEC. 619. ANNUAL REPORT OF DIRECTOR.

    Section 13 of title 35, United States Code, as redesignated by 
section 618 of this Act, is amended to read as follows:

``Sec. 13. Annual report to Congress

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

SEC. 620. 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. 621. PAY OF DIRECTOR.

    Section 5314 of title 5, United States Code, is amended by striking
            ``Assistant Secretary of Commerce and Commissioner of 
        Patents and Trademarks.''
and inserting
            ``Under Secretary of Commerce and Director of the United 
        States Patent and Trademark Office.''.

            Subtitle B--Effective Date; Technical Amendments

SEC. 631. 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. 632. TECHNICAL AND CONFORMING AMENDMENTS.

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

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

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

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

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

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

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

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

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

            (5) Section 41(h) of title 35, United States Code, is 
        amended by striking ``Commissioner of Patents and Trademarks'' 
        and inserting ``Director''.
            (6) Section 155 of title 35, United States Code, is amended 
        by striking ``Commissioner of Patents and Trademarks'' and 
        inserting ``Director''.
            (7) Section 155A(c) of title 35, United States Code, is 
        amended by striking ``Commissioner of Patents and Trademarks'' 
        and inserting ``Director''.
            (8)(A) Except as provided in subparagraph (B), title 35, 
        United States Code, is amended by striking ``Commissioner'' 
        each place it appears and inserting ``Director''.
            (B) Chapter 17 of title 35, United States Code, is amended 
        by striking ``Commissioner'' each place it appears and 
        inserting ``Commissioner of Patents''.
            (9) Section 41(a)(8)(A) of title 35, United States Code, is 
        amended by striking ``On'' and inserting ``on''.
            (10) Section 157(d) of title 35, United States Code, is 
        amended by striking ``Secretary of Commerce'' and inserting 
        ``Director''.
            (11) Section 181 of title 35, United States Code, is 
        amended in the third paragraph by striking ``Secretary of 
        Commerce under rules prescribed by him'' and inserting 
        ``Director under rules prescribed by the Patent and Trademark 
        Office''.
            (12) Section 188 of title 35, United States Code, is 
        amended by striking ``Secretary of Commerce'' and inserting 
        ``Patent and Trademark Office''.
            (13) Section 202(a) of title 35, United States Code, is 
        amended--
                    (A) by striking ``iv)'' and inserting ``(iv)''; and
                    (B) by striking the second period after 
                ``Department of Energy'' at the end of the first 
                sentence.
    (b) Other Provisions of Law.--
            (1)(A) Section 45 of the Act of July 5, 1946 (commonly 
        referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1127), 
        is amended by striking ``The term `Commissioner'' means the 
        Commissioner of Patents and Trademarks.' and inserting ``The 
        term `Director' means the 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 617 of this Act, 
        is amended by striking ``Commissioner'' each place it appears 
        and inserting ``Director''.
            (2) Section 500(e) of title 5, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (3) Section 5102(c)(23) of title 5, United States Code, is 
        amended to read as follows:
            ``(23) administrative patent judges and designated 
        administrative patent judges in the United States Patent and 
        Trademark Office;''.
            (4) Section 5316 of title 5, United States Code (5 U.S.C. 
        5316) is amended by striking ``Commissioner of Patents, 
        Department of Commerce.'', `Deputy Commissioner of Patents and 
        Trademarks.'', ``Assistant Commissioner for Patents.'', and 
        `Assistant Commissioner for Trademarks.''.
            (5) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 
        638(p)(1)(B)) is amended to read as follows:
                    ``(B) the Director of the United States Patent and 
                Trademark Office; and''.
            (6) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
        1511) is amended by striking ``(d) Patent and Trademark 
        Office;'' and redesignating subsections (a) through (g) as 
        paragraphs (1) through (6), respectively and indenting the 
        paragraphs as so redesignated 2 ems to the right.
            (7) Section 19 of the Tennessee Valley Authority Act of 
        1933 (16 U.S.C. 831r) is amended--
                    (A) by striking ``Patent Office of the United 
                States'' and inserting ``United States Patent and 
                Trademark Office''; and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Director of the United States Patent and 
                Trademark Office''.
            (8) Section 182(b)(2)(A) of the Trade Act of 1974 (19 
        U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner of 
        Patents and Trademarks'' and inserting ``Director of the United 
        States Patent and Trademark Office''.
            (9) Section 302(b)(2)(D) of the Trade Act of 1974 (19 
        U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner of 
        Patents and Trademarks'' and inserting ``Director of the United 
        States Patent and Trademark Office''.
            (10) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
        is amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (11) Sections 505(m) and 512(o) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
        amended by striking ``Patent and Trademark Office of the 
        Department of Commerce'' and inserting ``United States Patent 
        and Trademark Office''.
            (12) Section 702(d) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner of 
        Patents'' and inserting ``Director of the United States Patent 
        and Trademark Office'' and by striking ``Commissioner'' and 
        inserting ``Director''.
            (13) Section 105(e) of the Federal Alcohol Administration 
        Act (27 U.S.C. 205(e)) is amended by striking ``United States 
        Patent Office'' and inserting ``United States Patent and 
        Trademark Office''.
            (14) Section 1295(a)(4) of title 28, United States Code, is 
        amended--
                    (A) in subparagraph (A) by inserting ``United 
                States'' before ``Patent and Trademark''; and
                    (B) in subparagraph (B) by striking ``Commissioner 
                of Patents and Trademarks'' and inserting ``Director of 
                the United States Patent and Trademark Office''.
            (15) Chapter 115 of title 28, United States Code, is 
        amended--
                    (A) in the item relating to section 1744 in the 
                table of sections by striking ``Patent Office'' and 
                inserting ``United States Patent and Trademark 
                Office'';
                    (B) in section 1744--
                            (i) by striking ``Patent Office'' each 
                        place it appears in the text and section 
                        heading and inserting ``United States Patent 
                        and Trademark Office'';
                            (ii) by striking ``Commissioner of 
                        Patents'' and inserting ``Director of the 
                        United States Patent and Trademark Office''; 
                        and
                    (C) by striking ``Commissioner'' and inserting 
                ``Director''.
            (16) Section 1745 of title 28, United States Code, is 
        amended by striking ``United States Patent Office'' and 
        inserting ``United States Patent and Trademark Office''.
            (17) Section 1928 of title 28, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``United 
        States Patent and Trademark Office''.
            (18) Section 151 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2181) is amended in subsections c. and d. by striking 
        ``Commissioner of Patents'' and inserting ``Director of the 
        United States Patent and Trademark Office''.
            (19) Section 152 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2182) is amended by striking ``Commissioner of Patents'' 
        each place it appears and inserting ``Director of the United 
        States Patent and Trademark Office''.
            (20) Section 305 of the National Aeronautics and Space Act 
        of 1958 (42 U.S.C. 2457) is amended--
                    (A) in subsection (c) by striking ``Commissioner of 
                Patents'' and inserting ``Director of the United States 
                Patent and Trademark Office (hereafter in this section 
                referred to as the `Director')''; and
                    (B) by striking ``Commissioner'' each subsequent 
                place it appears and inserting ``Director''.
            (21) Section 12(a) of the Solar Heating and Cooling 
        Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
        striking ``Commissioner of the Patent Office'' and inserting 
        ``Director of the United States Patent and Trademark Office''.
            (22) Section 1111 of title 44, United States Code, is 
        amended by striking ``the Commissioner of Patents,''.
            (23) Section 1114 of title 44, United States Code, is 
        amended by striking ``the Commissioner of Patents,''.
            (24) Section 1123 of title 44, United States Code, is 
        amended by striking ``the Patent Office,''.
            (25) Sections 1337 and 1338 of title 44, United States 
        Code, and the items relating to those sections in the table of 
        contents for chapter 13 of such title, are repealed.
            (26) Section 10(i) of the Trading with the enemy Act (50 
        U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
        Patents'' and inserting ``Director of the United States Patent 
        and Trademark Office''.
            (27) 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. 641. 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. 642. 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. 643. 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. 644. 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. 645. 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. 646. 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. 647. 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. 648. 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, subject to 
the submission of a plan to the Committees on Appropriations of the 
House and Senate in accordance with the procedures set forth in section 
605 of the Departments of Commerce, Justice, and State, the Judiciary, 
and Related Agencies Appropriations Act, 1999, as contained in Public 
Law 105-277.

SEC. 649. 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 VII--MISCELLANEOUS PATENT PROVISIONS

SEC. 701. 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 Commissioner, a 
        provisional application may be treated as an application filed 
        under subsection (a). Subject to section 119(e)(3) of this 
        title, if no such request is made, the provisional application 
        shall be regarded as abandoned 12 months after the filing date 
        of such application and shall not be subject to revival 
        thereafter.''.
    (b) Technical Amendment Relating to Weekends and Holidays.--Section 
119(e) of title 35, United States code, is amended by adding at the end 
the following:
    ``(3) If the day that is 12 months after the filing date of a 
provisional application falls on a Saturday, Sunday, or Federal holiday 
within the District of Columbia, the period of pendency of the 
provisional application shall be extended to the next succeeding 
secular or business day.''.
    (c) Elimination of Copendency Requirement.--Section 119(e)(2) of 
title 35, United States Code, is amended by striking ``and the 
provisional application was pending on the filing date of the 
application for patent under section 111(a) or section 363 of this 
title''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply to any 
provisional application filed on or after June 8, 1995, except that the 
amendments made by subsections (b) and (c) shall have no effect with 
respect to any patent which is the subject of litigation in an action 
commenced before such date of enactment.

SEC. 702. INTERNATIONAL APPLICATIONS.

    Section 119 of title 35, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by inserting ``in a WTO member country or'' 
                after ``patent for the same invention''; and
                    (B) by inserting ``such WTO member country or'' 
                after ``first filed in'';
            (2) in subsection (c), by inserting ``WTO member country 
        or'' after ``application in the same''; and
            (3) by adding at the end the following:
    ``(f) Applications for plant breeder's rights filed in a WTO member 
country (or in a foreign UPOV Contracting Party) shall have the same 
effect for the purpose of the right of priority under subsections (a) 
through (c) of this section as applications for patent, subject to the 
same conditions and requirements of this section as apply to 
applications for patents.
    ``(g) As used in this section--
            ``(1) the term `WTO member country' has the meaning given 
        that term in section 2(10) of the Uruguay Round Agreements Act; 
        and
            ``(2) the term `UPOV Contracting Party' means a member of 
        the International Convention for the Protection of New 
        Varieties of Plants.''.

SEC. 703. CERTAIN LIMITATIONS ON DAMAGES FOR PATENT INFRINGEMENT NOT 
                    APPLICABLE.

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

SEC. 704. 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. 705. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN SUPPORT OF 
                    BIOTECHNOLOGY PATENTS.

    (a) In General.--No later than 6 months after the date of the 
enactment of this Act, the Comptroller General of the United States, in 
consultation with the Director of the United States Patent and 
Trademark Office, shall conduct a study and submit a report to the 
Congress on the potential risks to the United States biotechnology 
industry relating to biological deposits in support of biotechnology 
patents.
    (b) Contents.--The study conducted under this section shall 
include--
            (1) an examination of the risk of export and the risk of 
        transfers to third parties of biological deposits, and the 
        risks posed by the change to 18-month publication requirements 
        made by this Act;
            (2) an analysis of comparative legal and regulatory 
        regimes; and
            (3) any related recommendations.
    (c) Consideration of Report.--In drafting regulations affecting 
biological deposits (including any modification of title 37, Code of 
Federal Regulations, section 1.801 et seq.), the Patent and Trademark 
Office shall consider the recommendations of the study conducted under 
this section.

SEC. 706. PRIOR INVENTION.

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

SEC. 707. PRIOR ART EXCLUSION FOR CERTAIN COMMONLY ASSIGNED PATENTS.

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

                          Purpose and Summary

    The ``American Inventors Protection Act,'' H.R. 1907, will 
help to solve current problems and inefficiencies in our patent 
system. It guarantees 17 years of patent protection to diligent 
applicants; makes technology which is accessible to citizens of 
other countries available to Americans as well; allows earlier 
inventors limited relief when they cannot endure the 
prohibitively high costs of patenting every process or method 
that contributes to the development of an ``end'' product; 
reduces patent litigation by improving the reexamination 
process; protects inventors from scam promoters; and 
streamlines operations at the Patent and Trademark Office 
(PTO).

                Background and Need for the Legislation

                       105th Congress: Background

    Generally. The United States is by far the world's largest 
producer of intellectual property, which 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. Patents issued in new fields of technology do not 
always benefit from the search of the best prior art. The 
existing patent reexamination system is an ineffective means 
for bringing relevant prior art unavailable to examiners during 
their search to the attention of the PTO due to the ex parte 
nature of the proceeding. Without even a minimal level of 
participation of third parties, many patents are now properly 
issued in areas of technology previously thought to be 
unpatentable, such as business methods, thereby forcing 
inventors to bear unreasonable costs and infringement of their 
inventions by having to apply for a patent on every process or 
method employed by them--even if unrelated to an end product. 
Some applicants have perfected ways to abuse the system through 
dilatory prosecution that allows them to essentially extort 
millions of dollars from inventors which independently 
implemented and commercialized the inventions in question. 
Another key problem is that the PTO is unable to run at peak 
efficiency due to excessive regulation.
    Since many other nations have learned from our success, 
America no longer stands alone in its commitment to a strong 
system of patent protection for independent inventors, small 
businesses, and industries. Consequently, it is more important 
now than ever that Congress adopt certain reforms that will 
secure America's status as the world leader in the production 
and exportation of intellectual property.
    H.R. 400/S.507. In light of this background, Chairman Coble 
introduced an omnibus patent and trademark bill during the 
105th Congress to improve our current system. This legislation, 
H.R. 400, contained several titles addressing major problems 
which threaten our patent system. With one exception (that 
portion of the legislation containing miscellaneous 
provisions), each title consisted of an independent bill that 
was the subject of comprehensive hearings in the Subcommittee 
on Courts and Intellectual Property over two Congresses. Each 
of these titles also reflected 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 PTO.
    The House passed H.R. 400 in amended form on April 24, 
1997. The Senate Committee on the Judiciary reported a 
substitute version of the bill--S. 507--on March 23, 1998, but 
the full Senate took no further action on the legislation.
    Both H.R. 400 and S. 507 contained several titles that were 
nearly identical or at least similar in content, but there were 
major differences as well, largely owing to amendments adopted 
during floor consideration of H.R. 400.
    More specifically, Title I of both bills would have 
transformed the PTO into a government corporation; however, 
H.R. 400 created an intellectual property policy office in the 
Department of Commerce funded by user fees. There was no policy 
office equivalent in S. 507.
    Title II of both bills contained provisions which required 
early publication of patent applications 18 months after filing 
(under current law, publication only occurs upon issuance of 
the patent). Pursuant to an amendment offered by Representative 
Kaptur, H.R. 400 generally exempted small businesses, 
independent inventors, and universities from the publication 
requirement unless they filed a counterpart application in a 
foreign country. S. 507 expanded this exemption to any U.S. 
patent filed only in the United States.
    Both bills contained essentially the same patent term 
restoration provisions, but they were set forth in different 
sections: Title III of S. 507, and Title II of H.R. 400. 
Extensions of up to 10 years would be available in the case of 
successful appeals and unusual administrative delays. If delays 
were a function of patent interferences or government secrecy 
orders, a patent could be extended for the period of delay 
without any cap under either version.
    Similarly, both H.R. 400 and S. 507 contained highly 
similar provisions pertaining to prior domestic commercial user 
rights. Unlike earlier prior user rights legislation, H.R. 400 
expanded the scope of the right to include prior domestic 
``research'' users, and this expansion was incorporated into S. 
507. These changes were set forth in Title IV of S. 507 and 
Title III of H.R. 400.
    Title IV of H.R. 400 established new regulations governing 
invention promotion services, an increasing source of consumer 
fraud within the patent world. There was no counterpart in S. 
507.
    Title V of S. 507 amended current law on the matter of 
patent reexamination in an effort to remove some of the 
disincentives to test patent validity in an inexpensive 
administrative proceeding in the PTO rather than in expensive 
U.S. district court proceedings. The House equivalent was 
deleted from H.R. 400 by the Kaptur amendment.
    Finally, Title VI of S. 507 and Title V of H.R. 400 share 
some of the same miscellaneous patent provisions, excepting a 
section in the House bill that permitted applicants to pay 
extra fees instead of filing divisional applications and 
another requiring the PTO to publish procurement contracts not 
found in the Senate measure. In turn, S. 507 had provisions on 
electronic patent information in rural States and a GAO study 
of biological deposits which were not in H.R. 400.

                       106th Congress: Background

    Generally. At the beginning of the 106th Congress, Chairman 
Coble worked with a coalition of members and groups, led by 
Representative Rohrabacher, to include in H.R. 1907 the 
amendments offered on the floor of the House in the 105th 
Congress and other responses to concerns raised by independent 
inventors. This good-faith collaboration has resulted in the 
reported version of H.R. 1907.
    Major concerns. First-time inventors are frequently cheated 
out of hundreds of millions of dollars annually by unscrupulous 
invention promoters. American jobs are at risk by late issuing 
patents and patents issued on inventions previously considered 
to be unpatentable subject matter. Our foreign competitors, who 
obtain nearly 50% of the U.S. patents issued each year, protect 
their companies and workers from the disruptions caused by such 
late-issuing patents.
    Notwithstanding how diligent a patent applicant might be, 
there are circumstances where such an applicant can nonetheless 
lose years of effective patent term due to delays in the PTO 
and other circumstances beyond her control. While our foreign 
competitors are able to see the latest U.S. patent technology 
in their native languages barely six months after a U.S. 
inventor files a patent application in their country, the 
reverse is not true. U.S. researchers and investors are denied 
the opportunity to learn what their foreign competitors are 
working on until a U.S. patent issues. This causes duplicative 
research and wasted developmental expenditures, putting U.S. 
inventors at a serious disadvantage vis-a-vis their foreign 
counterparts and competitors.
    An individual or company that wishes to test the validity 
of an issued U.S. patent that is believed to be too broad in 
scope has no effective alternative to simply waiting and 
challenging the patent in an expensive district court 
proceeding. Further, an independent inventor, when challenged 
on the validity of her patent, is potentially subject to suit 
anywhere in the country at great litigious expense. The ability 
of the PTO to recruit and train highly qualified engineers to 
become patent examiners and to give them the resources they 
need to avoid issuing patents on such questionable inventions 
is hampered by the maze of red tape in which the Office must 
function, a situation frequently worsened by excessive 
regulation.
    H.R. 1907 will alleviate these concerns and improve the 
American intellectual property system.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held a hearing on the Committee Print of the 
``American Inventors Protection Act'' (later introduced as H.R. 
1907) on March 25, 1999. Testimony was received from seven 
witnesses representing seven organizations, along with two 
Members of Congress.

                        Committee Consideration

    On May 20, 1999, the Subcommittee on Courts and 
Intellectual Property met in open session and ordered reported 
the Committee Print on the ``American Inventors Protection 
Act'' by voice vote, a quorum being present. On May 26, 1999, 
the Committee met in open session and ordered reported 
favorably the bill H.R. 1907 with amendment by voice vote, a 
quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(1)(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 Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(1)(3)(D) of rule XI of the rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(1)(3)(B) of rule XI of the Rules of the House of 
Representatives 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(1)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 1907, 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, July 21, 1999.
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. 1907, the American 
Inventors Protection Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for federal costs), who can be reached at 226-2860, and John 
Harris (for the private-sector impact), who can be reached at 
226-2649.
            Sincerely,

                                            Dan L. Crippen, Director.  
    Enclosure

H.R. 1907--American Inventors Protection Act of 1999

                                SUMMARY

    H.R. 1907 would establish the United States Patent and 
Trademark Office (PTO) as an independent agency within the 
Department of Commerce and make a number of other changes in 
laws governing the issuance of patents and related procedures.
    CBO estimates that implementing H.R. 1907 would result in 
net discretionary spending by the PTO totaling about $37 
million over the 2000-2004 period, assuming appropriation of 
the authorized amounts. Enacting H.R. 1907 would increase 
direct spending and receipts, but CBO estimates that any such 
effects would be less than $500,000 in any year. Because the 
bill would affect direct spending and receipts, pay-as-you-go 
procedures would apply.
    H.R. 1907 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would not impose 
costs on state, local, or tribal governments. H.R. 1907 would 
create new private-sector mandates by placing requirements on 
companies that market inventions and by creating new fees for 
PTO services. New PTO fees are private-sector mandates because 
the federal government controls the patent system and no 
reasonable alternatives to the patent system exist. CBO 
estimates that the total costs of the private-sector mandates 
in H.R. 1907 would be below the statutory threshold established 
in UMRA ($100 million in 1996, adjusted for inflation).

