Leahy-Smith America Invents Act

H. R. 1249

One Hundred Twelfth Congress
of the
United States of America
AT T H E F I R S T S E S S I O N
Begun and held at the City of Washington on Wednesday,
the fifth day of January, two thousand and eleven

An Act
To amend title 35, United States Code, to provide for patent reform.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Leahy-Smith
America Invents Act’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
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1. Short title; table of contents.
2. Definitions.
3. First inventor to file.
4. Inventor’s oath or declaration.
5. Defense to infringement based on prior commercial use.
6. Post-grant review proceedings.
7. Patent Trial and Appeal Board.
8. Preissuance submissions by third parties.
9. Venue.
10. Fee setting authority.
11. Fees for patent services.
12. Supplemental examination.
13. Funding agreements.
14. Tax strategies deemed within the prior art.
15. Best mode requirement.
16. Marking.
17. Advice of counsel.
18. Transitional program for covered business method patents.
19. Jurisdiction and procedural matters.
20. Technical amendments.
21. Travel expenses and payment of administrative judges.
22. Patent and Trademark Office funding.
23. Satellite offices.
24. Designation of Detroit satellite office.
25. Priority examination for important technologies.
26. Study on implementation.
27. Study on genetic testing.
28. Patent Ombudsman Program for small business concerns.
29. Establishment of methods for studying the diversity of applicants.
30. Sense of Congress.
31. USPTO study on international patent protections for small businesses.
32. Pro bono program.
33. Limitation on issuance of patents.
34. Study of patent litigation.
35. Effective date.
36. Budgetary effects.
37. Calculation of 60-day period for application of patent term extension.

SEC. 2. DEFINITIONS.

In this Act:
(1) DIRECTOR.—The term ‘‘Director’’ means the Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.

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(2) OFFICE.—The term ‘‘Office’’ means the United States
Patent and Trademark Office.
(3) PATENT PUBLIC ADVISORY COMMITTEE.—The term
‘‘Patent Public Advisory Committee’’ means the Patent Public
Advisory Committee established under section 5(a) of title 35,
United States Code.
(4) TRADEMARK ACT OF 1946.—The term ‘‘Trademark Act
of 1946’’ means the Act entitled ‘‘An Act to provide for the
registration and protection of trademarks used in commerce,
to carry out the provisions of certain international conventions,
and for other purposes’’, approved July 5, 1946 (15 U.S.C.
1051 et seq.) (commonly referred to as the ‘‘Trademark Act
of 1946’’ or the ‘‘Lanham Act’’).
(5) TRADEMARK PUBLIC ADVISORY COMMITTEE.—The term
‘‘Trademark Public Advisory Committee’’ means the Trademark
Public Advisory Committee established under section 5(a) of
title 35, United States Code.
SEC. 3. FIRST INVENTOR TO FILE.

(a) DEFINITIONS.—Section 100 of title 35, United States Code,
is amended—
(1) in subsection (e), by striking ‘‘or inter partes reexamination under section 311’’; and
(2) by adding at the end the following:
‘‘(f) The term ‘inventor’ means the individual or, if a joint
invention, the individuals collectively who invented or discovered
the subject matter of the invention.
‘‘(g) The terms ‘joint inventor’ and ‘coinventor’ mean any 1
of the individuals who invented or discovered the subject matter
of a joint invention.
‘‘(h) The term ‘joint research agreement’ means a written contract, grant, or cooperative agreement entered into by 2 or more
persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.
‘‘(i)(1) The term ‘effective filing date’ for a claimed invention
in a patent or application for patent means—
‘‘(A) if subparagraph (B) does not apply, the actual filing
date of the patent or the application for the patent containing
a claim to the invention; or
‘‘(B) the filing date of the earliest application for which
the patent or application is entitled, as to such invention,
to a right of priority under section 119, 365(a), or 365(b) or
to the benefit of an earlier filing date under section 120, 121,
or 365(c).
‘‘(2) The effective filing date for a claimed invention in an
application for reissue or reissued patent shall be determined by
deeming the claim to the invention to have been contained in
the patent for which reissue was sought.
‘‘(j) The term ‘claimed invention’ means the subject matter
defined by a claim in a patent or an application for a patent.’’.
(b) CONDITIONS FOR PATENTABILITY.—
(1) IN GENERAL.—Section 102 of title 35, United States
Code, is amended to read as follows:
‘‘§ 102. Conditions for patentability; novelty
‘‘(a) NOVELTY; PRIOR ART.—A person shall be entitled to a
patent unless—

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‘‘(1) the claimed invention was patented, described in a
printed publication, or in public use, on sale, or otherwise
available to the public before the effective filing date of the
claimed invention; or
‘‘(2) the claimed invention was described in a patent issued
under section 151, or in an application for patent published
or deemed published under section 122(b), in which the patent
or application, as the case may be, names another inventor
and was effectively filed before the effective filing date of the
claimed invention.
‘‘(b) EXCEPTIONS.—
‘‘(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION.—A disclosure
made 1 year or less before the effective filing date of a claimed
invention shall not be prior art to the claimed invention under
subsection (a)(1) if—
‘‘(A) the disclosure was made by the inventor or joint
inventor or by another who obtained the subject matter
disclosed directly or indirectly from the inventor or a joint
inventor; or
‘‘(B) the subject matter disclosed had, before such
disclosure, been publicly disclosed by the inventor or a
joint inventor or another who obtained the subject matter
disclosed directly or indirectly from the inventor or a joint
inventor.
‘‘(2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.—A disclosure shall not be prior art to a claimed invention
under subsection (a)(2) if—
‘‘(A) the subject matter disclosed was obtained directly
or indirectly from the inventor or a joint inventor;
‘‘(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2),
been publicly disclosed by the inventor or a joint inventor
or another who obtained the subject matter disclosed
directly or indirectly from the inventor or a joint inventor;
or
‘‘(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed
invention, were owned by the same person or subject to
an obligation of assignment to the same person.
‘‘(c) COMMON OWNERSHIP UNDER JOINT RESEARCH AGREEMENTS.—Subject matter disclosed and a claimed invention shall
be deemed to have been owned by the same person or subject
to an obligation of assignment to the same person in applying
the provisions of subsection (b)(2)(C) if—
‘‘(1) the subject matter disclosed was developed and the
claimed invention was made by, or on behalf of, 1 or more
parties to a joint research agreement that was in effect on
or before the effective filing date of the claimed invention;
‘‘(2) the claimed invention was made as a result of activities
undertaken within the scope of the joint research agreement;
and
‘‘(3) the application for patent for the claimed invention
discloses or is amended to disclose the names of the parties
to the joint research agreement.
‘‘(d) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVE AS
PRIOR ART.—For purposes of determining whether a patent or

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application for patent is prior art to a claimed invention under
subsection (a)(2), such patent or application shall be considered
to have been effectively filed, with respect to any subject matter
described in the patent or application—
‘‘(1) if paragraph (2) does not apply, as of the actual filing
date of the patent or the application for patent; or
‘‘(2) if the patent or application for patent is entitled to
claim a right of priority under section 119, 365(a), or 365(b),
or to claim the benefit of an earlier filing date under section
120, 121, or 365(c), based upon 1 or more prior filed applications
for patent, as of the filing date of the earliest such application
that describes the subject matter.’’.
(2) CONTINUITY OF INTENT UNDER THE CREATE ACT.—The
enactment of section 102(c) of title 35, United States Code,
under paragraph (1) of this subsection is done with the same
intent to promote joint research activities that was expressed,
including in the legislative history, through the enactment of
the Cooperative Research and Technology Enhancement Act
of 2004 (Public Law 108–453; the ‘‘CREATE Act’’), the amendments of which are stricken by subsection (c) of this section.
The United States Patent and Trademark Office shall administer section 102(c) of title 35, United States Code, in a manner
consistent with the legislative history of the CREATE Act that
was relevant to its administration by the United States Patent
and Trademark Office.
(3) CONFORMING AMENDMENT.—The item relating to section
102 in the table of sections for chapter 10 of title 35, United
States Code, is amended to read as follows:
‘‘102. Conditions for patentability; novelty.’’.

(c) CONDITIONS FOR PATENTABILITY; NONOBVIOUS SUBJECT
MATTER.—Section 103 of title 35, United States Code, is amended
to read as follows:
‘‘§ 103. Conditions for patentability; non-obvious subject
matter
‘‘A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed
as set forth in section 102, if the differences between the claimed
invention and the prior art are such that the claimed invention
as a whole would have been obvious before the effective filing
date of the claimed invention to a person having ordinary skill
in the art to which the claimed invention pertains. Patentability
shall not be negated by the manner in which the invention was
made.’’.
(d) REPEAL OF REQUIREMENTS FOR INVENTIONS MADE
ABROAD.—Section 104 of title 35, United States Code, and the
item relating to that section in the table of sections for chapter
10 of title 35, United States Code, are repealed.
(e) REPEAL OF STATUTORY INVENTION REGISTRATION.—
(1) IN GENERAL.—Section 157 of title 35, United States
Code, and the item relating to that section in the table of
sections for chapter 14 of title 35, United States Code, are
repealed.
(2) REMOVAL OF CROSS REFERENCES.—Section 111(b)(8) of
title 35, United States Code, is amended by striking ‘‘sections
115, 131, 135, and 157’’ and inserting ‘‘sections 131 and 135’’.

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(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect upon the expiration of the 18-month
period beginning on the date of the enactment of this Act,
and shall apply to any request for a statutory invention registration filed on or after that effective date.
(f) EARLIER FILING DATE FOR INVENTOR AND JOINT INVENTOR.—
Section 120 of title 35, United States Code, is amended by striking
‘‘which is filed by an inventor or inventors named’’ and inserting
‘‘which names an inventor or joint inventor’’.
(g) CONFORMING AMENDMENTS.—
(1) RIGHT OF PRIORITY.—Section 172 of title 35, United
States Code, is amended by striking ‘‘and the time specified
in section 102(d)’’.
(2) LIMITATION ON REMEDIES.—Section 287(c)(4) of title 35,
United States Code, is amended by striking ‘‘the earliest effective filing date of which is prior to’’ and inserting ‘‘which
has an effective filing date before’’.
(3) INTERNATIONAL APPLICATION DESIGNATING THE UNITED
STATES: EFFECT.—Section 363 of title 35, United States Code,
is amended by striking ‘‘except as otherwise provided in section
102(e) of this title’’.
(4) PUBLICATION OF INTERNATIONAL APPLICATION: EFFECT.—
Section 374 of title 35, United States Code, is amended by
striking ‘‘sections 102(e) and 154(d)’’ and inserting ‘‘section
154(d)’’.
(5) PATENT ISSUED ON INTERNATIONAL APPLICATION:
EFFECT.—The second sentence of section 375(a) of title 35,
United States Code, is amended by striking ‘‘Subject to section
102(e) of this title, such’’ and inserting ‘‘Such’’.
(6) LIMIT ON RIGHT OF PRIORITY.—Section 119(a) of title
35, United States Code, is amended by striking ‘‘; but no patent
shall be granted’’ and all that follows through ‘‘one year prior
to such filing’’.
(7) INVENTIONS MADE WITH FEDERAL ASSISTANCE.—Section
202(c) of title 35, United States Code, is amended—
(A) in paragraph (2)—
(i) by striking ‘‘publication, on sale, or public use,’’
and all that follows through ‘‘obtained in the United
States’’ and inserting ‘‘the 1-year period referred to
in section 102(b) would end before the end of that
2-year period’’; and
(ii) by striking ‘‘prior to the end of the statutory’’
and inserting ‘‘before the end of that 1-year’’; and
(B) in paragraph (3), by striking ‘‘any statutory bar
date that may occur under this title due to publication,
on sale, or public use’’ and inserting ‘‘the expiration of
the 1-year period referred to in section 102(b)’’.
(h) DERIVED PATENTS.—
(1) IN GENERAL.—Section 291 of title 35, United States
Code, is amended to read as follows:
‘‘§ 291. Derived Patents
‘‘(a) IN GENERAL.—The owner of a patent may have relief by
civil action against the owner of another patent that claims the
same invention and has an earlier effective filing date, if the invention claimed in such other patent was derived from the inventor

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of the invention claimed in the patent owned by the person seeking
relief under this section.
‘‘(b) FILING LIMITATION.—An action under this section may
be filed only before the end of the 1-year period beginning on
the date of the issuance of the first patent containing a claim
to the allegedly derived invention and naming an individual alleged
to have derived such invention as the inventor or joint inventor.’’.
(2) CONFORMING AMENDMENT.—The item relating to section
291 in the table of sections for chapter 29 of title 35, United
States Code, is amended to read as follows:
‘‘291. Derived patents.’’.

(i) DERIVATION PROCEEDINGS.—Section 135 of title 35, United
States Code, is amended to read as follows:
‘‘§ 135. Derivation proceedings
‘‘(a) INSTITUTION OF PROCEEDING.—An applicant for patent may
file a petition to institute a derivation proceeding in the Office.
The petition shall set forth with particularity the basis for finding
that an inventor named in an earlier application derived the claimed
invention from an inventor named in the petitioner’s application
and, without authorization, the earlier application claiming such
invention was filed. Any such petition may be filed only within
the 1-year period beginning on the date of the first publication
of a claim to an invention that is the same or substantially the
same as the earlier application’s claim to the invention, shall be
made under oath, and shall be supported by substantial evidence.
Whenever the Director determines that a petition filed under this
subsection demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation
proceeding. The determination by the Director whether to institute
a derivation proceeding shall be final and nonappealable.
‘‘(b) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.—
In a derivation proceeding instituted under subsection (a), the
Patent Trial and Appeal Board shall determine whether an inventor
named in the earlier application derived the claimed invention
from an inventor named in the petitioner’s application and, without
authorization, the earlier application claiming such invention was
filed. In appropriate circumstances, the Patent Trial and Appeal
Board may correct the naming of the inventor in any application
or patent at issue. The Director shall prescribe regulations setting
forth standards for the conduct of derivation proceedings, including
requiring parties to provide sufficient evidence to prove and rebut
a claim of derivation.
‘‘(c) DEFERRAL OF DECISION.—The Patent Trial and Appeal
Board may defer action on a petition for a derivation proceeding
until the expiration of the 3-month period beginning on the date
on which the Director issues a patent that includes the claimed
invention that is the subject of the petition. The Patent Trial
and Appeal Board also may defer action on a petition for a derivation proceeding, or stay the proceeding after it has been instituted,
until the termination of a proceeding under chapter 30, 31, or
32 involving the patent of the earlier applicant.
‘‘(d) EFFECT OF FINAL DECISION.—The final decision of the
Patent Trial and Appeal Board, if adverse to claims in an application for patent, shall constitute the final refusal by the Office
on those claims. The final decision of the Patent Trial and Appeal

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Board, if adverse to claims in a patent, shall, if no appeal or
other review of the decision has been or can be taken or had,
constitute cancellation of those claims, and notice of such cancellation shall be endorsed on copies of the patent distributed after
such cancellation.
‘‘(e) SETTLEMENT.—Parties to a proceeding instituted under subsection (a) may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct
inventors of the claimed invention in dispute. Unless the Patent
Trial and Appeal Board finds the agreement to be inconsistent
with the evidence of record, if any, it shall take action consistent
with the agreement. Any written settlement or understanding of
the parties shall be filed with the Director. At the request of
a party to the proceeding, the agreement or understanding shall
be treated as business confidential information, shall be kept separate from the file of the involved patents or applications, and
shall be made available only to Government agencies on written
request, or to any person on a showing of good cause.
‘‘(f) ARBITRATION.—Parties to a proceeding instituted under subsection (a) may, within such time as may be specified by the
Director by regulation, 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 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 Director
from determining the patentability of the claimed inventions
involved in the proceeding.’’.
(j) ELIMINATION OF REFERENCES TO INTERFERENCES.—(1) Sections 134, 145, 146, 154, and 305 of title 35, United States Code,
are each amended by striking ‘‘Board of Patent Appeals and Interferences’’ each place it appears and inserting ‘‘Patent Trial and
Appeal Board’’.
(2)(A) Section 146 of title 35, United States Code, is amended—
(i) by striking ‘‘an interference’’ and inserting ‘‘a derivation proceeding’’; and
(ii) by striking ‘‘the interference’’ and inserting ‘‘the
derivation proceeding’’.
(B) The subparagraph heading for section 154(b)(1)(C) of
title 35, United States Code, is amended to read as follows:
‘‘(C) GUARANTEE OF ADJUSTMENTS FOR DELAYS DUE
TO DERIVATION PROCEEDINGS, SECRECY ORDERS, AND
APPEALS.—’’.
(3) The section heading for section 134 of title 35, United
States Code, is amended to read as follows:
‘‘§ 134. Appeal to the Patent Trial and Appeal Board’’.
(4) The section heading for section 146 of title 35, United
States Code, is amended to read as follows:

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‘‘§ 146. Civil action in case of derivation proceeding’’.
(5) The items relating to sections 134 and 135 in the table
of sections for chapter 12 of title 35, United States Code, are
amended to read as follows:
‘‘134. Appeal to the Patent Trial and Appeal Board.
‘‘135. Derivation proceedings.’’.

(6) The item relating to section 146 in the table of sections
for chapter 13 of title 35, United States Code, is amended to
read as follows:
‘‘146. Civil action in case of derivation proceeding.’’.

