Support Technology and Research for Our Nation's Growth and Economic Resilience Patents Act of 2018 or the STRONGER Patents Act of 2018
This bill makes several changes to the patent law, including the procedures that the U.S. Patent and Trademark Office uses to conduct administrative patent validity reviews.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5340 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
H. R. 5340
To strengthen the position of the United States as the world's leading
innovator by amending title 35, United States Code, to protect the
property rights of the inventors that grow the country's economy.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 20, 2018
Mr. Stivers (for himself, Mr. Foster, Mr. Davidson, Mr. Duffy, Mr.
Cramer, Mr. King of New York, Ms. Velazquez, Mr. Huizenga, Mr. Joyce of
Ohio, Mr. Bilirakis, Mr. Danny K. Davis of Illinois, Mr. Rush, Mr.
Brendan F. Boyle of Pennsylvania, Mr. Peters, Mrs. Watson Coleman, and
Mr. Gosar) introduced the following bill; which was referred to the
Committee on the Judiciary, and in addition to the Committee on Energy
and Commerce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To strengthen the position of the United States as the world's leading
innovator by amending title 35, United States Code, to protect the
property rights of the inventors that grow the country's economy.
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 ``Support Technology
and Research for Our Nation's Growth and Economic Resilience Patents
Act of 2018'' or the ``STRONGER Patents Act of 2018''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--STRONGER PATENTS ACT
Sec. 101. Findings.
Sec. 102. Inter partes review.
Sec. 103. Post-grant review.
Sec. 104. Composition of post-grant review and inter partes review
panels.
Sec. 105. Reexamination of patents.
Sec. 106. Restoration of patents as property rights.
Sec. 107. Elimination of USPTO fee diversion.
Sec. 108. Infringement of patent.
Sec. 109. Institutions of higher education.
Sec. 110. Assisting small businesses in the U.S. patent system.
TITLE II--TARGETING ROGUE AND OPAQUE LETTERS
Sec. 201. Definitions.
Sec. 202. Unfair or deceptive acts or practices in connection with the
assertion of a United States patent.
Sec. 203. Enforcement by Federal Trade Commission.
Sec. 204. Preemption of State laws on patent demand letters and
enforcement by State attorneys general.
TITLE I--STRONGER PATENTS ACT
SEC. 101. FINDINGS.
Congress finds that--
(1) the patent property rights enshrined in the
Constitution of the United States provide the foundation for
the exceptional innovation environment in the United States;
(2) strong patent rights encourage United States inventors
to invest their resources in creating new inventions;
(3) patent protection has led to patient cures, positive
changes to the standard of living for all people in the United
States, and improvements to the agricultural,
telecommunications, and electronics industries, among others;
(4) the United States patent system is an essential part of
the country's economic success;
(5) strong patent protection improves the chances of
success for small companies and increases their chances of
securing financing from investors;
(6) intellectual property-intensive industries in the
United States generate tens of millions of jobs for individuals
in the United States;
(7) intellectual property-intensive industries in the
United States account for more than one-third of the country's
gross domestic product;
(8) in the highly competitive global economy, the United
States needs to uphold strong patent protections to maintain
its position as the world's premier innovative country;
(9) Congress last enacted comprehensive reforms of the
patent system just recently, in 2011;
(10) unintended consequences of the comprehensive 2011
reform of patent laws are continuing to become evident,
including the strategic filing of post-grant review proceedings
to depress stock prices and extort settlements, the filing of
repetitive petitions for inter partes and post-grant reviews
that have the effect of harassing patent owners, and the
unnecessary duplication of work by the district courts of the
United States and the Patent Trial and Appeal Board;
(11) the Judicial Conference of the United States has made
significant revisions to rules governing pleadings and
discovery in the Federal Rules of Civil Procedure, which took
effect in December 2015;
(12) the Supreme Court recently issued rulings in Octane
Fitness, LLC v. Icon Health & Fitness, Inc., 134 S.Ct. 1749
(2014) and Highmark Inc. v. Allcare Health Management System,
Inc., 134 S.Ct. 1744 (2014) that significantly reduced the
burden on an alleged infringer to recover attorney fees from
the patent owner, and increased the incidence of fees shifted
to the losing party; and
(13) efforts by Congress to reform the patent system
without careful scrutiny create a serious risk of making it
more costly and difficult for legitimate innovators to protect
their patents from infringement, thereby weakening United
States companies and the United States economy.
SEC. 102. INTER PARTES REVIEW.