               DESCRIPTION OF THE BILL'S MAJOR PROVISIONS

    Title I would require invention marketing companies that 
evaluate the market potential of inventions to include 
standardized disclosures in contracts between the companies and 
the inventors. It would establish civil remedies for inventors 
who have been injured by violations of this title. Finally, 
title I would establish a new federal crime for providing false 
or misleading information to inventors and would impose fines 
of up to $10,000 for each offense.
    Title II would allow an inventor who has used an invention 
at least one year before it is patented by another party to 
continue using the invention without infringing on the new 
patent. This provision (also known as the ``first inventor 
defense'') would protect companies that choose to protect their 
inventions through trade secrets laws instead of patent 
protection and companies in sectors that until recently were 
denied patents.
    Title III would extend the term of a patent for up to 10 
years for administrative delays by PTO or by successful 
appellate reviews. In addition, the title would provide 
extensions for every day beyond three years that PTO took to 
issue a patent. Finally, this title would provide unlimited 
extensions for delays experienced as a result of interference 
and secrecy orders.
    Title IV 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. Applications that 
are only for domestic use, subject to secrecy orders, or no 
longer pending would not be published. Under this title, 
following the grant of a patent, an inventor would be entitled 
to a reasonable royalty from anyone who used, sold, or imported 
the invention during the period from the time of publication 
until the patent was granted. Finally, title IV would authorize 
the PTO to raise existing fees or establish a new fee to offset 
the cost of publishing patent applications.Title V would allow 
third parties to request that PTO reexamine other pertinent 
patents and printed materials that the examiner might not have 
uncovered during the course of the original patent examination. 
The title also would give the requestor the opportunity to file 
comments on each response by the patent owner. It would allow 
either the patent holder or the requestor to appeal the 
decision of the patent examiner to the Board of Patent Appeals 
and Interference (BPAI) and to appeal the decision of the BPAI 
to the Court of Appeals for the Federal Circuit. Title V 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.Title VI would make the PTO an independent agency 
within the Department of Commerce. It would retain the same 
name and would be subject to the policy guidance of the 
Department of Commerce but would exercise more control 
regarding its operations and administration. This title also 
would establish an advisory committee for patents and one for 
trademarks.Title VII would change the procedure to apply for 
patents so as to effectively eliminate the requirement to pay 
fees for those applications that are later abandoned. H.R. 1907 
also would require the PTO and the General Accounting Office 
(GAO) to complete a number of studies for the Congress. In 
addition, H.R. 1907 would make a number of other changes to 
patent law that would not significantly affect the federal 
budget.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 1907 is shown in 
Table 1. The costs of this legislation fall within budget 
function 370 (commerce and housing credit).

                                Table 1. Estimated Budgetary Impact of H.R. 1907
                                    [By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              1999     2000     2001     2002     2003     2004
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Changes in PTO Fees
  Estimated Authorization Level \1\.......................        0        3      -25      -27      -28      -30
  Estimated Outlays.......................................        0        3      -25      -27      -28      -30
Changes in PTO Spending
  Estimated Authorization Level...........................        0       13       38       37       38       40
  Estimated Outlays.......................................        0        8       28       34       36       39
Changes in Net PTO Spending
  Estimated Authorization Level \1\.......................        0       16       13       10       10       10
  Estimated Outlays.......................................        0       11        3        7        8        8
----------------------------------------------------------------------------------------------------------------

                           BASIS OF ESTIMATE

    For the purposes of this estimate, CBO assumes that H.R. 
1907 will be enacted by the end of fiscal year 1999. Estimated 
outlays are based on historical spending patterns for the PTO 
and information provided by the agency.
Spending Subject to Appropriation
    In general, most or all of PTO's spending is offset by the 
fees that it collects. In some years (for example, 1998 and 
1999), the agency's cash collections have exceeded its 
expenditures. CBO estimates that net PTO spending under H.R. 
1907 would be $37 million higher than under current law over 
the 2000-2004 period--additional spending of $145 million less 
additional collections of $108 million, assuming the necessary 
appropriation action.
    Under current law, the PTO cannot collect or spend any user 
fees without prior approval in an appropriation act. Although 
H.R. 1907 would establish the PTO as a government corporation, 
the agency would still need to receive such approval in 
appropriation acts to collect or spend any of the user fees. 
CBO assumes that over time the PTO would be authorized to spend 
all of the fees that the agency collects.
    Changes in PTO Fees. Table 2 shows the estimated fee 
collections under H.R. 1907 as compared to projected fee 
collections under current law. H.R. 1907 would require the PTO 
to collect some additional user fees, which CBO estimates would 
total $108 million over five years.

                                           Table 2. Estimated PTO Fees
                                [Outlays in millions of dollars, by fiscal Year]
----------------------------------------------------------------------------------------------------------------
                                                        1999      2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
Fees Under Current Law..............................      -912      -984    -1,053    -1,127    -1,206    -1,290
Proposed Changes \1\................................         0         3       -25       -27       -28       -30
Fees Under H.R. 1097................................      -912      -981    -1,078    -1,154    -1,234    -1,320
----------------------------------------------------------------------------------------------------------------
Note: Fee collections are recorded as negative outlays.
\1\ Would require appropriation action.

    Publication Fees. H.R. 1907 would authorize the PTO to 
raise existing fees or establish a new fee to offset the cost 
of publishing certain patent applications. (The agency has 
authority under current law to charge fees to offset costs of 
processing applications.) Because the PTO would not be allowed 
to collect or spend the additional fees without approval in 
appropriation acts, any collections would reduce discretionary 
spending. Based on information from the PTO, CBO estimates that 
the PTO would collect an additional $89 million in publication 
fees over the 2000-2004 period. The PTO would incur some 
initial costs that would not be recovered by fees, and CBO 
expects a lag between the time the PTO collects and spends the 
fees. As a result, CBO estimates that the agency would spend 
about $81 million on publications over the same period.
    Reexamination Fee. H.R. 1907 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. 1907 
would nearly double the number of reexamination requests, 
resulting in additional fee collections of about $36 million 
over the 2000-2004 period. Because CBO expects a lag between 
the time the PTO collects and spends the fees, CBO estimates 
that the bill would increase PTO's spending on reexaminations 
by about $31 million over the 2000-2004 period.
    Penalty Fee. The bill also 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.
    Provisional Application Fee. The bill would effectively 
waive the fee for provisional applications that later are 
abandoned. Based on information from the PTO, CBO estimates 
enacting H.R. 1907 would cause PTO to forgo about $17 million 
over the 2000-2004 period.
    Changes in PTO Spending. CBO estimates that the PTO would 
spend $146 million more over the 2000-2004 period than under 
current law. Based on information from the agency, CBO 
estimates that extending the term of delayed patents would 
increase PTO's spending for administrative costs by about $33 
million over the 2000-2004 period, without having any 
corresponding effect on fee collections. Most of the remaining 
increase in spending under H.R. 1907--an estimated $112 million 
over the 2000-2004 period, primarily for publishing 
applications and conducting reexamination proceedings--would be 
more than offset by increased fee collections over that same 
period.
    Establishing the Patent and Trademark Office as an 
independent agency within the Department of Commerce 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.
    Other Discretionary Costs. CBO estimates that the study 
required by the bill would cost GAO less than $500,000 in 
fiscal year 2004. Because H.R. 1907 would establish a new 
federal crime, CBO anticipates that the U.S. government would 
be able to pursue cases that it otherwise would be unable to 
prosecute. Based on information from DOJ, however, we do not 
expect the government to pursue many additional cases. Thus, 
CBO estimates that implementing the bill would not have a 
significant impact on the cost of federal law enforcement 
activity. Implementing the bill also could increase costs to 
the federal courts if more civil suits are filed by private 
parties, but we do not expect many additional cases.
Direct Spending
    Criminal Fines. Enacting H.R. 1907 could increase 
governmental receipts (i.e., revenues) from fines, but we 
estimate that any such increase would be less than $500,000 
annually. Criminal fines are deposited as revenues in the Crime 
Victims Fund and spent in subsequent years. Thus, any change in 
direct spending from the fund would match the increase in 
revenues (with a lag of one or more years).
    Royalty Payments. Enacting H.R. 1907 could increase 
payments of royalties for use of an invention between the time 
the application was published and the patent was granted. 
However, CBO has no basis for estimating the timing or 
magnitude of such payments.

                      PAY-AS-YOU-GO CONSIDERATIONS

    The Balanced Budget and Emergency Deficit Control Act sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts. CBO estimates that enacting H.R. 1907 
would increase receipts from criminal fines and spending of 
those receipts by less than $500,000 each year.

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

    H.R. 1907 contains no intergovernmental mandates as defined 
in UMRA and would not impose costs on state, local, or tribal 
governments.

                 ESTIMATED IMPACT ON THE PRIVATE SECTOR

    H.R. 1907 would create new private-sector mandates by 
placing requirements on invention marketing companies, by 
increasing existing Patent and Trademark Office fees, and by 
creating some new fees for PTO services. PTO fee increases and 
new fees are private-sector mandates because the federal 
government controls the patent system and no reasonable 
alternatives to the patent system exist. CBO estimates that the 
total costs of the private-sector mandates in H.R. 1907 would 
be below the threshold established in UMRA ($100 million in 
1996, adjusted for inflation).
    Title I of H.R. 1907 would protect inventors by regulating 
their contractual agreements with invention marketers. Through 
an extensive cover notice and various provisions within each 
contract, marketers of inventions would be required to identify 
their services, fees, business history, and the contractual and 
legal rights of inventors. They would also be required to give 
customers a written statement similar to the cover notice 
before signing contracts, and to make quarterly progress 
reports once contracts have been signed. Because these 
requirements affect content of contracts rather than invention 
marketers' day to day operations and because of the small size 
of the invention marketing industry, CBO expects that the total 
costs of the this mandate to the private sector would be small.
    H.R. 1907 contains provisions that would authorize new fees 
and increase existing ones. The bill would allow the PTO to 
increase its fee for the publication of patent applications. 
Title V would create a new fee for delayed responses to PTO 
inquiries by patent owners in reexamination proceedings. CBO 
estimates that, in fiscal years 2001 through 2004, the PTO 
would collect an additional $20 million dollars per year in 
publication fees from patent applications. Collections from the 
delayed response fee would not be significant.

                         ESTIMATE PREPARED BY:

Federal Costs: Mark Hadley (226-2860)
Impact on the Private Sector: John Harris (226-2649)

                         ESTIMATE APPROVED BY:

Robert A. Sunshine
Deputy Assistant Director for Budget Analysis

                   Constitutional Authority Statement

    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

    Sec. 1. Short Title. Section 1 sets forth the short title 
of H.R. 1907: the ``American Inventors Protection Act of 
1999.''
    Sec. 2. Table of Contents. Section 2 enumerates the table 
of contents of H.R. 1907.

                       Title I--Inventors' Rights

    Generally. Title I would create a new chapter five in title 
35 of the United States Code, designed to curb the deceptive 
practices of certain invention promotion companies. Many of 
these companies advertise on television and in magazines that 
inventors may call a toll-free number for assistance in 
marketing their inventions. They are sent an invention 
evaluation form, which they are asked to complete to allow the 
promoter to provide expert analysis of the market potential of 
their inventions. The inventors return the form with 
descriptions of the inventions, which become the basis for 
contacts by salespeople at the promotion companies. The next 
step is usually a ``professional''-appearing product research 
report which contains nothing more than boilerplate information 
stating that the invention has outstanding market potential and 
fills an important need in the field. The promotion companies 
attempt to convince the inventor to buy their marketing 
services, normally on a sliding scale in which the promoter 
will ask for a front-end payment of up to $10,000 and a 
percentage of resulting profits, or a reduced front-end payment 
of $6,000 or $8,000 with commensurately larger royalties on 
profits. Once paid under such a scenario, a promoter will 
typically and only forward information to a list of companies 
that never respond.
    This title addresses these problems by requiring: (1) that 
contracts between marketing companies and inventors contain 
standardized disclosures, including the number of inventions 
evaluated by the promoter during the previous five years, the 
type of evaluation received, the number that received a profit, 
and contractual terms prescribing payment conditions and 
termination rights; and (2) that promotion companies submit 
quarterly reports to their client inventors, describing their 
efforts on behalf of the inventors.
    Remedies against companies for failing to comply under new 
chapter five include private civil actions for the greater of 
actual damages or statutory damages in the amount of $5,000, 
the possibility of treble damages, and costs and attorneys' 
fees. Criminal penalties of up to $10,000 are also provided.
    Sec. 101. Short title. Title I may be cited as the `` 
Inventors' Rights Act.''
    Sec. 102. Invention promotion services. This section adds a 
new chapter 5 to Part I of title 35, United States Code, 
consisting of Sec. Sec. 51 through 59. Legitimate invention 
assistance and development organizations can be of great 
assistance to novice inventors by providing information on how 
to protect an invention, how to develop it, how to obtain 
financing to manufacture it, or how to license or sell the 
invention. While many invention developers are legitimate, the 
unscrupulous ones take advantage of untutored inventors, asking 
for large sums of money up front for which they provide no real 
service in return. This new section provides a much needed tool 
for independent inventors to use if they are a victim of the 
predatory practices of an unscrupulous invention promoter.
    New Sec. 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. Paragraph (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 Sec. 170(b)(1)(A) of the Internal Revenue 
Code of 1986; or any person registered and in good standing 
with the PTO who is acting within the scope of his or her 
registration to practice before the agency.
    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 PTO is exempt from 
regulation when acting within the scope of that person's 
registration to practice before the agency. However, the 
Committee recognizes that registered patent attorneys and 
agents may provide services which fall outside the scope of 
their registration to practice before the PTO and within the 
definition of invention development services. Whenever a 
registered patent attorney or agent engages in conduct 
described in Sec.  51(4)(B) and (C), she will be subject to the 
provisions of this act.
    Section 51(4) defines the term ``invention promotion 
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 Sec. 52(a) requires that contracts for invention 
promotion services be in writing and that a copy of the signed 
contract be provided to the customer at the time she enters 
into the contract. In the event the contract is entered into on 
behalf of a third party, that third party must be identified 
and will be treated as a customer under the provisions of the 
chapter that apply.
    Section 52(b) requires invention promoters to provide to 
customers, at the time a contract is entered into, a written 
document stating whether the promoter customarily seeks more 
than one contract in connection with an invention and seeks to 
perform services in connection with an invention in one or more 
phases, using one or more contracts governing the performance 
at each phase. In addition, invention promoters must provide 
the customer with a copy of the written contract together with 
a summary, in writing, describing the promoter'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 promoter.
    Section 52(c) provides the customer with the right to 
terminate a contract for invention promotion services by 
sending a letter to the invention promoter 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 
promoter execute the invention development contract. It is the 
intention of the Congress to provide the customer a ``cooling 
off'' period during 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 promoter 
on the date received, even though the date(s) in such 
instruments differ from the date of receipt.
    New Sec. 53(a) of title 35 requires that every contract for 
invention promotion services include a cover sheet with a 
notice set forth 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 promoter and stating the number of those evaluated 
positively and the number negatively; advising the customer 
that assigning rights to the invention promoter may permit 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 
promoter 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 promoter; informing the customer 
of the invention promotion companies with which the invention 
promoter's officer have been affiliated in the previous 10 
years to enable the customer to evaluate 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 if an inventor proceeds without the advice 
of an attorney registered by the PTO.
    Section 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 promoter. 
This section also prohibits inclusion of other matter.
    Section 53(c) allows the invention promoter to delete from 
the total number of customers who have contracted with the 
promoter (as required to be given in Sec. 53(a)) those 
customers who have purchased trade show services, research, 
advertising, or other non-marketing services from the invention 
promoter. The invention promoter also need not include those 
who have defaulted in their payments under invention promotion 
contracts.
    Section 54 of title 35 requires the invention promoter to 
provide each customer who has contracted for invention 
promotion 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 promoter on behalf of the customer during the 
report period and the services to be performed, giving the 
names of the persons who the invention promoter knows 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. Complete and 
accurate summaries 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 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 Sec. 55(a) requires that all contracts for invention 
promotion services include, in bold-face type of not less than 
12-point size: the terms and conditions of payment and the 
contract termination rights required by Sec. 52; a statement 
making it clear that the customer may avoid entering into the 
contract by not making the initial payment to the invention 
promoter; a complete, clear, and concise description of the 
specific acts and services that the invention promoter is to 
perform for customer; a clear statement indicating whether the 
invention promoter 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 promoter 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 promoter 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 promoter or anyone on behalf of the invention 
promoter, 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 promotion services and an unequivocal statement 
acknowledging that the invention promoter is required to 
maintain all such records and correspondence for the customer 
for at least two years following the expiration of the 
invention promotion services contract; and a statement of the 
time schedule for performance of the invention promotion 
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 promotion services.
    Section 55(b) makes it clear that, if the invention 
promoter has discretion regarding the nature of the specific 
acts and services the invention promoter is to perform for the 
customer, as those acts and services are described in the 
contract, the invention promoter will be deemed to be a 
fiduciary with all corresponding obligations with respect to 
the customer.
    Section 55(c) requires that, within seven days of written 
notice to the invention promoter or the custodian of records 
and correspondence identified in the contract for invention 
promotion services, such custodian must make available to the 
customer or her representative for review and copying all 
records and correspondence related to the invention promotion 
contract. The review and copying shall take place on the 
invention promoter's premises during normal business hours and 
any fees for copying shall be reasonable.
    Section 56(a) authorizes the customer to declare void any 
contract for invention promotion services that does not conform 
to the requirements of chapter 5 of Part I of title 35, United 
States Code. In addition, this section authorizes the customer 
to void any contract entered into in reliance upon any material 
false, fraudulent, or misleading information, representation, 
notice, or advertisement of the invention promoter. The 
contract shall also be voidable where it provides for obtaining 
a utility, design, or plant patent unless the contract 
specifies that the filing will be done by an agent or attorney 
registered to practice before the PTO. Finally, Sec. 56(a) 
makes void and unenforceable any waiver by a customer of any 
provision required by chapter 5.
    Section 56(b) establishes a civil cause of action against 
any invention promoter who injures a customer through a 
violation of any of the obligations of chapter 5 or through any 
material false or fraudulent statement, representation, or 
omission of material fact by the invention promoter, or any 
person acting on behalf of the invention promoter, or through 
failure of the invention promoter to make all the disclosures 
required under the chapter. In such a civil action, the 
customer may recover from the invention promoter, or any 
officers, directors, or partners of such promoter, reasonable 
costs, attorneys' fees, and the greater of $5,000 or the amount 
of actual damages sustained by the customer. Subsection (b)(2) 
authorizes the court to increase damages to an amount not to 
exceed three times the amount awarded as statutory or actual 
damages in egregious cases which will be dependent on whether 
regulatory sanctions or other corrective action has been taken 
as a result of previous complaints against the invention 
promoter.
    Section 56(c) establishes a rebuttable presumption of 
injury in the event of any substantial violation of chapter 5 
by an invention promoter or of execution of an invention 
promotion services contract by a customer in reliance on any 
false or fraudulent statements, representations, or material 
omissions by the invention promoter or any person acting on 
behalf of the invention promoter.
    Section 57(a) requires the Director of the PTO to retain 
all complaints submitted to the PTO regarding invention 
promoters, together with any responses by invention promoters 
to those complaints, and to make such complaints and responses 
available to the public.
    Section 57(b) authorizes the Director to request from 
Federal and State agencies copies of any complaints relating to 
invention promotion services they have received and to include 
those complaints in the records maintained by the PTO regarding 
invention promotion services.
    Section 58 provides that knowingly 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.
    Sec. 103. Effective date. This section provides that the 
effective date of chapter 5 will be 60 days after the date of 
enactment of this Act.

                    Title II--First Inventor Defense

    Generally. Title II strikes an equitable balance between 
the interests of U.S.inventors who have invented and 
commercialized business methods and processes, many of which 
until recently were not patentable, and later U.S. or foreign 
inventors who have patented the processes. The title creates an 
earlier-inventor defense for inventors who have reduced an 
invention to practice in the U.S. at least one year before the 
patent filing date of the later inventor and commercially used 
the invention in the U.S. before the filing date. A party 
entitled to the defense must not have derived the invention 
from the patent owner. The bill protects the patent owner by 
providing that a party who establishes an earlier-inventor 
defense is not an earlier inventor for purposes of invalidating 
the patent.
    The title clarifies the interface between two key branches 
of intellectual property law--patents and trade secrets. Patent 
law serves the public interest by encouraging innovation and 
investment in new technology, and may be thought of as 
providing a right to exclude other parties from an invention in 
return for the inventor making a public disclosure of the 
invention. Trade secret law, however, also serves the public 
interest by protecting investments in new technology. Trade 
secrets have taken on a new importance with an increase in the 
ability to patent all business methods and processes. It would 
be administratively and economically impossible to expect any 
inventor to apply for a patent on all business methods and 
processes now deemed patentable. In order to protect inventors 
and to encourage proper disclosure, this title is limited to 
business methods and processes only.
    The earlier-inventor defense is important to many small and 
large businesses, including financial services and software 
companies--any business that relies on innovative business 
processes and methods. The defense does not apply to end 
products. The 1998 opinion by the U.S. Court of Appeals for the 
Federal Circuit in State Street Bank and Trust Co. v. Signature 
Financial Group,\1\ which held that methods of doing business 
are patentable, has added to the urgency of the issue. 
Thousands of ``back office'' processes are now being patented. 
In the past, many businesses that developed and used such 
processes thought secrecy was the only protection available. 
Under established law, these pre-existing processes do not now 
qualify for patent protection because they have been in 
commercial use.
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    \1\____F.3d____ (Fed. Cir. 1998) [hereinafter State Street].
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    Sec. 201. Short title. Title II may be cited as the ``First 
to Invent Act.''
    Sec. 202. Defense to patent infringement based on earlier 
inventor. In establishing the defense, subsection (a) of 
Sec. 202 creates a new Sec. 273 of the Patent Act, which in 
subsection (a) sets forth the following definitions:

        (1) Lcommercially used and commercial use mean use of a 
        process or method in the United States in commerce or 
        the use of a process or method in the design, testing, 
        or production in the United States of a product or 
        service;

        (2) Lcommercial use as applied to a nonprofit research 
        laboratory and nonprofit entities such as a university, 
        research center, or hospital intended to benefit the 
        public means that such entities may assert the defense 
        only based on continued use by and in the entities 
        themselves, but that the defense is inapplicable to 
        subsequent commercialization or use outside the 
        entities;

        (3) Lprocess or method means processes as defined in 
        Sec. 100 (b) of the Patent Act and includes inventions 
        that were or could have been claimed in a patent in the 
        form of a process; and

        (4) Leffective filing date means the earlier of the 
        actual filing date of the application for the patent or 
        the filing date of any earlier US, foreign, or 
        international application to which the subject matter 
        at issue is entitled under the Patent Act.