(k) STATUTE OF LIMITATIONS.—
(1) IN GENERAL.—Section 32 of title 35, United States Code,
is amended by inserting between the third and fourth sentences
the following: ‘‘A proceeding under this section shall be commenced not later than the earlier of either the date that is
10 years after the date on which the misconduct forming the
basis for the proceeding occurred, or 1 year after the date
on which the misconduct forming the basis for the proceeding
is made known to an officer or employee of the Office as
prescribed in the regulations established under section
2(b)(2)(D).’’.
(2) REPORT TO CONGRESS.—The Director shall provide on
a biennial basis to the Judiciary Committees of the Senate
and House of Representatives a report providing a short
description of incidents made known to an officer or employee
of the Office as prescribed in the regulations established under
section 2(b)(2)(D) of title 35, United States Code, that reflect
substantial evidence of misconduct before the Office but for
which the Office was barred from commencing a proceeding
under section 32 of title 35, United States Code, by the time
limitation established by the fourth sentence of that section.
(3) EFFECTIVE DATE.—The amendment made by paragraph
(1) shall apply in any case in which the time period for instituting a proceeding under section 32 of title 35, United States
Code, had not lapsed before the date of the enactment of this
Act.
(l) SMALL BUSINESS STUDY.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘Chief Counsel’’ means the Chief Counsel
for Advocacy of the Small Business Administration;
(B) the term ‘‘General Counsel’’ means the General
Counsel of the United States Patent and Trademark Office;
and
(C) the term ‘‘small business concern’’ has the meaning
given that term under section 3 of the Small Business
Act (15 U.S.C. 632).
(2) STUDY.—
(A) IN GENERAL.—The Chief Counsel, in consultation
with the General Counsel, shall conduct a study of the
effects of eliminating the use of dates of invention in determining whether an applicant is entitled to a patent under
title 35, United States Code.
(B) AREAS OF STUDY.—The study conducted under
subparagraph (A) shall include examination of the effects

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of eliminating the use of invention dates, including examining—
(i) how the change would affect the ability of small
business concerns to obtain patents and their costs
of obtaining patents;
(ii) whether the change would create, mitigate,
or exacerbate any disadvantages for applicants for patents that are small business concerns relative to
applicants for patents that are not small business concerns, and whether the change would create any advantages for applicants for patents that are small business
concerns relative to applicants for patents that are
not small business concerns;
(iii) the cost savings and other potential benefits
to small business concerns of the change; and
(iv) the feasibility and costs and benefits to small
business concerns of alternative means of determining
whether an applicant is entitled to a patent under
title 35, United States Code.
(3) REPORT.—Not later than the date that is 1 year after
the date of the enactment of this Act, the Chief Counsel shall
submit to the Committee on Small Business and Entrepreneurship and the Committee on the Judiciary of the Senate and
the Committee on Small Business and the Committee on the
Judiciary of the House of Representatives a report on the
results of the study under paragraph (2).
(m) REPORT ON PRIOR USER RIGHTS.—
(1) IN GENERAL.—Not later than the end of the 4-month
period beginning on the date of the enactment of this Act,
the Director shall report, to the Committee on the Judiciary
of the Senate and the Committee on the Judiciary of the House
of Representatives, the findings and recommendations of the
Director on the operation of prior user rights in selected countries in the industrialized world. The report shall include the
following:
(A) A comparison between patent laws of the United
States and the laws of other industrialized countries,
including members of the European Union and Japan,
Canada, and Australia.
(B) An analysis of the effect of prior user rights on
innovation rates in the selected countries.
(C) An analysis of the correlation, if any, between
prior user rights and start-up enterprises and the ability
to attract venture capital to start new companies.
(D) An analysis of the effect of prior user rights, if
any, on small businesses, universities, and individual
inventors.
(E) An analysis of legal and constitutional issues, if
any, that arise from placing trade secret law in patent
law.
(F) An analysis of whether the change to a first-tofile patent system creates a particular need for prior user
rights.
(2) CONSULTATION WITH OTHER AGENCIES.—In preparing
the report required under paragraph (1), the Director shall
consult with the United States Trade Representative, the Secretary of State, and the Attorney General.

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(n) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as otherwise provided in this section, the amendments made by this section shall take effect
upon the expiration of the 18-month period beginning on the
date of the enactment of this Act, and shall apply to any
application for patent, and to any patent issuing thereon, that
contains or contained at any time—
(A) a claim to a claimed invention that has an effective
filing date as defined in section 100(i) of title 35, United
States Code, that is on or after the effective date described
in this paragraph; or
(B) a specific reference under section 120, 121, or 365(c)
of title 35, United States Code, to any patent or application
that contains or contained at any time such a claim.
(2) INTERFERING PATENTS.—The provisions of sections
102(g), 135, and 291 of title 35, United States Code, as in
effect on the day before the effective date set forth in paragraph
(1) of this subsection, shall apply to each claim of an application
for patent, and any patent issued thereon, for which the amendments made by this section also apply, if such application
or patent contains or contained at any time—
(A) a claim to an invention having an effective filing
date as defined in section 100(i) of title 35, United States
Code, that occurs before the effective date set forth in
paragraph (1) of this subsection; or
(B) a specific reference under section 120, 121, or 365(c)
of title 35, United States Code, to any patent or application
that contains or contained at any time such a claim.
(o) SENSE OF CONGRESS.—It is the sense of the Congress that
converting the United States patent system from ‘‘first to invent’’
to a system of ‘‘first inventor to file’’ will promote the progress
of science and the useful arts by securing for limited times to
inventors the exclusive rights to their discoveries and provide inventors with greater certainty regarding the scope of protection provided by the grant of exclusive rights to their discoveries.
(p) SENSE OF CONGRESS.—It is the sense of the Congress that
converting the United States patent system from ‘‘first to invent’’
to a system of ‘‘first inventor to file’’ will improve the United
States patent system and promote harmonization of the United
States patent system with the patent systems commonly used in
nearly all other countries throughout the world with whom the
United States conducts trade and thereby promote greater international uniformity and certainty in the procedures used for
securing the exclusive rights of inventors to their discoveries.
SEC. 4. INVENTOR’S OATH OR DECLARATION.

(a) INVENTOR’S OATH OR DECLARATION.—
(1) IN GENERAL.—Section 115 of title 35, United States
Code, is amended to read as follows:
‘‘§ 115. Inventor’s oath or declaration
‘‘(a) NAMING THE INVENTOR; INVENTOR’S OATH OR DECLARATION.—An application for patent that is filed under section 111(a)
or commences the national stage under section 371 shall include,
or be amended to include, the name of the inventor for any invention
claimed in the application. Except as otherwise provided in this
section, each individual who is the inventor or a joint inventor

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of a claimed invention in an application for patent shall execute
an oath or declaration in connection with the application.
‘‘(b) REQUIRED STATEMENTS.—An oath or declaration under subsection (a) shall contain statements that—
‘‘(1) the application was made or was authorized to be
made by the affiant or declarant; and
‘‘(2) such individual believes himself or herself to be the
original inventor or an original joint inventor of a claimed
invention in the application.
‘‘(c) ADDITIONAL REQUIREMENTS.—The Director may specify
additional information relating to the inventor and the invention
that is required to be included in an oath or declaration under
subsection (a).
‘‘(d) SUBSTITUTE STATEMENT.—
‘‘(1) IN GENERAL.—In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide
a substitute statement under the circumstances described in
paragraph (2) and such additional circumstances that the
Director may specify by regulation.
‘‘(2) PERMITTED CIRCUMSTANCES.—A substitute statement
under paragraph (1) is permitted with respect to any individual
who—
‘‘(A) is unable to file the oath or declaration under
subsection (a) because the individual—
‘‘(i) is deceased;
‘‘(ii) is under legal incapacity; or
‘‘(iii) cannot be found or reached after diligent
effort; or
‘‘(B) is under an obligation to assign the invention
but has refused to make the oath or declaration required
under subsection (a).
‘‘(3) CONTENTS.—A substitute statement under this subsection shall—
‘‘(A) identify the individual with respect to whom the
statement applies;
‘‘(B) set forth the circumstances representing the permitted basis for the filing of the substitute statement in
lieu of the oath or declaration under subsection (a); and
‘‘(C) contain any additional information, including any
showing, required by the Director.
‘‘(e) MAKING REQUIRED STATEMENTS IN ASSIGNMENT OF
RECORD.—An individual who is under an obligation of assignment
of an application for patent may include the required statements
under subsections (b) and (c) in the assignment executed by the
individual, in lieu of filing such statements separately.
‘‘(f) TIME FOR FILING.—A notice of allowance under section
151 may be provided to an applicant for patent only if the applicant
for patent has filed each required oath or declaration under subsection (a) or has filed a substitute statement under subsection
(d) or recorded an assignment meeting the requirements of subsection (e).
‘‘(g) EARLIER-FILED APPLICATION CONTAINING REQUIRED STATEMENTS OR SUBSTITUTE STATEMENT.—
‘‘(1) EXCEPTION.—The requirements under this section shall
not apply to an individual with respect to an application for
patent in which the individual is named as the inventor or

H. R. 1249—12
a joint inventor and who claims the benefit under section 120,
121, or 365(c) of the filing of an earlier-filed application, if—
‘‘(A) an oath or declaration meeting the requirements
of subsection (a) was executed by the individual and was
filed in connection with the earlier-filed application;
‘‘(B) a substitute statement meeting the requirements
of subsection (d) was filed in connection with the earlier
filed application with respect to the individual; or
‘‘(C) an assignment meeting the requirements of subsection (e) was executed with respect to the earlier-filed
application by the individual and was recorded in connection with the earlier-filed application.
‘‘(2) COPIES OF OATHS, DECLARATIONS, STATEMENTS, OR
ASSIGNMENTS.—Notwithstanding paragraph (1), the Director
may require that a copy of the executed oath or declaration,
the substitute statement, or the assignment filed in connection
with the earlier-filed application be included in the later-filed
application.
‘‘(h) SUPPLEMENTAL AND CORRECTED STATEMENTS; FILING ADDITIONAL STATEMENTS.—
‘‘(1) IN GENERAL.—Any person making a statement required
under this section may withdraw, replace, or otherwise correct
the statement at any time. If a change is made in the naming
of the inventor requiring the filing of 1 or more additional
statements under this section, the Director shall establish regulations under which such additional statements may be filed.
‘‘(2) SUPPLEMENTAL STATEMENTS NOT REQUIRED.—If an individual has executed an oath or declaration meeting the requirements of subsection (a) or an assignment meeting the requirements of subsection (e) with respect to an application for patent,
the Director may not thereafter require that individual to make
any additional oath, declaration, or other statement equivalent
to those required by this section in connection with the application for patent or any patent issuing thereon.
‘‘(3) SAVINGS CLAUSE.—A patent shall not be invalid or
unenforceable based upon the failure to comply with a requirement under this section if the failure is remedied as provided
under paragraph (1).
‘‘(i) ACKNOWLEDGMENT OF PENALTIES.—Any declaration or
statement filed pursuant to this section shall contain an acknowledgment that any willful false statement made in such declaration
or statement is punishable under section 1001 of title 18 by fine
or imprisonment of not more than 5 years, or both.’’.
(2) RELATIONSHIP TO DIVISIONAL APPLICATIONS.—Section
121 of title 35, United States Code, is amended by striking
‘‘If a divisional application’’ and all that follows through
‘‘inventor.’’.
(3) REQUIREMENTS FOR NONPROVISIONAL APPLICATIONS.—
Section 111(a) of title 35, United States Code, is amended—
(A) in paragraph (2)(C), by striking ‘‘by the applicant’’
and inserting ‘‘or declaration’’;
(B) in the heading for paragraph (3), by inserting ‘‘OR
DECLARATION’’ after ‘‘AND OATH’’; and
(C) by inserting ‘‘or declaration’’ after ‘‘and oath’’ each
place it appears.

H. R. 1249—13
(4) CONFORMING AMENDMENT.—The item relating to section
115 in the table of sections for chapter 11 of title 35, United
States Code, is amended to read as follows:
‘‘115. Inventor’s oath or declaration.’’.

(b) FILING BY OTHER THAN INVENTOR.—
(1) IN GENERAL.—Section 118 of title 35, United States
Code, is amended to read as follows:
‘‘§ 118. Filing by other than inventor
‘‘A person to whom the inventor has assigned or is under
an obligation to assign the invention may make an application
for patent. A person who otherwise shows sufficient proprietary
interest in the matter may make an 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 appropriate to preserve
the rights of the parties. If the Director grants a patent on an
application filed under this section by a person other than the
inventor, the patent shall be granted to the real party in interest
and upon such notice to the inventor as the Director considers
to be sufficient.’’.
(2) CONFORMING AMENDMENT.—Section 251 of title 35,
United States Code, is amended in the third undesignated
paragraph by inserting ‘‘or the application for the original
patent was filed by the assignee of the entire interest’’ after
‘‘claims of the original patent’’.
(c) SPECIFICATION.—Section 112 of title 35, United States Code,
is amended—
(1) in the first undesignated paragraph—
(A) by striking ‘‘The specification’’ and inserting ‘‘(a)
IN GENERAL.—The specification’’; and
(B) by striking ‘‘of carrying out his invention’’ and
inserting ‘‘or joint inventor of carrying out the invention’’;
(2) in the second undesignated paragraph—
(A) by striking ‘‘The specification’’ and inserting ‘‘(b)
CONCLUSION.—The specification’’; and
(B) by striking ‘‘applicant regards as his invention’’
and inserting ‘‘inventor or a joint inventor regards as the
invention’’;
(3) in the third undesignated paragraph, by striking ‘‘A
claim’’ and inserting ‘‘(c) FORM.—A claim’’;
(4) in the fourth undesignated paragraph, by striking ‘‘Subject to the following paragraph,’’ and inserting ‘‘(d) REFERENCE
IN DEPENDENT FORMS.—Subject to subsection (e),’’;
(5) in the fifth undesignated paragraph, by striking ‘‘A
claim’’ and inserting ‘‘(e) REFERENCE IN MULTIPLE DEPENDENT
FORM.—A claim’’; and
(6) in the last undesignated paragraph, by striking ‘‘An
element’’ and inserting ‘‘(f) ELEMENT IN CLAIM FOR A COMBINATION.—An element’’.
(d) CONFORMING AMENDMENTS.—
(1) Sections 111(b)(1)(A) of title 35, United States Code,
is amended by striking ‘‘the first paragraph of section 112
of this title’’ and inserting ‘‘section 112(a)’’.
(2) Section 111(b)(2) of title 35, United States Code, is
amended by striking ‘‘the second through fifth paragraphs of

H. R. 1249—14
section 112,’’ and inserting ‘‘subsections (b) through (e) of section 112,’’.
(e) EFFECTIVE DATE.—The amendments made by this section
shall take effect upon the expiration of the 1-year period beginning
on the date of the enactment of this Act and shall apply to any
patent application that is filed on or after that effective date.
SEC. 5. DEFENSE TO INFRINGEMENT BASED ON PRIOR COMMERCIAL
USE.

(a) IN GENERAL.—Section 273 of title 35, United States Code,
is amended to read as follows:
‘‘§ 273. Defense to infringement based on prior commercial
use
‘‘(a) IN GENERAL.—A person shall be entitled to a defense
under section 282(b) with respect to subject matter consisting of
a process, or consisting of a machine, manufacture, or composition
of matter used in a manufacturing or other commercial process,
that would otherwise infringe a claimed invention being asserted
against the person if—
‘‘(1) such person, acting in good faith, commercially used
the subject matter in the United States, either in connection
with an internal commercial use or an actual arm’s length
sale or other arm’s length commercial transfer of a useful
end result of such commercial use; and
‘‘(2) such commercial use occurred at least 1 year before
the earlier of either—
‘‘(A) the effective filing date of the claimed invention;
or
‘‘(B) the date on which the claimed invention was disclosed to the public in a manner that qualified for the
exception from prior art under section 102(b).
‘‘(b) BURDEN OF PROOF.—A person asserting a defense under
this section shall have the burden of establishing the defense by
clear and convincing evidence.
‘‘(c) ADDITIONAL COMMERCIAL USES.—
‘‘(1) PREMARKETING REGULATORY REVIEW.—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 to be commercially used for purposes of subsection (a)(1) during such regulatory review period.
‘‘(2) NONPROFIT LABORATORY USE.—A use of subject matter
by a nonprofit research laboratory or other nonprofit entity,
such as a university or hospital, for which the public is the
intended beneficiary, shall be deemed to be a commercial use
for purposes of subsection (a)(1), except that a defense under
this section may be asserted pursuant to this paragraph only
for continued and noncommercial use by and in the laboratory
or other nonprofit entity.
‘‘(d) EXHAUSTION OF RIGHTS.—Notwithstanding subsection
(e)(1), the sale or other disposition of a useful end result by a
person entitled to assert a defense under this section in connection
with a patent with respect to that useful end result shall exhaust
the patent owner’s rights under the patent to the extent that

H. R. 1249—15
such rights would have been exhausted had such sale or other
disposition been made by the patent owner.
‘‘(e) LIMITATIONS AND EXCEPTIONS.—
‘‘(1) PERSONAL DEFENSE.—
‘‘(A) IN GENERAL.—A defense under this section may
be asserted only by the person who performed or directed
the performance of the commercial use described in subsection (a), or by an entity that controls, is controlled
by, or is under common control with such person.
‘‘(B) TRANSFER OF RIGHT.—Except for any transfer to
the patent owner, the right to assert a defense under
this section 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.
‘‘(C) RESTRICTION ON SITES.—A defense under this section, when acquired by a person as part of an assignment
or transfer described in subparagraph (B), may only be
asserted for uses at sites where the subject matter that
would otherwise infringe a claimed invention is in use
before the later of the effective filing date of the claimed
invention or the date of the assignment or transfer of
such enterprise or line of business.
‘‘(2) DERIVATION.—A person may not assert a 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.
‘‘(3) 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 for which it has been established that
a commercial use that qualifies under this section occurred,
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) ABANDONMENT OF USE.—A person who has abandoned
commercial use (that qualifies under this section) 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 on or after the date of
such abandonment.
‘‘(5) UNIVERSITY EXCEPTION.—
‘‘(A) IN GENERAL.—A person commercially using subject
matter to which subsection (a) applies may not assert a
defense under this section if the claimed invention with
respect to which the defense is asserted was, at the time
the invention was made, owned or subject to an obligation
of assignment to either an institution of higher education
(as defined in section 101(a) of the Higher Education Act
of 1965 (20 U.S.C. 1001(a)), or a technology transfer
organization whose primary purpose is to facilitate the
commercialization of technologies developed by one or more
such institutions of higher education.