(a) Claim Construction.--Section 316(a) of title 35, United States
Code, is amended--
(1) in paragraph (9), by inserting after ``substitute
claims,'' the following: ``including the standard for how
substitute claims should be construed,'';
(2) in paragraph (12), by striking ``; and'' and inserting
a semicolon;
(3) in paragraph (13), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following new paragraph:
``(14) providing that for all purposes under this chapter--
``(A) each challenged claim of a patent shall be
construed as the claim would be construed under section
282(b) in an action to invalidate a patent, including
by construing each challenged claim of the patent in
accordance with--
``(i) the ordinary and customary meaning of
the claim as understood by a person having
ordinary skill in the art to which the claimed
invention pertains; and
``(ii) the prosecution history pertaining
to the patent; and
``(B) if a court has previously construed a
challenged claim of a patent or a challenged claim term
in a civil action to which the patent owner was a
party, the Office shall consider that claim
construction.''.
(b) Burden of Proof.--Section 316(e) of title 35, United States
Code, is amended to read as follows:
``(e) Evidentiary Standards.--
``(1) Presumption of validity.--The presumption of validity
under section 282(a) shall apply to a previously issued claim
that is challenged during an inter partes review under this
chapter.
``(2) Burden of proof.--In an inter partes review
instituted under this chapter, the petitioner shall have the
burden of proving a proposition of unpatentability of a
previously issued claim by clear and convincing evidence.''.
(c) Standing.--Section 311 of title 35, United States Code, is
amended by adding at the end the following new subsection:
``(d) Persons That May Petition.--
``(1) Definition.--In this subsection, the term `charged
with infringement' means a real and substantial controversy
regarding infringement of a patent exists such that the
petitioner would have standing to bring a declaratory judgment
action in Federal court.
``(2) Necessary conditions.--A person may not file with the
Office a petition to institute an inter partes review of a
patent unless the person, or a real party in interest or privy
of the person, has been--
``(A) sued for infringement of the patent; or
``(B) charged with infringement under the
patent.''.
(d) Limitation on Reviews.--Section 314(a) of title 35, United
States Code, is amended to read as follows:
``(a) Threshold.--
``(1) Likelihood of prevailing.--Subject to paragraph (2),
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 one of the claims challenged in the
petition.
``(2) Previous institution.--The Director may not authorize
an inter partes review to be instituted on a claim challenged
in a petition if the Director has previously instituted an
inter partes review or post-grant review with respect to that
claim.''.
(e) Appeals From Institution Decisions.--Section 314 of title 35,
United States Code, is amended by striking subsection (d) and inserting
the following:
``(d) No Appeal.--A determination by the Director not to institute
an inter partes review under this section shall be final and
nonappealable.
``(e) Interlocutory Appeal.--
``(1) Right of appeal.--A determination by the Director to
institute an inter partes review under this section may be
appealed to the United States Court of Appeals for the Federal
Circuit.
``(2) Timing.--A party shall file a notice of interlocutory
appeal under paragraph (1) not later than 7 days after the date
on which the Director enters the institution decision.
``(3) Limitation.--An interlocutory appeal filed under
paragraph (1) may challenge the institution decision on any
basis except for the determination made under section
314(a)(1).
``(4) Effect on proceedings.--An interlocutory appeal filed
under paragraph (1) shall not stay proceedings in the inter
partes review unless the Director or the United States Court of
Appeals for the Federal Circuit so orders.
``(5) Decision.--An interlocutory appeal filed under
paragraph (1) may be granted by the United States Court of
Appeals for the Federal Circuit, which may include
consideration of whether--
``(A) the institution decision appears to be in
error and mere institution of the inter partes review
presents a risk of immediate, irreparable injury to the
patent owner;
``(B) the institution decision presents an
unsettled and fundamental issue of law, important both
to the specific proceeding and generally, that is
likely to evade end-of-the-proceeding review; or
``(C) the institution decision is manifestly
erroneous.''.
(f) Eliminating Repetitive Proceedings.--Section 315(e) of title
35, United States Code, is amended to read as follows:
``(e) Estoppel.--
``(1) Proceedings before the office.--A person petitioning
for an inter partes review of a claim in a patent under this
chapter, or the real party in interest or privy of the
petitioner, may not petition for a subsequent inter partes
review before the Office with respect to that patent on any
ground that the petitioner raised or reasonably could have
raised in the initial petition, unless, after the filing of the
initial petition, the petitioner, or the real party in interest
or privy of the petitioner, is charged with infringement of
additional claims of the patent.