    To be ``commercially used'' or in ``commercial use'' for 
purposes of subsection (a), the use must be in connection with 
an actual arm's-length sale or other arm's-length commercial 
transfer of a product or service. The process or method that is 
the subject matter of the defense may be an internal business 
process or method, such as internal management software or a 
preliminary or intermediate manufacturing procedure, which 
contributes to the effectiveness of the business that is 
producing the product or service transferred in an arm's-length 
commercial transfer. Commercial use does not require the 
subject matter at issue to be accessible to or otherwise known 
to the public.
    Subject matter that must undergo a premarketing regulatory 
review period during which safety or efficacy is established 
before commercial marketing or use is considered to be 
commercially used and in commercial use during the regulatory 
review period.
    An invention is considered to be a process or method if it 
is used in connection with the production of a useful end-
product or -service and is or could have been claimed in the 
form of a business process or method in a patent. A software-
related invention, for example, that was claimed by the patent 
draftsman as a programmed machine when the same invention could 
have been protected with process or method patent claims is a 
process or method for purposes of Sec. 273.
    Subsection (b)(1) of proposed Sec. 273 establishes a 
general defense against infringement under Sec. 271 of the 
Patent Act. Specifically, a person will not be held liable with 
respect to any subject matter that would otherwise infringe one 
or more claims to a business process or method in another 
party's patent if the person:

        (1) Lacting in good faith, actually reduced the subject 
        matter to practice at least one year before the 
        effective filing date of the patent; and

        (2) Lcommercially used the subject matter before the 
        effective filing date of the patent.

    Although not confined to the financial services industry, 
the first inventor defense is of particular significance to 
that industry, and the industry serves as a prime illustration 
of the need for the defense. The State Street decision has 
brought that industry abruptly to the forefront of cutting-edge 
patent law protection for subject matter that previously had 
been thought to be unpatentable. The State Street court came 
down on the side of a very broad scope of subject matter that 
qualifies for patent protection. State Street clarifies that 
the characterization of subject matter as a method of doing 
business does not render it unpatentable. One consequence is 
that the ``back office'' processes and methods that are 
fundamental to the delivery of many financial services, but 
transparent to the end user of the services, are now fair game 
for patent protection.
    An example suffices to show the nature of the problem and 
the fairness in the solution proposed by Sec. 273. From the end 
user's perspective, a typical credit card transaction appears 
simple and straightforward. A cardholder presents her card as 
payment for goods or services, signs a charge slip, and goes on 
her way. But that seemingly effortless transaction most often 
requires the services of a number of third parties to interact 
between the cardholder and the card-issuing financial 
institution, both in real time and thereafter. When the card is 
first presented, a third-party credit card processor, in 
conjunction with communications companies, may provide real 
time authorization services to the card issuer to verify that 
the card is valid and not being offered for purchases beyond 
its pre-approved credit limit. The processing of the actual 
transaction may involve additional third parties such as 
acquiring banks and credit card interchange networks that pass 
the transaction along until it eventually reaches the card 
issuer who closes the loop by obtaining payment form the 
cardholder. Thus, a ``simple'' credit card transaction in most 
cases would be impossible without the sale or transfer of 
services between many third parties who utilize their own 
proprietary systems to process the transaction and interact 
with each other to pass the transaction along. Under proposed 
Sec. 273, each of these third parties would be free to continue 
their bona fide commercial operations without interference from 
a subsequent inventor who obtains a patent claiming common 
subject matter as her invention.
    Accordingly, an ``arm's length commercial transfer of a 
product or service'' under proposed Sec. 273 includes the use 
of an invention for a process or method, the subject matter of 
which may be directed to an information or data processing 
system providing a financial service. These financial services 
may embody business methods or processes incorporated into any 
number of systems including, but not limited to, trading, 
investment and liquidity management, securities custody and 
reporting, balance reporting, funds transfer, ACH, ATM 
processing, on-line banking, check processing, and compliance 
and risk management. In each of these systems, multiple 
processing and method steps are acting upon a customer's data 
without its knowledge.
    In the past, many of the financial institutions that 
developed and used such systems did so in a climate where trade 
secret protection was believed to be the only practical legal 
protection available. Under established law, these pre-existing 
systems do not now qualify for patent protection because they 
have been in commercial use for some time, albeit in secret. 
Such secret or ``concealed''use may not prevent another, later 
inventor from obtaining patent protection that would bar the 
earlier developer and user from continuing to use the business 
processes and methods that are her earlier inventions and that 
may have been in use for years or even decades. The definitions 
for ``commercially used'' and ``commercial use'' incorporate 
the requirement for use of the subject process or method in 
connection with an actual arm's length sale or transfer. This 
ensures that the protection afforded by the prior user defense 
extends only to bona fide ongoing business practices without 
imposing any thresholds or limits on the scale of the business 
that qualifies for the defense.
    Subsection (b)(2) states that the sale or other lawful 
disposition of a product or service produced by a patented 
process or method, by a person entitled to assert a Sec. 273 
defense, exhausts the patent owner's rights with respect to 
that product or service to the same extent such rights would 
have been exhausted had the sale or other disposition been made 
by the patent owner. For example, if a purchaser would have had 
the right to resell a product if bought from the patent owner, 
the purchaser has the same right if the product is purchased 
from a person entitled to a Sec. 273 defense.
    Subsection (b)(3) creates limitations and qualifications on 
the use of the defense. First, a person may not assert the 
defense unless the invention for which the defense is asserted 
is for a business process or method, the exclusive purpose of 
which is to produce a useful end product or service; that is, 
the defense will not be available if the subject matter itself 
is a useful end product or service that constitutes one or more 
claims in the patent. Second, a person may not assert the 
defense if the subject matter was derived from the patent owner 
or persons in privity with the patent owner. Third, subsection 
(b)(3) makes clear that the application of the defense does not 
create a general license under all claims of the patent in 
question--it extends only to the specific subject matter 
claimed in the patent with respect to which the person can 
assert the defense. At the same time, however, the defense does 
extend to variations in the quantity or volume of use of the 
claimed subject matter, and to improvements that do not 
infringe additional specifically-claimed subject matter.
    Subsection (b)(4) requires that the person asserting the 
defense must assume the burden of proof in establishing it by 
clear and convincing evidence. Subsection (b)(5) establishes 
that the person who abandons the commercial use of subject 
matter may not rely on activities performed before the date of 
such abandonment in establishing the defense with respect to 
actions taken after the date of abandonment. Such a person can 
rely only on the date when commercial use of the subject matter 
was resumed.
    Subsection (b)(6) notes that the defense may only be 
asserted by the person who performed the acts necessary to 
establish the defense, and, except for transfer to the patent 
owner, the right to assert the defense cannot be licensed, 
assigned, or transferred to a third party except as an 
ancillary and subordinate part of a good-faith assignment or 
transfer for other reasons of the entire enterprise or line of 
business to which the defense relates. To illustrate, a person 
is lawfully entitled to assert the defense as it relates to the 
operation of a specific piece of machinery. The person owns 
several other pieces of machinery that perform distinct 
functions which, taken together, comprise the person's 
business. That person may not transfer the defense as it 
relates to the specific piece of machinery to a third party 
unless the entire commercial establishment is transferred as 
well.
    Subsection (b)(7) limits the sites for which the defense 
may be asserted when the defense has been transferred along 
with the enterprise or line of business to which the defense 
relates, as permitted by subsection (b)(6). Specifically, when 
the enterprise or line of business to which the defense relates 
has been transferred, the defense may be asserted only for uses 
at those sites where the subject matter was used before the 
later of the patent filing date or the date of transfer of the 
enterprise or line of business. A site is a factory site or 
other major facility in which an enterprise or line of business 
has made a significant capital investment, and does not 
include, for example, offsite locations for development of 
software components or manufacture of parts or ingredients.
    Subsection (b)(8) states that a person who fails to 
demonstrate a reasonable basis for asserting the defense may be 
held liable for attorneys fees under Sec. 285 of the Patent 
Act.
    Subsection (b)(9) specifies that the successful assertion 
of the defense does not mean that the affected patent is 
invalid. Paragraph (9) eliminates a point of uncertainty under 
current law concerning the validity of patents, and strikes a 
balance between the rights of a later inventor who obtains a 
patent and an earlier inventor who continues to use its method 
or process in the conduct of its business. Under current law, 
although the matter has seldom been litigated, a party who 
commercially used an invention in secrecy before the patent 
filing date and invented the subject matter before the patent 
owner's invention may argue that the patent is invalid under 
Sec. 102 (g) of the Patent Act. Arguably, commercial use of an 
invention in secrecy is not suppression or concealment of the 
invention within the meaning of Sec. 102(g), and therefore the 
party's earlier invention will invalidate the patent.\2\ The 
bill provides that a party who a uses a process or business 
method commercially in secrecy before the patent filing date 
and establishes a Sec. 273 defense is not an earlier inventor 
for purposes of invalidating the patent.
---------------------------------------------------------------------------
    \2\ See Dunlop Holdings v. ________, ________ F.2d ________ (7th 
Cir. 19____).
---------------------------------------------------------------------------
    Sec. 203. Effective date and applicability. The effective 
date for Title II is the date of enactment, except that the 
title does not apply to any infringement action pending on the 
date of enactment or to any subject matter for which an 
adjudication of infringement, including a consent judgment, has 
been made before the date of enactment.

                    Title III--Patent Term Guarantee

    Generally. Title III amends the provisions in the Patent 
Act that compensate patent applicants for certain reductions in 
patent term that are not the fault of the applicant. The 
provisions that were initially included only provided 
adjustments for up to 10 years for secrecy orders, 
interferences, and successful appeals. Not only are these 
adjustments too short in some cases, but no adjustments were 
provided for administrative delays caused by the PTO that were 
beyond the control of the applicant. Accordingly, Title III 
removes the 10-year caps from the existing provisions, adds a 
new provision to compensate applicants fully for PTO-caused 
administrative delays, and, for good measure, includes a new 
provision guaranteeing diligent applicants at least a 17-year 
term by extending the term of any patent not granted within 
three years of filing. Thus, no patent applicant diligently 
seeking to obtain a patent will receive a term of less than the 
17 years as provided under the pre-GATT \3\ standard; in fact, 
most will receive considerably more. Only those who purposely 
manipulate the system to delay the issuance of their patents 
will be penalized under Title III, a result that the Committee 
believes entirely appropriate.
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    \3\ General Agreement on Tariffs and Trade, Pub. L. No. 103-465. 
The framework for international trade since its inception in 1948, GATT 
is now administered under the auspices of the World Trade Organization 
(WTO) (see note 19, infra).
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    Sec. 301. Short title. Title III may be cited as the 
``Patent Term Guarantee Act.''
    Sec. 302. Patent term guarantee authority. Section 302 
amends Sec. 154(b) of the Patent Act covering term. First, new 
subsection (b)(1)(A)(i)-(iv) guarantees day-for-day restoration 
of term lost as a result of delay created by the PTO when the 
agency fails to

        (1) Lmake a notification of the rejection of any claim 
        for a patent or any objection or argument under 
        Sec. 132, or give or mail a written notice of allowance 
        under Sec. 151, within 14 months after the date on 
        which a non-provisional application was actually filed 
        in the PTO;

        (2) Lrespond to a reply under Sec. 132, or to an appeal 
        taken under Sec. 134, within four months after the date 
        on which the reply was filed or the appeal was taken;

        (3) Lact on an application within four months after the 
        date of a decision by the Board of Patent Appeals and 
        Interferences under Sec. 134 or Sec. 135 or a decision 
        by a Federal court under Sec. Sec. 141, 145, or 146 in 
        a case in which allowable claims remain in the 
        application; or

        (4) Lissue a patent within four months after the date 
        on which the issue fee was paid under Sec. 151 and all 
        outstanding requirements were satisfied.

    Further, subject to certain limitations, infra, 
Sec. 154(b)(1)(B) guarantees a total application pendency of no 
more than three years. Specifically, day-for-day restoration of 
term is granted if the PTO has not issued a patent within three 
years after ``the actual date of the application in the United 
States.'' This language was intentionally selected to exclude 
the filing date of an application under the Patent Cooperation 
Treaty (PCT).\4\ Otherwise, an applicant could obtain up to a 
30-month extension of a U.S. patent merely by filing under PCT, 
rather than directly in the PTO, gaining an unfair advantage in 
contrast to strictly domestic applicants. Any periods of time
---------------------------------------------------------------------------
    \4\ See Herbert F. Schwartz, Patent Law & Practice (2d ed., Federal 
Judicial Center,1995), note 72 at 22. The PCT is a multilateral treaty 
among more than 50 nations that is designed to simplify the patenting 
process when an applicant seeks a patent on the same invention in more 
than one nation. See also 35 U.S.C.A. chs. 35-37 and PCT Applicant's 
Guide (1992, rev. 1994).

        (1) Lconsumed in the continued examination of the 
        application under Sec. 132(b) of the Patent Act as 
---------------------------------------------------------------------------
        added by Sec. 303 of this Act;

        (2) Llost due to an interference under Sec. 135(a), a 
        secrecy order under Sec. 181, or appellate review by 
        the Board of Patent Appeals and Interferences or by a 
        Federal court (irrespective of the outcome); and

        (3) Lincurred at the request of an applicant in excess 
        of the three months to respond to a notice from the 
        Office permitted by Sec. 154(b)(2)(C)(ii) unless 
        excused by a showing by the applicant under 
        Sec. 154(b)(3)(C) that in spite of all due care the 
        applicant could not respond within three months shall 
        not be considered a delay by the PTO and shall not be 
        counted for purposes of determining whether the patent 
        issued within three years from the actual filing date.

    Day-for-day restoration is also granted under new 
Sec. 154(b)(1)(C) for delays resulting from interferences,\5\ 
secrecy orders,\6\ and appeals by the Board of Patent Appeals 
and Interferences or a Federal court in which a patent was 
issued as a result of a decision reversing an adverse 
determination of patentability.
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    \5\ 35 U.S.C. Sec. 135(a).
    \6\ 35 U.S.C. Sec. 181.
---------------------------------------------------------------------------
    Section 302 imposes limitations on restoration of term. In 
general, pursuant to new Sec. 154(b)(2)(A)-(C) of the bill, 
total adjustments granted for restorations under (b)(1) are 
reduced as follows:

        (A) LTo the extent that there are multiple grounds for 
        extending the term of a patent that may exist 
        simultaneously (e.g., delay due to a secrecy order 
        under Sec. 181 and administrative delay under 
        Sec. 154(b)(1)(A)), the term should not be extended for 
        each ground of delay but only for the actual number of 
        days that the issuance of a patent was delayed.

        (B) LThe term of any patent which has been disclaimed 
        beyond a date certain may not receive an adjustment 
        beyond the expiration date specified in the disclaimer.

        (C) LAdjustments shall be reduced by a period equal to 
        the time in which the applicant failed to engage in 
        reasonable efforts to conclude prosecution of the 
        application, based on regulations developed by the 
        Director, and an applicant shall be deemed to have 
        failed to engage in such reasonable efforts for any 
        periods of time in excess of three months that are 
        taken to respond to a notice from the Office making any 
        rejection or other request.

    New Sec. 154(b)(3) sets forth the procedures for the 
adjustment of patent terms. Paragraph (3)(A) empowers the 
Director to establish regulations by which term extensions are 
determined and contested. Paragraph (3)(B) requires the 
Director to send a notice of any determination with the notice 
of allowance and to give the applicant one opportunity to 
request reconsideration of the determination. Paragraph (3)(C) 
requires the Director to reinstate any time the applicant takes 
to respond to a notice from the Office in excess of three 
months that was deducted from any patent term extension that 
would otherwise have been granted if the applicant can show 
that he or she was, in spite of all due care, unable to respond 
within three months. In no case shall more than an additional 
three months be reinstated for each response. Paragraph (3)(D) 
requires the Director to grant the patent after completion of 
determining any patent term extension irrespective of whether 
the applicant appeals.
    New Sec. 154(b)(4) regulates appeals of term adjustment 
determinations made by the Director. Paragraph (4)(A) requires 
a dissatisfied applicant to seek remedy in the District Court 
for the District of Columbia under the Administrative 
Procedures Act \7\ within 180 days after the grant of the 
patent. The Director shall alter the term of the patent to 
reflect any final judgment. Paragraph (4)(B) precludes a third 
party from challenging the determination of a patent term prior 
to patent grant.
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    \7\ 5 U.S.C. Sec. Sec. 551-559, 701-706, 1305, 3105, 3344, 5372, 
7521.
---------------------------------------------------------------------------
    Section 302(b) makes certain conforming amendments to 
Sec. 282 of the Patent Act and the appellate jurisdiction of 
the U.S. Court of Appeals for the Federal Circuit.\8\
---------------------------------------------------------------------------
    \8\ 28 U.S.C. Sec. 1295.
---------------------------------------------------------------------------
    Sec. 303. Continued examination of patent applications. 
Section 303 amends Sec. 132 of the Patent Act to permit an 
applicant to request that an examiner continue the examination 
(reexamine) an application following a notice of rejection by 
the examiner. New Sec. 132(b) authorizes the Director to 
prescribe regulations for the continued examination of an 
application notwithstanding a ``final'' rejection, at the 
request of the applicant. The Director may also establish 
appropriate fees for continued examination proceedings, and 
shall provide a 50% fee reduction for small entities which 
qualify for preferential treatment under Sec. 41(h)(1) of the 
Patent Act.
    Section 304. Technical clarification. Section 304 of the 
bill coordinates technical term adjustment provisions set forth 
in Sec. 154(b) with those in Sec. 156(a) of the Patent Act.
    Section 305. Effective date. The effective date for the 
amendments in Sec. Sec. 302 and 304 is the date of enactment 
and, with the exception of design applications (the terms of 
which are not measured from filing), applies to any application 
filed on or after that date. The amendments made by Sec. 303 
take effect six months after date of enactment to allow the PTO 
to prepare implementing regulations.

Title IV--United States Publication of Patent Applications Filed Abroad

    Generally. Title IV provides for the publication of pending 
patent applications which have a corresponding foreign 
counterpart. Any pending U.S. application filed only in the 
United States (e.g., one that does not have a foreign 
counterpart) will not be published if the applicant so 
requests. Thus, an applicant wishing to maintain her 
application in confidence may do so merely by filing only in 
the United States and requesting that the PTO not publish the 
application. For those applicants who do file abroad or who 
voluntarily publish their applications, provisional rights will 
be available for assertion against any third party who uses the 
claimed invention between publication and grant provided that 
substantially similar claims are contained in both the 
published application and granted patent. This change will 
ensure that American inventors will be able to see the 
technology that our foreign competition is seeking to patent 
much earlier than is possible today.
    Sec. 401. Short title. Title IV may be cited as the 
``Publication of Foreign Filed Applications Act.''
    Sec. 402. Publication. Amended Sec. 122 of the Patent Act 
continues the general rule in subsection (a) that patent 
applications will be maintained in confidence. Paragraph (1)(A) 
of new subsection (b) creates a new exception to this general 
rule by requiring publication of certain applications promptly 
after the expiration of an 18-month period following the 
earliest claimed U.S. or foreign filing date. Design patent 
applications \9\ and provisional applications \10\ are not 
subject to publication. The Director is authorized by 
subparagraph (B) to determine what information concerning 
published applications shall be made available to the public, 
and, under subparagraph (C) any decision made in this regard is 
final and not subject to review.
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    \9\ 35 U.S.C. Sec. 171. Since design applications do not disclose 
technology, inventors do not have a particular interest in having them 
published. The bill as written therefore simplifies the proposed system 
of publication to confine the requirement to those applications for 
which there is a need for publication.
    \10\ 35 U.S.C. Sec. 111(b). Pursuant to 35 U.S.C. Sec. 111(b)(5), 
all provisional applications are abandoned 12 months after the date of 
their filing; accordingly, they are not subject to the 18-month 
publication requirement.
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    Subsection (b)(2) enumerates exceptions to the general rule 
requiring publication. Subparagraph (A) precludes publication 
of any application that is no longer pending at the 18th month 
from filing. Subparagraph (B) bars publication of any 
application that is the subject of a secrecy order until the 
secrecy order is rescinded.
    Pursuant to subparagraph (C)(i), any applicant who is not 
filing overseas and does not wish her application to be 
published can simply make a request and state that her 
invention has not and will not be the subject of an application 
filed in a foreign country that requires publication after 18 
months. Subparagraph (C)(ii) clarifies that an applicant may 
rescind this request at any time. Moreover, if an applicant has 
requested that her application not be published in a foreign 
country with a publication requirement, subparagraph (C)(iii) 
imposes a duty on the applicant to notify the Director of this 
fact. An unexcused failure to notify the Director will result 
in the abandonment of the application. If an applicant either 
rescinds a request that her application not be published or 
notifies the Director that an application has been filed in an 
early publication country or through the PCT, the U.S. 
application will be published at 18 months pursuant to 
subsection (b)(1).
    Finally, under subparagraph (C)(v), where an applicant has 
filed an application in a foreign country, either directly or 
through the PCT, so that the application will be published 18 
months from its earliest effective filing date, the applicant 
may limit the scope of the publication by the PTO to the total 
of the cumulative scope of the applications filed in all 
foreign countries. Where the foreign application is identical 
to the application filed in the United States or where an 
application filed under the PCT is identical to the application 
filed in the United States, the applicant may not limit the 
extent to which the application filed in the United States is 
published. However, where an applicant has limited the 
description of an application filed in a foreign country, 
either directly or through the PCT in comparison with the 
application filed in the PTO, the applicant may restrict the 
publication by the PTO to no more than the cumulative details 
of what will be published in all of the foreign applications 
and through the PCT. The applicant may restrict the extent of 
publication of her U.S. application by submitting a redacted 
copy of the application to the PTO eliminating only those 
details that will not be published in any of the foreign 
applications. Any description contained in at least one of the 
foreign national or PCT filings may not be excluded from 
publication in the corresponding U.S. patent application. To 
ensure that any redacted copy of the U.S. application is 
published in place of the original U.S. application, the 
redacted copy must be received within 16 months from the 
earliest effective filing date. Finally, if the published U.S. 
application as redacted by the applicant does not enable a 
person skilled in the art to make and use the claimed 
invention, provisional rights under Sec. 154(d) shall not be 
available.
    Subsection (c) requires the Director to establish 
procedures to ensure that no protest or other form of pre-
issuance opposition to the grant of a patent on an application 
may be initiated after publication without the express written 
consent of the applicant.
    Subsection (d) requires the Government Accounting Office 
(GAO) to conduct a study of applicants who file only in the 
United States during a three-year period beginning on the 
effective date of Title IV. The study will focus on the 
percentage of U.S. applicants who file only in the United 
States versus those who file outside the United States; how 
many domestic-only filers request not to be published; how many 
who request not to be published later rescind that request; and 
whether there is any correlation between the type of applicant 
(e.g., small vs. large entity) and publication. The Comptroller 
General must submit the findings of the study, once completed, 
to the Committees on the Judiciary of the House and Senate.
    Sec. 403. Time for claiming benefit of earlier filing date. 
Section 119 of the Patent Act prescribes procedures to 
implement the right to claim priority under Article 4 of the 
Paris Convention for the Protection of Industrial Property.\11\ 
Under that Article, an applicant seeking protection in the 
United States may claim the filing date of an application for 
the same invention filed in another Convention country--
provided the subsequent application is filed in the United 
States within 12 months of the earlier filing in the foreign 
country.
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    \11\ Mar. 20, 1883, as revised at Brussels, Dec. 14, 1900, 25 Stat. 
1645, T.S. No. 579, and subsequently through 1967. The Paris Convention 
contains a number of specific provisions relating directly to 
industrial designs and other more general provisions which are also 
applicable to industrial designs. The Convention has 99 member nations, 
including the United States. See also Pierre Maugue, The International 
Protection of Industrial Designs Under the International Conventions, 
19 Univ. of Baltimore Law Review 393-396 (Nos. One/Two, Fall 1989/
Winter 1990).
---------------------------------------------------------------------------
    Section 403 of Title IV amends Sec. 119(b) of the Patent 
Act to authorize the Director to establish a cut-off date by 
which the applicant must claim priority. This is to ensure that 
the claim will be made early enough--generally not later than 
the 16th month from the earliest effective filing date--so as 
to permit an orderly publication schedule for pending 
applications. As the PTO moves to electronic filing, it is 
envisioned that this date could be moved closer to the 18th 
month.
    The amendment to Sec. 119(b) also gives the Director the 
discretion to consider the failure of the applicant to file a 
timely claim for priority to be a waiver of any such priority 
claim. The Director is also authorized to establish procedures 
(including the payment of a surcharge) to accept an 
unintentionally delayed priority claim.
    Section 403(b) of Title IV amends Sec. 120 of the Patent 
Act in a similar way. This provision empowers the Director to: 
establish a time by which the priority of an earlier filed 
United States application must be claimed; consider the failure 
to meet that time limit to be a waiver of the right to claim 
such priority; and accept an unintentionally late claim of 
priority subject to the payment of a surcharge.
    Sec. 404. Provisional rights. Section 404 amends Sec. 154 
of the Patent Act by adding a new subsection (d) to accord 
provisional rights to obtain a reasonable royalty for 
applicants whose applications are published under amended 
Sec. 122(b) of the Patent Act, supra, or applications 
designating the United States filed under the PCT. Generally, 
this provision establishes the right of an applicant to obtain 
a reasonable royalty from any person who, during the period 
beginning on the date that his or her application is published 
and ending on the date a patent is issued--