H. R. 1249—16
‘‘(B) EXCEPTION.—Subparagraph (A) shall not apply
if any of the activities required to reduce to practice the
subject matter of the claimed invention could not have
been undertaken using funds provided by the Federal
Government.
‘‘(f) UNREASONABLE ASSERTION OF DEFENSE.—If the defense
under this section is pleaded by a person who is found to infringe
the patent and who subsequently fails to demonstrate a reasonable
basis for asserting the defense, the court shall find the case exceptional for the purpose of awarding attorney fees under section
285.
‘‘(g) INVALIDITY.—A patent shall not be deemed to be invalid
under section 102 or 103 solely because a defense is raised or
established under this section.’’.
(b) CONFORMING AMENDMENT.—The item relating to section
273 in the table of sections for chapter 28 of title 35, United
States Code, is amended to read as follows:
‘‘273. Defense to infringement based on prior commercial use.’’.

(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to any patent issued on or after the date of the enactment of this Act.
SEC. 6. POST-GRANT REVIEW PROCEEDINGS.

(a) INTER PARTES REVIEW.—Chapter 31 of title 35, United
States Code, is amended to read as follows:
‘‘CHAPTER 31—INTER PARTES REVIEW
‘‘Sec.
‘‘311.
‘‘312.
‘‘313.
‘‘314.
‘‘315.
‘‘316.
‘‘317.
‘‘318.
‘‘319.

Inter partes review.
Petitions.
Preliminary response to petition.
Institution of inter partes review.
Relation to other proceedings or actions.
Conduct of inter partes review.
Settlement.
Decision of the Board.
Appeal.

‘‘§ 311. Inter partes review
‘‘(a) IN GENERAL.—Subject to the provisions of this chapter,
a person who is not the owner of a patent may file with the
Office a petition to institute an inter partes review of the patent.
The Director shall establish, by regulation, fees to be paid by
the person requesting the review, in such amounts as the Director
determines to be reasonable, considering the aggregate costs of
the review.
‘‘(b) SCOPE.—A petitioner in an inter partes review may request
to cancel as unpatentable 1 or more claims of a patent only on
a ground that could be raised under section 102 or 103 and only
on the basis of prior art consisting of patents or printed publications.
‘‘(c) FILING DEADLINE.—A petition for inter partes review shall
be filed after the later of either—
‘‘(1) the date that is 9 months after the grant of a patent
or issuance of a reissue of a patent; or
‘‘(2) if a post-grant review is instituted under chapter 32,
the date of the termination of such post-grant review.

H. R. 1249—17
‘‘§ 312. Petitions
‘‘(a) REQUIREMENTS OF PETITION.—A petition filed under section
311 may be considered only if—
‘‘(1) the petition is accompanied by payment of the fee
established by the Director under section 311;
‘‘(2) the petition identifies all real parties in interest;
‘‘(3) the petition identifies, in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports
the grounds for the challenge to each claim, including—
‘‘(A) copies of patents and printed publications that
the petitioner relies upon in support of the petition; and
‘‘(B) affidavits or declarations of supporting evidence
and opinions, if the petitioner relies on expert opinions;
‘‘(4) the petition provides such other information as the
Director may require by regulation; and
‘‘(5) the petitioner provides copies of any of the documents
required under paragraphs (2), (3), and (4) to the patent owner
or, if applicable, the designated representative of the patent
owner.
‘‘(b) PUBLIC AVAILABILITY.—As soon as practicable after the
receipt of a petition under section 311, the Director shall make
the petition available to the public.
‘‘§ 313. Preliminary response to petition
‘‘If an inter partes review petition is filed under section 311,
the patent owner shall have the right to file a preliminary response
to the petition, within a time period set by the Director, that
sets forth reasons why no inter partes review should be instituted
based upon the failure of the petition to meet any requirement
of this chapter.
‘‘§ 314. Institution of inter partes review
‘‘(a) THRESHOLD.—The Director may not authorize an inter
partes review to be instituted unless the Director determines that
the information presented in the petition filed under section 311
and any response filed under section 313 shows that there is a
reasonable likelihood that the petitioner would prevail with respect
to at least 1 of the claims challenged in the petition.
‘‘(b) TIMING.—The Director shall determine whether to institute
an inter partes review under this chapter pursuant to a petition
filed under section 311 within 3 months after—
‘‘(1) receiving a preliminary response to the petition under
section 313; or
‘‘(2) if no such preliminary response is filed, the last date
on which such response may be filed.
‘‘(c) NOTICE.—The Director shall notify the petitioner and patent
owner, in writing, of the Director’s determination under subsection
(a), and shall make such notice available to the public as soon
as is practicable. Such notice shall include the date on which
the review shall commence.
‘‘(d) NO APPEAL.—The determination by the Director whether
to institute an inter partes review under this section shall be
final and nonappealable.
‘‘§ 315. Relation to other proceedings or actions
‘‘(a) INFRINGER’S CIVIL ACTION.—

H. R. 1249—18
‘‘(1) INTER PARTES REVIEW BARRED BY CIVIL ACTION.—An
inter partes review may not be instituted if, before the date
on which the petition for such a review is filed, the petitioner
or real party in interest filed a civil action challenging the
validity of a claim of the patent.
‘‘(2) STAY OF CIVIL ACTION.—If the petitioner or real party
in interest files a civil action challenging the validity of a
claim of the patent on or after the date on which the petitioner
files a petition for inter partes review of the patent, that civil
action shall be automatically stayed until either—
‘‘(A) the patent owner moves the court to lift the stay;
‘‘(B) the patent owner files a civil action or counterclaim
alleging that the petitioner or real party in interest has
infringed the patent; or
‘‘(C) the petitioner or real party in interest moves the
court to dismiss the civil action.
‘‘(3) TREATMENT OF COUNTERCLAIM.—A counterclaim challenging the validity of a claim of a patent does not constitute
a civil action challenging the validity of a claim of a patent
for purposes of this subsection.
‘‘(b) PATENT OWNER’S ACTION.—An inter partes review may
not be instituted if the petition requesting the proceeding is filed
more than 1 year after the date on which the petitioner, real
party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation
set forth in the preceding sentence shall not apply to a request
for joinder under subsection (c).
‘‘(c) JOINDER.—If the Director institutes an inter partes review,
the Director, in his or her discretion, may join as a party to
that inter partes review any person who properly files a petition
under section 311 that the Director, after receiving a preliminary
response under section 313 or the expiration of the time for filing
such a response, determines warrants the institution of an inter
partes review under section 314.
‘‘(d) MULTIPLE PROCEEDINGS.—Notwithstanding sections 135(a),
251, and 252, and chapter 30, during the pendency of an inter
partes review, if another proceeding or matter involving the patent
is before the Office, the Director may determine the manner in
which the inter partes review or other proceeding or matter may
proceed, including providing for stay, transfer, consolidation, or
termination of any such matter or proceeding.
‘‘(e) ESTOPPEL.—
‘‘(1) PROCEEDINGS BEFORE THE OFFICE.—The petitioner in
an inter partes review of a claim in a patent under this chapter
that results in a final written decision under section 318(a),
or the real party in interest or privy of the petitioner, may
not request or maintain a proceeding before the Office with
respect to that claim on any ground that the petitioner raised
or reasonably could have raised during that inter partes review.
‘‘(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.—The petitioner in an inter partes review of a claim in a patent under
this chapter that results in a final written decision under
section 318(a), or the real party in interest or privy of the
petitioner, may not assert either in a civil action arising in
whole or in part under section 1338 of title 28 or in a proceeding
before the International Trade Commission under section 337
of the Tariff Act of 1930 that the claim is invalid on any

H. R. 1249—19
ground that the petitioner raised or reasonably could have
raised during that inter partes review.
‘‘§ 316. Conduct of inter partes review
‘‘(a) REGULATIONS.—The Director shall prescribe regulations—
‘‘(1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that
any petition or document filed with the intent that it be sealed
shall, if accompanied by a motion to seal, be treated as sealed
pending the outcome of the ruling on the motion;
‘‘(2) setting forth the standards for the showing of sufficient
grounds to institute a review under section 314(a);
‘‘(3) establishing procedures for the submission of supplemental information after the petition is filed;
‘‘(4) establishing and governing inter partes review under
this chapter and the relationship of such review to other proceedings under this title;
‘‘(5) setting forth standards and procedures for discovery
of relevant evidence, including that such discovery shall be
limited to—
‘‘(A) the deposition of witnesses submitting affidavits
or declarations; and
‘‘(B) what is otherwise necessary in the interest of
justice;
‘‘(6) prescribing sanctions for abuse of discovery, abuse
of process, or any other improper use of the proceeding, such
as to harass or to cause unnecessary delay or an unnecessary
increase in the cost of the proceeding;
‘‘(7) providing for protective orders governing the exchange
and submission of confidential information;
‘‘(8) providing for the filing by the patent owner of a
response to the petition under section 313 after an inter partes
review has been instituted, and requiring that the patent owner
file with such response, through affidavits or declarations, any
additional factual evidence and expert opinions on which the
patent owner relies in support of the response;
‘‘(9) setting forth standards and procedures for allowing
the patent owner to move to amend the patent under subsection
(d) to cancel a challenged claim or propose a reasonable number
of substitute claims, and ensuring that any information submitted by the patent owner in support of any amendment
entered under subsection (d) is made available to the public
as part of the prosecution history of the patent;
‘‘(10) providing either party with the right to an oral
hearing as part of the proceeding;
‘‘(11) requiring that the final determination in an inter
partes review be issued not later than 1 year after the date
on which the Director notices the institution of a review under
this chapter, except that the Director may, for good cause
shown, extend the 1-year period by not more than 6 months,
and may adjust the time periods in this paragraph in the
case of joinder under section 315(c);
‘‘(12) setting a time period for requesting joinder under
section 315(c); and
‘‘(13) providing the petitioner with at least 1 opportunity
to file written comments within a time period established by
the Director.

H. R. 1249—20
‘‘(b) CONSIDERATIONS.—In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
‘‘(c) PATENT TRIAL AND APPEAL BOARD.—The Patent Trial and
Appeal Board shall, in accordance with section 6, conduct each
inter partes review instituted under this chapter.
‘‘(d) AMENDMENT OF THE PATENT.—
‘‘(1) IN GENERAL.—During an inter partes review instituted
under this chapter, the patent owner may file 1 motion to
amend the patent in 1 or more of the following ways:
‘‘(A) Cancel any challenged patent claim.
‘‘(B) For each challenged claim, propose a reasonable
number of substitute claims.
‘‘(2) ADDITIONAL MOTIONS.—Additional motions to amend
may be permitted upon the joint request of the petitioner and
the patent owner to materially advance the settlement of a
proceeding under section 317, or as permitted by regulations
prescribed by the Director.
‘‘(3) SCOPE OF CLAIMS.—An amendment under this subsection may not enlarge the scope of the claims of the patent
or introduce new matter.
‘‘(e) EVIDENTIARY STANDARDS.—In an inter partes review
instituted under this chapter, the petitioner shall have the burden
of proving a proposition of unpatentability by a preponderance
of the evidence.
‘‘§ 317. Settlement
‘‘(a) IN GENERAL.—An inter partes review instituted under this
chapter shall be terminated with respect to any petitioner upon
the joint request of the petitioner and the patent owner, unless
the Office has decided the merits of the proceeding before the
request for termination is filed. If the inter partes review is terminated with respect to a petitioner under this section, no estoppel
under section 315(e) shall attach to the petitioner, or to the real
party in interest or privy of the petitioner, on the basis of that
petitioner’s institution of that inter partes review. If no petitioner
remains in the inter partes review, the Office may terminate the
review or proceed to a final written decision under section 318(a).
‘‘(b) AGREEMENTS IN WRITING.—Any agreement or understanding between the patent owner and a petitioner, including
any collateral agreements referred to in such agreement or understanding, made in connection with, or in contemplation of, the
termination of an inter partes review under this section shall be
in writing and a true copy of such agreement or understanding
shall be filed in the Office before the termination of the inter
partes review as between the parties. At the request of a party
to the proceeding, the agreement or understanding shall be treated
as business confidential information, shall be kept separate from
the file of the involved patents, and shall be made available only
to Federal Government agencies on written request, or to any
person on a showing of good cause.
‘‘§ 318. Decision of the Board
‘‘(a) FINAL WRITTEN DECISION.—If an inter partes review is
instituted and not dismissed under this chapter, the Patent Trial

H. R. 1249—21
and Appeal Board shall issue a final written decision with respect
to the patentability of any patent claim challenged by the petitioner
and any new claim added under section 316(d).
‘‘(b) CERTIFICATE.—If the Patent Trial and Appeal Board issues
a final written decision under subsection (a) and the time for
appeal has expired or any appeal has terminated, the Director
shall issue and publish a certificate canceling any claim of the
patent finally determined to be unpatentable, confirming any claim
of the patent determined to be patentable, and incorporating in
the patent by operation of the certificate any new or amended
claim determined to be patentable.
‘‘(c) INTERVENING RIGHTS.—Any proposed amended or new claim
determined to be patentable and incorporated into a patent following an inter partes review under this chapter shall have the
same effect as that specified in section 252 for reissued patents
on the right of any person who made, purchased, or used within
the United States, or imported into the United States, anything
patented by such proposed amended or new claim, or who made
substantial preparation therefor, before the issuance of a certificate
under subsection (b).
‘‘(d) DATA ON LENGTH OF REVIEW.—The Office shall make available to the public data describing the length of time between the
institution of, and the issuance of a final written decision under
subsection (a) for, each inter partes review.
‘‘§ 319. Appeal
‘‘A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 318(a) may appeal
the decision pursuant to sections 141 through 144. Any party to
the inter partes review shall have the right to be a party to
the appeal.’’.
(b) CONFORMING AMENDMENT.—The table of chapters for part
III of title 35, United States Code, is amended by striking the
item relating to chapter 31 and inserting the following:
‘‘31. Inter Partes Review ........................................................................................

311’’.

(c) REGULATIONS AND EFFECTIVE DATE.—
(1) REGULATIONS.—The Director shall, not later than the
date that is 1 year after the date of the enactment of this
Act, issue regulations to carry out chapter 31 of title 35, United
States Code, as amended by subsection (a) of this section.
(2) APPLICABILITY.—
(A) IN GENERAL.—The amendments made by subsection
(a) shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and
shall apply to any patent issued before, on, or after that
effective date.
(B) GRADUATED IMPLEMENTATION.—The Director may
impose a limit on the number of inter partes reviews that
may be instituted under chapter 31 of title 35, United
States Code, during each of the first 4 1-year periods in
which the amendments made by subsection (a) are in effect,
if such number in each year equals or exceeds the number
of inter partes reexaminations that are ordered under
chapter 31 of title 35, United States Code, in the last
fiscal year ending before the effective date of the amendments made by subsection (a).
(3) TRANSITION.—

H. R. 1249—22
(A) IN GENERAL.—Chapter 31 of title 35, United States
Code, is amended—
(i) in section 312—
(I) in subsection (a)—
(aa) in the first sentence, by striking ‘‘a
substantial new question of patentability
affecting any claim of the patent concerned
is raised by the request,’’ and inserting ‘‘the
information presented in the request shows
that there is a reasonable likelihood that the
requester would prevail with respect to at
least 1 of the claims challenged in the
request,’’; and
(bb) in the second sentence, by striking
‘‘The existence of a substantial new question
of patentability’’ and inserting ‘‘A showing that
there is a reasonable likelihood that the
requester would prevail with respect to at
least 1 of the claims challenged in the
request’’; and
(II) in subsection (c), in the second sentence,
by striking ‘‘no substantial new question of patentability has been raised,’’ and inserting ‘‘the
showing required by subsection (a) has not been
made,’’; and
(ii) in section 313, by striking ‘‘a substantial new
question of patentability affecting a claim of the patent
is raised’’ and inserting ‘‘it has been shown that there
is a reasonable likelihood that the requester would
prevail with respect to at least 1 of the claims challenged in the request’’.
(B) APPLICATION.—The amendments made by this
paragraph—
(i) shall take effect on the date of the enactment
of this Act; and
(ii) shall apply to requests for inter partes
reexamination that are filed on or after such date
of enactment, but before the effective date set forth
in paragraph (2)(A) of this subsection.
(C) CONTINUED APPLICABILITY OF PRIOR PROVISIONS.—
The provisions of chapter 31 of title 35, United States
Code, as amended by this paragraph, shall continue to
apply to requests for inter partes reexamination that are
filed before the effective date set forth in paragraph (2)(A)
as if subsection (a) had not been enacted.
(d) POST-GRANT REVIEW.—Part III of title 35, United States
Code, is amended by adding at the end the following:
‘‘CHAPTER 32—POST-GRANT REVIEW
‘‘Sec.
‘‘321.
‘‘322.
‘‘323.
‘‘324.
‘‘325.
‘‘326.
‘‘327.
‘‘328.
‘‘329.

Post-grant review.
Petitions.
Preliminary response to petition.
Institution of post-grant review.
Relation to other proceedings or actions.
Conduct of post-grant review.
Settlement.
Decision of the Board.
Appeal.