``(2) Civil actions and other proceedings.--A person
petitioning for an inter partes review of a claim in a patent
under this chapter that results in an institution decision
under section 314, 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 (19 U.S.C. 1337) that the
claim is invalid based on section 102 or 103 of this title,
unless the invalidity argument is based on allegations that the
claimed invention was in public use, on sale, or otherwise
available to the public before the effective filing date of the
claimed invention.''.
(g) Real Party in Interest.--
(1) Clarification of definition.--Section 315 of title 35,
United States Code, is amended by adding at the end the
following new subsection:
``(f) Petitioner.--For purposes of this chapter, a person that
directly or through an affiliate, subsidiary, or proxy, makes a
financial contribution to the preparation for, or conduct during, an
inter partes review on behalf of the petitioner shall be considered a
real party in interest of the petitioner.''.
(2) Discovery of real party in interest.--Section 316(a)(5)
of title 35, United States Code, is amended to read as follows:
``(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;
``(B) evidence identifying the petitioner's real
parties in interest; and
``(C) what is otherwise necessary in the interest
of justice;''.
(h) Priority of Federal Court Validity Determinations.--
(1) In general.--Section 315 of title 35, United States
Code, as amended by subsections (f) and (g), is further
amended--
(A) by redesignating subsections (c) through (f) as
subsections (d) through (g), respectively; and
(B) by inserting after subsection (b) the following
new subsection:
``(c) Federal Court Validity Determinations.--
``(1) Institution barred.--An inter partes review of a
patent claim may not be instituted if, 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 (19 U.S.C. 1337), a court
has entered a final judgment--
``(A) that decides the validity of the patent claim
with respect to section 102 or 103; and
``(B) from which an appeal under section 1295 of
title 28 may be taken, or from which an appeal under
section 1295 of title 28 was previously available but
is no longer available.
``(2) Stay of proceedings.--
``(A) In general.--If, 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 (19 U.S.C.
1337), a court has entered a final judgment that
decides the validity of a patent claim with respect to
section 102 or 103 and from which an appeal under
section 1295 of title 28 may be taken, the Patent Trial
and Appeal Board shall stay any ongoing inter partes
review of that patent claim pending a final decision of
the court or Commission, as applicable.
``(B) Termination.--If the validity of a patent
claim described in subparagraph (A) is finally upheld
by a court or the International Trade Commission, as
applicable, the Patent Trial and Appeal Board shall
terminate the inter partes review.''.
(2) Technical and conforming amendments.--Chapter 31 of
title 35, United States Code, is amended--
(A) in section 315(b), by striking ``subsection
(c)'' and inserting ``subsection (d)'';
(B) in section 316(a)--
(i) in paragraph (11), by striking
``section 315(c)'' and inserting ``section
315(d)''; and
(ii) in paragraph (12), by striking
``section 315(c)'' and inserting ``section
315(d)''; and
(C) in section 317(a), by striking ``section
315(e)'' and inserting ``section 315(f)''.
(i) Amendment of Claims.--
(1) Inter partes review amendment practice.--Chapter 31 of
title 35, United States Code, is amended by inserting after
section 316 the following new section:
``Sec. 316A. Inter partes review amendment practice
``(a) Actions Permitted.--During an inter partes review instituted
under this chapter, the patent owner may move to take one or more of
the following actions with respect to any challenged patent claim being
reviewed:
``(1) Cancel the claim.
``(2) Propose a reasonable number of substitute claims
whose patentability will be adjudicated by the Patent Trial and
Appeal Board in accordance with subsection (c).
``(3) Propose a reasonable number of substitute claims to
be examined in an expedited inter partes review (in this
section referred to as `expedited IPR') reexamination in
accordance with subsection (d).
``(b) Scope of Claims.--An amendment to a patent under this section
may not enlarge the scope of the claims of the patent or introduce new
matter.
``(c) Amendment Practice Before the Patent Trial and Appeal
Board.--
``(1) Patent owner's initial motion.--For each challenged
claim for which the patent owner seeks to propose a reasonable
number of substitute claims, the patent owner shall be required
to make a prima facie showing that each substitute claim--
``(A) responds to each ground of unpatentability on
which the inter partes review was instituted;
``(B) meets the written description requirement
under section 112(a); and
``(C) meets the requirement under subsection (b) of
this section.