        (1) Lmakes, uses, offers for sale, or sells the 
        invention in the United States, or imports such an 
        invention into the United States; or

        (2) Lif the invention claimed is a process, makes, 
        uses, offers for sale, sells, or imports a product made 
        by that process in the United States; and

        (3) Lhad actual notice of the published application 
        and, in the case of an application filed under the PCT 
        designating the United States that is published in a 
        language other than English, a translation of the 
        application into English.

    The requirement of actual notice is critical. The mere fact 
that the published application is included in a commercial 
database where it might be found is insufficient. The published 
applicant must give actual notice of the published application 
to the accused infringer and explain what acts are regarded as 
giving rise to provisional rights.
    Another important limitation on the availability of 
provisional royalties is that the claims in the published 
application that are alleged to give rise to provisional rights 
must also appear in the patent in substantially identical form. 
To allow anything less than substantial identity would impose 
an unacceptable burden on the public. If provisional rights 
were available in the situation where the only valid claim 
infringed first appeared in the granted patent, the public 
would have no guidance as to the specific behavior to avoid 
between publication and grant. Every person or company that 
might be operating within the scope of the disclosure of the 
published application would have to conduct her own private 
examination to determine whether a published application 
contained patentable subject matter that she should avoid. The 
burden should be on the applicant to initially draft a schedule 
of claims that gives adequate notice to the public of what she 
is seeking to patent.
    Amended Sec. 154(d)(3) imposes a six-year statute of 
limitations from grant in which an action for reasonable 
royalties must be brought.
    Amended Sec. 154(d)(4) sets forth some additional rules 
qualifying when an international application under the PCT will 
give rise to provisional rights. The date that will give rise 
to provisional rights for international applications will be 
the date on which the PTO receives a copy of the application 
published under the PCT in the English language; if the 
application is published under the PCT in a language other than 
English, then the date on which provisional rights will arise 
will be the date on which the PTO receives a translation of the 
international application in the English language. The Director 
is empowered to require an applicant to provide a copy of the 
international application and a translation of it.
    New Sec. 154(b)(5) provides an additional benefit for 
applicants who seek to obtain the benefits of early publication 
to protect their early marketing of their inventions against 
copiers. While early publication will permit an applicant to 
obtain a reasonable royalty from copiers, the applicant cannot 
enjoin such copiers. New Sec. 154(b)(5) addresses that problem. 
When in the course of examination, an applicant receives a 
communication from the PTO (an ``office action'') that one or 
more claims of her published application are allowable, the 
applicant is permitted to request the issuance of a patent 
incorporating those claims. The applicant may continue to 
prosecute the remaining still ``rejected'' claims as provided 
in chapter 12 of the Patent Act. Any subsequently allowed 
claims may be incorporated into the patent or issued as a 
separate patent as determined by the Director. The Director is 
also authorized to charge appropriate fees to cover the cost of 
incorporating additional claims into the patent or issuing a 
separate patent. Coupled with the possibility of provisional 
rights from publication (and publication can be requested upon 
filing) to the early grant of a patent on a single allowed 
claim, Title IV greatly enhances the arsenal of rights 
available to a small entity or independent inventor who markets 
her invention quickly.
    Sec. 405. Prior art effect of published applications. 
Section 405 amends Sec. 102(e) of the Patent Act to treat an 
application published by the PTO in the same fashion as a 
patent published by the PTO. Accordingly, a published 
application is given prior art effect as of its earliest 
effective U.S. filing date against any subsequently filed U.S. 
applications. As with patents, any foreign filing date to which 
the published application is entitled will not be the effective 
filing date of the U.S. published application for prior art 
purposes. An exception to this general rule is made for 
international applications designating the United States that 
are published under Article 21(2)(a) of the PCT in the English 
language. Such applications are given a prior art effect as of 
their international filing date. The prior art effect accorded 
to patents under Sec. 405 remain unchanged from present 
Sec. 102(e) of the Patent Act.
    Sec. 406. Cost recovery for publications. Section 406 
authorizes the Director to recover the costs of early 
publication required by the amendment made by Sec. 402 of this 
Act by charging a separate publication fee after a notice of 
allowance is given pursuant to Sec. 151 of the Patent Act.
    Sec. 407. Conforming amendments. Section 407 consists of 
various technical and conforming amendments to the Patent Act. 
These include amending Sec. 181 of the Patent Act to clarify 
that publication of pending applications does not apply to 
applications under secrecy orders, and amending Sec. 284 of the 
Patent Act to ensure that increased damages authorized under 
Sec. 284 shall not apply to the reasonable royalties possible 
under amended Sec. 154(d). In addition, Sec. 374 of the Patent 
Act is amended to provide that the effect of the publication of 
an international application designating the United States 
shall be the same as the publication of an application 
published under amended Sec. 122(b), except as its effect as 
prior art is modified by amended Sec. 102(e) and its giving 
rise to provisional rights is qualified by new Sec. 154(d).
    Sec. 408. Effective date. Title IV shall take effect on the 
date that is one year after the date of enactment and shall 
apply to all applications filed under Sec. 111 of the Patent 
Act on or after that date; and to all applications complying 
with Sec. 371 of the Patent Act that resulted from 
international applications filed on or after that date. The 
provisional rights provided in amended Sec. 154(d) and the 
prior art effect provided in amended Sec. 102(e) shall apply to 
all applications pending on the date that is one year after the 
date of enactment that are voluntarily published by their 
applicants. Finally, Sec. 404 (provisional rights) shall apply 
to international applications designating the United States 
that are filed on or after the date that is one year after the 
date of enactment.

                Title V--Patent Litigation Reduction Act

    Generally. Title V reduces expensive patent litigation in 
U.S. district courts by allowing third-party requesters to 
participate minimally in reexamination proceedings in the PTO. 
Congress enacted legislation to authorize reexamination of 
patents in the PTO in 1980, but reexamination has been used 
infrequently since a third party who requests reexamination 
cannot participate at all in the proceedings. Numerous 
witnesses have suggested that the volume of lawsuits in 
district courts will be reduced if third parties are given an 
opportunity to make their case for patent invalidity in the 
PTO. Title V encourages third parties to rely on reexamination 
proceedings.
    Title V allows third-party requesters to submit one written 
comment each time the patent owner files a response to the PTO. 
In addition, third-party requesters can appeal to the PTO Board 
of Patent Appeals and Interferences and to the Court of Appeals 
for the Federal Circuit from a PTO determination that a 
reexamined patent is valid. To prevent harassment, third-party 
requesters who participate in a reexamination proceeding are 
estopped from raising in a subsequent court action or 
reexamination any issue of patent validity that they raised or 
could have raised during reexamination. Anyone who requests 
reexamination must identify the real party in interest.
    Title V retains the requirement of current law that 
reexamination cannot be commenced unless the PTO makes an 
unappealable threshold determination that a ``substantial new 
question'' is raised. As under current law, grounds for 
reexamination are limited to earlier patents and printed 
publications--grounds that are well-suited for consideration in 
PTO proceedings.
    Sec. 501. Short title. Title V may be cited as the ``Patent 
Litigation Reduction Act.''
    Sec. 502. Definitions. Section 502 amends Sec. 100 of the 
Patent Act by defining ``third-party requester'' as a person 
requesting reexamination under Sec. 302 who is not a patent 
owner.
    Sec. 503. Reexamination procedures. Under Sec. 301 of the 
Patent Act, any person at any time may cite in writing prior 
art to the PTO. This citation consists of patents or printed 
publications which that person believes will bear on the 
patentability of any claim of a particular patent. If the 
person explains in writing the pertinency and manner of 
applying such prior art to at least one claim of the patent, 
the citation of such prior art and the explanation will become 
a part of the official file of the patent.
    Proposed Sec. 301, like current Sec. 301, governs the 
citation of prior art having a bearing on a granted patent. It 
does not afford any right to cite prior art having a bearing on 
pending patent applications. Citations of prior art having a 
bearing on published or other pending applications may be 
regulated or prohibited by the Director, for example, under 
procedures to ensure that no protest or other form of pre-
issuance opposition to the grant of a patent on an application 
may be initiated after publication of the application without 
the express written consent of the applicant.\12\
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    \12\ See Sec. 402 of H.R. 1907, supra.
---------------------------------------------------------------------------
    Section 503 of the bill deletes the last sentence of 
current Sec. 301, which guarantees anonymity to the person 
citing prior art, upon request. Under proposed Sec. 301, the 
Director may require that the identity of the person citing 
prior art, or the identity of the real party in interest on 
whose behalf the prior art is cited, be publicly disclosed.
    Section 503 amends Sec. 302 of the Patent Act by requiring 
that any person who files a written request for reexamination 
based on a citation of prior art must reveal the identity of 
the real party in interest.
    Proposed Sec. 303 of the Patent Act confers upon the 
Commissioner the authority and responsibility to determine, 
within three months after the filing of a request for 
reexamination, whether a substantial new question affecting 
patentability of any claim of the patent is raised by the 
request. A decision in this regard is final and not subject to 
judicial review. Section 503 of the bill retains these features 
and leaves the authority and responsibility with the Director 
(formerly known as Commissioner \13\).
---------------------------------------------------------------------------
    \13\ See Sec. 613 of H.R. 1907, infra.
---------------------------------------------------------------------------
    Proposed Sec. Sec. 304-305 of the Patent Act as amended by 
Sec. 503 are substantially similar to Sec. Sec. 304-305 of 
current law. Under proposed Sec. 304, if the Director 
determines that a substantial new question of patentability 
affecting a claim is raised, the determination shall include an 
order for reexamination for resolution of the question. The 
order may be accompanied by the initial PTO action on the 
merits of reexamination conducted in accordance with Sec. 305. 
Generally, under proposed Sec. 305 reexamination shall be 
conducted according to the procedures set forth in 
Sec. Sec. 132-133 of the Patent Act. The patent owner will be 
permitted to propose any amendment to the patent and a new 
claim or claims, with one exception: no proposed amended or new 
claim enlarging the scope of the claims will be allowed.
    Proposed Sec. 305 elaborates on procedure with regard to 
third-party requesters who, for the first time, are permitted 
to participate in reexamination proceedings. 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. In addition, the third-party requester shall 
receive a copy of any communication sent by the PTO to the 
patent owner concerning reexamination. After each response by 
the patent owner to an action on the merits by the PTO, the 
third-party requester shall have one opportunity to file 
written comments, but not to make oral arguments, addressing 
issues raised by the PTO or in the patent owner's response. In 
the absence of good cause, as under current law, the agency 
must act in reexamination matters with special dispatch.
    Proposed Sec. 306 prescribes the procedures for appeal of 
an adverse PTO decision by the patent owner and the third-party 
requester. Both the patent owner and the third-party requester 
are entitled to appeal to the Patent Board of Appeals and 
Interferences (Sec. 134 of the Patent Act) and to the U.S. 
Court of Appeals for the Federal Circuit (Sec. Sec. 141-144); 
either may also be a party to any appeal by the other. Neither 
party is entitled to the alternative to a Federal Circuit 
appeal that a patent owner has under current law--which is a 
civil action under Sec. 145 of the Patent Act.
    To deter unnecessary litigation, proposed Sec. 306 imposes 
constraints on the third-party requester. In general, a third-
party requester who is granted a reexamination by the PTO may 
not assert at a later time in any civil action in U.S. district 
court \14\ the invalidity of any claim finally determined to be 
patentable on any ground that the third-party requester raised 
or could have raised during reexamination. At the same time, 
the third-party requester may assert invalidity based on newly 
discovered prior art unavailable at the time of the 
reexamination. Prior art was unavailable at the time of the 
reexamination if it was not known to the individuals who were 
involved in the reexamination proceeding on behalf of the 
third-party requester and the PTO.
---------------------------------------------------------------------------
    \14\ See 28 U.S.C. Sec. 1338.
---------------------------------------------------------------------------
    Title V creates a new Sec. 308 which sets forth certain 
conditions by which reexamination is prohibited to prevent 
harassment of a patent holder. In general, once an order for 
reexamination has been issued, neither a third-party requester 
nor the patent owner may file a subsequent request for 
reexamination until a reexamination certificate is issued and 
published, unless the Director orders otherwise. Further, if a 
third-party requester asserts patent invalidity in a civil 
action and a final decision is entered that the party failed to 
prove the assertion of invalidity, or if a final decision in a 
reexamination instituted by the requester is favorable to 
patentability, after any appeals, that third-party requester 
cannot thereafter request reexamination on the basis of issues 
which were or which could have been raised. However, the third-
party requester may assert invalidity based on newly discovered 
prior art unavailable at the time of the civil action or 
reexamination. Prior art was unavailable at the time if it was 
not known to the individuals who were involved in the civil 
action or reexamination proceeding on behalf of the third-party 
requester and the PTO.
    Proposed Sec. 309 gives a patent owner the right, once 
reexamination has been ordered, to obtain a stay of any pending 
litigation involving an issue of patentability of any claims of 
the patent that are the subject of the reexamination, unless 
the court determines that the stay would not serve the 
interests of justice.
    Sec. 504. Conforming amendments. Section 504 makes the 
following conforming amendments to the Patent Act:
    A patent owner must pay a fee of $1,210 for each petition 
in connection with an unintentionally delayed response by the 
patent owner during a reexamination.
    A patent applicant, any of whose claims has been twice 
rejected; a patent owner in a reexamination proceeding; and a 
third-party requester may all appeal final adverse decisions 
from a primary examiner to the Board of Patent Appeals and 
Interferences.
    Proposed Sec. 141 states that either a patent owner or a 
third-party requester in a reexamination proceeding may appeal 
an adverse decision by the Board of Patent Appeals and 
Interferences only to the U.S. Court of Appeals for the Federal 
Circuit (and not to a U.S. district court).
    The Director is required pursuant to Sec. 143 (proceedings 
on appeal to the Federal Circuit) to submit to the court the 
grounds for the PTO decision in any reexamination, as well as 
in any ex parte case, addressing all the issues involved in the 
appeal.
    Sec. 505. Report to Congress. Five years after the 
effective date of Title V, the Director must submit to Congress 
a report evaluating whether the reexamination proceedings set 
forth in the Title are inequitable to any of the parties in 
interest and, if so, the report shall contain recommendations 
for change to eliminate the inequity.
    Sec. 506. Estoppel Effect of Reexamination. Section 506 
estops any party who requests reexamination from challenging at 
a later time, in any civil action, any fact determined during 
the process of the reexamination. The estoppel arises after a 
final decision in the reexamination or a final decision in any 
appeals of the reexamination. If Sec. 506 is held to be 
unenforceable, the enforcability of the rest of title V or the 
Act is not affected.
    Sec. 507. Effective date. Title V shall take effect on the 
date that is one year after the date of enactment and shall 
apply to all reexamination requests filed on or after such 
date.

                 Title VI--Patent and Trademark Office

    Generally. Title VI establishes the PTO as an agency of the 
United States within the Department of Commerce. The Secretary 
of Commerce gives policy direction to the agency, but the 
agency itself is responsible for the management and 
administration of operations and has independent control of 
budget allocations and expenditures, personnel decisions and 
processes, and procurement. The Committee intends that the 
Office will conduct its patent and trademark operations without 
micro-management by Department of Commerce officials, with the 
exception of policy guidance of the Secretary. The agency is 
headed by an Under Secretary of Commerce for Intellectual 
Property and Director of the United States Patent and Trademark 
Office, a Deputy, and a Commissioner of Patents and a 
Commissioner of Trademarks. The agency is exempt from 
government-wide personnel ceilings. A patent public advisory 
committee and a trademark public advisory committee are 
established to advise the Director on agency policies, goals, 
performance, budget and user fees.
    Sec. 601. Short title. Title VI may be cited as the 
``Patent and Trademark Office Efficiency Act.''
Subtitle A--United States Patent and Trademark Office
    Sec. 611. Establishment of Patent and Trademark Office. 
Section 611 establishes the PTO as an agency of the United 
States within the Department of Commerce and under the policy 
direction of the Secretary of Commerce. The PTO is explicitly 
responsible for decisions regarding the management and 
administration of its operations and has independent control of 
budget allocations and expenditures, personnel decisions and 
processes, procurements, and other administrative and 
management functions. Patent operations and trademark 
operations are to be treated as separate operating units within 
the Office.
    The PTO shall maintain its principal office in the 
metropolitan Washington, D.C., area, for the service of process 
and papers and for the purpose of discharging its functions. 
For purposes of venue in civil actions, the agency is deemed to 
be a resident of the district in which its principal office is 
located, except where otherwise provided by law. The PTO is 
also permitted to establish satellite offices in such other 
places in the United States as it considers necessary and 
appropriate to conduct business.
    Sec. 612. Powers and duties. Subject to the policy 
direction of the Secretary of the Commerce, in general the PTO 
will be responsible for granting and issuing patents, the 
registration of trademarks, and the dissemination of patent and 
trademark information to the public.
    The PTO will also possess specific powers, which include:

         (1) La requirement to adopt and use an Office seal for 
        judicial notice purposes and for authenticating 
        patents, trademark certificates and papers issued by 
        the Office;

         (2) Lthe authority to establish regulations, not 
        inconsistent with law, that

                (A) Lgovern the conduct of PTO proceedings 
                within the Office,

                (B) Lshall be made after notice and opportunity 
                for full participation by interested public and 
                private parties,

                (C) Lfacilitate and expedite the processing of 
                patent applications, particularly those which 
                can be processed electronically,

                (D) Lgovern the recognition, conduct, and 
                qualifications of agents, attorneys, or other 
                persons representing applicants or others 
                before the PTO,

                (E) Lrecognize the public interest in ensuring 
                that the patent system retain a reduced fee 
                structure for small entities, and

                (F) Lprovide for the development of a 
                performance-based process for managing that 
                includes quantitative and qualitative measures, 
                standards for evaluating cost-effectiveness, 
                and consistency with principles of impartiality 
                and competitiveness;

         (3) Lthe authority to acquire, construct, purchase, 
        lease, hold, manage, operate, improve, alter and 
        renovate any real, personal, or mixed property as it 
        considers necessary to discharge its functions;

         (4) Lthe authority to make purchases of property, 
        contracts for construction, maintenance, or management 
        and operation of facilities, as well as to contract for 
        and purchase printing services without regard to those 
        federal laws which govern such proceedings;

         (5) Lthe authority to use services, equipment, 
        personnel, facilities and equipment of other federal 
        entities, with their consent and on a reimbursable 
        basis;

         (6) Lthe authority to use, with the consent of the 
        United States and the agency, government, or 
        international organization concerned, the services, 
        records, facilities or personnel of any State or local 
        government agency or foreign government or 
        international organization to perform functions on its 
        behalf;

         (7) Lthe authority to retain and use all of its 
        revenues and receipts;

         (8) La requirement to promote exports of goods and 
        services of the United States industries that rely on 
        intellectual property, this activity being undertaken 
        in coordination with the Under Secretary of Commerce 
        for International Trade;

         (9) La requirement to advise the President, through 
        the Secretary of Commerce, on national and certain 
        international intellectual property policy issues;

        (10) La requirement to advise Federal departments and 
        agencies of intellectual property policy in the United 
        States and intellectual property protection abroad;

        (11) La requirement to provide guidance regarding 
        proposals offered by agencies to assist foreign 
        governments and international intergovernmental 
        organizations on matters of intellectual property 
        protection;

        (12) Lthe authority to conduct programs, studies or 
        exchanges regarding domestic or international 
        intellectual property law and the effectiveness of 
        intellectual property protection domestically and 
        abroad;

        (13) La requirement to advise the Secretary of Commerce 
        on any programs and studies relating to intellectual 
        property policy that the PTO may conduct or is 
        authorized to conduct, cooperatively with foreign 
        intellectual property offices and international 
        intergovernmental organizations; and

        (14) Lthe authority to (A) coordinate with the 
        Department of State in conducting programs and studies 
        cooperatively with foreign intellectual property 
        offices and international intergovernmental 
        organizations, and (B) transfer, with the concurrence 
        of the Secretary of State, up to $100,000 in any year 
        to the Department of State to pay an international 
        intergovernmental organization for studies and programs 
        advancing international cooperation concerning patents, 
        trademarks, and other matters.