H. R. 1249—23
‘‘§ 321. Post-grant review
‘‘(a) IN GENERAL.—Subject to the provisions of this chapter,
a person who is not the owner of a patent may file with the
Office a petition to institute a post-grant review of the patent.
The Director shall establish, by regulation, fees to be paid by
the person requesting the review, in such amounts as the Director
determines to be reasonable, considering the aggregate costs of
the post-grant review.
‘‘(b) SCOPE.—A petitioner in a post-grant review may request
to cancel as unpatentable 1 or more claims of a patent on any
ground that could be raised under paragraph (2) or (3) of section
282(b) (relating to invalidity of the patent or any claim).
‘‘(c) FILING DEADLINE.—A petition for a post-grant review may
only be filed not later than the date that is 9 months after the
date of the grant of the patent or of the issuance of a reissue
patent (as the case may be).
‘‘§ 322. Petitions
‘‘(a) REQUIREMENTS OF PETITION.—A petition filed under section
321 may be considered only if—
‘‘(1) the petition is accompanied by payment of the fee
established by the Director under section 321;
‘‘(2) the petition identifies all real parties in interest;
‘‘(3) the petition identifies, in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports
the grounds for the challenge to each claim, including—
‘‘(A) copies of patents and printed publications that
the petitioner relies upon in support of the petition; and
‘‘(B) affidavits or declarations of supporting evidence
and opinions, if the petitioner relies on other factual evidence or on expert opinions;
‘‘(4) the petition provides such other information as the
Director may require by regulation; and
‘‘(5) the petitioner provides copies of any of the documents
required under paragraphs (2), (3), and (4) to the patent owner
or, if applicable, the designated representative of the patent
owner.
‘‘(b) PUBLIC AVAILABILITY.—As soon as practicable after the
receipt of a petition under section 321, the Director shall make
the petition available to the public.
‘‘§ 323. Preliminary response to petition
‘‘If a post-grant review petition is filed under section 321,
the patent owner shall have the right to file a preliminary response
to the petition, within a time period set by the Director, that
sets forth reasons why no post-grant review should be instituted
based upon the failure of the petition to meet any requirement
of this chapter.
‘‘§ 324. Institution of post-grant review
‘‘(a) THRESHOLD.—The Director may not authorize a post-grant
review to be instituted unless the Director determines that the
information presented in the petition filed under section 321, if
such information is not rebutted, would demonstrate that it is
more likely than not that at least 1 of the claims challenged in
the petition is unpatentable.

H. R. 1249—24
‘‘(b) ADDITIONAL GROUNDS.—The determination required under
subsection (a) may also be satisfied by a showing that the petition
raises a novel or unsettled legal question that is important to
other patents or patent applications.
‘‘(c) TIMING.—The Director shall determine whether to institute
a post-grant review under this chapter pursuant to a petition filed
under section 321 within 3 months after—
‘‘(1) receiving a preliminary response to the petition under
section 323; or
‘‘(2) if no such preliminary response is filed, the last date
on which such response may be filed.
‘‘(d) NOTICE.—The Director shall notify the petitioner and
patent owner, in writing, of the Director’s determination under
subsection (a) or (b), and shall make such notice available to the
public as soon as is practicable. Such notice shall include the
date on which the review shall commence.
‘‘(e) NO APPEAL.—The determination by the Director whether
to institute a post-grant review under this section shall be final
and nonappealable.
‘‘§ 325. Relation to other proceedings or actions
‘‘(a) INFRINGER’S CIVIL ACTION.—
‘‘(1) POST-GRANT REVIEW BARRED BY CIVIL ACTION.—A postgrant review may not be instituted under this chapter if, before
the date on which the petition for such a review is filed,
the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.
‘‘(2) STAY OF CIVIL ACTION.—If the petitioner or real party
in interest files a civil action challenging the validity of a
claim of the patent on or after the date on which the petitioner
files a petition for post-grant review of the patent, that civil
action shall be automatically stayed until either—
‘‘(A) the patent owner moves the court to lift the stay;
‘‘(B) the patent owner files a civil action or counterclaim
alleging that the petitioner or real party in interest has
infringed the patent; or
‘‘(C) the petitioner or real party in interest moves the
court to dismiss the civil action.
‘‘(3) TREATMENT OF COUNTERCLAIM.—A counterclaim challenging the validity of a claim of a patent does not constitute
a civil action challenging the validity of a claim of a patent
for purposes of this subsection.
‘‘(b) PRELIMINARY INJUNCTIONS.—If a civil action alleging
infringement of a patent is filed within 3 months after the date
on which the patent is granted, the court may not stay its consideration of the patent owner’s motion for a preliminary injunction
against infringement of the patent on the basis that a petition
for post-grant review has been filed under this chapter or that
such a post-grant review has been instituted under this chapter.
‘‘(c) JOINDER.—If more than 1 petition for a post-grant review
under this chapter is properly filed against the same patent and
the Director determines that more than 1 of these petitions warrants the institution of a post-grant review under section 324,
the Director may consolidate such reviews into a single post-grant
review.
‘‘(d) MULTIPLE PROCEEDINGS.—Notwithstanding sections 135(a),
251, and 252, and chapter 30, during the pendency of any post-

H. R. 1249—25
grant review under this chapter, if another proceeding or matter
involving the patent is before the Office, the Director may determine
the manner in which the post-grant review or other proceeding
or matter may proceed, including providing for the stay, transfer,
consolidation, or termination of any such matter or proceeding.
In determining whether to institute or order a proceeding under
this chapter, chapter 30, or chapter 31, the Director may take
into account whether, and reject the petition or request because,
the same or substantially the same prior art or arguments previously were presented to the Office.
‘‘(e) ESTOPPEL.—
‘‘(1) PROCEEDINGS BEFORE THE OFFICE.—The petitioner in
a post-grant review of a claim in a patent under this chapter
that results in a final written decision under section 328(a),
or the real party in interest or privy of the petitioner, may
not request or maintain a proceeding before the Office with
respect to that claim on any ground that the petitioner raised
or reasonably could have raised during that post-grant review.
‘‘(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.—The petitioner in a post-grant review of a claim in a patent under
this chapter that results in a final written decision under
section 328(a), or the real party in interest or privy of the
petitioner, may not assert either in a civil action arising in
whole or in part under section 1338 of title 28 or in a proceeding
before the International Trade Commission under section 337
of the Tariff Act of 1930 that the claim is invalid on any
ground that the petitioner raised or reasonably could have
raised during that post-grant review.
‘‘(f) REISSUE PATENTS.—A post-grant review may not be
instituted under this chapter if the petition requests cancellation
of a claim in a reissue patent that is identical to or narrower
than a claim in the original patent from which the reissue patent
was issued, and the time limitations in section 321(c) would bar
filing a petition for a post-grant review for such original patent.
‘‘§ 326. Conduct of post-grant review
‘‘(a) REGULATIONS.—The Director shall prescribe regulations—
‘‘(1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that
any petition or document filed with the intent that it be sealed
shall, if accompanied by a motion to seal, be treated as sealed
pending the outcome of the ruling on the motion;
‘‘(2) setting forth the standards for the showing of sufficient
grounds to institute a review under subsections (a) and (b)
of section 324;
‘‘(3) establishing procedures for the submission of supplemental information after the petition is filed;
‘‘(4) establishing and governing a post-grant review under
this chapter and the relationship of such review to other proceedings under this title;
‘‘(5) setting forth standards and procedures for discovery
of relevant evidence, including that such discovery shall be
limited to evidence directly related to factual assertions
advanced by either party in the proceeding;
‘‘(6) prescribing sanctions for abuse of discovery, abuse
of process, or any other improper use of the proceeding, such

H. R. 1249—26
as to harass or to cause unnecessary delay or an unnecessary
increase in the cost of the proceeding;
‘‘(7) providing for protective orders governing the exchange
and submission of confidential information;
‘‘(8) providing for the filing by the patent owner of a
response to the petition under section 323 after a post-grant
review has been instituted, and requiring that the patent owner
file with such response, through affidavits or declarations, any
additional factual evidence and expert opinions on which the
patent owner relies in support of the response;
‘‘(9) setting forth standards and procedures for allowing
the patent owner to move to amend the patent under subsection
(d) to cancel a challenged claim or propose a reasonable number
of substitute claims, and ensuring that any information submitted by the patent owner in support of any amendment
entered under subsection (d) is made available to the public
as part of the prosecution history of the patent;
‘‘(10) providing either party with the right to an oral
hearing as part of the proceeding;
‘‘(11) requiring that the final determination in any postgrant review be issued not later than 1 year after the date
on which the Director notices the institution of a proceeding
under this chapter, except that the Director may, for good
cause shown, extend the 1-year period by not more than 6
months, and may adjust the time periods in this paragraph
in the case of joinder under section 325(c); and
‘‘(12) providing the petitioner with at least 1 opportunity
to file written comments within a time period established by
the Director.
‘‘(b) CONSIDERATIONS.—In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
‘‘(c) PATENT TRIAL AND APPEAL BOARD.—The Patent Trial and
Appeal Board shall, in accordance with section 6, conduct each
post-grant review instituted under this chapter.
‘‘(d) AMENDMENT OF THE PATENT.—
‘‘(1) IN GENERAL.—During a post-grant review instituted
under this chapter, the patent owner may file 1 motion to
amend the patent in 1 or more of the following ways:
‘‘(A) Cancel any challenged patent claim.
‘‘(B) For each challenged claim, propose a reasonable
number of substitute claims.
‘‘(2) ADDITIONAL MOTIONS.—Additional motions to amend
may be permitted upon the joint request of the petitioner and
the patent owner to materially advance the settlement of a
proceeding under section 327, or upon the request of the patent
owner for good cause shown.
‘‘(3) SCOPE OF CLAIMS.—An amendment under this subsection may not enlarge the scope of the claims of the patent
or introduce new matter.
‘‘(e) EVIDENTIARY STANDARDS.—In a post-grant review
instituted under this chapter, the petitioner shall have the burden
of proving a proposition of unpatentability by a preponderance
of the evidence.

H. R. 1249—27
‘‘§ 327. Settlement
‘‘(a) IN GENERAL.—A post-grant review instituted under this
chapter shall be terminated with respect to any petitioner upon
the joint request of the petitioner and the patent owner, unless
the Office has decided the merits of the proceeding before the
request for termination is filed. If the post-grant review is terminated with respect to a petitioner under this section, no estoppel
under section 325(e) shall attach to the petitioner, or to the real
party in interest or privy of the petitioner, on the basis of that
petitioner’s institution of that post-grant review. If no petitioner
remains in the post-grant review, the Office may terminate the
post-grant review or proceed to a final written decision under section
328(a).
‘‘(b) AGREEMENTS IN WRITING.—Any agreement or understanding between the patent owner and a petitioner, including
any collateral agreements referred to in such agreement or understanding, made in connection with, or in contemplation of, the
termination of a post-grant review under this section shall be in
writing, and a true copy of such agreement or understanding shall
be filed in the Office before the termination of the post-grant review
as between the parties. At the request of a party to the proceeding,
the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the
involved patents, and shall be made available only to Federal
Government agencies on written request, or to any person on a
showing of good cause.
‘‘§ 328. Decision of the Board
‘‘(a) FINAL WRITTEN DECISION.—If a post-grant review is
instituted and not dismissed under this chapter, the Patent Trial
and Appeal Board shall issue a final written decision with respect
to the patentability of any patent claim challenged by the petitioner
and any new claim added under section 326(d).
‘‘(b) CERTIFICATE.—If the Patent Trial and Appeal Board issues
a final written decision under subsection (a) and the time for
appeal has expired or any appeal has terminated, the Director
shall issue and publish a certificate canceling any claim of the
patent finally determined to be unpatentable, confirming any claim
of the patent determined to be patentable, and incorporating in
the patent by operation of the certificate any new or amended
claim determined to be patentable.
‘‘(c) INTERVENING RIGHTS.—Any proposed amended or new claim
determined to be patentable and incorporated into a patent following a post-grant review under this chapter shall have the same
effect as that specified in section 252 of this title for reissued
patents on the right of any person who made, purchased, or used
within the United States, or imported into the United States, anything patented by such proposed amended or new claim, or who
made substantial preparation therefor, before the issuance of a
certificate under subsection (b).
‘‘(d) DATA ON LENGTH OF REVIEW.—The Office shall make available to the public data describing the length of time between the
institution of, and the issuance of a final written decision under
subsection (a) for, each post-grant review.

H. R. 1249—28
‘‘§ 329. Appeal
‘‘A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 328(a) may appeal
the decision pursuant to sections 141 through 144. Any party to
the post-grant review shall have the right to be a party to the
appeal.’’.
(e) CONFORMING AMENDMENT.—The table of chapters for part
III of title 35, United States Code, is amended by adding at the
end the following:
‘‘32. Post-Grant Review ..........................................................................................

321’’.

(f) REGULATIONS AND EFFECTIVE DATE.—
(1) REGULATIONS.—The Director shall, not later than the
date that is 1 year after the date of the enactment of this
Act, issue regulations to carry out chapter 32 of title 35, United
States Code, as added by subsection (d) of this section.
(2) APPLICABILITY.—
(A) IN GENERAL.—The amendments made by subsection
(d) shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and,
except as provided in section 18 and in paragraph (3),
shall apply only to patents described in section 3(n)(1).
(B) LIMITATION.—The Director may impose a limit on
the number of post-grant reviews that may be instituted
under chapter 32 of title 35, United States Code, during
each of the first 4 1-year periods in which the amendments
made by subsection (d) are in effect.
(3) PENDING INTERFERENCES.—
(A) PROCEDURES IN GENERAL.—The Director shall
determine, and include in the regulations issued under
paragraph (1), the procedures under which an interference
commenced before the effective date set forth in paragraph
(2)(A) is to proceed, including whether such interference—
(i) is to be dismissed without prejudice to the filing
of a petition for a post-grant review under chapter
32 of title 35, United States Code; or
(ii) is to proceed as if this Act had not been enacted.
(B) PROCEEDINGS BY PATENT TRIAL AND APPEAL
BOARD.—For purposes of an interference that is commenced
before the effective date set forth in paragraph (2)(A), the
Director may deem the Patent Trial and Appeal Board
to be the Board of Patent Appeals and Interferences, and
may allow the Patent Trial and Appeal Board to conduct
any further proceedings in that interference.
(C) APPEALS.—The authorization to appeal or have
remedy from derivation proceedings in sections 141(d) and
146 of title 35, United States Code, as amended by this
Act, and the jurisdiction to entertain appeals from derivation proceedings in section 1295(a)(4)(A) of title 28, United
States Code, as amended by this Act, shall be deemed
to extend to any final decision in an interference that
is commenced before the effective date set forth in paragraph (2)(A) of this subsection and that is not dismissed
pursuant to this paragraph.
(g) CITATION OF PRIOR ART AND WRITTEN STATEMENTS.—
(1) IN GENERAL.—Section 301 of title 35, United States
Code, is amended to read as follows:

H. R. 1249—29
‘‘§ 301. Citation of prior art and written statements
‘‘(a) IN GENERAL.—Any person at any time may cite to the
Office in writing—
‘‘(1) 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; or
‘‘(2) statements of the patent owner filed in a proceeding
before a Federal court or the Office in which the patent owner
took a position on the scope of any claim of a particular patent.
‘‘(b) OFFICIAL FILE.—If the person citing prior art or written
statements pursuant to subsection (a) explains in writing the pertinence and manner of applying the prior art or written statements
to at least 1 claim of the patent, the citation of the prior art
or written statements and the explanation thereof shall become
a part of the official file of the patent.
‘‘(c) ADDITIONAL INFORMATION.—A party that submits a written
statement pursuant to subsection (a)(2) shall include any other
documents, pleadings, or evidence from the proceeding in which
the statement was filed that addresses the written statement.
‘‘(d) LIMITATIONS.—A written statement submitted pursuant
to subsection (a)(2), and additional information submitted pursuant
to subsection (c), shall not be considered by the Office for any
purpose other than to determine the proper meaning of a patent
claim in a proceeding that is ordered or instituted pursuant to
section 304, 314, or 324. If any such written statement or additional
information is subject to an applicable protective order, such statement or information shall be redacted to exclude information that
is subject to that order.
‘‘(e) CONFIDENTIALITY.—Upon the written request of the person
citing prior art or written statements pursuant to subsection (a),
that person’s identity shall be excluded from the patent file and
kept confidential.’’.
(2) CONFORMING AMENDMENT.—The item relating to section
301 in the table of sections for chapter 30 of title 35, United
States Code, is amended to read as follows:
‘‘301. Citation of prior art and written statements.’’.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall
apply to any patent issued before, on, or after that effective
date.
(h) REEXAMINATION.—
(1) DETERMINATION BY DIRECTOR.—
(A) IN GENERAL.—Section 303(a) of title 35, United
States Code, is amended by striking ‘‘section 301 of this
title’’ and inserting ‘‘section 301 or 302’’.
(B) EFFECTIVE DATE.—The amendment made by this
paragraph shall take effect upon the expiration of the 1year period beginning on the date of the enactment of
this Act and shall apply to any patent issued before, on,
or after that effective date.
(2) APPEAL.—
(A) IN GENERAL.—Section 306 of title 35, United States
Code, is amended by striking ‘‘145’’ and inserting ‘‘144’’.
(B) EFFECTIVE DATE.—The amendment made by this
paragraph shall take effect on the date of the enactment

H. R. 1249—30
of this Act and shall apply to any appeal of a reexamination
before the Board of Patent Appeals and Interferences or
the Patent Trial and Appeal Board that is pending on,
or brought on or after, the date of the enactment of this
Act.
SEC. 7. PATENT TRIAL AND APPEAL BOARD.