``(2) New evidence.--
``(A) Petitioner.--The petitioner may respond to
the patent owner's initial motion under paragraph (1)
by presenting new evidence.
``(B) Patent owner.--The patent owner shall have
not less than 1 opportunity to respond to any new
evidence presented under subparagraph (A).
``(3) Expedited patentability report.--
``(A) In general.--Upon the filing of a motion
under paragraph (1), the Patent Trial and Appeal Board
may order an expedited patentability report from a
patent examiner on a substitute claim.
``(B) Contents of report.--In ordering an expedited
patentability report, the Patent Trial and Appeal Board
may--
``(i) order examination of any ground of
patentability that is assessed by a patent
examiner under chapter 12; and
``(ii) request a non-binding recommendation
as to the patentability of a substitute claim.
``(C) Right of reply.--Any party to the inter
partes review may file supplemental briefing, including
new evidence, addressing the expedited patentability
report.
``(D) Timing.--The production of the expedited
patentability report shall be expedited.
``(E) Good cause.--The ordering of an expedited
patentability report shall constitute good cause, for
purposes of section 316(a)(11), to extend the 1-year
period for the inter partes review.
``(4) Adjudication of patentability.--
``(A) No rebuttal.--A patent owner shall be
entitled to a substitute claim if the prima facie
showing required under paragraph (1) is not rebutted.
``(B) Additional evidence.--If additional evidence
of record is presented, the patent owner shall be
entitled to a substitute claim unless a preponderance
of that evidence proves that the patent owner is not so
entitled.
``(5) Patent trial and appeal board's discretion to order
expedited ipr reexamination.--Upon issuing a final written
decision with respect to each challenged claim, the Patent
Trial and Appeal Board may order an expedited IPR reexamination
to be conducted under subsection (d)(2) to consider a
substitute claim in lieu of issuing a final written decision on
that claim.
``(6) Amendments to advance settlement.--The Patent Trial
and Appeal Board may consider additional motions to amend upon
the joint request of the petitioner and the patent owner to
materially advance the settlement of a proceeding under section
317 if the patent owner makes the prima facie showing required
under paragraph (1).
``(d) Amendment Practice Before a Patent Examiner.--
``(1) Motion to convert to expedited ipr examination.--
``(A) In general.--If the Director determines to
institute an inter partes review on a challenged claim
under section 314, a patent owner may, before any
further substantive briefing on the patentability of an
instituted claim, move to terminate the inter partes
review in favor of an expedited IPR reexamination under
paragraph (2) of this subsection.
``(B) Contents of motion.--A patent owner shall be
required to show good cause for why an expedited IPR
reexamination would further the goals of the patent
system, including consideration of whether there are
substantial--
``(i) investments in research directly
related to the claimed invention;
``(ii) secondary indicia of non-
obviousness, such as commercial success, long-
felt but unsolved needs, or failures of persons
skilled in the art to develop the claimed
invention; or
``(iii) changes in case law governing
relevant substantive patentability requirements
since the patent was issued.
``(C) New evidence allowed.--The opening motion and
opposition briefs under this paragraph may include new
evidence, and further rebuttal evidence may be allowed
by the Patent Trial and Appeal Board.
``(2) Conduct of expedited ipr examination.--
``(A) In general.--If the Patent Trial and Appeal
Board grants a motion filed under paragraph (1), the
patent owner shall cancel each instituted claim and
submit a reasonable number of substitute claims for
consideration by the patent examiner in an expedited
IPR examination under this paragraph.
``(B) Timing.--A patent examiner shall complete an
expedited IPR examination, excluding any time for
appeals, within 18 months after the date on which any
substitute claim is submitted under subparagraph (A).
``(C) Procedures.--Consideration of the substitute
claims in an expedited IPR examination shall follow the
procedures established for initial examination under
sections 132 and 133, subject to subsection (b) of this
section and modified as necessary to ensure that the
procedures are expedited.
``(D) Appeal.--
``(i) Patent examiner decision.--If the
final decision of a patent examiner in an
expedited IPR examination is adverse to the
patentability of a substitute claim, the patent
owner may appeal the decision to the Patent
Trial and Appeal Board under section 134(c).
``(ii) Patent trial and appeal board
decision.--If the final decision in an appeal
of an expedited IPR reexamination to the Patent
Trial and Appeal Board under section 134(c) is
adverse to the patentability of a substitute
claim, the patent owner may appeal the decision
to the United States Court of Appeals for the
Federal Circuit in accordance with sections 141
through 144.