    The specific powers set forth in new subsection (b) are 
clarified in new subsection (c). The special payments of 
paragraph (14)(B) are additional to other payments or 
contributions and are not subject to any limitation imposed by 
law. Nothing in subsection (b) derogates from the duties of the 
Secretary of State or the United States Trade Representative as 
set forth in Sec. 141 of the Trade Act of 1974 \15\, nor 
derogates from the duties and functions of the Register of 
Copyrights. The Director is required to consult with the 
Administrator of General Services when exercising authority 
under paragraphs (3) and (4)(A). Finally, nothing in Sec. 612 
may be construed to nullify, void, cancel, or interrupt any 
pending request-for-proposal let or contract issued by the 
General Services Administration for the specific purpose of 
relocating or leasing space to the PTO.
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    \15\ 19 U.S.C. Sec. 2171.
---------------------------------------------------------------------------
    Sec. 613. Organization and management. Section 613 details 
the organization and management of the agency. The powers and 
duties of the PTO shall be vested in the Director, who shall be 
appointed by the President, by and with the consent of the 
Senate. The Director performs two main functions. As Under 
Secretary of Commerce for Intellectual Property, she serves as 
the policy advisor to the Secretary of Commerce on intellectual 
property issues. As Director, she is responsible for the 
management and direction of the PTO. She shall consult with the 
Public Advisory Committees, infra, on a regular basis regarding 
operations of the agency and before submitting budgetary 
proposals and fee or regulation changes. The Director shall 
take an oath of office, and will maintain a program for 
identifying national security positions and providing the 
appropriate clearances. In addition to receiving a basic rate 
of compensation as prescribed in 5 U.S.C. Sec. 5314, the 
Director may receive a bonus of up to 50 percent of the 
Director's annual rate of pay, based on an evaluation by the 
Secretary of Commerce as defined in an annual performance 
agreement developed between the two. Under no condition may the 
Director's combined salary and bonus exceed the salary of the 
President. The President may remove the Director from office, 
but must provide notification, including an explanation of any 
such removal, to both houses of Congress.
    The Director shall appoint a Deputy Director to act in the 
capacity of the Director if the Director is absent or 
incapacitated. The Secretary of Commerce shall appoint two 
Commissioners, one for Patents, the other for Trademarks. The 
Commissioners will have five-year terms and may be reappointed 
to new terms by the Secretary. Each Commissioner shall possess 
a demonstrated experience in patent and trademark law, 
respectively; and they shall be responsible for the management 
and direction of the patent and trademark operations, 
respectively. In addition to receiving a basic rate of 
compensation under the Senior Executive Service \16\ and a 
locality payment, the Commissioners may receive bonuses of up 
to 50 percent of their annual basic rate of compensation based 
on a performance evaluation by the Secretary, acting through 
the Director. The Secretary may remove Commissioners for 
misconduct or unsatisfactory performance.
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    \16\ 28 U.S.C. Sec. 5382.
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    The Director may also appoint other officers, agents, and 
employees as she sees fit, and define their responsibilities 
with equal discretion. The PTO is specifically not subject to 
any administratively or statutorily imposed limits (full-time 
equivalents, or ``FTEs'') on positions or personnel.
    The PTO is charged with developing an incentive program to 
retain senior (of the primary examiner grade or higher) patent 
and trademark examiners eligible for retirement for the sole 
purpose of training patent and trademark examiners.
    The PTO will be subject to all provisions of title 5 of the 
U.S. Code governing federal employees. All relevant labor 
agreements which are in effect the day before enactment of 
Title VI shall be adopted by the agency. All PTO employees as 
of the day before the effective date of Title VI shall remain 
officers and employees of the agency without a break in service 
or changes in their accumulated leave or compensatory time 
accounts. Other personnel of the Department of Commerce shall 
be transferred to the PTO if a major function of their work is 
reimbursed by the PTO, they spend at least half of their work 
time in support of the PTO, or a transfer to the PTO would be 
in the interest of the agency, as determined by the Secretary 
of Commerce in consultation with the Director.
    On or after the effective date of the Act, the President 
shall appoint an individual to serve as Director until a 
Director qualifies under subsection (a). The persons serving as 
the Assistant Commissioner for Patents and the Assistant 
Commissioner for Trademarks on the day before the effective 
date of the Act may serve as the Commissioner for Patents and 
the Commissioner for Trademarks, respectively, until a 
respective Commissioner is appointed under subsection (b)(2).
    Sec. 614. Public Advisory Committees. Section 614 provides 
a new section 5 of the Patent Act which establishes a Patent 
Public Advisory Committee and a Trademark Public Advisory 
Committee. Each Committee has nine voting members with three-
year terms appointed by and serving at the pleasure of the 
Secretary of Commerce. Initial appointments will be made within 
three months of the effective date of the Act; and three of the 
initial appointees will receive one-year terms, three will 
receive two-year terms, and three will receive full terms. 
Vacancies will be filled within three months. The Secretary 
will also designate chairpersons for three-year terms.
    The members of the Committees will be U.S. citizens and 
will be chosen to represent the interests of users. The Patent 
Public Advisory Committee shall have members who represent 
small and large entity applicants in the United States in 
proportion to the number of applications filed by the small and 
large entity applicants. In no case shall the small entity 
applicants be represented by less than 25 percent of the 
members of the Patent Public Advisory Committee. The members of 
both Committees shall include individuals with substantial 
background and achievement in finance, management, labor 
relations, science, technology, and office automation. Each 
labor organization recognized by the PTO shall be represented 
on the Committees by a non-voting member.
    The Committees meet at the call of the chair to consider an 
agenda established by the chair. Each Committee reviews the 
policies, goals, performance, budget, and user fees that bear 
on its area of concern and advises the Director on these 
matters. Within 60 days of the end of a fiscal year, the 
Committees prepare annual reports, transmit the reports to the 
Secretary of Commerce, the President, and the Committees on the 
Judiciary of the Congress, and publish the reports in the 
Official Gazette of the PTO.
    Members of the Committees are compensated at a defined 
daily rate for meeting and travel days. Members are provided 
access to PTO records and information other than personnel or 
other privileged information including that concerning patent 
applications. Members are special Government employees within 
the meaning of Sec. 202 of title 18. The Federal Advisory 
Committee Act shall not apply to the Committees. Finally, 
Sec. 614 provides that Committee meetings shall be open to the 
public unless by a majority vote the Committee meets in 
executive session to consider personnel or other confidential 
information.
    Sec. 615. Patent and Trademark Office funding. Pursuant to 
Sec. 42(c) of the Patent Act, fees available to the 
Commissioner under Sec. 31 of the Trademark Act of 1946 \17\ 
may be used only for the processing of trademark registrations 
and for other trademark-related activities, and to cover a 
proportionate share of the administrative costs of the PTO. In 
an effort to more tightly ``fence'' trademark funds for 
trademark purposes, Sec. 615 amends this language such that all 
(trademark) fees available to the Commissioner shall be used 
for trademark registration and other trademark-related 
purposes. In other words, the Commissioner may exercise no 
discretion when spending funds; they must be earmarked for 
trademark purposes.
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    \17\ 15 U.S.C. Sec. 1051, et seq.
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    Sec. 616. Conforming amendments. Technical conforming 
amendments (repeals) to the Patent Act are set forth in 
Sec. 616.
    Sec. 617. Trademark Trial and Appeal Board. Section 617 
amends Sec. 17 of the Trademark Act of 1946 by specifying that 
the Director shall give notice to all affected parties and 
shall direct a Trademark Trial and Appeal Board to determine 
the respective rights of those parties before it in a relevant 
proceeding. The section also invests the Director with the 
power of appointing administrative trademark judges to the 
Board. The Director, the Commissioner of Trademarks, the 
Commissioner of Patents, and the administrative trademark 
judges shall serve on the Board.
    Sec. 618. Board of Patent Appeals and Interferences. Under 
existing Sec. 7 of the Patent Act, the Commissioner, Deputy 
Commissioner, Assistant Commissioners, and the examiners-in-
chief constitute the Board of Patent Appeals and Interferences. 
Pursuant to Sec. 618 of Title VI, the Board is comprised of the 
Director, the Commissioner for Patents, the Commissioner for 
Trademarks, and the administrative patent judges. In addition, 
the existing statute allows each appellant a hearing before 
three members of the Board who are designated by the 
Commissioner. Section 618 empowers the Director with this 
authority.
    Sec. 619. Annual report of Director. No later than 180 days 
after the end of each fiscal year, the Director must provide a 
report to Congress detailing funds received and expended by the 
PTO, the purposes for which the funds were spent, the quality 
and quantity of PTO work, the nature of training provided to 
examiners, the evaluations of the Director and the 
Commissioners by the Secretary of Commerce, the Director's and 
Commissioners' compensation, and other information relating to 
the agency.
    Sec. 620. Suspension or exclusion from practice. Under 
existing Sec. 32 of the Patent Act, the Commissioner (the 
Director pursuant to Sec. 632 of this Act) has the authority, 
after notice and a hearing, to suspend or exclude from further 
practice before the PTO any person who is incompetent, 
disreputable, indulges in gross misconduct or fraud, or is 
noncompliant with PTO regulations. Section 620 permits the 
Director to designate an attorney who is an officer or employee 
of the PTO to conduct a hearing under Sec. 32.
    Section 621. Pay of Director. Section 621 replaces the 
Assistant Secretary of Commerce and Commissioner of Patents and 
Trademarks with the Under Secretary of Commerce for 
Intellectual Property and Director of the United States Patent 
and Trademark Office to receive pay at Level III of the 
Executive Schedule.\18\
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    \18\ 5 U.S.C. Sec. 5314.
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Subtitle B--Effective Date; Technical Amendments
    Sec. 631. Effective date. The effective date of Title VI is 
four months after the date of enactment.
    Section 632. Technical and conforming amendments. Section 
632 sets forth numerous technical and conforming amendments 
related to Title VI.
Subtitle C--Miscellaneous Provisions
    Sec. 641. References. Section 641 clarifies that any 
reference to the transfer of a function from a department or 
office to the head of such department or office means the head 
of such department or office to which the function is 
transferred. In addition, references in other federal materials 
to the Commissioner of Patents and Trademarks refers, upon 
enactment, to the Director of the United States Patent and 
Trademark Office. Similarly, references to the Assistant 
Commissioner for Patents is deemed to refer to the Commissioner 
for Patents and references to the Assistant Commissioner for 
Trademarks is deemed to refer to the Commissioner for 
Trademarks.
    Sec. 642. Exercise of authorities. Under Sec. 642, except 
as otherwise provided by law, a federal official to whom a 
function is transferred pursuant to Title VI may exercise all 
authorities under any other provision of law that were 
available regarding the performance of that function to the 
official empowered to perform that function immediately before 
the date of the transfer (of the function).
    Sec. 643. Savings provisions. Relevant legal documents that 
relate to a function which is transferred by Title VI, and 
which are in effect on the date of such transfer, shall 
continue in effect according to their terms unless later 
modified or repealed in an appropriate manner. Applications or 
proceedings concerning any benefit, service, or license pending 
on the effective date of Title VI before an office transferred 
shall not be affected, and shall continue thereafter, but may 
later be modified or repealed in the appropriate manner.
    Title VI will not affect suits commenced before the 
effective date of passage. Suits or actions by or against the 
Department of Commerce, its employees, or the Secretary shall 
not abate by reason of enactment of Title VI. Suits against a 
relevant government officer in her official capacity shall 
continue post enactment, and if a function has transferred to 
another officer by virtue of enactment, that other officer 
shall substitute as the defendant. Finally, administrative and 
judicial review procedures that apply to a function transferred 
shall apply to the head of the relevant federal agency and 
other officers to which the function is transferred.
    Sec. 644. Transfer of assets. Section 644 states that all 
available personnel, property, records, and funds related to a 
function transferred pursuant to Title VI shall be made 
available to the relevant official or head of the agency to 
which the function transfers at such time or times as the 
Director of the Office of Management and Budget (OMB) directs.
    Sec. 645. Delegation and assignment. Section 645 allows an 
official to whom a function is transferred under Title VI to 
delegate that function to another officer or employee. The 
official to whom the function was originally transferred 
nonetheless remains responsible for the administration of the 
function.
    Sec. 646. Authority of Director of the Office of Management 
and Budget with respect to functions transferred.
     Pursuant to Sec. 646, if necessary the Director of OMB 
shall make any determination of the functions transferred 
pursuant to Title VI.
    Sec. 647. Certain vesting of functions considered 
transfers. Section 647 states that the vesting of a function in 
a department or office pursuant to reestablishment of an office 
shall be considered to be the transfer of that function.
    Sec. 648. Availability of existing funds. Under Sec. 648, 
existing appropriations and funds available for the performance 
of functions and other activities terminated pursuant to Title 
VI shall remain available (for the duration of their period of 
availability) for necessary expenses in connection with the 
termination and resolution of such functions and activities, 
subject to the submission of a plan to House and Senate 
appropriators in accordance with Public Law 105-277 
(Departments of Commerce, Justice, and State, the Judiciary and 
Related Agencies Appropriations Act, Fiscal Year 1999).
    Sec. 649. Definitions. Function includes any duty, 
obligation, power, authority, responsibility, right, privilege, 
activity, or program.
    Office includes any office, administration, agency, bureau, 
institute, council, unit, organizational entity, or component 
thereof.

               Title VII--Miscellaneous Patent Provisions

    Generally. Title VII consists of seven largely-unrelated 
provisions that make needed clarifying and technical changes to 
the Patent Act . Title VII also authorizes a study. The 
provisions in Title VII take effect on the date of enactment 
except where stated otherwise in certain sections.
    Sec. 701. Provisional applications. Section 701 amends 
Sec. 111(b)(5) of the Patent Act by permitting a provisional 
application to be treated as a non-provisional application. The 
applicant must make a request within 12 months after the filing 
date of the provisional application for it to be treated as a 
non-provisional application.
    Section 701 also amends Sec. 119(e) of the Patent Act by 
clarifying the treatment of a provisional application when its 
last day of pendency falls on a weekend or a Federal holiday, 
and by eliminating the requirement that a provisional 
application must be co-pending with a non-provisional 
application if the provisional application is to be relied on 
in any PTO proceeding.
    Sec. 702. International applications. Section 702 amends 
Sec. 119(a) of the Patent Act to permit persons who filed an 
application for patent first in a WTO \19\ 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.\20\ These Articles require that WTO member countries 
apply the substantive provisions of the Paris Convention for 
the Protection of Industrial Property to other WTO member 
countries. As some WTO member countries are not yet members of 
the Paris Convention, and as developing countries are 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.
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    \19\ World Trade Organization. The agreement establishing the WTO 
is a multilateral instrument which creates a permanent organization to 
oversee the implementation of the Uruguay Round Agreements, including 
the GATT 1994, to provide a forum for multilateral trade negotiations 
and to administer dispute settlements (see note 3, supra). Staff of the 
House Comm. on Ways and Means, 104th Cong., 1st Sess., Overview and 
Compilation of U.S. Trade Statutes 1040 (Comm. Print 1995).
    \20\ Trade-Related Aspects of Intellectual Property Rights 
Agreement; i.e., that component of GATT which addresses intellectual 
property rights among the signatory members.
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    Section 702 also adds subsection (f) to Sec. 119 of the 
Patent Act to provide for the right of priority in the United 
States on the basis of an application for a plant breeder's 
right first filed in a WTO member country or in a UPOV \21\ 
Contracting Party. Many foreign countries provide only a sui 
generis system of protection for plant varieties. Because 
Sec. 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.
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    \21\ International Convention for the Protection of New Varieties 
of Plants. UPOV is administered by the World Intellectual Property 
Organization (WIPO), which is charged with the administration of, and 
activities concerning revisions to, the international intellectual 
property treaties. UPOV has 40 members, and guarantees plant breeders 
national treatment and right of priority in other countries that are 
members of the treaty, along with certain other benefits. See M.A. 
Leaffer, International Treaties on Intellectual Property at 47 (BNA, 2d 
ed. 1997).
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    Subsection (g) is added to Sec. 119 to define the terms 
``WTO member country'' and ``UPOV Contracting Party.''
    Sec. 703. Certain limitations on remedies for patent 
infringement not applicable. Section 703 amends Sec. 287(c)(4) 
of the Patent Act, which pertains to certain limitations on 
remedies for patent infringement, to make it applicable to 
applications filed on or after September 30, 1996.
    Sec. 704. Electronic filing. Section 704 amends Sec. 22 of 
the Patent Act to clarify that the PTO may receive information 
in electronic form.
    Sec. 705. Study and report on biologic deposits in support 
of biotechnology patents. Section 705 charges the Comptroller 
General, in consultation with the PTO Director, with conducting 
a study and submitting a report to Congress no later than six 
months after the date of enactment on the potential risks to 
the U.S. biotechnological industry regarding biological 
deposits in support of biotechnology patents. The study shall 
include: an examination of the risk of export and of transfers 
to third parties of biological deposits, and the risks posed by 
the 18-month publication requirement of Title IV; an analysis 
of comparative legal and regulatory regimes; and any related 
recommendations. The PTO is then charged with considering these 
recommendations when drafting regulations affecting biological 
deposits.
    Sec. 706. Prior invention. Section 706 amends Sec. 102(g) 
of the Patent Act to make clear that an inventor who is 
involved in a PTO interference proceeding by operation of 
Sec. 104 is subject to the requirements of Sec. 102(g), 
including the requirement that the invention was not abandoned, 
suppressed, or concealed.
    Sec. 707. Prior art exclusion for certain commonly assigned 
patents. Section 707 amends Sec. 103 of the Patent Act, which 
sets forth patentability conditions related to the 
nonobviousness of subject matter. Section 103(c) of the current 
statute states that subject matter developed by another person 
which qualifies as prior art only under Sec. 102(f) or (g) 
shall not preclude granting a patent on an invention with only 
obvious differences where the subject matter and claimed 
invention were, at the time the invention was made, owned by 
the same person or subject to an obligation of assignment to 
the same person. The bill amends Sec. 103(c) by adding a 
reference to Sec. 102(e), which currently bars the granting of 
a patent if the invention was described in another patent 
granted on an application filed before the applicant's date of 
invention. The effect of the amendment is to allow an applicant 
to receive a patent when an invention with only obvious 
differences from the applicant's invention was described in a 
patent granted on an application filed before the applicant's 
invention, provided the inventions are commonly owned or 
subject to an obligation of assignment to the same person.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) 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]
1   Establishment, Officers and Employees, Functions..................

           *       *       *       *       *       *       *


                 [PART I--PATENT AND TRADEMARK OFFICE]

           PART I--UNITED STATES PATENT AND TRADEMARK OFFICE

Chap.                                                               Sec.
      Establishment, Officers, Functions..............................1]
1   Establishment, Officers and Employees, Functions..................

           *       *       *       *       *       *       *


             [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.
[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.

[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 in effect for level III of the Executive Schedule 
under section 5314 of title 5, United States Code.
    [(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.]

      CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

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

Sec. 1. Establishment

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

Sec. 2. Powers and duties

    (a) In General.--The United States Patent and Trademark 
Office, subject to the policy direction of the Secretary of 
Commerce--
            (1) shall be responsible for the granting and 
        issuing of patents and the registration of trademarks; 
        and
            (2) shall be responsible for disseminating to the 
        public information with respect to patents and 
        trademarks.
    (b) Specific Powers.--The Office--
            (1) shall adopt and use a seal of the Office, which 
        shall be judicially noticed and with which letters 
        patent, certificates of trademark registrations, and 
        papers issued by the Office shall be authenticated;
            (2) may establish regulations, not inconsistent 
        with law, which--
                    (A) shall govern the conduct of proceedings 
                in the Office;
                    (B) shall be made 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;
                    (E) shall recognize the public interest in 
                continuing to safeguard broad access to the 
                United States patent system through the reduced 
                fee structure for small entities under section 
                41(b)(1) of this title; and
                    (F) provide for the development of a 
                performance-based process that includes 
                quantitative and qualitative measures and 
                standards for evaluating cost-effectiveness and 
                is consistent with the principles of 
                impartiality and competitiveness;
            (3) may acquire, construct, purchase, lease, hold, 
        manage, operate, improve, alter, and renovate any real, 
        personal, or mixed property, or any interest therein, 
        as it considers necessary to carry out its functions;
            (4)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation 
        of facilities, and contracts for supplies or services, 
        without regard to the provisions of the Federal 
        Property and Administrative Services Act of 1949 (40 
        U.S.C. 471 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;
            (5) may use, with their consent, services, 
        equipment, personnel, and facilities of other 
        departments, agencies, and instrumentalities of the 
        Federal Government, on a reimbursable basis, and 
        cooperate with such other departments, agencies, and 
        instrumentalities in the establishment and use of 
        services, equipment, and facilities of the Office;
            (6) may, when the Director determines that it is 
        practicable, efficient, and cost-effective to do so, 
        use, with the consent of the United States and the 
        agency, 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;
            (10) shall advise Federal departments and agencies 
        on matters of intellectual property policy in the 
        United States and intellectual property protection in 
        other countries;
            (11) shall provide guidance, as appropriate, with 
        respect to proposals by agencies to assist foreign 
        governments and international intergovernmental 
        organizations on matters of intellectual property 
        protection;
            (12) may conduct programs, studies, or exchanges of 
        items or services regarding domestic and international 
        intellectual property law and the effectiveness of 
        intellectual property protection domestically and 
        throughout the world;
            (13)(A) shall advise the Secretary of Commerce on 
        programs and studies relating to intellectual property 
        policy that are conducted, or authorized to be 
        conducted, cooperatively with foreign intellectual 
        property offices and international intergovernmental 
        organizations; and
            (B) may conduct programs and studies described in 
        subparagraph (A); and
            (14)(A) in coordination with the Department of 
        State, may conduct programs and studies cooperatively 
        with foreign intellectual property offices and 
        international intergovernmental organizations; and
            (B) with the concurrence of the Secretary of State, 
        may authorize the transfer of not to exceed $100,000 in 
        any year to the Department of State for the purpose of 
        making special payments to international 
        intergovernmental organizations for studies and 
        programs for advancing international cooperation 
        concerning patents, trademarks, and other matters.
    (c) Clarification of Specific Powers.--(1) The special 
payments under paragraph (14)(B) shall be in addition to any 
other payments or contributions to international organizations 
described in paragraph (14)(B) and shall not be subject to any 
limitations imposed by law on the amounts of such other 
payments or contributions by the United States Government.
    (2) Nothing in subsection (b) shall derogate from the 
duties of the Secretary of State or from the duties of the 
United States Trade Representative as set forth in section 141 
of the Trade Act of 1974 (19 U.S.C. 2171).
    (3) Nothing in subsection (b) shall derogate from the 
duties and functions of the Register of Copyrights or otherwise 
alter current authorities relating to copyright matters.
    (4) In exercising the Director's powers under paragraphs 
(3) and (4)(A) of subsection (b), the Director shall consult 
with the Administrator of General Services.
    (d) Construction.--Nothing in this section shall be 
construed to nullify, void, cancel, or interrupt any pending 
request-for-proposal let or contract issued by the General 
Services Administration for the specific purpose of relocating 
or leasing space to the United States Patent and Trademark 
Office.

Sec. 3. Officers and employees

    (a) Under Secretary and Director.--
            (1) In general.--The powers and duties of the 
        United States Patent and Trademark Office shall be 
        vested in an Under Secretary of Commerce and Director 
        of the United States Patent and Trademark Office (in 
        this title referred to as the `Director'), who shall be 
        a citizen of the United States and who shall be 
        appointed by the President, by and with the advice and 
        consent of the Senate. The Director shall be a person 
        who has a professional background and experience in 
        patent or trademark law the Director shall be 
        responsible for providing policy direction and 
        management supervision for the Office.
            (2) Duties.--
                    (A) In general.--The Director shall be 
                responsible for the supervision 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) Consulting with the public advisory 
                committees.--The Director shall consult with 
                the Patent Public Advisory Committee 
                established in section 5 on a regular basis on 
                matters relating to the patent operations of 
                the Office, shall consult with the Trademark 
                Public Advisory Committee established in 
                section 5 on a regular basis on matters 
                relating to the trademark operations of the 
                Office, and shall consult with the respective 
                Public Advisory Committee before submitting 
                budgetary proposals to the Office of Management 
                and Budget or changing or proposing to change 
                patent or trademark user fees or patent or 
                trademark regulations, as the case may be.
                    (C) 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) Oath.--The Director shall, before taking 
        office, take an oath to discharge faithfully the duties 
        of the Office.
            (4) Compensation.--In addition to the Director's 
        pay as prescribed in section 5314 of title 5, the 
        Director may receive a bonus in an amount up to, but 
        not in excess of, 50 percent of the Director's annual 
        rate of pay, 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 organization and 
        individual goals in key operational areas as delineated 
        in an annual performance plan agreed to by the Director 
        and the Secretary and made public in the annual report 
        of the Director. Payment of a bonus under this 
        paragraph may be made to the Director only to the 
        extent that such payment does not cause the Director's 
        total aggregate compensation in a calendar year to 
        equal or exceed the amount of the salary of the 
        President under section 102 of title 3.
            (5) Removal.--The Director may be removed from 
        office by the President. The President shall provide 
        notification of any such removal to both Houses of 
        Congress.
    (b) Officers and Employees of the Office.--
            (1) Deputy under secretary and deputy director.--
        The Director shall appoint a Deputy Under Secretary of 
        Commerce and Deputy Director of the United States 
        Patent and Trademark Office who shall be vested with 
        the authority to act in the capacity of the Director in 
        the event of the absence or incapacity of the Director. 
        The Deputy Under Secretary and Deputy Director of the 
        United States Patent and Trademark Office shall be a 
        citizen of the United States who has a professional 
        background and experience in patent or trademark law.
            (2) Commissioners.--
                    (A) Appointment and duties.--The Secretary 
                of Commerce shall appoint a Commissioner for 
                Patents and a Commissioner for Trademarks. The 
                Commissioner for Patents shall be a citizen of 
                the United States with demonstrated management 
                ability and professional background and 
                experience in patent law and serve for a term 
                of 5 years. The Commissioner for Trademarks 
                shall be a citizen of the United States with 
                demonstrated management ability and 
                professional background and experience in 
                trademark law and serve for a term of 5 years. 
                The Commissioner for Patents and the 
                Commissioner for Trademarks shall serve as the 
                chief operating officers for the operations of 
                the Office relating to patents and trademarks, 
                respectively, and shall be responsible for the 
                management and direction of all aspects of the 
                activities of the Office that affect the 
                administration of patent and trademark 
                operations, respectively. The Secretary may 
                reappoint a Commissioner to subsequent terms of 
                5 years as long as the performance of the 
                Commissioner as set forth in the performance 
                agreement in subparagraph (B) is satisfactory.
                    (B) Salary and performance agreement.--The 
                Commissioners shall be paid an annual rate of 
                basic pay not to exceed the maximum rate of 
                basic pay for the Senior Executive Service 
                established under section 5382 of title 5, 
                United States Code, including any applicable 
                locality-based comparability payment that may 
                be authorized under section 5304(h)(2)(C) of 
                title 5. The compensation of the Commissioners 
                shall be considered for purposes of section 
                207(c)(2)(A) of title 18, United States Code, 
                to be the equivalent of that described under 
                clause (ii) of section 207(c)(2)(A) of title 
                18. In addition, the Commissioners may receive 
                a bonus in an amount of up to, but not in 
                excess of, 50 percent of the Commissioner's 
                annual rate of basic pay, based upon an 
                evaluation by the Secretary of Commerce, acting 
                through the Director, of the Commissioners' 
                performance as defined in an annual performance 
                agreement between the Commissioners and the 
                Secretary. The annual performance agreements 
                shall incorporate measurable organization and 
                individual goals in key operational areas as 
                delineated in an annual performance plan agreed 
                to by the Commissioners and the Secretary. 
                Payment of a bonus under this subparagraph may 
                be made to the Commissioners only to the extent 
                that such payment does not cause the 
                Commissioners' total aggregate compensation in 
                a calendar year to equal or exceed the amount 
                of the salary of the President under section 
                102 of title 3.
                    (C) Removal.--The Commissioners may be 
                removed from office by the Secretary for 
                misconduct or nonsatisfactory performance under 
                the performance agreement described in 
                subparagraph (B). The Secretary shall provide 
                notification of any such removal to both Houses 
                of Congress.
            (3) Other officers and employees.--The Director 
        shall--
                    (A) appoint such officers, employees 
                (including attorneys), and agents of the Office 
                as the Director considers necessary to carry 
                out the functions of the Office; and
                    (B) define the title, authority, and duties 
                of such officers and employees and delegate to 
                them such of the powers vested in the Office as 
                the Director may determine.
        The Office shall not be subject to any administratively 
        or statutorily imposed limitation on positions or 
        personnel, and no positions or personnel of the Office 
        shall be taken into account for purposes of applying 
        any such limitation.
            (4) Training of examiners.--The Patent and 
        Trademark Office shall develop an incentive program to 
        retain as employees patent and trademark examiners of 
        the primary examiner grade or higher who are eligible 
        for retirement, for the sole purpose of training patent 
        and trademark examiners.
    (c) Continued Applicability of Title 5.--Officers and 
employees of the Office shall be subject to the provisions of 
title 5 relating to Federal employees.
    (d) Adoption of Existing Labor Agreements.--The Office 
shall adopt all labor agreements which are in effect, as of the 
day before the effective date of the Patent and Trademark 
Office Efficiency Act, with respect to such Office (as then in 
effect).
    (e) Carryover of Personnel.--
            (1) From pto.--Effective as of the effective date 
        of the Patent and Trademark Office Efficiency Act, all 
        officers and employees of the Patent and Trademark 
        Office on the day before such effective date shall 
        become officers and employees of the Office, without a 
        break in service.
            (2) Other personnel.--Any individual who, on the 
        day before the effective date of the Patent and 
        Trademark Office Efficiency Act, is an officer or 
        employee of the Department of Commerce (other than an 
        officer or employee under paragraph (1)) shall be 
        transferred to the Office, as necessary to carry out 
        the purposes of this Act, if--
                    (A) such individual serves in a position 
                for which a major function is the performance 
                of work reimbursed by the Patent and Trademark 
                Office, as determined by the Secretary of 
                Commerce;
                    (B) such individual serves in a position 
                that performed work in support of the Patent 
                and Trademark Office during at least half of 
                the incumbent's work time, as determined by the 
                Secretary of Commerce; or
                    (C) such transfer would be in the interest 
                of the Office, as determined by the Secretary 
                of Commerce in consultation with the Director.
        Any transfer under this paragraph shall be effective as 
        of the same effective date as referred to in paragraph 
        (1), and shall be made without a break in service.
            (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 
        Efficiency Act, the President shall appoint an 
        individual to serve as the Director until the date on 
        which a Director qualifies under subsection (a). The 
        President shall not make more than one such appointment 
        under this subsection.
            (2) Continuation in office of certain officers.--
        (A) The individual serving as the Assistant 
        Commissioner for Patents on the day before the 
        effective date of the Patent and Trademark Office 
        Efficiency Act may serve as the Commissioner for 
        Patents until the date on which a Commissioner for 
        Patents is appointed under subsection (b).
            (B) The individual serving as the Assistant 
        Commissioner for Trademarks on the day before the 
        effective date of the Patent and Trademark Office 
        Efficiency Act may serve as the Commissioner for 
        Trademarks until the date on which a Commissioner for 
        Trademarks is appointed under subsection (b).

Sec. 4. Restrictions on officers and employees as to interest in 
                    patents

    Officers and employees of the Patent and Trademark Office 
shall be incapable, during the period of their appointments and 
for one year thereafter, of applying for a patent and of 
acquiring, directly or indirectly, except by inheritance or 
bequest, any patent or any right or interest in any patent, 
issued or to be issued by the Office. In patents applied for 
thereafter they shall not be entitled to any priority date 
earlier than one year after the termination of their 
appointment.

Sec. 5. Patent and Trademark Office Public Advisory Committees

    (a) Establishment of Public Advisory Committees.--
            (1) Appointment.--The United States Patent and 
        Trademark Office shall have a Patent Public Advisory 
        Committee and a Trademark Public Advisory Committee, 
        each of which shall have 9 voting members who shall be 
        appointed by the Secretary of Commerce and serve at the 
        pleasure of the Secretary of Commerce. Members of each 
        Public Advisory Committee shall be appointed for a term 
        of 3 years, except that of the members first appointed, 
        3 shall be appointed for a term of 1 year, and 3 shall 
        be appointed for a term of 2 years. In making 
        appointments to each Committee, the Secretary of 
        Commerce shall consider the risk of loss of competitive 
        advantage in international commerce or other harm to 
        United States companies as a result of such 
        appointments.
            (2) Chair.--The Secretary shall designate a chair 
        of each Advisory Committee, whose term as chair shall 
        be for 3 years.
            (3) Timing of appointments.--Initial appointments 
        to each Advisory Committee shall be made within 3 
        months after the effective date of the Patent and 
        Trademark Office Efficiency Act. Vacancies shall be 
        filled within 3 months after they occur.
    (b) Basis for Appointments.--Members of each Advisory 
Committee--
            (1) shall be citizens of the United States who 
        shall be chosen so as to represent the interests of 
        diverse users of the Patent and Trademark Office with 
        respect to patents, in the case of the Patent Public 
        Advisory Committee, and with respect to trademarks, in 
        the case of the Trademark Public Advisory Committee;
            (2) shall include members who represent small and 
        large entity applicants located in the United States in 
        proportion to the number of applications filed by such 
        members, but in no case shall members who represent 
        small entity patent applicants, including small 
        business concerns, independent inventors, and nonprofit 
        organizations, constitute less than 25 percent of the 
        members of the Patent Public Advisory Committee; and
            (3) shall include individuals with substantial 
        background and achievement in finance, management, 
        labor relations, science, technology, and office 
        automation.
In addition to the voting members, each Advisory Committee 
shall include a representative of each labor organization 
recognized by the Patent and Trademark Office. Such 
representatives shall be nonvoting members of the Advisory 
Committee to which they are appointed.
    (c) Meetings.--Each Advisory Committee shall meet at the 
call of the chair to consider an agenda set by the Chair.
    (d) Duties.--Each Advisory Committee shall--
            (1) review the policies, goals, performance, 
        budget, and user fees of the Patent and Trademark 
        Office with respect to patents, in the case of the 
        Patent Public Advisory Committee, and with respect to 
        Trademarks, in the case of the Trademark Public 
        Advisory Committee, and advise the Director on these 
        matters;
            (2) within 60 days after the end of each fiscal 
        year--
                    (A) prepare an annual report on the matters 
                referred to in paragraph (1);
                    (B) transmit the report to the Secretary of 
                Commerce, the President, and the Committees on 
                the Judiciary of the Senate and the House of 
                Representatives; and
                    (C) publish the report in the Official 
                Gazette of the Patent and Trademark Office.
    (e) Compensation.--Each member of each Advisory Committee 
shall be compensated for each day (including travel time) 
during which such member is attending meetings or conferences 
of that Advisory Committee or otherwise engaged in the business 
of that Advisory Committee, at the rate which is the daily 
equivalent of the annual rate of basic pay in effect for level 
III of the Executive Schedule under section 5314 of title 5. 
While away from such member's home or regular place of business 
such member shall be allowed travel expenses, including per 
diem in lieu of subsistence, as authorized by section 5703 of 
title 5.
    (f) Access to Information.--Members of each Advisory 
Committee shall be provided access to records and information 
in the Patent and Trademark Office, except for personnel or 
other privileged information and information concerning patent 
applications required to be kept in confidence by section 122.
    (g) Applicability of Certain Ethics Laws.--Members of each 
Advisory Committee shall be special Government employees within 
the meaning of section 202 of title 18.
    (h) Inapplicability of Federal Advisory Committee Act.--The 
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply 
to each Advisory Committee.
    (i) Open Meetings.--The meetings of each Advisory Committee 
shall be open to the public, except that each Advisory 
Committee may by majority vote meet in executive session when 
considering personnel or other information.

[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 
Director, 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). 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. [8.] 7. 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.] 8. 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.] 9. 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.] 10. 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.
    2. Certificates of trade-mark registrations, including 
statements and drawings, together with copies of the same.
    3. The Official Gazette of the United States Patent and 
Trademark Office.
    4. Annual indexes of patents and patentees, and of trade-
marks and registrants.
    5. Annual volumes of decisions in patent and trade-mark 
cases.
    6. Pamphlet copies of the patent laws and rules of 
practice, laws and rules relating to trade-marks, and circulars 
or other publications relating to the business of the Office.
    (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.] 11. 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.] 12. 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. 13. Annual report to Congress

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

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.
    (b) When the day, or the last day, for taking any action or 
paying any fee in the United States Patent and Trademark Office 
falls on Saturday, Sunday, or a Federal holiday within the 
District of Columbia, the action may be taken, or the fee paid, 
on the next succeeding secular or business day.

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.
    (b) Whenever such written declaration is used, the document 
must warn the declarant that willful false statements and the 
like are punishable by fine or imprisonment, or both (18 U.S.C. 
1001).

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.]
32.  Suspension or exclusion from practice.
33.  Unauthorized representation as practitioner.

[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, $1,210, unless the petition is 
        filed under section 133 or 151 of this title, in which 
        case the fee shall be $110.]
            (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, $1,210, 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, $110;

           *       *       *       *       *       *       *

For the purpose of computing fees, a multiple dependent claim 
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, $940.
            (2) 7 years and 6 months after grant, $1,900.
            (3) 11 years and 6 months after grant, $2,910.
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 6 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 6-month grace period 
the payment of an applicable maintenance fee. No fee may 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) * * *

           *       *       *       *       *       *       *

    (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 of Patents and Trademarks] Director.

           *       *       *       *       *       *       *

    (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 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] Director.
    (b) All fees paid to the [Commissioner] Director 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) To the extent and in the amounts provided in advance in 
appropriations Acts, fees authorized in this title or any other 
Act to be charged or established by the [Commissioner] Director 
shall be collected by and shall be available to the 
[Commissioner] Director to carry out the activities of the 
Patent and Trademark Office. [Fees] All fees available to the 
[Commissioner] Director under section 31 of the Trademark Act 
of 1946 [may] shall 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] Director may refund any fee paid by 
mistake or any amount paid in excess of that required.

           *       *       *       *       *       *       *


                CHAPTER 5--INVENTION PROMOTION 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 promoter.
59. Rule of construction.

Sec. 51. Definitions

    For purposes of this chapter--
            (1) the term ``contract for invention promotion 
        services'' means a contract by which an invention 
        promoter undertakes invention promotion services for a 
        customer;
            (2) the term ``customer'' means any person, firm, 
        partnership, corporation, or other entity who enters 
        into a financial relationship or 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, except when 
                that person performs any act described in 
                subparagraph (B) or (C) of paragraph (4); and
            (4) the term ``invention promotion 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, offering to 
                license or sell, 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 
                promotion services.

Sec. 52. Contracting requirements

    (a) In General.--(1) Every contract for invention promotion 
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, the identity and address of such party shall be 
disclosed by such party's agent and such party shall be 
considered a customer for purposes of this chapter.
    (b) Requirements of Invention Promoter.--The invention 
promoter shall--
            (1) state in a written document, at the time a 
        customer enters into a contract forinvention promotion 
        services, whether the usual business practice of the 
        invention promoter 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 promoter, 
        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 invention promoter.
    (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 promotion services by sending a written letter to the 
invention promoter 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 promoter 
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 promoter 
or to a third party for the benefit of the invention promoter, 
without regard to the date or dates appearing in such 
instrument, shall be deemed payment received by the invention 
promoter on the date received for purposes of this section.

Sec. 53. Standard provisions for cover notice

    (a) Contents.--Every contract for invention promotion 
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 
PROMOTER FOR COMMERCIAL POTENTIAL IN THE PAST FIVE (5) YEARS IS 
XXXXX. OF THAT NUMBER, XXXXX RECEIVED POSITIVE EVALUATIONS AND 
XXXXX RECEIVED NEGATIVE EVALUATIONS.
    ``IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO 
THE INVENTION PROMOTER, THE INVENTION PROMOTER 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 PROMOTER IN THE PAST FIVE (5) YEARS IS XXXXX. THE 
TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS INVENTION PROMOTER TO 
HAVE RECEIVED, BY VIRTUE OF THIS INVENTION PROMOTER'S 
PERFORMANCE, AN AMOUNT OF MONEY IN EXCESS OF THE AMOUNT PAID BY 
THE CUSTOMER TO THIS INVENTION PROMOTER IS XXXXXXX. AS A RESULT 
OF THE EFFORTS OF THIS INVENTION PROMOTER, XXXXX NUMBER OF 
CUSTOMERS HAVE RECEIVED LICENSE AGREEMENTS FOR THEIR 
INVENTIONS.
    ``THE OFFICERS OF THIS INVENTION PROMOTER HAVE COLLECTIVELY 
OR INDIVIDUALLY BEEN AFFILIATED IN THE LAST TEN (10) YEARS WITH 
THE FOLLOWING INVENTION PROMOTION COMPANIES: (LIST THE NAMES 
AND ADDRESSES OF ALL PREVIOUS INVENTION PROMOTION 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 WHICH RESULTED IN REGULATORY SANCTIONS OR OTHER 
CORRECTIVE ACTIONS.
    ``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 promoter, 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 PROMOTER 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 promoter, nor with 
respect to customers who have defaulted in their payment to the 
invention promoter.

Sec. 54. Reports to customer required

    With respect to every contract for invention promotion 
services, the invention promoter 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 promotion 
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 the initial 
        payment to the invention promoter;
            (3) a full, clear, and concise description of the 
        specific acts or services that the invention promoter 
        undertakes to perform for the customer;
            (4) a statement as to whether the invention 
        promoter 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 promoter 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 promoter undertakes to 
        perform for the customer;
            (6) if any oral or written representation of 
        estimated or projected customer earnings is given by 
        the invention promoter (or any agent, employee, 
        officer, director, partner, or independent contractor 
        of such invention promoter), 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 promotion services, and a statement that 
        the invention promoter is required to maintain all 
        records and correspondence relating to performance of 
        the invention promotion 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 promotion services, 
        including an estimated date in which such performance 
        is expected to be completed.
    (b) Invention Promoter as Fiduciary.--To the extent that 
the description of the specific acts or services affords 
discretion to the invention promoter with respect to what 
specific acts or services shall be performed, the invention 
promoter 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 promoter's premises during 
normal business hours.