(a) COMPOSITION AND DUTIES.—
(1) IN GENERAL.—Section 6 of title 35, United States Code,
is amended to read as follows:
‘‘§ 6. Patent Trial and Appeal Board
‘‘(a) IN GENERAL.—There shall be in the Office a Patent Trial
and Appeal Board. The Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and the
administrative patent judges shall constitute the Patent Trial and
Appeal Board. The administrative patent judges shall be persons
of competent legal knowledge and scientific ability who are
appointed by the Secretary, in consultation with the Director. Any
reference in any Federal law, Executive order, rule, regulation,
or delegation of authority, or any document of or pertaining to
the Board of Patent Appeals and Interferences is deemed to refer
to the Patent Trial and Appeal Board.
‘‘(b) DUTIES.—The Patent Trial and Appeal Board shall—
‘‘(1) on written appeal of an applicant, review adverse
decisions of examiners upon applications for patents pursuant
to section 134(a);
‘‘(2) review appeals of reexaminations pursuant to section
134(b);
‘‘(3) conduct derivation proceedings pursuant to section 135;
and
‘‘(4) conduct inter partes reviews and post-grant reviews
pursuant to chapters 31 and 32.
‘‘(c) 3-MEMBER PANELS.—Each appeal, derivation proceeding,
post-grant review, and inter partes review shall be heard by at
least 3 members of the Patent Trial and Appeal Board, who shall
be designated by the Director. Only the Patent Trial and Appeal
Board may grant rehearings.
‘‘(d) TREATMENT OF PRIOR APPOINTMENTS.—The Secretary of
Commerce may, in the Secretary’s discretion, deem the appointment
of an administrative patent judge who, before the date of the
enactment of this subsection, held office pursuant to an appointment
by the Director to take effect on the date on which the Director
initially appointed the administrative patent judge. It shall be
a defense to a challenge to the appointment of an administrative
patent judge on the basis of the judge’s having been originally
appointed by the Director that the administrative patent judge
so appointed was acting as a de facto officer.’’.
(2) CONFORMING AMENDMENT.—The item relating to section
6 in the table of sections for chapter 1 of title 35, United
States Code, is amended to read as follows:
‘‘6. Patent Trial and Appeal Board.’’.

(b) ADMINISTRATIVE APPEALS.—Section 134 of title 35, United
States Code, is amended—
(1) in subsection (b), by striking ‘‘any reexamination proceeding’’ and inserting ‘‘a reexamination’’; and

H. R. 1249—31
(2) by striking subsection (c).
(c) CIRCUIT APPEALS.—
(1) IN GENERAL.—Section 141 of title 35, United States
Code, is amended to read as follows:
‘‘§ 141. Appeal to Court of Appeals for the Federal Circuit
‘‘(a) EXAMINATIONS.—An applicant who is dissatisfied with the
final decision in an appeal to the Patent Trial and Appeal Board
under section 134(a) may appeal the Board’s 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.
‘‘(b) REEXAMINATIONS.—A patent owner who is dissatisfied with
the final decision in an appeal of a reexamination to the Patent
Trial and Appeal Board under section 134(b) may appeal the Board’s
decision only to the United States Court of Appeals for the Federal
Circuit.
‘‘(c) POST-GRANT AND INTER PARTES REVIEWS.—A party to an
inter partes review or a post-grant review who is dissatisfied with
the final written decision of the Patent Trial and Appeal Board
under section 318(a) or 328(a) (as the case may be) may appeal
the Board’s decision only to the United States Court of Appeals
for the Federal Circuit.
‘‘(d) DERIVATION PROCEEDINGS.—A party to a derivation proceeding who is dissatisfied with the final decision of the Patent
Trial and Appeal Board in the proceeding 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
derivation proceeding, within 20 days after the appellant has filed
notice of appeal in accordance with section 142, files notice with
the Director that the party elects to have all further proceedings
conducted as provided in section 146. If the appellant does not,
within 30 days after the filing of such notice by the adverse party,
file a civil action under section 146, the Board’s decision shall
govern the further proceedings in the case.’’.
(2) JURISDICTION.—Section 1295(a)(4)(A) of title 28, United
States Code, is amended to read as follows:
‘‘(A) the Patent Trial and Appeal Board of the United
States Patent and Trademark Office with respect to a
patent application, derivation proceeding, reexamination,
post-grant review, or inter partes review under title 35,
at the instance of a party who exercised that party’s right
to participate in the applicable proceeding before or appeal
to the Board, except that an applicant or a party to a
derivation proceeding may also have remedy by civil action
pursuant to section 145 or 146 of title 35; an appeal under
this subparagraph of a decision of the Board with respect
to an application or derivation proceeding shall waive the
right of such applicant or party to proceed under section
145 or 146 of title 35;’’.
(3) PROCEEDINGS ON APPEAL.—Section 143 of title 35,
United States Code, is amended—
(A) by striking the third sentence and inserting the
following: ‘‘In an ex parte case, the Director shall submit
to the court in writing the grounds for the decision of
the Patent and Trademark Office, addressing all of the
issues raised in the appeal. The Director shall have the

H. R. 1249—32
right to intervene in an appeal from a decision entered
by the Patent Trial and Appeal Board in a derivation
proceeding under section 135 or in an inter partes or postgrant review under chapter 31 or 32.’’; and
(B) by striking the last sentence.
(d) CONFORMING AMENDMENTS.—
(1) ATOMIC ENERGY ACT OF 1954.—Section 152 of the Atomic
Energy Act of 1954 (42 U.S.C. 2182) is amended in the third
undesignated paragraph—
(A) by striking ‘‘Board of Patent Appeals and Interferences’’ each place it appears and inserting ‘‘Patent Trial
and Appeal Board’’; and
(B) by inserting ‘‘and derivation’’ after ‘‘established for
interference’’.
(2) TITLE 51.—Section 20135 of title 51, United States
Code, is amended—
(A) in subsections (e) and (f), by striking ‘‘Board of
Patent Appeals and Interferences’’ each place it appears
and inserting ‘‘Patent Trial and Appeal Board’’; and
(B) in subsection (e), by inserting ‘‘and derivation’’
after ‘‘established for interference’’.
(e) EFFECTIVE DATE.—The amendments made by this section
shall take effect upon the expiration of the 1-year period beginning
on the date of the enactment of this Act and shall apply to proceedings commenced on or after that effective date, except that—
(1) the extension of jurisdiction to the United States Court
of Appeals for the Federal Circuit to entertain appeals of
decisions of the Patent Trial and Appeal Board in reexaminations under the amendment made by subsection (c)(2) shall
be deemed to take effect on the date of the enactment of
this Act and shall extend to any decision of the Board of
Patent Appeals and Interferences with respect to a reexamination that is entered before, on, or after the date of the enactment
of this Act;
(2) the provisions of sections 6, 134, and 141 of title 35,
United States Code, as in effect on the day before the effective
date of the amendments made by this section shall continue
to apply to inter partes reexaminations that are requested
under section 311 of such title before such effective date;
(3) the Patent Trial and Appeal Board may be deemed
to be the Board of Patent Appeals and Interferences for purposes of appeals of inter partes reexaminations that are
requested under section 311 of title 35, United States Code,
before the effective date of the amendments made by this
section; and
(4) the Director’s right under the fourth sentence of section
143 of title 35, United States Code, as amended by subsection
(c)(3) of this section, to intervene in an appeal from a decision
entered by the Patent Trial and Appeal Board shall be deemed
to extend to inter partes reexaminations that are requested
under section 311 of such title before the effective date of
the amendments made by this section.
SEC. 8. PREISSUANCE SUBMISSIONS BY THIRD PARTIES.

(a) IN GENERAL.—Section 122 of title 35, United States Code,
is amended by adding at the end the following:
‘‘(e) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.—

H. R. 1249—33
‘‘(1) IN GENERAL.—Any third party may submit for consideration and inclusion in the record of a patent application, any
patent, published patent application, or other printed publication of potential relevance to the examination of the application,
if such submission is made in writing before the earlier of—
‘‘(A) the date a notice of allowance under section 151
is given or mailed in the application for patent; or
‘‘(B) the later of—
‘‘(i) 6 months after the date on which the application for patent is first published under section 122
by the Office, or
‘‘(ii) the date of the first rejection under section
132 of any claim by the examiner during the examination of the application for patent.
‘‘(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—
‘‘(A) set forth a concise description of the asserted
relevance of each submitted document;
‘‘(B) be accompanied by such fee as the Director may
prescribe; and
‘‘(C) include a statement by the person making such
submission affirming that the submission was made in
compliance with this section.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall take effect upon the expiration of the 1-year period beginning
on the date of the enactment of this Act and shall apply to any
patent application filed before, on, or after that effective date.
SEC. 9. VENUE.

(a) TECHNICAL AMENDMENTS RELATING TO VENUE.—Sections
32, 145, 146, 154(b)(4)(A), and 293 of title 35, United States Code,
and section 21(b)(4) of the Trademark Act of 1946 (15 U.S.C.
1071(b)(4)), are each amended by striking ‘‘United States District
Court for the District of Columbia’’ each place that term appears
and inserting ‘‘United States District Court for the Eastern District
of Virginia’’.
(b) 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 civil action commenced on or after that date.
SEC. 10. FEE SETTING AUTHORITY.

(a) FEE SETTING.—
(1) IN GENERAL.—The Director may set or adjust by rule
any fee established, authorized, or charged under title 35,
United States Code, or the Trademark Act of 1946 (15 U.S.C.
1051 et seq.), for any services performed by or materials furnished by, the Office, subject to paragraph (2).
(2) FEES TO RECOVER COSTS.—Fees may be set or adjusted
under paragraph (1) only to recover the aggregate estimated
costs to the Office for processing, activities, services, and materials relating to patents (in the case of patent fees) and trademarks (in the case of trademark fees), including administrative
costs of the Office with respect to such patent or trademark
fees (as the case may be).
(b) SMALL AND MICRO ENTITIES.—The fees set or adjusted under
subsection (a) for filing, searching, examining, issuing, appealing,
and maintaining patent applications and patents shall be reduced
by 50 percent with respect to the application of such fees to any

H. R. 1249—34
small entity that qualifies for reduced fees under section 41(h)(1)
of title 35, United States Code, and shall be reduced by 75 percent
with respect to the application of such fees to any micro entity
as defined in section 123 of that title (as added by subsection
(g) of this section).
(c) REDUCTION OF FEES IN CERTAIN FISCAL YEARS.—In each
fiscal year, the Director—
(1) shall consult with the Patent Public Advisory Committee and the Trademark Public Advisory Committee on the
advisability of reducing any fees described in subsection (a);
and
(2) after the consultation required under paragraph (1),
may reduce such fees.
(d) ROLE OF THE PUBLIC ADVISORY COMMITTEE.—The Director
shall—
(1) not less than 45 days before publishing any proposed
fee under subsection (a) in the Federal Register, submit the
proposed fee to the Patent Public Advisory Committee or the
Trademark Public Advisory Committee, or both, as appropriate;
(2)(A) provide the relevant advisory committee described
in paragraph (1) a 30-day period following the submission of
any proposed fee, in which to deliberate, consider, and comment
on such proposal;
(B) require that, during that 30-day period, the relevant
advisory committee hold a public hearing relating to such proposal; and
(C) assist the relevant advisory committee in carrying out
that public hearing, including by offering the use of the
resources of the Office to notify and promote the hearing to
the public and interested stakeholders;
(3) require the relevant advisory committee to make available to the public a written report setting forth in detail the
comments, advice, and recommendations of the committee
regarding the proposed fee; and
(4) consider and analyze any comments, advice, or recommendations received from the relevant advisory committee
before setting or adjusting (as the case may be) the fee.
(e) PUBLICATION IN THE FEDERAL REGISTER.—
(1) PUBLICATION AND RATIONALE.—The Director shall—
(A) publish any proposed fee change under this section
in the Federal Register;
(B) include, in such publication, the specific rationale
and purpose for the proposal, including the possible
expectations or benefits resulting from the proposed
change; and
(C) notify, through the Chair and Ranking Member
of the Committees on the Judiciary of the Senate and
the House of Representatives, the Congress of the proposed
change not later than the date on which the proposed
change is published under subparagraph (A).
(2) PUBLIC COMMENT PERIOD.—The Director shall, in the
publication under paragraph (1), provide the public a period
of not less than 45 days in which to submit comments on
the proposed change in fees.
(3) PUBLICATION OF FINAL RULE.—The final rule setting
or adjusting a fee under this section shall be published in

H. R. 1249—35
the Federal Register and in the Official Gazette of the Patent
and Trademark Office.
(4) CONGRESSIONAL COMMENT PERIOD.—A fee set or
adjusted under subsection (a) may not become effective—
(A) before the end of the 45-day period beginning on
the day after the date on which the Director publishes
the final rule adjusting or setting the fee under paragraph
(3); or
(B) if a law is enacted disapproving such fee.
(5) RULE OF CONSTRUCTION.—Rules prescribed under this
section shall not diminish—
(A) the rights of an applicant for a patent under title
35, United States Code, or for a mark under the Trademark
Act of 1946; or
(B) any rights under a ratified treaty.
(f) RETENTION OF AUTHORITY.—The Director retains the
authority under subsection (a) to set or adjust fees only during
such period as the Patent and Trademark Office remains an agency
within the Department of Commerce.
(g) MICRO ENTITY DEFINED.—
(1) IN GENERAL.—Chapter 11 of title 35, United States
Code, is amended by adding at the end the following new
section:
‘‘§ 123. Micro entity defined
‘‘(a) IN GENERAL.—For purposes of this title, the term ‘micro
entity’ means an applicant who makes a certification that the
applicant—
‘‘(1) qualifies as a small entity, as defined in regulations
issued by the Director;
‘‘(2) has not been named as an inventor on more than
4 previously filed patent applications, other than applications
filed in another country, provisional applications under section
111(b), or international applications filed under the treaty
defined in section 351(a) for which the basic national fee under
section 41(a) was not paid;
‘‘(3) did not, in the calendar year preceding the calendar
year in which the applicable fee is being paid, have a gross
income, as defined in section 61(a) of the Internal Revenue
Code of 1986, exceeding 3 times the median household income
for that preceding calendar year, as most recently reported
by the Bureau of the Census; and
‘‘(4) has not assigned, granted, or conveyed, and is not
under an obligation by contract or law to assign, grant, or
convey, a license or other ownership interest in the application
concerned to an entity that, in the calendar year preceding
the calendar year in which the applicable fee is being paid,
had a gross income, as defined in section 61(a) of the Internal
Revenue Code of 1986, exceeding 3 times the median household
income for that preceding calendar year, as most recently
reported by the Bureau of the Census.
‘‘(b) APPLICATIONS RESULTING FROM PRIOR EMPLOYMENT.—An
applicant is not considered to be named on a previously filed application for purposes of subsection (a)(2) if the applicant has assigned,
or is under an obligation by contract or law to assign, all ownership
rights in the application as the result of the applicant’s previous
employment.

H. R. 1249—36
‘‘(c) FOREIGN CURRENCY EXCHANGE RATE.—If an applicant’s
or entity’s gross income in the preceding calendar year is not
in United States dollars, the average currency exchange rate, as
reported by the Internal Revenue Service, during that calendar
year shall be used to determine whether the applicant’s or entity’s
gross income exceeds the threshold specified in paragraphs (3)
or (4) of subsection (a).
‘‘(d) INSTITUTIONS OF HIGHER EDUCATION.—For purposes of this
section, a micro entity shall include an applicant who certifies
that—
‘‘(1) the applicant’s employer, from which the applicant
obtains the majority of the applicant’s income, is an institution
of higher education as defined in section 101(a) of the Higher
Education Act of 1965 (20 U.S.C. 1001(a)); or
‘‘(2) the applicant has assigned, granted, conveyed, or is
under an obligation by contract or law, to assign, grant, or
convey, a license or other ownership interest in the particular
applications to such an institution of higher education.
‘‘(e) DIRECTOR’S AUTHORITY.—In addition to the limits imposed
by this section, the Director may, in the Director’s discretion, impose
income limits, annual filing limits, or other limits on who may
qualify as a micro entity pursuant to this section if the Director
determines that such additional limits are reasonably necessary
to avoid an undue impact on other patent applicants or owners
or are otherwise reasonably necessary and appropriate. At least
3 months before any limits proposed to be imposed pursuant to
this subsection take effect, the Director shall inform the Committee
on the Judiciary of the House of Representatives and the Committee
on the Judiciary of the Senate of any such proposed limits.’’.
(2) CONFORMING AMENDMENT.—Chapter 11 of title 35,
United States Code, is amended by adding at the end the
following new item:
‘‘123. Micro entity defined.’’.

(h) ELECTRONIC FILING INCENTIVE.—
(1) IN GENERAL.—Notwithstanding any other provision of
this section, an additional fee of $400 shall be established
for each application for an original patent, except for a design,
plant, or provisional application, that is not filed by electronic
means as prescribed by the Director. The fee established by
this subsection shall be reduced by 50 percent for small entities
that qualify for reduced fees under section 41(h)(1) of title
35, United States Code. All fees paid under this subsection
shall be deposited in the Treasury as an offsetting receipt
that shall not be available for obligation or expenditure.
(2) EFFECTIVE DATE.—This subsection shall take effect upon
the expiration of the 60-day period beginning on the date of
the enactment of this Act.
(i) EFFECTIVE DATE; SUNSET.—
(1) EFFECTIVE DATE.—Except as provided in subsection (h),
this section and the amendments made by this section shall
take effect on the date of the enactment of this Act.
(2) SUNSET.—The authority of the Director to set or adjust
any fee under subsection (a) shall terminate upon the expiration
of the 7-year period beginning on the date of the enactment
of this Act.

H. R. 1249—37
(3) PRIOR REGULATIONS NOT AFFECTED.—The termination
of authority under this subsection shall not affect any regulations issued under this section before the effective date of
such termination or any rulemaking proceeding for the issuance
of regulations under this section that is pending on such date.
SEC. 11. FEES FOR PATENT SERVICES.