``(E) Certificate.--If the patent examiner
determines in an expedited IPR examination that a
substitute claim is patentable, and the time for appeal
has expired or any appeal proceeding has terminated,
the Director shall issue and publish a certificate
incorporating in the patent the substitute claim.
``(F) Intervening rights.--Any substitute claim
determined to be patentable and incorporated into a
patent following an expedited IPR examination 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
the substitute claim, or who made substantial
preparation therefor, prior to issuance of a
certificate under subparagraph (E).''.
(2) Technical and conforming amendments.--
(A) Expedited ipr examination appeals.--
(i) Appeals to patent trial and appeal
board.--Section 134 of title 35, United States
Code, is amended by adding at the end the
following new subsection:
``(c) Patent Owner in Expedited IPR Examination.--A patent owner
may appeal from the final rejection of any substitute claim by the
primary examiner in an expedited IPR examination under section 316A(d)
to the Patent Trial and Appeal Board, having once paid the fee for such
appeal.''.
(ii) Appeals to federal circuit.--Section
141 of title 35, United States Code, is
amended--
(I) by redesignating subsections
(c) and (d) as subsections (d) and (e);
and
(II) by inserting after subsection
(b) the following new subsection:
``(c) Expedited IPR Examinations.--A patent owner who is
dissatisfied with the final decision in an appeal to the Patent Trial
and Appeal Board under section 134(c) of an expedited IPR examination
may appeal the Board's decision to the United States Court of Appeals
for the Federal Circuit.''.
(B) Conduct of inter partes review.--Section 316 of
title 35, United States Code, is amended--
(i) in subsection (a)(9), by striking
``subsection (d)'' each place that term appears
and inserting ``section 316A'';
(ii) by striking subsection (d); and
(iii) by redesignating subsection (e) as
subsection (d).
(C) Decision of the board.--Section 318(a) of title
35, United States Code, is amended--
(i) by striking ``If'' and inserting
``Except as provided in section 316A(c)(5),
if''; and
(ii) by striking ``section 316(d)'' and
inserting ``section 316A''.
(D) Table of sections.--The table of sections for
chapter 31 of title 35, United States Code, is amended
by inserting after the item relating to section 316 the
following new item:
``316A. Inter partes review amendment practice.''.
SEC. 103. POST-GRANT REVIEW.
(a) Claim Construction.--Section 326(a) of title 35, United States
Code, is amended--
(1) in paragraph (9), by inserting after ``substitute
claims,'' the following: ``including the standard for how
substitute claims should be construed,'';
(2) in paragraph (11), by striking ``; and'' and inserting
a semicolon;
(3) in paragraph (12), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following new paragraph:
``(13) providing that for all purposes under this chapter--
``(A) each challenged claim of a patent shall be
construed as the claim would be construed under section
282(b) in an action to invalidate a patent, including
by construing each challenged claim of the patent in
accordance with--
``(i) the ordinary and customary meaning of
the claim as understood by a person having
ordinary skill in the art to which the claimed
invention pertains; and
``(ii) the prosecution history pertaining
to the patent; and
``(B) if a court has previously construed a
challenged claim of a patent or a challenged claim term
in a civil action to which the patent owner was a
party, the Office shall consider that claim
construction.''.
(b) Burden of Proof.--Section 326(e) of title 35, United States
Code, is amended to read as follows:
``(e) Evidentiary Standards.--
``(1) Presumption of validity.--The presumption of validity
under section 282(a) shall apply to a previously issued claim
that is challenged during a proceeding under this chapter.
``(2) Burden of proof.--In a post-grant review instituted
under this chapter, the petitioner shall have the burden of
proving a proposition of unpatentability of a previously issued
claim by clear and convincing evidence.''.
(c) Standing.--Section 321 of title 35, United States Code, is
amended by adding at the end the following new subsection:
``(d) Persons That May Petition.--
``(1) Definition.--In this subsection, the term `charged
with infringement' means a real and substantial controversy
regarding infringement of a patent exists such that the
petitioner would have standing to bring a declaratory judgment
action in Federal court.
``(2) Necessary conditions.--A person may not file with the
Office a petition to institute a post-grant review of the
patent unless the person, or a real party in interest or privy
of the person, demonstrates--
``(A) a reasonable possibility of being--
``(i) sued for infringement of the patent;
or
``(ii) charged with infringement under the
patent; or
``(B) a competitive harm related to the validity of
the patent.''.