Sec. 56. Remedies

    (a) In General.--(1) Any contract for invention promotion 
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 promotion services entered 
into in reliance upon any material false, fraudulent, or 
misleading information, representation, notice, or 
advertisement of the invention promoter (or any agent, 
employee, officer, director, partner, or independent contractor 
of such invention promoter) 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 promotion 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 promoter offers to perform or 
performs such act through aperson 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 promoter or by any 
material false or fraudulent statement or representation, or 
any omission of material fact, by an invention promoter (or any 
agent, employee, director, officer, partner, or independent 
contractor of such invention promoter) or by failure of an 
invention promoter to make all the disclosures required under 
this chapter, may recover in a civil action against the 
invention promoter (or the officers, directors, or partners of 
such invention promoter) in addition to reasonable costs and 
attorneys' fees, 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, taking 
into account past complaints made against the invention 
promoter that resulted in regulatory sanctions or other 
corrective actions based on those record compiled by the 
Director under section 57.
    (c) Rebuttable Presumption of Injury.--For purposes of this 
section, substantial violation of any provision of this chapter 
by an invention promoter or execution by the customer of a 
contract for invention promotion services in reliance on any 
material false or fraudulent statements 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 promoters publicly available, 
together with any response of the invention promoters.
    (b) Request for Complaints.--The Director may request 
complaints relating to invention promotion 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 promoters.

Sec. 58. Fraudulent representation by an invention promoter

    Whoever, in providing invention promotion 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)(A) an application for patent, published 
        pursuant to section 122(b), by another filed in the 
        United States before the invention by the applicant for 
        patent, except that an international application filed 
        under the treaty defined in section 351(a) shall have 
        the effect under this subsection of a national 
        application published under section 122(b) only if the 
        international application designating the United States 
        was published under Article 21(2)(a) of such treaty in 
        the English language, or
            (B) a patent granted on an application for patent 
        by another filed in the United States before the 
        invention by the applicant for patent, except that a 
        patent shall not be deemed filed in the United States 
        for the purposes of this subsection based on the filing 
        of an international application filed under the treaty 
        defined in section 351(a), or

           *       *       *       *       *       *       *

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

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

    (a) * * *

           *       *       *       *       *       *       *

    (c) Subject matter developed by another person, which 
qualifies as prior art only under [subsection (f) or (g)] one 
or more of subsections (e), (f), and (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.

Sec. 104. Invention made abroad

    (a) In General.--
            (1) * * *

           *       *       *       *       *       *       *

            (3) Use of information.--To the extent that any 
        information in a NAFTA country or a WTO member country 
        concerning knowledge, use, or other activity relevant 
        to proving or disproving a date of invention has not 
        been made available for use in a proceeding in the 
        Patent and Trademark Office, a court, or any other 
        competent authority to the same extent as such 
        information could be made available in the United 
        States, the [Commissioner] Director, court, or such 
        other authority shall draw appropriate inferences, or 
        take other action permitted by statute, rule, or 
        regulation, in favor of the party that requested the 
        information in the proceeding.

           *       *       *       *       *       *       *


                   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.

           *       *       *       *       *       *       *

            (3) Fee and oath.--The application must be 
        accompanied by the fee required by law. The fee and 
        oath 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.
            (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) * * *

           *       *       *       *       *       *       *

            (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 
        Commissioner, a provisional application may be treated 
        as an application filed under subsection (a). Subject 
        to section 119(e)(3) of this title, if no such request 
        is made, the provisional application shall be regarded 
        as abandoned 12 months after the filing date of such 
        application and shall not be subject to revival 
        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 WTO member 
country or in a foreign country which affords similar 
privileges in the case of applications filed in such WTO member 
country or the United States or to citizens of the United 
States, 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, identifying the foreign 
application by specifying its application number, country, and 
the day, month, and year of its filing, is filed in the Patent 
and Trademark Office at such time during the pendency of the 
application as required by the Director.
    (2) The Director may consider the failure of the applicant 
to file a timely claim for priority as a waiver of any such 
claim. The Director may establish procedures, including the 
payment of a surcharge, to accept an unintentionally delayed 
claim under this section.
    (3) The Director may require a certified copy of the 
original foreign application, specification, and drawings upon 
which it is based, a translation if not in the English 
language, and such other information as the Director considers 
necessary. Any such certification shall be made by the foreign 
intellectual property authority in which the foreign 
application was filed and show the date of the application and 
of the filing of the specification and other papers.
    (c) In like manner and subject to the same conditions and 
requirements, the right provided in this section may be based 
upon a subsequent regularly filed application in the same WTO 
member country or foreign country instead of the first filed 
foreign application, provided that any foreign application 
filed prior to such subsequent application has been withdrawn, 
abandoned, or otherwise disposed of, without having been laid 
open to public inspection and without leaving any rights 
outstanding, and has not served, nor thereafter shall serve, as 
a basis for claiming a right of priority.

           *       *       *       *       *       *       *

    (e)(1) An application for patent filed under section 111(a) 
or section 363 of this title for an invention disclosed in the 
manner provided by the first paragraph of section 112 of this 
title in a provisional application filed under section 111(b) 
of this title, by an inventor or inventors named in the 
provisional application, shall have the same effect, as to such 
invention, as though filed on the date of the provisional 
application filed under section 111(b) of this title, if the 
application for patent filed under section 111(a) or section 
363 of this title is filed not later than 12 months after the 
date on which the provisional application was filed and if it 
contains or is amended to contain a specific reference to the 
provisional application.
    (2) A provisional application filed under section 111(b) of 
this title may not be relied upon in any proceeding in the 
Patent and Trademark Office unless the fee set forth in 
subparagraph (A) or (C) of section 41(a)(1) of this title has 
been paid [and the provisional application was pending on the 
filing date of the application for patent under section 111(a) 
or section 363 of this title].
    (3) If the day that is 12 months after the filing date of a 
provisional application falls on a Saturday, Sunday, or Federal 
holiday within the District of Columbia, the period of pendency 
of the provisional application shall be extended to the next 
succeeding secular or business day.
    (f) Applications for plant breeder's rights filed in a WTO 
member country (or in a foreign UPOV Contracting Party) shall 
have the same effect for the purpose of the right of priority 
under subsections (a) through (c) of this section as 
applications for patent, subject to the same conditions and 
requirements of this section as apply to applications for 
patents.
    (g) As used in this section--
            (1) the term ``WTO member country'' has the meaning 
        given that term in section 2(10) of the Uruguay Round 
        Agreements Act; 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. The 
Director may determine the time period during the pendency of 
the application within which an amendment containing the 
specific reference to the earlier filed application is 
submitted. 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 unintentionally 
late submissions of amendments under this section.

Sec. 121. Divisional applications

    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.

[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 any 
such application 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) United States Publication of Applications Published 
Abroad.--
            (1) In general.--(A) Subject to paragraph (2), each 
        application for patent, except applications for design 
        patents filed under chapter 16 and provisional 
        applications filed under section 111(b), shall be 
        published, in accordance with procedures determined by 
        the Director, promptly upon the expiration of a period 
        of 18 months after 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) Pursuant to this title and 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 under section 181 shall not be published.
            (C)(i) If an applicant, upon filing, makes a 
        request that an application not be published pursuant 
        to paragraph (1), and states in such request that the 
        invention disclosed in the application has not been the 
        subject of an application filed in another country, or 
        under a multilateral international agreement, that 
        requires publication of applications 18 months after 
        filing, the application shall not be published as 
        provided in paragraph (1).
            (ii) An applicant may rescind a request made under 
        clause (i) at any time.
            (iii) An applicant who has made a request under 
        clause (i) but who subsequently files, in a foreign 
        country or under a multilateral international agreement 
        specified in clause (i), an application directed to the 
        invention disclosed in the application filed in the 
        Patent and Trademark Office, shall notify the Director 
        of such filing not later than 45 days after the date of 
        the filing of such foreign or international 
        application. A failure of the applicant to provide such 
        notice within the prescribed period shall result in the 
        application being regarded as abandoned, unless it is 
        shown to the satisfaction of the Director that the 
        delay in submitting the notice was unintentional.
            (iv) If a notice is made pursuant to clause (iii), 
        or the applicant rescinds a request pursuant to clause 
        (ii), the Director shall publish the application on or 
        as soon as is practical after the date that is 
        specified in clause (i).
            (v) If an applicant has filed applications in one 
        or more foreign countries, directly or through a 
        multilateral international agreement, and such foreign 
        filed applications corresponding to an application 
        filed in the Patent and Trademark Office or the 
        description of the invention in such foreign filed 
        applications is less extensive than the application or 
        description of the invention in the application filed 
        in the Patent and Trademark Office, the applicant may 
        submit a redacted copy of the application filed in the 
        Patent and Trademark Office eliminating any part or 
        description of the invention in such application that 
        is not also contained in any of the corresponding 
        applications filed in a foreign country. The Director 
        may only publish the redacted copy of the application 
        unless the redacted copy of the application is not 
        received within 16 months after the earliest effective 
        filing date for which a benefit is sought under this 
        title. The provisions of section 154(d) shall not apply 
        to a claim if the description of the invention 
        published in the redacted application filed under this 
        clause with respect to the claim does not enable a 
        person skilled in the art to make and use the subject 
        matter of the claim.
    (c) Protest and Pre-Issuance Opposition.--The Director 
shall establish appropriate procedures to ensure that no 
protest or other form of pre-issuance opposition to the grant 
of a patent on an application may be initiated after 
publication of the application without the express written 
consent of the applicant.

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

    (a) 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.
    (b) The Director shall prescribe regulations to provide for 
the continued examination of applications for patent at the 
request of the applicant. The Commissioner may establish 
appropriate fees for such continued examination and shall 
provide a 50 percent reduction on such fees for small entities 
that qualify for reduced fees under section 41(h)(1) of this 
title.

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.

           *       *       *       *       *       *       *

    (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. By filing such an 
appeal the applicant waives his or her right to proceed under 
section 145 of this title. A patent owner or third-party 
requester in a reexamination proceeding dissatisfied with the 
final decision in an appeal to the Board of Patent Appeals and 
Interferences under section 134 may appeal the decision only to 
the United States Court of Appeals for the Federal Circuit. 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 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) In General.--
            (1) Contents.--Every patent shall contain a short 
        title of the invention and a grant to the patentee, his 
        heirs or assigns, of the right to exclude others from 
        making, using, offering for sale, or selling the 
        invention throughout the United States or importing the 
        invention into the United States, and, if the invention 
        is a process, of the right to exclude others from 
        using, offering for sale or selling throughout the 
        United States, or importing into the United States, 
        products made by that process, referring to the 
        specification for the particulars thereof.
            (2) Term.--Subject to the payment of fees under 
        this title, such grant shall be for a term beginning on 
        the date on which the patent issues and ending 20 years 
        from the date on which the application for the patent 
        was filed in the United States or, if the application 
        contains a specific reference to an earlier filed 
        application or applications under section 120, 121, or 
        365(c) of this title, from the date on which the 
        earliest such application was filed.
            (3) Priority.--Priority under section 119, 365(a), 
        or 365(b) of this title shall not be taken into account 
        in determining the term of a patent.
            (4) Specification and drawing.--A copy of the 
        specification and drawing shall be annexed to the 
        patent and be a part of such patent.
    [(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) Adjustment of Patent Term.--
            (1) Patent term guarantees.--
                    (A) Guarantee of prompt patent and 
                trademark office responses.--Subject to the 
                limitations under paragraph (2), if the issue 
                of an original patent is delayed due to the 
                failure of the Patent and Trademark Office to--
                            (i) make a notification of the 
                        rejection of any claim for a patent or 
                        any objection or argument under section 
                        132, or give or mail a written notice 
                        of allowance under section 151, within 
                        14 months after the date on which the 
                        application was filed;
                            (ii) respond to a reply under 
                        section 132, or to an appeal taken 
                        under section 134, within 4 months 
                        after the date on which the reply was 
                        filed or the appeal was taken;
                            (iii) act on an application within 
                        4 months after the date of a decision 
                        by the Board of Patent Appeals and 
                        Interferences under section 134 or 135 
                        or a decision by a Federal court under 
                        section 141, 145, or 146 in a case in 
                        which allowable claims remain in the 
                        application; or
                            (iv) issue a patent within 4 months 
                        after the date on which the issue fee 
                        was paid under section 151 and all 
                        outstanding requirements were 
                        satisfied;
                the term of the patent shall be extended one 
                day for each day after the end of the period 
                specified in clause (i), (ii), (iii), or (iv), 
                as the case may be, until the action described 
                in such clause is taken.
                    (B) Guarantee of no more than 3-year 
                application pendency.--Subject to the 
                limitations under paragraph (2), if the issue 
                of an original patent is delayed due to the 
                failure of the Patent and Trademark Office to 
                issue a patent within 3 years after the actual 
                filing date of the application in the United 
                States, not including--
                            (i) any time consumed by continued 
                        examination of the application 
                        requested by the applicant under 
                        section 132(b);
                            (ii) any time consumed by a 
                        proceeding under section 135(a), any 
                        time consumed by the imposition of an 
                        order pursuant to section 181, or any 
                        time consumed by appellate review by 
                        the Board of Patent Appeals and 
                        Interferences or by a Federal court; or
                            (iii) any delay in the processing 
                        of the application by the Patent and 
                        Trademark Office requested by the 
                        applicant except as permitted by 
                        paragraph (2)(C),
                the term of the patent shall be extended 1 day 
                for each day after the end of that 3-year 
                period until the patent is issued.
                    (C) Guarantee or adjustments for delays due 
                to interferences, secrecy orders, and 
                appeals.--Subject to the limitations under 
                paragraph (2), if the issue of an original 
                patent is delayed due to--
                            (i) a proceeding under section 
                        135(a);
                            (ii) the imposition of an order 
                        pursuant to section 181; or
                            (iii) appellate review by the Board 
                        of Patent Appeals and Interferences or 
                        by a Federal court in a case in which 
                        the patent was issued pursuant to a 
                        decision in the review reversing an 
                        adverse determination of patentability,
                the term of the patent shall be extended one 
                day for each day of the pendency of the 
                proceeding, order, or review, as the case may 
                be.
            (2) Limitations.--
                    (A) In general.--To the extent that periods 
                of delay attributable to grounds specified in 
                paragraph (1) overlap, the period of any 
                adjustment granted under this subsection shall 
                not exceed the actual number of days the 
                issuance of the patent was delayed.
                    (B) Disclaimed term.--No patent the term of 
                which has been disclaimed beyond a specified 
                date may be adjusted under this section beyond 
                the expiration date specified in the 
                disclaimer.
                    (C) Reduction of period of adjustment.--
                            (i) The period of adjustment of the 
                        term of a patent under paragraph (1) 
                        shall be reduced by a period equal to 
                        the period of time during which the 
                        applicant failed to engage in 
                        reasonable efforts to conclude 
                        prosecution of the application.
                            (ii) With respect to adjustments to 
                        patent term made under the authority of 
                        paragraph (1)(B), an applicant shall be 
                        deemed to have failed to engage in 
                        reasonable efforts to conclude 
                        processing or examination of an 
                        application for the cumulative total of 
                        any periods of time in excess of 3 
                        months that are taken to respond to a 
                        notice from the Office making any 
                        rejection, objection, argument, or 
                        other request, measuring such 3-month 
                        period from the date the notice was 
                        given or mailed to the applicant.
                            (iii) The Director shall prescribe 
                        regulations establishing the 
                        circumstances that constitute a failure 
                        of an applicant to engage in reasonable 
                        efforts to conclude processing or 
                        examination of an application.
            (3) Procedures for patent term adjustment 
        determination.--
                    (A) The Director shall prescribe 
                regulations establishing procedures for the 
                application for and determination of patent 
                term adjustments under this subsection.
                    (B) Under the procedures established under 
                subparagraph (A), the Director shall--
                            (i) make a determination of the 
                        period of any patent term adjustment 
                        under this subsection, and shall 
                        transmit a notice of that determination 
                        with the written notice of allowance of 
                        the application under section 151; and
                            (ii) provide the applicant one 
                        opportunity to request reconsideration 
                        of any patent term adjustment 
                        determination made by the Director.
                    (C) The Director shall reinstate all or 
                part of the cumulative period of time of an 
                adjustment under paragraph (2)(C) if the 
                applicant, prior to the issuance of the patent, 
                makes a showing that, in spite of all due care, 
                the applicant was unable to respond within the 
                3-month period, but in no case shall more than 
                3 additional months for each such response 
                beyond the original 3-month period be 
                reinstated.
                    (D) The Director shall proceed to grant the 
                patent after completion of the Director's 
                determination of a patent term adjustment under 
                the procedures established under this 
                subsection, notwithstanding any appeal taken by 
                the applicant of such determination.
            (4) Appeal of patent term adjustment 
        determination.--
                    (A) An applicant dissatisfied with a 
                determination made by the Director under 
                paragraph (3) shall have remedy by a civil 
                action against the Director filed in the United 
                States District Court for the District of 
                Columbia within 180 days after the grant of the 
                patent. Chapter 7 of title 5 shall apply to 
                such action. Any final judgment resulting in a 
                change to the period of adjustment of the 
                patent term shall be served on the Director, 
                and the Director shall thereafter alter the 
                term of the patent to reflect such change.
                    (B) The determination of a patent term 
                adjustment under this subsection shall not be 
                subject to appeal or challenge by a third party 
                prior to the grant of the patent.

           *       *       *       *       *       *       *

    (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), or in the case of an international 
        application filed under the treaty defined in section 
        351(a) designating the United States under Article 
        21(2)(a) of such treaty, the date of publication of the 
        application, and ending on the date the patent is 
        issued--
                    (A)(i) makes, uses, offers for sale, or 
                sells in the United States the invention as 
                claimed in the published patent application or 
                imports such an invention into the United 
                States; or
                    (ii) if the invention as claimed in the 
                published patent application is a process, 
                uses, offers for sale, or sells in the United 
                States or imports into the United States 
                products made by that process as claimed in the 
                published patent application; and
                    (B) had actual notice of the published 
                patent application, and in a case in which the 
                right arising under this paragraph is based 
                upon an international application designating 
                the United States that is published in a 
                language other than English, a translation of 
                the international application into the English 
                language.
            (2) Right based on substantially identical 
        inventions.--The right under paragraph (1) to obtain a 
        reasonable royalty shall not be available under this 
        subsection unless the invention as claimed in the 
        patent is substantially identical to the invention as 
        claimed in the published patent application.
            (3) time limitation on obtaining a reasonable 
        royalty.--The right under paragraph (1) to obtain a 
        reasonable royalty shall be available only in an action 
        brought not later than 6 years after the patent is 
        issued. The right under paragraph (1) to obtain a 
        reasonable royalty shall not be affected by the 
        duration of the period described in paragraph (1).
            (4) Requirements for international applications.--
                    (A) Effective date.--The right under 
                paragraph (1) to obtain a reasonable royalty 
                based upon the publication under the treaty 
                defined in section 351(a) of an international 
                application designating the United States shall 
                commence on the date on which the Patent and 
                Trademark Office receives a copy of the 
                publication under the treaty of the 
                international application, or, if the 
                publication under the treaty of the 
                international application is in a language 
                other than English, on the date on which the 
                Patent and Trademark Office receives a 
                translation of the international application in 
                the English language.
                    (B) Copies.--The Director may require the 
                applicant to provide a copy of the 
                international application and a translation 
                thereof.
            (5) Issuance of patents on individual claims.--If 
        the Director in a notification to the applicant under 
        section 132 indicates that one or more claims of a 
        published application are allowable, the applicant may 
        request the issuance of a patent incorporating those 
        claims. The applicant may continue prosecution of the 
        remaining claims as provided in chapter 12 of this 
        title. Any subsequently allowed claims may be 
        incorporated into the patent or issued in a separate 
        patent, in accordance with regulations adopted by the 
        Director. The Director may establish appropriate fees 
        to cover the costs of incorporating any additional 
        claims into the patent or issuing a separate patent.

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) The term of a patent which claims a product, a method 
of using a product, or a method of manufacturing a product 
shall be extended in accordance with this section from the 
original expiration date of the patent, which shall include any 
patent term adjustment granted under section 154(b), if--
            (1) * * *

           *       *       *       *       *       *       *

    (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) * * *

           *       *       *       *       *       *       *

            (ii) the Secretary of Health and Human Services if 
        the patent claims any other drug product, a medical 
        device, or a food additive or color additive or a 
        method of using or manufacturing such a product, 
        device, or additive and if the product, device, and 
        additive are subject to the Federal Food, Drug, and 
        Cosmetic Act,
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) * * *
    (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) * * *

           *       *       *       *       *       *       *

    (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.
    (d) The [Secretary of Commerce] Director shall report to 
the Congress annually on the use of statutory invention 
registrations. Such report shall include an assessment of the 
degree to which agencies of the Federal Government are making 
use of the statutory invention registration system, the degree 
to which it aids the management of federally developed 
technology, and an assessment of the cost savings to the 
Federal Government of the use of such procedures.

CHAPTER 15--PLANT PATENTS

           *       *       *       *       *       *       *


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] 
Commissioner of Patents 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] 
Commissioner of Patents, 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] Commissioner of Patents and the 
[Commissioner] Commissioner of Patents 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] Commissioner of Patents 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] Director under rules prescribed by the Patent and 
Trademark Office.
    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] 
Commissioner of Patents 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] Commissioner of Patents 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] Commissioner of Patents 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] Commissioner of 
Patents. The abandonment shall be held to have occurred as of 
the time of violation. The consent of the [Commissioner] 
Commissioner of Patents 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.

           *       *       *       *       *       *       *


Sec. 184. Filing of application in foreign country

    Except when authorized by a license obtained from the 
[Commissioner] Commissioner of Patents a person shall not file 
or cause or authorize to be filed in any foreign country prior 
to six months after filing in the United States an application 
for patent or for the registration of a utility model, 
industrial design, or model in respect of an invention made in 
this country. A license shall not be granted with respect to an 
invention subject to an order issued by the [Commissioner] 
Commissioner of Patents pursuant to section 181 of this title 
without the concurrence of the head of the departments and the 
chief officers of the agencies who caused the order to be 
issued. The license may be granted retroactively where an 
application has been filed abroad through error and without 
deceptive intent and the application does not disclose an 
invention within the scope of section 181 of this title.