(a) GENERAL PATENT SERVICES.—Subsections (a) and (b) of section 41 of title 35, United States Code, are amended to read as
follows:
‘‘(a) GENERAL FEES.—The Director shall charge the following
fees:
‘‘(1) FILING AND BASIC NATIONAL FEES.—
‘‘(A) On filing each application for an original patent,
except for design, plant, or provisional applications, $330.
‘‘(B) On filing each application for an original design
patent, $220.
‘‘(C) On filing each application for an original plant
patent, $220.
‘‘(D) On filing each provisional application for an
original patent, $220.
‘‘(E) On filing each application for the reissue of a
patent, $330.
‘‘(F) The basic national fee for each international
application filed under the treaty defined in section 351(a)
entering the national stage under section 371, $330.
‘‘(G) In addition, excluding any sequence listing or
computer program listing filed in an electronic medium
as prescribed by the Director, for any application the specification and drawings of which exceed 100 sheets of paper
(or equivalent as prescribed by the Director if filed in
an electronic medium), $270 for each additional 50 sheets
of paper (or equivalent as prescribed by the Director if
filed in an electronic medium) or fraction thereof.
‘‘(2) EXCESS CLAIMS FEES.—
‘‘(A) IN GENERAL.—In addition to the fee specified in
paragraph (1)—
‘‘(i) on filing or on presentation at any other time,
$220 for each claim in independent form in excess
of 3;
‘‘(ii) on filing or on presentation at any other time,
$52 for each claim (whether dependent or independent)
in excess of 20; and
‘‘(iii) for each application containing a multiple
dependent claim, $390.
‘‘(B) MULTIPLE DEPENDENT CLAIMS.—For the purpose
of computing fees under subparagraph (A), a multiple
dependent claim referred to in section 112 or any claim
depending therefrom shall be considered as separate
dependent claims in accordance with the number of claims
to which reference is made.
‘‘(C) REFUNDS; ERRORS IN PAYMENT.—The Director may
by regulation provide for a refund of any part of the fee
specified in subparagraph (A) for any claim that is canceled
before an examination on the merits, as prescribed by
the Director, has been made of the application under section 131. Errors in payment of the additional fees under

H. R. 1249—38
this paragraph may be rectified in accordance with regulations prescribed by the Director.
‘‘(3) EXAMINATION FEES.—
‘‘(A) IN GENERAL.—
‘‘(i) For examination of each application for an
original patent, except for design, plant, provisional,
or international applications, $220.
‘‘(ii) For examination of each application for an
original design patent, $140.
‘‘(iii) For examination of each application for an
original plant patent, $170.
‘‘(iv) For examination of the national stage of each
international application, $220.
‘‘(v) For examination of each application for the
reissue of a patent, $650.
‘‘(B) APPLICABILITY OF OTHER FEE PROVISIONS.—The
provisions of paragraphs (3) and (4) of section 111(a)
relating to the payment of the fee for filing the application
shall apply to the payment of the fee specified in subparagraph (A) with respect to an application filed under section
111(a). The provisions of section 371(d) relating to the
payment of the national fee shall apply to the payment
of the fee specified in subparagraph (A) with respect to
an international application.
‘‘(4) ISSUE FEES.—
‘‘(A) For issuing each original patent, except for design
or plant patents, $1,510.
‘‘(B) For issuing each original design patent, $860.
‘‘(C) For issuing each original plant patent, $1,190.
‘‘(D) For issuing each reissue patent, $1,510.
‘‘(5) DISCLAIMER FEE.—On filing each disclaimer, $140.
‘‘(6) APPEAL FEES.—
‘‘(A) On filing an appeal from the examiner to the
Patent Trial and Appeal Board, $540.
‘‘(B) In addition, on filing a brief in support of the
appeal, $540, and on requesting an oral hearing in the
appeal before the Patent Trial and Appeal Board, $1,080.
‘‘(7) REVIVAL FEES.—On filing each petition for the revival
of an unintentionally abandoned application for a patent, for
the unintentionally delayed payment of the fee for issuing
each patent, or for an unintentionally delayed response by
the patent owner in any reexamination proceeding, $1,620,
unless the petition is filed under section 133 or 151, in which
case the fee shall be $540.
‘‘(8) EXTENSION FEES.—For petitions for 1-month extensions
of time to take actions required by the Director in an application—
‘‘(A) on filing a first petition, $130;
‘‘(B) on filing a second petition, $360; and
‘‘(C) on filing a third or subsequent petition, $620.
‘‘(b) MAINTENANCE FEES.—
‘‘(1) IN GENERAL.—The Director shall charge the following
fees for maintaining in force all patents based on applications
filed on or after December 12, 1980:
‘‘(A) Three years and 6 months after grant, $980.
‘‘(B) Seven years and 6 months after grant, $2,480.
‘‘(C) Eleven years and 6 months after grant, $4,110.

H. R. 1249—39
‘‘(2) GRACE PERIOD; SURCHARGE.—Unless payment of the
applicable maintenance fee under paragraph (1) is received
in the Office on or before the date the fee is due or within
a grace period of 6 months thereafter, the patent shall expire
as of the end of such grace period. The 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.
‘‘(3) NO MAINTENANCE FEE FOR DESIGN OR PLANT PATENT.—
No fee may be established for maintaining a design or plant
patent in force.’’.
(b) DELAYS IN PAYMENT.—Subsection (c) of section 41 of title
35, United States Code, is amended—
(1) by striking ‘‘(c)(1) The Director’’ and inserting:
‘‘(c) DELAYS IN PAYMENT OF MAINTENANCE FEES.—
‘‘(1) ACCEPTANCE.—The Director’’; and
(2) by striking ‘‘(2) A patent’’ and inserting:
‘‘(2) EFFECT ON RIGHTS OF OTHERS.—A patent’’.
(c) PATENT SEARCH FEES.—Subsection (d) of section 41 of title
35, United States Code, is amended to read as follows:
‘‘(d) PATENT SEARCH AND OTHER FEES.—
‘‘(1) PATENT SEARCH FEES.—
‘‘(A) IN GENERAL.—The Director shall charge the fees
specified under subparagraph (B) for the search of each
application for a patent, except for provisional applications.
The Director shall adjust the fees charged under this paragraph to ensure that the fees recover an amount not to
exceed the estimated average cost to the Office of searching
applications for patent by Office personnel.
‘‘(B) SPECIFIC FEES.—The fees referred to in subparagraph (A) are—
‘‘(i) $540 for each application for an original patent,
except for design, plant, provisional, or international
applications;
‘‘(ii) $100 for each application for an original design
patent;
‘‘(iii) $330 for each application for an original plant
patent;
‘‘(iv) $540 for the national stage of each international application; and
‘‘(v) $540 for each application for the reissue of
a patent.
‘‘(C) APPLICABILITY OF OTHER PROVISIONS.—The provisions of paragraphs (3) and (4) of section 111(a) relating
to the payment of the fee for filing the application shall
apply to the payment of the fee specified in this paragraph
with respect to an application filed under section 111(a).
The provisions of section 371(d) relating to the payment
of the national fee shall apply to the payment of the fee
specified in this paragraph with respect to an international
application.
‘‘(D) REFUNDS.—The Director may by regulation provide for a refund of any part of the fee specified in this
paragraph for any applicant who files a written declaration
of express abandonment as prescribed by the Director
before an examination has been made of the application
under section 131.

H. R. 1249—40
‘‘(2) OTHER FEES.—
‘‘(A) IN GENERAL.—The 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 Director shall charge the
following fees for the following services:
‘‘(i) For recording a document affecting title, $40
per property.
‘‘(ii) For each photocopy, $.25 per page.
‘‘(iii) For each black and white copy of a patent,
$3.
‘‘(B) COPIES FOR LIBRARIES.—The yearly fee for providing a library specified in section 12 with uncertified
printed copies of the specifications and drawings for all
patents in that year shall be $50.’’.
(d) FEES FOR SMALL ENTITIES.—Subsection (h) of section 41
of title 35, United States Code, is amended to read as follows:
‘‘(h) FEES FOR SMALL ENTITIES.—
‘‘(1) REDUCTIONS IN FEES.—Subject to paragraph (3), fees
charged under subsections (a), (b), and (d)(1) 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 Director.
‘‘(2) SURCHARGES AND OTHER FEES.—With respect to its
application to any entity described in paragraph (1), any surcharge or fee charged under subsection (c) or (d) shall not
be higher than the surcharge or fee required of any other
entity under the same or substantially similar circumstances.
‘‘(3) REDUCTION FOR ELECTRONIC FILING.—The fee charged
under subsection (a)(1)(A) shall be reduced by 75 percent with
respect to its application to any entity to which paragraph
(1) applies, if the application is filed by electronic means as
prescribed by the Director.’’.
(e) TECHNICAL AMENDMENTS.—Section 41 of title 35, United
States Code, is amended—
(1) in subsection (e), in the first sentence, by striking
‘‘The Director’’ and inserting ‘‘WAIVER OF FEES; COPIES
REGARDING NOTICE.—The Director’’;
(2) in subsection (f), by striking ‘‘The fees’’ and inserting
‘‘ADJUSTMENT OF FEES.—The fees’’;
(3) by repealing subsection (g); and
(4) in subsection (i)—
(A) by striking ‘‘(i)(1) The Director’’ and inserting the
following:
‘‘(i) ELECTRONIC PATENT AND TRADEMARK DATA.—
‘‘(1) MAINTENANCE OF COLLECTIONS.—The Director’’;
(B) by striking ‘‘(2) The Director’’ and inserting the
following:
‘‘(2) AVAILABILITY OF AUTOMATED SEARCH SYSTEMS.—The
Director’’;
(C) by striking ‘‘(3) The Director’’ and inserting the
following:
‘‘(3) ACCESS FEES.—The Director’’; and
(D) by striking ‘‘(4) The Director’’ and inserting the
following:

H. R. 1249—41
‘‘(4) ANNUAL REPORT TO CONGRESS.—The Director’’.
(f) ADJUSTMENT OF TRADEMARK FEES.—Section 802(a) of division B of the Consolidated Appropriations Act, 2005 (Public Law
108–447) is amended—
(1) in the first sentence, by striking ‘‘During fiscal years
2005, 2006, and 2007,’’, and inserting ‘‘Until such time as
the Director sets or adjusts the fees otherwise,’’; and
(2) in the second sentence, by striking ‘‘During fiscal years
2005, 2006, and 2007, the’’ and inserting ‘‘The’’.
(g) EFFECTIVE DATE, APPLICABILITY, AND TRANSITION PROVISIONS.—Section 803(a) of division B of the Consolidated Appropriations Act, 2005 (Public Law 108–447) is amended by striking ‘‘and
shall apply only with respect to the remaining portion of fiscal
year 2005 and fiscal year 2006’’.
(h) PRIORITIZED EXAMINATION FEE.—
(1) IN GENERAL.—
(A) FEE.—
(i) PRIORITIZED EXAMINATION FEE.—A fee of $4,800
shall be established for filing a request, pursuant to
section 2(b)(2)(G) of title 35, United States Code, for
prioritized examination of a nonprovisional application
for an original utility or plant patent.
(ii) ADDITIONAL FEES.—In addition to the
prioritized examination fee under clause (i), the fees
due on an application for which prioritized examination
is being sought are the filing, search, and examination
fees (including any applicable excess claims and
application size fees), processing fee, and publication
fee for that application.
(B) REGULATIONS; LIMITATIONS.—
(i) REGULATIONS.—The Director may by regulation
prescribe conditions for acceptance of a request under
subparagraph (A) and a limit on the number of filings
for prioritized examination that may be accepted.
(ii) LIMITATION ON CLAIMS.— Until regulations are
prescribed under clause (i), no application for which
prioritized examination is requested may contain or
be amended to contain more than 4 independent claims
or more than 30 total claims.
(iii) LIMITATION ON TOTAL NUMBER OF REQUESTS.—
The Director may not accept in any fiscal year more
than 10,000 requests for prioritization until regulations
are prescribed under this subparagraph setting another
limit.
(2) REDUCTION IN FEES FOR SMALL ENTITIES.—The Director
shall reduce fees for providing prioritized examination of nonprovisional applications for original utility and plant patents
by 50 percent for small entities that qualify for reduced fees
under section 41(h)(1) of title 35, United States Code.
(3) DEPOSIT OF FEES.—All fees paid under this subsection
shall be credited to the United States Patent and Trademark
Office Appropriation Account, shall remain available until
expended, and may be used only for the purposes specified
in section 42(c)(3)(A) of title 35, United States Code.
(4) EFFECTIVE DATE AND TERMINATION.—

H. R. 1249—42
(A) EFFECTIVE DATE.—This subsection shall take effect
on the date that is 10 days after the date of the enactment
of this Act.
(B) TERMINATION.—The fee imposed under paragraph
(1)(A)(i), and the reduced fee under paragraph (2), shall
terminate on the effective date of the setting or adjustment
of the fee under paragraph (1)(A)(i) pursuant to the exercise
of the authority under section 10 for the first time with
respect to that fee.
(i) APPROPRIATION ACCOUNT TRANSITION FEES.—
(1) SURCHARGE.—
(A) IN GENERAL.—There shall be a surcharge of 15
percent, rounded by standard arithmetic rules, on all fees
charged or authorized by subsections (a), (b), and (d)(1)
of section 41, and section 132(b), of title 35, United States
Code. Any surcharge imposed under this subsection is,
and shall be construed to be, separate from and in addition
to any other surcharge imposed under this Act or any
other provision of law.
(B) DEPOSIT OF AMOUNTS.—Amounts collected pursuant
to the surcharge imposed under subparagraph (A) shall
be credited to the United States Patent and Trademark
Appropriation Account, shall remain available until
expended, and may be used only for the purposes specified
in section 42(c)(3)(A) of title 35, United States Code.
(2) EFFECTIVE DATE AND TERMINATION OF SURCHARGE.—
The surcharge provided for in paragraph (1)—
(A) shall take effect on the date that is 10 days after
the date of the enactment of this Act; and
(B) shall terminate, with respect to a fee to which
paragraph (1)(A) applies, on the effective date of the setting
or adjustment of that fee pursuant to the exercise of the
authority under section 10 for the first time with respect
to that fee.
(j) EFFECTIVE DATE.—Except as otherwise provided in this section, this section and the amendments made by this section shall
take effect on the date of the enactment of this Act.
SEC. 12. SUPPLEMENTAL EXAMINATION.

(a) IN GENERAL.—Chapter 25 of title 35, United States Code,
is amended by adding at the end the following:
‘‘§ 257. Supplemental examinations to consider, reconsider,
or correct information
‘‘(a) REQUEST FOR SUPPLEMENTAL EXAMINATION.—A patent
owner may request supplemental examination of a patent in the
Office to consider, reconsider, or correct information believed to
be relevant to the patent, in accordance with such requirements
as the Director may establish. Within 3 months after the date
a request for supplemental examination meeting the requirements
of this section is received, the Director shall conduct the supplemental examination and shall conclude such examination by issuing
a certificate indicating whether the information presented in the
request raises a substantial new question of patentability.
‘‘(b) REEXAMINATION ORDERED.—If the certificate issued under
subsection (a) indicates that a substantial new question of patentability is raised by 1 or more items of information in the request,

H. R. 1249—43
the Director shall order reexamination of the patent. The
reexamination shall be conducted according to procedures established by chapter 30, except that the patent owner shall not have
the right to file a statement pursuant to section 304. During the
reexamination, the Director shall address each substantial new
question of patentability identified during the supplemental examination, notwithstanding the limitations in chapter 30 relating to
patents and printed publication or any other provision of such
chapter.
‘‘(c) EFFECT.—
‘‘(1) IN GENERAL.—A patent shall not be held unenforceable
on the basis of conduct relating to information that had not
been considered, was inadequately considered, or was incorrect
in a prior examination of the patent if the information was
considered, reconsidered, or corrected during a supplemental
examination of the patent. The making of a request under
subsection (a), or the absence thereof, shall not be relevant
to enforceability of the patent under section 282.
‘‘(2) EXCEPTIONS.—
‘‘(A) PRIOR ALLEGATIONS.—Paragraph (1) shall not
apply to an allegation pled with particularity in a civil
action, or set forth with particularity in a notice received
by the patent owner under section 505(j)(2)(B)(iv)(II) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(j)(2)(B)(iv)(II)), before the date of a supplemental examination request under subsection (a) to consider, reconsider,
or correct information forming the basis for the allegation.
‘‘(B) PATENT ENFORCEMENT ACTIONS.—In an action
brought under section 337(a) of the Tariff Act of 1930
(19 U.S.C. 1337(a)), or section 281 of this title, paragraph
(1) shall not apply to any defense raised in the action
that is based upon information that was considered,
reconsidered, or corrected pursuant to a supplemental
examination request under subsection (a), unless the
supplemental examination, and any reexamination ordered
pursuant to the request, are concluded before the date
on which the action is brought.
‘‘(d) FEES AND REGULATIONS.—
‘‘(1) FEES.—The Director shall, by regulation, establish fees
for the submission of a request for supplemental examination
of a patent, and to consider each item of information submitted
in the request. If reexamination is ordered under subsection
(b), fees established and applicable to ex parte reexamination
proceedings under chapter 30 shall be paid, in addition to
fees applicable to supplemental examination.
‘‘(2) REGULATIONS.—The Director shall issue regulations
governing the form, content, and other requirements of requests
for supplemental examination, and establishing procedures for
reviewing information submitted in such requests.
‘‘(e) FRAUD.—If the Director becomes aware, during the course
of a supplemental examination or reexamination proceeding ordered
under this section, that a material fraud on the Office may have
been committed in connection with the patent that is the subject
of the supplemental examination, then in addition to any other
actions the Director is authorized to take, including the cancellation
of any claims found to be invalid under section 307 as a result
of a reexamination ordered under this section, the Director shall

H. R. 1249—44
also refer the matter to the Attorney General for such further
action as the Attorney General may deem appropriate. Any such
referral shall be treated as confidential, shall not be included in
the file of the patent, and shall not be disclosed to the public
unless the United States charges a person with a criminal offense
in connection with such referral.
‘‘(f) RULE OF CONSTRUCTION.—Nothing in this section shall
be construed—
‘‘(1) to preclude the imposition of sanctions based upon
criminal or antitrust laws (including section 1001(a) of title
18, the first section of the Clayton Act, and section 5 of the
Federal Trade Commission Act to the extent that section relates
to unfair methods of competition);
‘‘(2) to limit the authority of the Director to investigate
issues of possible misconduct and impose sanctions for misconduct in connection with matters or proceedings before the
Office; or
‘‘(3) to limit the authority of the Director to issue regulations under chapter 3 relating to sanctions for misconduct by
representatives practicing before the Office.’’.
(b) CONFORMING AMENDMENT.—The table of sections for chapter
25 of title 35, United States Code, is amended by adding at the
end the following new item:
‘‘257. Supplemental examinations to consider, reconsider, or correct information.’’.