           *       *       *       *       *       *       *


Sec. 188. Rules and regulations, delegation of power

    The Atomic Energy Commission, the Secretary of a defense 
department, the chief officer of any other department or agency 
of the Government designated by the President as a defense 
agency of the United States, and the [Secretary of Commerce] 
Patent and Trademark Office, may separately issue rules and 
regulations to enable the respective department or agency to 
carry out the provisions of this chapter, and may delegate any 
power conferred by this chapter.

CHAPTER 18--PATENT RIGHTS IN INVENTIONS MADE WITH FEDERAL ASSISTANCE

           *       *       *       *       *       *       *


Sec. 202. Disposition of rights

    (a) Each nonprofit organization or small business firm may, 
within a reasonable time after disclosure as required by 
paragraph (c)(1) of this section, elect to retain title to any 
subject invention: Provided, however, That a funding agreement 
may provide otherwise (i) when the contractor is not located in 
the United States or does not have a place of business located 
in the United States or is subject to the control of a foreign 
government, (ii) in exceptional circumstances when it is 
determined by the agency that restriction or elimination of the 
right to retain title to any subject invention will better 
promote the policy and objectives of this chapter (iii) when it 
is determined by a Government authority which is authorized by 
statute or Executive order to conduct foreign intelligence or 
counter-intelligence activities that the restriction or 
elimination of the right to retain title to any subject 
invention is necessary to protect the security of such 
activities or, [iv)] (iv) when the funding agreement includes 
the operation of a Government-owned, contractor-operated 
facility of the Department of Energy primarily dedicated to 
that Department's naval nuclear propulsion or weapons related 
programs and all funding agreement limitations under this 
subparagraph on the contractor's right to elect title to a 
subject invention are limited to inventions occurring under the 
above two programs of the Department of Energy.[.] The rights 
of the nonprofit organization or small business firm shall be 
subject to the provisions of paragraph (c) of this section and 
the other provisions of this chapter.

           *       *       *       *       *       *       *


           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 
ntention, 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

           *       *       *       *       *       *       *


    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.  Defense to infringement based on earlier inventor.

           *       *       *       *       *       *       *


Sec. 273. Defense to infringement based on earlier inventor

    (a) Definitions.--For purposes of this section--
            (1) the terms ``commercially used'' and 
        ``commercial use'' mean use of a process or method in 
        the United States or the use of a process or method in 
        the design, testing, or production in the United States 
        of a product or service, so long as such use is in 
        connection with an actual arm's-length sale or other 
        arm's-length commercial transfer of a product or 
        service, whether or not the subject matter at issue is 
        accessible to or otherwise known to the public, except 
        that the subject matter for which commercial marketing 
        or use is subject to a premarketing regulatory review 
        period during which the safety or efficacy of the 
        subject matter is established, including any period 
        specified in section 156(g), shall be deemed 
        ``commercially used'' and in ``commercial use'' during 
        such regulatory review period;
            (2) in the case of activities performed by a 
        nonprofit research laboratory, or nonprofit entity such 
        as a university, research center, or hospital, a use 
        for which the public is the intended beneficiary shall 
        be considered to be a use described in paragraph (1), 
        except that the use--
                    (A) may be asserted as a defense under this 
                section only for continued use by and in the 
                laboratory or nonprofit entity; and
                    (B) may not be asserted as a defense with 
                respect to any subsequent commercialization or 
                use outside such laboratory or nonprofit 
                entity;
            (3) the term ``process or method'' means 
        ``process'' as defined in section 100(b), and includes 
        any invention that produces a useful end product or 
        service which has been or could have been claimed in a 
        patent in the form of a process; and
            (4) the ``effective filing date'' of a patent is 
        the earlier of the actual filing date of the 
        application for the patent or the filing date of any 
        earlier United States, foreign, or international 
        application to which the subject matter at issue is 
        entitled under section 119, 120, or 365 of this title.
    (b) Defense to Infringement.--.
            (1) In general.--It shall be a defense to an action 
        for infringement under section 271 of this title with 
        respect to any subject matter that would otherwise 
        infringe one or more claims asserting a process or 
        method in the patent being asserted against a person, 
        if such person had, acting in good faith, actually 
        reduced the subject matter to practice at least one 
        year before the effective filing date of such patent, 
        and commercially used the subject matter before the 
        effective filing date of such patent.
            (2) Exhaustion of right.--The sale or other 
        disposition, of a product or service produced by a 
        patented process or method, by a person entitled to 
        assert a defense under this section with respect to 
        that product or service shall exhaust the patent 
        owner's rights under the patent to the extent such 
        rights would have been exhausted had such sale or other 
        disposition been made by the patent owner.
            (3) Limitations and qualifications of defense.--The 
        defense to infringement under this section is subject 
        to the following:
                    (A) Patent.--A person may not assert the 
                defense under this section unless the invention 
                for which the defense is asserted is for a 
                process or method, the exclusive purpose of 
                which is to produce a useful end product or 
                service.
                    (B) Derivation.--A person may not assert 
                the defense under this section if the subject 
                matter on which the defense is based was 
                derived from the patentee or persons in privity 
                with the patentee.
                    (C) Not a general license.--The defense 
                asserted by a person under this section is not 
                a general license under all claims of the 
                patent at issue, but extends only to the 
                specific subject matter claimed in the patent 
                with respect to which the person can assert a 
                defense under this chapter, except that the 
                defense shall also extend to variations in the 
                quantity or volume of use of the claimed 
                subject matter, and to improvements in the 
                claimed subject matter that do not infringe 
                additional specifically claimed subject matter 
                of the patent.
            (4) Burden of proof.--A person asserting the 
        defense under this section shall have the burden of 
        establishing the defense by clear and convincing 
        evidence.
            (5) Abandonment of use.--A person who has abandoned 
        commercial use of subject matter may not rely on 
        activities performed before the date of such 
        abandonment in establishing a defense under this 
        section with respect to actions taken after the date of 
        such abandonment.
            (6) Personal defense.--The defense under this 
        section may be asserted only by the person who 
        performed the acts necessary to establish the defense 
        and, except for any transfer to the patent owner, the 
        right to assert the defense shall not be licensed or 
        assigned or transferred to another person except as an 
        ancillary and subordinate part of a good faith 
        assignment or transfer for other reasons of the entire 
        enterprise or line of business to which the defense 
        relates.
            (7) Limitation on sites.--A defense under this 
        section, when acquired as part of a good faith 
        assignment or transfer of an entire enterprise or line 
        of business to which the defense relates, may only be 
        asserted for uses at sites where the subject matter 
        that would otherwise infringe one or more of the claims 
        is in use before the later of the effective filing date 
        of the patent or the date of the assignment or transfer 
        of such enterprise or line of business.
            (8) Unsuccessful assertion of defense.--If the 
        defense under this section is pleaded by a person who 
        is found to infringe the patent and who subsequently 
        fails to demonstrate a reasonable basis for asserting 
        the defense, the court shall find the case exceptional 
        for the purpose of awarding attorney's fees under 
        section 285 of this title.
            (9) Invalidity.--A patent shall not be deemed to be 
        invalid under section 102 or 103 of this title solely 
        because a defense is raised or established under this 
        section.

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] 154(b) or 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

    Upon finding for the claimant the court shall award the 
claimant damages adequate to compensate for the infringement, 
but in no event less than a reasonable royalty for the use made 
of the invention by the infringer, together with interest and 
costs as fixed by the court.
    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. 287. Limitation on damages and other remedies; marking and notice

    (a) * * *

           *       *       *       *       *       *       *

    (c)(1) * * *

           *       *       *       *       *       *       *

    (4) This subsection shall not apply to any patent issued 
[before the date of enactment of this subsection] based on an 
application the earliest effective filing date of which is 
prior to September 30, 1996.

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *


Sec. 294. Voluntary arbitration

    (a) * * *

           *       *       *       *       *       *       *

    (d) When an award is made by an arbitrator, the patentee, 
his assignee or licensee shall give notice thereof in writing 
to the [Commissioner] Director. There shall be a separate 
notice prepared for each patent involved in such proceeding. 
Such notice shall set forth the names and addresses of the 
parties, the name of the inventor, and the name of the patent 
owner, shall designate the number of the patent, and shall 
contain a copy of the award. If an award is modified by a 
court, the party requesting such modification shall give notice 
of such modification to the [Commissioner] Director. The 
[Commissioner] Director shall, upon receipt of either notice, 
enter the same in the record of the prosecution of such patent. 
If the required notice is not filed with the [Commissioner] 
Director, any party to the proceeding may provide such notice 
to the [Commissioner] Director.
    (e) The award shall be unenforceable until the notice 
required by subsection (d) is received by the [Commissioner] 
Director.

           *       *       *       *       *       *       *


[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.
[304.  Reexamination order by Commissioner.
[305.  Conduct of reexamination proceedings.
[306.  Appeal.
[307.  Certificate of patentability, unpatentability, and claim 
          cancellation.

[Sec. 301. Citation of prior art

    [Any person at any time may cite to the Office in writing 
prior art consisting of patents or printed publications which 
that person believes to have a bearing on the patentability of 
any claim of a particular patent. If the person explains in 
writing the pertinency and manner of applying such prior art to 
at least one claim of the patent, the citation of such prior 
art and the explanation thereof will become a part of the 
official file of the patent. At the written request of the 
person citing the prior art, his or her identity will be 
excluded from the patent file and kept confidential.

[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.]

 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 Director.
304. Reexamination order by Director.
305. Conduct of reexamination proceedings.
306. Appeal.
307. Certificate of patentability, unpatentability, and claim 
          cancellation.
308. Reexamination prohibited.
309. Stay of litigation.

Sec. 301. Citation of prior art

    Any person at any time may cite to the Office in writing 
prior art consisting of patents or printed publications which 
that person believes to have a bearing on the patentability of 
any claim of a particular patent. If the person explains in 
writing the pertinency and manner of applying such prior art to 
at least one claim of the patent, the citation of such prior 
art and the explanation thereof will become a part of the 
official file of the patent.

Sec. 302. Request for reexamination

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

Sec. 303. Determination of issue by Director

    (a) Reexamination.--Not later than 3 months after the 
filing of a request for reexamination under section 302, the 
Director shall determine whether a substantial new question of 
patentability affecting any claim of the patent concerned is 
raised by the request, with or without consideration of other 
patents or printed publications. On the Director's initiative, 
and any time, the Director may determine whether a substantial 
new question of patentability is raised by patents and 
publications.
    (b) Record.--A record of the Director's determination under 
subsection (a) shall be placed in the official file of the 
patent, and a copy shall be promptly given or mailed to the 
owner of record of the patent and to the third-party requester, 
if any.
    (c) Final Decision.--A determination by the Director 
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.

Sec. 304. Reexamination order by Director

    If, in a determination made under section 303(a), the 
Director finds that a substantial new question of patentability 
affecting a claim of a patent is raised, the determination 
shall include an order for 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.

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, except as provided for under this section. 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. In addition, the 
third-party requester shall receive a copy of any communication 
sent by the Office to the patent owner concerning the patent 
subject to the reexamination proceeding.
    (3) Each time that the patent owner files a response to an 
action on the merits from the Patent and Trademark Office, the 
third-party requester shall have one opportunity to file 
written comments addressing issues raised by the action of the 
Office or the patent owner's response thereto, if those written 
comments are received by the Office within 30 days after the 
date of service of the patent owner's response.
    (c) Special Dispatch.--Unless otherwise provided by the 
Director for good cause, all 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, 
        and may appeal under the provisions of sections 141 
        through 144, with respect to any decision adverse to 
        the patentability of any original or proposed amended 
        or new claim of the patent; and
            (2) may be a party to any appeal taken by a third-
        party requester under subsection (b).
    (b) Third-Party Requester.--A third-party requester may--
            (1) appeal under the provisions of section 134, and 
        may appeal under the provisions of sections 141 through 
        144, with respect to any final decision favorable to 
        the patentability of any original or proposed amended 
        or new claim of the patent; or
            (2) be a party to any appeal taken by the patent 
        owner, subject to subsection (c).
    (c) Civil Action.--A third-party requester whose request 
for a reexamination results in an order under section 304 is 
estopped from asserting at a later time, in any civil action 
arising in whole or in part under section 1338 of title 28, the 
invalidity of any claim finally determined to be valid and 
patentable on any ground which the third-party requester raised 
or could have raised during the reexamination proceedings. This 
subsection does not prevent the assertion of invalidity based 
on newly discovered prior art unavailable to the third-party 
requester and the Patent and Trademark Office at the time of 
the reexamination proceedings.

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.

           *       *       *       *       *       *       *


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, neither the patent owner nor 
the third-party requester, if any, nor privies of either, may 
file a subsequent request for reexamination of the patent until 
a reexamination certificate is issued and published under 
section 307, unless authorized by the Director.
    (b) Final Decision.--Once a final decision has been entered 
against a party in a civil action arising in whole or in part 
under section 1338 of title 28 that the party has not sustained 
its burden of proving the invalidity of any patent claim in 
suit or if a final decision in a reexamination proceeding 
instituted by a third-party requester is favorable to the 
patentability of any original or proposed amended or new claim 
of the patent then neither that party nor its privies may 
thereafter request 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, and a reexamination requested by that party or its 
privies on the basis of such issues may not thereafter be 
maintained by the Office, notwithstanding any other provision 
of this chapter. This subsection does not prevent the assertion 
of invalidity based on newly discovered prior art unavailable 
to the third-party requester and the Patent and Trademark 
Office at the time of the reexamination proceedings.

Sec. 309. Stay of litigation

    Once an order for reexamination of a patent has been issued 
under section 304, the patent owner may obtain a stay of any 
pending litigation which involves an issue of patentability of 
any claims of the patent which are the subject of the 
reexamination order, unless the court before which such 
litigation is pending determines that a stay would not serve 
the interests of justice.

                  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).

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.
                              ----------                              


                      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
                    (C) a district court to which a case was 
                directed pursuant to section [145 or 146] 145, 
                146, or 154(b) of title 35;

           *       *       *       *       *       *       *


                           PART V--PROCEDURE

           *       *       *       *       *       *       *


                   CHAPTER 115--EVIDENCE; DOCUMENTARY

Sec.
1731. Handwriting.
     * * * * * * *
1744. Copies of [Patent Office] United States Patent and Trademark 
          Office documents, generally.

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *

                              ----------                              


                          ACT OF JULY 5, 1946

          (Commonly Referred to as the Trademark Act of 1946)



           *       *       *       *       *       *       *
                    TITLE I--THE PRINCIPAL REGISTER

           *       *       *       *       *       *       *


    Section 1. (a) The owner of a trademark used in commerce 
may apply to register his or her trademark under this Act on 
the principal register hereby established:
            (1) By filing in the Patent and Trademark Office--
                    (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.

           *       *       *       *       *       *       *

            (3) By complying with such rules or regulations, 
        not inconsistent with law, as may be prescribed by the 
        [Commissioner] Director.
    (b) A person who has a bona fide intention, under 
circumstances showing the good faith of such person, to use a 
trademark in commerce may apply to register the trademark under 
this Act on the principal register hereby established:
            (1) By filing in the Patent and Trademark Office--
                    (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

           *       *       *       *       *       *       *

            (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 and, those goods or services specified in the notice 
of allowance on or in connection with which the mark is used in 
commerce. 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.

    Sec. 2. No trademark by which the goods of the applicant 
may be distinguished from the goods of others shall be refused 
registration on the principal register on account of its nature 
unless it--
    (a)  * * *

           *       *       *       *       *       *       *

    (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 subsections (a), (b), 
(c), (d), (e)(3), and (e)(5) 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.

           *       *       *       *       *       *       *


    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 
cancelation, and upon cancelation 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.


    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.

           *       *       *       *       *       *       *

    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.


    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] 
Director 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) there has been no final decision adverse to 
        registrant's claim of ownership of such mark for such 
        goods or services, or to registrant's right to register 
        the same or to keep the same on the register; and

           *       *       *       *       *       *       *

            (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.

    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 Trial 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 Trial 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 Trial 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 trademarks 
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 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.

           *       *       *       *       *       *       *

    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 Trial 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. (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 
cancelation 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, trademarks, 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 term ``Commissioner'' means the Commissioner of 
Patents and Trademarks.] The term ``Director'' means the 
Director of the United States Patent and Trademark Office.

           *       *       *       *       *       *       *

    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 trial or for reconsideration of the decision on the 
record as made, as the appellate court may deem proper.

           *       *       *       *       *       *       *

                              ----------                              


                      TITLE 5, UNITED STATES CODE

                    PART I--THE AGENCIES GENERALLY

           *       *       *       *       *       *       *


                 CHAPTER 5--ADMINISTRATIVE PROCEDURE

           *       *       *       *       *       *       *


                    SUBCHAPTER I--GENERAL PROVISIONS

Sec. 500. Administrative practice; general provisions

            (1) ``agency'' has the meaning given it by section 
        551 of this title; and
    (a) For the purpose of this section--

           *       *       *       *       *       *       *

    (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.

           *       *       *       *       *       *       *


                       CHAPTER 51--CLASSIFICATION

           *       *       *       *       *       *       *


Sec. 5102. Definitions; application

    (a)  * * *

           *       *       *       *       *       *       *

    (c) This chapter does not apply to--
            (1)  * * *

           *       *       *       *       *       *       *

            [(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. 5314. Positions at level III

    Level III 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:
            Solicitor General of the United States.

           *       *       *       *       *       *       *

            [Assistant Secretary of Commerce and Commissioner 
        of Patents and Trademarks.]
            Under Secretary of Commerce and Director of the 
        United States Patent and Trademark Office.

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *

            [Commissioner of Patents, Department of Commerce.]

           *       *       *       *       *       *       *

            [Deputy Commissioner of Patents and Trademarks.]
            [Assistant Commissioner of Patents.]
            [Assistant Commissioner for Trademarks.]

           *       *       *       *       *       *       *

                              ----------                              


                  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) the heads of each of the Federal 
                agencies required by subsection (n) to 
                establish an STTR program;
                    [(B) the Commissioner of Patents and 
                Trademarks; and]
                    (B) the Director of the United States 
                Patent and Trademark Office; and

           *       *       *       *       *       *       *

                              ----------                              


               SECTION 12 OF THE 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, and 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 Service;
    [(c)] (3) National Institute of Standards and Technology;
    [(d) Patent Office;]
    [(e)] (4) Bureau of the Census;
    [(f)] (5) United States Fire Administration
    [(g)] (6) such other bureaus or other organizational units 
as the Secretary of Commerce may from time to time establish in 
accordance with the law.

           *       *       *       *       *       *       *

                              ----------                              


                 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 
Practices

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *

    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

           *       *       *       *       *       *       *


    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 .

           *       *       *       *       *       *       *

    Sec. 512. (a)(1)  * * *

           *       *       *       *       *       *       *

    (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

           *       *       *       *       *       *       *


    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] Director 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. It shall be unlawful for any person engaged in 
business as a distiller, brewer, rectifier, blender, or other 
producer, or as an importer or wholesaler, of distilled 
spirits, wine, or malt beverages, or as a bottler, or 
warehouseman and bottler, of distilled spirits, directly or 
indirectly or through an affiliate:
    (a) * * *

           *       *       *       *       *       *       *

    (e) 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 Secretary of the Treasury, 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 Secretary of the Treasury 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 August 29, 1935; 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.

           *       *       *       *       *       *       *

                              ----------                              


                       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.

           *       *       *       *       *       *       *

                              ----------                              


               NATIONAL AERONAUTICS AND SPACE ACT OF 1958



           *       *       *       *       *       *       *
                         TITLE III--MISCELLANEOUS

           *       *       *       *       *       *       *


                     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.
    (d) Upon any application as to which any such statement has 
been transmitted to the Administrator, the [Commissioner] 
Director[ may, if the invention is patentable, issue a patent 
to the applicant unless the Administrator, within ninety days 
after receipt of such application and statement, requests that 
such patent be issued to him on behalf of the United States. 
If, within such time, the Administrator files such a request 
with the [Commissioner] Director, the [Commissioner] Director 
shall transmit notice thereof to the applicant, and shall issue 
such patent to the Administrator unless the applicant within 
thirty days after receipt of such notice requests a hearing 
before the Board of Patent Appeals and Interferences on the 
question whether the Administrator is entitled under this 
section to receive such patent. The Board may hear and 
determine, in accordance with rules and procedures established 
for interference cases, the question so presented, and its 
determination shall be subject to appeal by the applicant or by 
the Administrator to the United States Court of Appeals for the 
Federal Circuit in accordance with procedures governing appeals 
from decisions of the Board of Patent Appeals and Interferences 
in other proceedings.
    (e) Whenever any patent has been issued to any applicant in 
conformity with subsection (d), and the Administrator 
thereafter has reason to believe that the statement filed by 
the applicant in connection therewith contained any false 
representation of any material fact, the Administrator within 
five years after the date of issuance of such patent may file 
with the [Commissioner] Director a request for the transfer to 
the Administrator of title to such patent on the records of the 
[Commissioner] Director. Notice of any such request shall be 
transmitted by the [Commissioner] Director to the owner of 
record of such patent, and title, to such patent shall be so 
transferred to the Administrator unless within thirty days 
after receipt of such notice such owner of record requests a 
hearing before the Board of Patent Appeals and Interferences on 
the question whether any such false representation was 
contained in such statement. Such question shall be heard and 
determined, and determination thereof shall be subject to 
review, in the manner prescribed by subsection (d) for 
questions arising thereunder. No request made by the 
Administrator under this subsection for the transfer of title 
to any patent, and no prosecution for the violation of any 
criminal statute, shall be barred by any failure of the 
Administrator to make a request under subsection (d) for the 
issuance of such patent to him, or by any notice previously 
given by the Administrator stating that he had no objection to 
the issuance of such patent to the applicant therefore.

           *       *       *       *       *       *       *

                              ----------                              


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

    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.

           *       *       *       *       *       *       *

                              ----------                              


                     INSPECTOR GENERAL ACT OF 1978

    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, or the Office of 
        Personnel Management; 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 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;

           *       *       *       *       *       *       *