(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect upon the expiration of the 1-year period beginning
on the date of the enactment of this Act and shall apply to any
patent issued before, on, or after that effective date.
SEC. 13. FUNDING AGREEMENTS.

(a) IN GENERAL.—Section 202(c)(7)(E)(i) of title 35, United
States Code, is amended—
(1) by striking ‘‘75 percent’’ and inserting ‘‘15 percent’’;
(2) by striking ‘‘25 percent’’ and inserting ‘‘85 percent’’;
and
(3) by striking ‘‘as described above in this clause (D);’’
and inserting ‘‘described above in this clause;’’.
(b) 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 patent issued before, on, or after that date.
SEC. 14. TAX STRATEGIES DEEMED WITHIN THE PRIOR ART.

(a) IN GENERAL.—For purposes of evaluating an invention
under section 102 or 103 of title 35, United States Code, any
strategy for reducing, avoiding, or deferring tax liability, whether
known or unknown at the time of the invention or application
for patent, shall be deemed insufficient to differentiate a claimed
invention from the prior art.
(b) DEFINITION.—For purposes of this section, the term ‘‘tax
liability’’ refers to any liability for a tax under any Federal, State,
or local law, or the law of any foreign jurisdiction, including any
statute, rule, regulation, or ordinance that levies, imposes, or
assesses such tax liability.
(c) EXCLUSIONS.—This section does not apply to that part of
an invention that—
(1) is a method, apparatus, technology, computer program
product, or system, that is used solely for preparing a tax

H. R. 1249—45
or information return or other tax filing, including one that
records, transmits, transfers, or organizes data related to such
filing; or
(2) is a method, apparatus, technology, computer program
product, or system used solely for financial management, to
the extent that it is severable from any tax strategy or does
not limit the use of any tax strategy by any taxpayer or tax
advisor.
(d) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to imply that other business methods are patentable
or that other business method patents are valid.
(e) EFFECTIVE DATE; APPLICABILITY.—This section shall take
effect on the date of the enactment of this Act and shall apply
to any patent application that is pending on, or filed on or after,
that date, and to any patent that is issued on or after that date.
SEC. 15. BEST MODE REQUIREMENT.

(a) IN GENERAL.—Section 282 of title 35, United States Code,
is amended in the second undesignated paragraph by striking paragraph (3) and inserting the following:
‘‘(3) Invalidity of the patent or any claim in suit for failure
to comply with—
‘‘(A) any requirement of section 112, except that the
failure to disclose the best mode shall not be a basis on
which any claim of a patent may be canceled or held
invalid or otherwise unenforceable; or
‘‘(B) any requirement of section 251.’’.
(b) CONFORMING AMENDMENT.—Sections 119(e)(1) and 120 of
title 35, United States Code, are each amended by striking ‘‘the
first paragraph of section 112 of this title’’ and inserting ‘‘section
112(a) (other than the requirement to disclose the best mode)’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect upon the date of the enactment of this Act and
shall apply to proceedings commenced on or after that date.
SEC. 16. MARKING.

(a) VIRTUAL MARKING.—
(1) IN GENERAL.—Section 287(a) of title 35, United States
Code, is amended by striking ‘‘or when,’’ and inserting ‘‘or
by fixing thereon the word ‘patent’ or the abbreviation ‘pat.’
together with an address of a posting on the Internet, accessible
to the public without charge for accessing the address, that
associates the patented article with the number of the patent,
or when,’’.
(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to any case that is pending on, or commenced
on or after, the date of the enactment of this Act.
(3) REPORT.—Not later than the date that is 3 years after
the date of the enactment of this Act, the Director shall submit
a report to Congress that provides—
(A) an analysis of the effectiveness of ‘‘virtual
marking’’, as provided in the amendment made by paragraph (1) of this subsection, as an alternative to the physical marking of articles;
(B) an analysis of whether such virtual marking has
limited or improved the ability of the general public to
access information about patents;

H. R. 1249—46
(C) an analysis of the legal issues, if any, that arise
from such virtual marking; and
(D) an analysis of the deficiencies, if any, of such
virtual marking.
(b) FALSE MARKING.—
(1) CIVIL PENALTY.—Section 292(a) of title 35, United
States, Code, is amended by adding at the end the following:
‘‘Only the United States may sue for the penalty authorized
by this subsection.’’.
(2) CIVIL ACTION FOR DAMAGES.—Subsection (b) of section
292 of title 35, United States Code, is amended to read as
follows:
‘‘(b) A person who has suffered a competitive injury as a result
of a violation of this section may file a civil action in a district
court of the United States for recovery of damages adequate to
compensate for the injury.’’.
(3) EXPIRED PATENTS.—Section 292 of title 35, United
States Code, is amended by adding at the end the following:
‘‘(c) The marking of a product, in a manner described in subsection (a), with matter relating to a patent that covered that
product but has expired is not a violation of this section.’’.
(4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to all cases, without exception, that are
pending on, or commenced on or after, the date of the enactment
of this Act.
SEC. 17. ADVICE OF COUNSEL.

(a) IN GENERAL.—Chapter 29 of title 35, United States Code,
is amended by adding at the end the following:
‘‘§ 298. Advice of counsel
‘‘The failure of an infringer to obtain the advice of counsel
with respect to any allegedly infringed patent, or the failure of
the infringer to present such advice to the court or jury, may
not be used to prove that the accused infringer willfully infringed
the patent or that the infringer intended to induce infringement
of the patent.’’.
(b) CONFORMING AMENDMENT.—The table of sections for chapter
29 of title 35, United States Code, is amended by adding at the
end the following:
‘‘298. Advice of counsel.’’.
SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS METHOD
PATENTS.

(a) TRANSITIONAL PROGRAM.—
(1) ESTABLISHMENT.—Not later than the date that is 1
year after the date of the enactment of this Act, the Director
shall issue regulations establishing and implementing a transitional post-grant review proceeding for review of the validity
of covered business method patents. The transitional proceeding
implemented pursuant to this subsection shall be regarded
as, and shall employ the standards and procedures of, a postgrant review under chapter 32 of title 35, United States Code,
subject to the following:
(A) Section 321(c) of title 35, United States Code, and
subsections (b), (e)(2), and (f) of section 325 of such title
shall not apply to a transitional proceeding.

H. R. 1249—47
(B) A person may not file a petition for a transitional
proceeding with respect to a covered business method
patent unless the person or the person’s real party in
interest or privy has been sued for infringement of the
patent or has been charged with infringement under that
patent.
(C) A petitioner in a transitional proceeding who challenges the validity of 1 or more claims in a covered business
method patent on a ground raised under section 102 or
103 of title 35, United States Code, as in effect on the
day before the effective date set forth in section 3(n)(1),
may support such ground only on the basis of—
(i) prior art that is described by section 102(a)
of such title of such title (as in effect on the day
before such effective date); or
(ii) prior art that—
(I) discloses the invention more than 1 year
before the date of the application for patent in
the United States; and
(II) would be described by section 102(a) of
such title (as in effect on the day before the effective date set forth in section 3(n)(1)) if the disclosure had been made by another before the invention thereof by the applicant for patent.
(D) The petitioner in a transitional proceeding that
results in a final written decision under section 328(a)
of title 35, United States Code, with respect to a claim
in a covered business method patent, or the petitioner’s
real party in interest, may not assert, either in a civil
action arising in whole or in part under section 1338 of
title 28, United States Code, or in a proceeding before
the International Trade Commission under section 337 of
the Tariff Act of 1930 (19 U.S.C. 1337), that the claim
is invalid on any ground that the petitioner raised during
that transitional proceeding.
(E) The Director may institute a transitional proceeding only for a patent that is a covered business method
patent.
(2) EFFECTIVE DATE.—The regulations issued under paragraph (1) shall take effect upon the expiration of the 1-year
period beginning on the date of the enactment of this Act
and shall apply to any covered business method patent issued
before, on, or after that effective date, except that the regulations shall not apply to a patent described in section 6(f)(2)(A)
of this Act during the period in which a petition for postgrant review of that patent would satisfy the requirements
of section 321(c) of title 35, United States Code.
(3) SUNSET.—
(A) IN GENERAL.—This subsection, and the regulations
issued under this subsection, are repealed effective upon
the expiration of the 8-year period beginning on the date
that the regulations issued under to paragraph (1) take
effect.
(B) APPLICABILITY.—Notwithstanding subparagraph
(A), this subsection and the regulations issued under this
subsection shall continue to apply, after the date of the

H. R. 1249—48
repeal under subparagraph (A), to any petition for a transitional proceeding that is filed before the date of such repeal.
(b) REQUEST FOR STAY.—
(1) IN GENERAL.—If a party seeks a stay of a civil action
alleging infringement of a patent under section 281 of title
35, United States Code, relating to a transitional proceeding
for that patent, the court shall decide whether to enter a
stay based on—
(A) whether a stay, or the denial thereof, will simplify
the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial
date has been set;
(C) whether a stay, or the denial thereof, would unduly
prejudice the nonmoving party or present a clear tactical
advantage for the moving party; and
(D) whether a stay, or the denial thereof, will reduce
the burden of litigation on the parties and on the court.
(2) REVIEW.—A party may take an immediate interlocutory
appeal from a district court’s decision under paragraph (1).
The United States Court of Appeals for the Federal Circuit
shall review the district court’s decision to ensure consistent
application of established precedent, and such review may be
de novo.
(c) ATM EXEMPTION FOR VENUE PURPOSES.—In an action for
infringement under section 281 of title 35, United States Code,
of a covered business method patent, an automated teller machine
shall not be deemed to be a regular and established place of business
for purposes of section 1400(b) of title 28, United States Code.
(d) DEFINITION.—
(1) IN GENERAL.—For purposes of this section, the term
‘‘covered business method patent’’ means a patent that claims
a method or corresponding apparatus for performing data processing or other operations used in the practice, administration,
or management of a financial product or service, except that
the term does not include patents for technological inventions.
(2) REGULATIONS.—To assist in implementing the transitional proceeding authorized by this subsection, the Director
shall issue regulations for determining whether a patent is
for a technological invention.
(e) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed as amending or interpreting categories of patent-eligible
subject matter set forth under section 101 of title 35, United States
Code.
SEC. 19. JURISDICTION AND PROCEDURAL MATTERS.

(a) STATE COURT JURISDICTION.—Section 1338(a) of title 28,
United States Code, is amended by striking the second sentence
and inserting the following: ‘‘No State court shall have jurisdiction
over any claim for relief arising under any Act of Congress relating
to patents, plant variety protection, or copyrights. For purposes
of this subsection, the term ‘State’ includes any State of the United
States, the District of Columbia, the Commonwealth of Puerto Rico,
the United States Virgin Islands, American Samoa, Guam, and
the Northern Mariana Islands.’’.
(b) COURT OF APPEALS FOR THE FEDERAL CIRCUIT.—Section
1295(a)(1) of title 28, United States Code, is amended to read
as follows:

H. R. 1249—49
‘‘(1) of an appeal from a final decision of a district court
of the United States, the District Court of Guam, the District
Court of the Virgin Islands, or the District Court of the
Northern Mariana Islands, in any civil action arising under,
or in any civil action in which a party has asserted a compulsory
counterclaim arising under, any Act of Congress relating to
patents or plant variety protection;’’.
(c) REMOVAL.—
(1) IN GENERAL.—Chapter 89 of title 28, United States
Code, is amended by adding at the end the following new
section:
‘‘§ 1454. Patent, plant variety protection, and copyright cases
‘‘(a) IN GENERAL.—A civil action in which any party asserts
a claim for relief arising under any Act of Congress relating to
patents, plant variety protection, or copyrights may be removed
to the district court of the United States for the district and division
embracing the place where the action is pending.
‘‘(b) SPECIAL RULES.—The removal of an action under this section shall be made in accordance with section 1446, except that
if the removal is based solely on this section—
‘‘(1) the action may be removed by any party; and
‘‘(2) the time limitations contained in section 1446(b) may
be extended at any time for cause shown.
‘‘(c) CLARIFICATION OF JURISDICTION IN CERTAIN CASES.—The
court to which a civil action is removed under this section is
not precluded from hearing and determining any claim in the civil
action because the State court from which the civil action is removed
did not have jurisdiction over that claim.
‘‘(d) REMAND.—If a civil action is removed solely under this
section, the district court—
‘‘(1) shall remand all claims that are neither a basis for
removal under subsection (a) nor within the original or supplemental jurisdiction of the district court under any Act of Congress; and
‘‘(2) may, under the circumstances specified in section
1367(c), remand any claims within the supplemental jurisdiction of the district court under section 1367.’’.
(2) CONFORMING AMENDMENT.—The table of sections for
chapter 89 of title 28, United States Code, is amended by
adding at the end the following new item:
‘‘1454. Patent, plant variety protection, and copyright cases.’’.

(d) PROCEDURAL MATTERS IN PATENT CASES.—
(1) JOINDER OF PARTIES AND STAY OF ACTIONS.—Chapter
29 of title 35, United States Code, as amended by this Act,
is further amended by adding at the end the following new
section:
‘‘§ 299. Joinder of parties
‘‘(a) JOINDER OF ACCUSED INFRINGERS.—With respect to any
civil action arising under any Act of Congress relating to patents,
other than an action or trial in which an act of infringement
under section 271(e)(2) has been pled, parties that are accused
infringers may be joined in one action as defendants or counterclaim
defendants, or have their actions consolidated for trial, or counterclaim defendants only if—

H. R. 1249—50
‘‘(1) any right to relief is asserted against the parties jointly,
severally, or in the alternative with respect to or arising out
of the same transaction, occurrence, or series of transactions
or occurrences relating to the making, using, importing into
the United States, offering for sale, or selling of the same
accused product or process; and
‘‘(2) questions of fact common to all defendants or counterclaim defendants will arise in the action.
‘‘(b) ALLEGATIONS INSUFFICIENT FOR JOINDER.—For purposes
of this subsection, accused infringers may not be joined in one
action as defendants or counterclaim defendants, or have their
actions consolidated for trial, based solely on allegations that they
each have infringed the patent or patents in suit.
‘‘(c) WAIVER.—A party that is an accused infringer may waive
the limitations set forth in this section with respect to that party.’’.
(2) CONFORMING AMENDMENT.—The table of sections for
chapter 29 of title 35, United States Code, as amended by
this Act, is further amended by adding at the end the following
new item:
‘‘299. Joinder of parties.’’.

(e) EFFECTIVE DATE.—The amendments made by this section
shall apply to any civil action commenced on or after the date
of the enactment of this Act.
SEC. 20. TECHNICAL AMENDMENTS.

(a) JOINT INVENTIONS.—Section 116 of title 35, United States
Code, is amended—
(1) in the first undesignated paragraph, by striking
‘‘When’’ and inserting ‘‘(a) JOINT INVENTIONS.—When’’;
(2) in the second undesignated paragraph, by striking
‘‘If a joint inventor’’ and inserting ‘‘(b) OMITTED
INVENTOR.—If a joint inventor’’; and
(3) in the third undesignated paragraph—
(A) by striking ‘‘Whenever’’ and inserting ‘‘(c)
CORRECTION OF ERRORS IN APPLICATION.—Whenever’’;
and
(B) by striking ‘‘and such error arose without any
deceptive intention on his part,’’.
(b) FILING OF APPLICATION IN FOREIGN COUNTRY.—Section 184
of title 35, United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking ‘‘Except when’’ and inserting ‘‘(a) FILING
IN FOREIGN COUNTRY.—Except when’’; and
(B) by striking ‘‘and without deceptive intent’’;
(2) in the second undesignated paragraph, by striking ‘‘The
term’’ and inserting ‘‘(b) APPLICATION.—The term’’; and
(3) in the third undesignated paragraph, by striking ‘‘The
scope’’ and inserting ‘‘(c) SUBSEQUENT MODIFICATIONS, AMENDMENTS, AND SUPPLEMENTS.—The scope’’.
(c) FILING WITHOUT A LICENSE.—Section 185 of title 35, United
States Code, is amended by striking ‘‘and without deceptive intent’’.
(d) REISSUE OF DEFECTIVE PATENTS.—Section 251 of title 35,
United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking ‘‘Whenever’’ and inserting ‘‘(a) IN GENERAL.—Whenever’’; and

H. R. 1249—51
(B) by striking ‘‘without any deceptive intention’’;
(2) in the second undesignated paragraph, by striking ‘‘The
Director’’ and inserting ‘‘(b) MULTIPLE REISSUED PATENTS.—
The Director’’;
(3) in the third undesignated paragraph, by striking ‘‘The
provisions’’ and inserting ‘‘(c) APPLICABILITY OF THIS TITLE.—
The provisions’’; and
(4) in the last undesignated paragraph, by striking ‘‘No
reissued patent’’ and inserting ‘‘(d) REISSUE PATENT ENLARGING
SCOPE OF CLAIMS.—No reissued patent’’.
(e) EFFECT OF REISSUE.—Section 253 of title 35, United States
Code, is amended—
(1) in the first undesignated paragraph, by striking ‘‘Whenever, without any deceptive intention,’’ and inserting ‘‘(a) IN
GENERAL.—Whenever’’; and
(2) in the second undesignated paragraph, by striking ‘‘In
like manner’’ and inserting ‘‘(b) ADDITIONAL DISCLAIMER OR
DEDICATION.—In the manner set forth in subsection (a),’’.
(f) CORRECTION OF NAMED INVENTOR.—Section 256 of title 35,
United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking ‘‘Whenever’’ and inserting ‘‘(a) CORRECTION.—Whenever’’; and
(B) by striking ‘‘and such error arose without any
deceptive intention on his part’’; and
(2) in the second undesignated paragraph, by striking ‘‘The
error’’ and inserting ‘‘(b) PATENT VALID IF ERROR CORRECTED.—
The error’’.
(g) PRESUMPTION OF VALIDITY.—Section 282 of title 35, United
States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking ‘‘A patent’’ and inserting ‘‘(a) IN GENERAL.—A patent’’; and
(B) by striking the third sentence;
(2) in the second undesignated paragraph—
(A) by striking ‘‘The following’’ and inserting ‘‘(b)
DEFENSES.—The following’’;
(B) in paragraph (1), by striking ‘‘uneforceability,’’ and
inserting ‘‘unenforceability.’’; and
(C) in paragraph (2), by striking ‘‘patentability,’’ and
inserting ‘‘patentability.’’ ; and
(3) in the third undesignated paragraph—
(A) by striking ‘‘In actions involving the validity or
infringement of a patent’’ and inserting ‘‘(c) NOTICE OF
ACTIONS; ACTIONS DURING EXTENSION OF PATENT TERM.—
In an action involving the validity or infringement of a
patent’’; and
(B) by striking ‘‘Claims Court’’ and inserting ‘‘Court
of Federal Claims’’.
(h) ACTION FOR INFRINGEMENT.—Section 288 of title 35, United
States Code, is amended by striking ‘‘, without deceptive intention,’’.
(i) REVISER’S NOTES.—
(1) Section 3(e)(2) of title 35, United States Code, is
amended by striking ‘‘this Act,’’ and inserting ‘‘that Act,’’.
(2) Section 202 of title 35, United States Code, is
amended—

H. R. 1249—52
(A) in subsection (b)(3), by striking ‘‘the section 203(b)’’
and inserting ‘‘section 203(b)’’; and
(B) in subsection (c)(7)(D), by striking ‘‘except where
it proves’’ and all that follows through ‘‘small business
firms; and’’ and inserting: ‘‘except where it is determined
to be infeasible following a reasonable inquiry, a preference
in the licensing of subject inventions shall be given to
small business firms; and’’.
(3) Section 209(d)(1) of title 35, United States Code, is
amended by striking ‘‘nontransferrable’’ and inserting ‘‘nontransferable’’.
(4) Section 287(c)(2)(G) of title 35, United States Code,
is amended by striking ‘‘any state’’ and inserting ‘‘any State’’.
(5) Section 371(b) of title 35, United States Code, is
amended by striking ‘‘of the treaty’’ and inserting ‘‘of the
treaty.’’.
(j) UNNECESSARY REFERENCES.—
(1) IN GENERAL.—Title 35, United States Code, is amended
by striking ‘‘of this title’’ each place that term appears.
(2) EXCEPTION.—The amendment made by paragraph (1)
shall not apply to the use of such term in the following sections
of title 35, United States Code:
(A) Section 1(c).
(B) Section 101.
(C) Subsections (a) and (b) of section 105.
(D) The first instance of the use of such term in section
111(b)(8).
(E) Section 161.
(F) Section 164.
(G) Section 171.
(H) Section 251(c), as so designated by this section.
(I) Section 261.
(J) Subsections (g) and (h) of section 271.
(K) Section 287(b)(1).
(L) Section 289.
(M) The first instance of the use of such term in
section 375(a).
(k) ADDITIONAL TECHNICAL AMENDMENTS.—Sections 155 and
155A of title 35, United States Code, and the items relating to
those sections in the table of sections for chapter 14 of such title,
are repealed.
(l) EFFECTIVE DATE.—The amendments made by this section
shall take effect upon the expiration of the 1-year period beginning
on the date of the enactment of this Act and shall apply to proceedings commenced on or after that effective date.
SEC. 21. TRAVEL EXPENSES AND PAYMENT OF ADMINISTRATIVE
JUDGES.

(a) AUTHORITY TO COVER CERTAIN TRAVEL RELATED
EXPENSES.—Section 2(b)(11) of title 35, United States Code, is
amended by inserting ‘‘, and the Office is authorized to expend
funds to cover the subsistence expenses and travel-related expenses,
including per diem, lodging costs, and transportation costs, of persons attending such programs who are not Federal employees’’
after ‘‘world’’.

H. R. 1249—53
(b) PAYMENT OF ADMINISTRATIVE JUDGES.—Section 3(b) of title
35, United States Code, is amended by adding at the end the
following:
‘‘(6) ADMINISTRATIVE PATENT JUDGES AND ADMINISTRATIVE
TRADEMARK JUDGES.—The Director may fix the rate of basic
pay for the administrative patent judges appointed pursuant
to section 6 and the administrative trademark judges appointed
pursuant to section 17 of the Trademark Act of 1946 (15 U.S.C.
1067) at not greater than the rate of basic pay payable for
level III of the Executive Schedule under section 5314 of title
5. The payment of a rate of basic pay under this paragraph
shall not be subject to the pay limitation under section 5306(e)
or 5373 of title 5.’’.
SEC. 22. PATENT AND TRADEMARK OFFICE FUNDING.

(a) IN GENERAL.—Section 42(c) of title 35, United States Code,
is amended—
(1) by striking ‘‘(c)’’ and inserting ‘‘(c)(1)’’;
(2) in the first sentence, by striking ‘‘shall be available’’
and inserting ‘‘shall, subject to paragraph (3), be available’’;
(3) by striking the second sentence; and
(4) by adding at the end the following:
‘‘(2) There is established in the Treasury a Patent and Trademark Fee Reserve Fund. If fee collections by the Patent and Trademark Office for a fiscal year exceed the amount appropriated to
the Office for that fiscal year, fees collected in excess of the appropriated amount shall be deposited in the Patent and Trademark
Fee Reserve Fund. To the extent and in the amounts provided
in appropriations Acts, amounts in the Fund shall be made available
until expended only for obligation and expenditure by the Office
in accordance with paragraph (3).
‘‘(3)(A) Any fees that are collected under sections 41, 42, and
376, and any surcharges on such fees, may only be used for expenses
of the Office relating to the processing of patent applications and
for other activities, services, and materials relating to patents and
to cover a share of the administrative costs of the Office relating
to patents.
‘‘(B) Any fees that are collected under section 31 of the Trademark Act of 1946, and any surcharges on such fees, may only
be used for expenses of the Office relating to the processing of
trademark registrations and for other activities, services, and materials relating to trademarks and to cover a share of the administrative costs of the Office relating to trademarks.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall take effect on October 1, 2011.
SEC. 23. SATELLITE OFFICES.

(a) ESTABLISHMENT.—Subject to available resources, the
Director shall, by not later than the date that is 3 years after
the date of the enactment of this Act, establish 3 or more satellite
offices in the United States to carry out the responsibilities of
the Office.
(b) PURPOSES.—The purposes of the satellite offices established
under subsection (a) are to—
(1) increase outreach activities to better connect patent
filers and innovators with the Office;
(2) enhance patent examiner retention;
(3) improve recruitment of patent examiners;

H. R. 1249—54
(4) decrease the number of patent applications waiting
for examination; and
(5) improve the quality of patent examination.
(c) REQUIRED CONSIDERATIONS.—
(1) IN GENERAL.—In selecting the location of each satellite
office to be established under subsection (a), the Director—
(A) shall ensure geographic diversity among the offices,
including by ensuring that such offices are established
in different States and regions throughout the Nation;
(B) may rely upon any previous evaluations by the
Office of potential locales for satellite offices, including
any evaluations prepared as part of the Office’s Nationwide
Workforce Program that resulted in the 2010 selection
of Detroit, Michigan, as the first satellite office of the
Office;
(C) shall evaluate and consider the extent to which
the purposes of satellite offices listed under subsection
(b) will be achieved;
(D) shall consider the availability of scientific and technically knowledgeable personnel in the region from which
to draw new patent examiners at minimal recruitment
cost; and
(E) shall consider the economic impact to the region.
(2) OPEN SELECTION PROCESS.—Nothing in paragraph (1)
shall constrain the Office to only consider its evaluations in
selecting the Detroit, Michigan, satellite office.
(d) REPORT TO CONGRESS.—Not later than the end of the third
fiscal year that begins after the date of the enactment of this
Act, the Director shall submit a report to Congress on—
(1) the rationale of the Director in selecting the location
of any satellite office required under subsection (a), including
an explanation of how the selected location will achieve the
purposes of satellite offices listed under subsection (b) and
how the required considerations listed under subsection (c)
were met;
(2) the progress of the Director in establishing all such
satellite offices; and
(3) whether the operation of existing satellite offices is
achieving the purposes under subsection (b).
SEC. 24. DESIGNATION OF DETROIT SATELLITE OFFICE.

(a) DESIGNATION.—The satellite office of the United States
Patent and Trademark Office to be located in Detroit, Michigan,
shall be known and designated as the ‘‘Elijah J. McCoy United
States Patent and Trademark Office’’.
(b) REFERENCES.—Any reference in a law, map, regulation,
document, paper, or other record of the United States to the satellite
office of the United States Patent and Trademark Office to be
located in Detroit, Michigan, referred to in subsection (a) shall
be deemed to be a reference to the ‘‘Elijah J. McCoy United States
Patent and Trademark Office’’.
SEC. 25. PRIORITY EXAMINATION FOR IMPORTANT TECHNOLOGIES.

Section 2(b)(2) of title 35, United States Code, is amended—
(1) in subparagraph (E), by striking ‘‘and’’ after the semicolon;
(2) in subparagraph (F), by inserting ‘‘and’’ after the semicolon; and

H. R. 1249—55
(3) by adding at the end the following:
‘‘(G) may, subject to any conditions prescribed by the
Director and at the request of the patent applicant, provide
for prioritization of examination of applications for products, processes, or technologies that are important to the
national economy or national competitiveness without
recovering the aggregate extra cost of providing such
prioritization, notwithstanding section 41 or any other
provision of law;’’.
SEC. 26. STUDY ON IMPLEMENTATION.

(a) PTO STUDY.—The Director shall conduct a study on the
manner in which this Act and the amendments made by this
Act are being implemented by the Office, and on such other aspects
of the patent policies and practices of the Federal Government
with respect to patent rights, innovation in the United States,
competitiveness of United States markets, access by small
businesses to capital for investment, and such other issues, as
the Director considers appropriate.
(b) REPORT TO CONGRESS.—The Director shall, not later than
the date that is 4 years after the date of the enactment of this
Act, submit to the Committees on the Judiciary of the House of
Representatives and the Senate a report on the results of the
study conducted under subsection (a), including recommendations
for any changes to laws and regulations that the Director considers
appropriate.
SEC. 27. STUDY ON GENETIC TESTING.

(a) IN GENERAL.—The Director shall conduct a study on effective ways to provide independent, confirming genetic diagnostic
test activity where gene patents and exclusive licensing for primary
genetic diagnostic tests exist.
(b) ITEMS INCLUDED IN STUDY.—The study shall include an
examination of at least the following:
(1) The impact that the current lack of independent second
opinion testing has had on the ability to provide the highest
level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing
and diagnoses.
(2) The effect that providing independent second opinion
genetic diagnostic testing would have on the existing patent
and license holders of an exclusive genetic test.
(3) The impact that current exclusive licensing and patents
on genetic testing activity has on the practice of medicine,
including but not limited to: the interpretation of testing results
and performance of testing procedures.
(4) The role that cost and insurance coverage have on
access to and provision of genetic diagnostic tests.
(c) CONFIRMING GENETIC DIAGNOSTIC TEST ACTIVITY
DEFINED.—For purposes of this section, the term ‘‘confirming
genetic diagnostic test activity’’ means the performance of a genetic
diagnostic test, by a genetic diagnostic test provider, on an individual solely for the purpose of providing the individual with an
independent confirmation of results obtained from another test
provider’s prior performance of the test on the individual.
(d) REPORT.—Not later than 9 months after the date of enactment of this Act, the Director shall report to the Committee on
the Judiciary of the Senate and the Committee on the Judiciary

H. R. 1249—56
of the House of Representatives on the findings of the study and
provide recommendations for establishing the availability of such
independent confirming genetic diagnostic test activity.
SEC. 28. PATENT OMBUDSMAN PROGRAM FOR SMALL BUSINESS CONCERNS.

Using available resources, the Director shall establish and
maintain in the Office a Patent Ombudsman Program. The duties
of the Program’s staff shall include providing support and services
relating to patent filings to small business concerns and independent inventors.
SEC. 29. ESTABLISHMENT OF METHODS FOR STUDYING THE DIVERSITY OF APPLICANTS.

The Director shall, not later than the end of the 6-month
period beginning on the date of the enactment of this Act, establish
methods for studying the diversity of patent applicants, including
those applicants who are minorities, women, or veterans. The
Director shall not use the results of such study to provide any
preferential treatment to patent applicants.
SEC. 30. SENSE OF CONGRESS.

It is the sense of Congress that the patent system should
promote industries to continue to develop new technologies that
spur growth and create jobs across the country which includes
protecting the rights of small businesses and inventors from predatory behavior that could result in the cutting off of innovation.
SEC. 31. USPTO STUDY ON INTERNATIONAL PATENT PROTECTIONS
FOR SMALL BUSINESSES.

(a) STUDY REQUIRED.—The Director, in consultation with the
Secretary of Commerce and the Administrator of the Small Business
Administration, shall, using the existing resources of the Office,
carry out a study—
(1) to determine how the Office, in coordination with other
Federal departments and agencies, can best help small
businesses with international patent protection; and
(2) whether, in order to help small businesses pay for
the costs of filing, maintaining, and enforcing international
patent applications, there should be established either—
(A) a revolving fund loan program to make loans to
small businesses to defray the costs of such applications,
maintenance, and enforcement and related technical assistance; or
(B) a grant program to defray the costs of such applications, maintenance, and enforcement and related technical
assistance.
(b) REPORT.—Not later than 120 days after the date of the
enactment of this Act, the Director shall issue a report to the
Congress containing—
(1) all findings and determinations made in carrying out
the study required under subsection (a);
(2) a statement of whether the determination was made
that—
(A) a revolving fund loan program described under
subsection (a)(2)(A) should be established;
(B) a grant program described under subsection
(a)(2)(B) should be established; or

H. R. 1249—57
(C) neither such program should be established; and
(3) any legislative recommendations the Director may have
developed in carrying out such study.
SEC. 32. PRO BONO PROGRAM.

(a) IN GENERAL.—The Director shall work with and support
intellectual property law associations across the country in the
establishment of pro bono programs designed to assist financially
under-resourced independent inventors and small businesses.
(b) EFFECTIVE DATE.—This section shall take effect on the
date of the enactment of this Act.
SEC. 33. LIMITATION ON ISSUANCE OF PATENTS.

(a) LIMITATION.—Notwithstanding any other provision of law,
no patent may issue on a claim directed to or encompassing a
human organism.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Subsection (a) shall apply to any application for patent that is pending on, or filed on or after, the
date of the enactment of this Act.
(2) PRIOR APPLICATIONS.—Subsection (a) shall not affect
the validity of any patent issued on an application to which
paragraph (1) does not apply.
SEC. 34. STUDY OF PATENT LITIGATION.

(a) GAO STUDY.—The Comptroller General of the United States
shall conduct a study of the consequences of litigation by nonpracticing entities, or by patent assertion entities, related to patent
claims made under title 35, United States Code, and regulations
authorized by that title.
(b) CONTENTS OF STUDY.—The study conducted under this section shall include the following:
(1) The annual volume of litigation described in subsection
(a) over the 20-year period ending on the date of the enactment
of this Act.
(2) The volume of cases comprising such litigation that
are found to be without merit after judicial review.
(3) The impacts of such litigation on the time required
to resolve patent claims.
(4) The estimated costs, including the estimated cost of
defense, associated with such litigation for patent holders,
patent licensors, patent licensees, and inventors, and for users
of alternate or competing innovations.
(5) The economic impact of such litigation on the economy
of the United States, including the impact on inventors, job
creation, employers, employees, and consumers.
(6) The benefit to commerce, if any, supplied by non-practicing entities or patent assertion entities that prosecute such
litigation.
(c) REPORT TO CONGRESS.—The Comptroller General shall, not
later than the date that is 1 year after the date of the enactment
of this Act, submit to the Committee on the Judiciary of the House
of Representatives and the Committee on the Judiciary of the
Senate a report on the results of the study required under this
section, including recommendations for any changes to laws and
regulations that will minimize any negative impact of patent litigation that was the subject of such study.

H. R. 1249—58
SEC. 35. EFFECTIVE DATE.

Except as otherwise provided in this Act, the provisions of
this Act shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall
apply to any patent issued on or after that effective date.
SEC. 36. BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go Act of 2010, shall be determined
by reference to the latest statement titled ‘‘Budgetary Effects of
PAYGO Legislation’’ for this Act, submitted for printing in the
Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior
to the vote on passage.
SEC. 37. CALCULATION OF 60-DAY PERIOD FOR APPLICATION OF
PATENT TERM EXTENSION.

(a) IN GENERAL.—Section 156(d)(1) of title 35, United States
Code, is amended by adding at the end the following flush sentence:
‘‘For purposes of determining the date on which a product receives
permission under the second sentence of this paragraph, if such
permission is transmitted after 4:30 P.M., Eastern Time, on a
business day, or is transmitted on a day that is not a business
day, the product shall be deemed to receive such permission on
the next business day. For purposes of the preceding sentence,
the term ‘business day’ means any Monday, Tuesday, Wednesday,
Thursday, or Friday, excluding any legal holiday under section
6103 of title 5.’’.
(b) APPLICABILITY.—The amendment made by subsection (a)
shall apply to any application for extension of a patent term under
section 156 of title 35, United States Code, that is pending on,
that is filed after, or as to which a decision regarding the application
is subject to judicial review on, the date of the enactment of this
Act.

Speaker of the House of Representatives.

Vice President of the United States and
President of the Senate.