(d) Limitation on Reviews.--Section 324(a) of title 35, United
States Code, is amended to read as follows:
``(a) Threshold.--
``(1) Likelihood of prevailing.--Subject to paragraph (2),
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 one of the claims challenged in
the petition is unpatentable.
``(2) Previous institution.--The Director may not authorize
a post-grant review to be instituted on a claim challenged in a
petition if the Director has previously instituted an inter
partes or post-grant review with respect to that claim.''.
(e) Appeals From Institution Decisions.--Section 324 of title 35,
United States Code, is amended by striking subsection (e) and inserting
the following:
``(e) No Appeal.--A determination by the Director not to institute
a post-grant review under this section shall be final and
nonappealable.
``(f) Interlocutory Appeal.--
``(1) Right of appeal.--A determination by the Director to
institute a post-grant review under this section may be
appealed to the United States Court of Appeals for the Federal
Circuit.
``(2) Timing.--A party shall file a notice of interlocutory
appeal under paragraph (1) not later than 7 days after the date
on which the Director enters the institution decision.
``(3) Limitation.--An interlocutory appeal filed under
paragraph (1) may challenge the institution decision on any
basis except for the determination made under section
324(a)(1).
``(4) Effect on proceedings.--An interlocutory appeal filed
under paragraph (1) shall not stay proceedings in the post-
grant review unless the Director or the United States Court of
Appeals for the Federal Circuit so orders.
``(5) Decision.--An interlocutory appeal filed under
paragraph (1) may be granted by the United States Court of
Appeals for the Federal Circuit, which may include
consideration of whether--
``(A) the institution decision appears to be in
error and mere institution presents a risk of
immediate, irreparable injury to the patent owner;
``(B) the institution decision presents an
unsettled and fundamental issue of law, important both
to the specific proceeding and generally, that is
likely to evade end-of-the-proceeding review; or
``(C) the institution decision is manifestly
erroneous.''.
(f) Eliminating Repetitive Proceedings.--Section 325(e)(1) of title
35, United States Code, is amended to read as follows:
``(1) Proceedings before the office.--A person petitioning
for a post-grant review of a claim in a patent under this
chapter, or the real party in interest or privy of the
petitioner, may not petition for a subsequent post-grant review
before the Office with respect to that patent on any ground
that the petitioner raised or reasonably could have raised in
the initial petition, unless, after the filing of the initial
petition, the petitioner, or the real party in interest or
privy of the petitioner, is charged with infringement of
additional claims of the patent.''.
(g) Real Party in Interest.--
(1) Clarification of definition.--Section 325 of title 35,
United States Code, is amended by adding at the end the
following new subsection:
``(g) Real Party in Interest.--For purposes of this chapter, a
person that directly or through an affiliate, subsidiary, or proxy,
makes a financial contribution to the preparation for, or conduct
during, a post-grant review on behalf of the petitioner shall be
considered a real party in interest of the petitioner.''.
(2) Discovery of real party in interest.--Section 326(a)(5)
of title 35, United States Code, is amended to read as follows:
``(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;
``(B) evidence identifying the petitioner's real
parties in interest; and
``(C) what is otherwise necessary in the interest
of justice;''.
(h) Priority of Federal Court Validity Determinations.--
(1) In general.--Section 325 of title 35, United States
Code, as amended by subsections (f) and (g), is further
amended--
(A) by redesignating subsections (c) through (g) as
subsections (d) through (h), respectively; and
(B) by inserting after subsection (b) the following
new subsection:
``(c) Federal Court Validity Determinations.--
``(1) Institution barred.--A post-grant review of a patent
claim may not be instituted if, 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 (19 U.S.C. 1337), a court
has entered a final judgment--
``(A) that decides the validity of the patent claim
with respect to section 102 or 103; and
``(B) from which an appeal under section 1295 of
title 28 may be taken, or from which an appeal under
section 1295 of title 28 was previously available but
is no longer available.
``(2) Stay of proceedings.--
``(A) In general.--If, 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 (19 U.S.C.
1337), a court has entered a final judgment that
decides the validity of a patent claim with respect to
section 102 or 103 and from which an appeal under
section 1295 of title 28 may be taken, the Patent Trial
and Appeal Board shall stay any ongoing post-grant
review of that patent claim pending a final decision of
the court or Commission, as applicable.
``(B) Termination.--If the validity of a patent
claim described in subparagraph (A) is finally upheld
by a court or the International Trade Commission, as
applicable, the Patent Trial and Appeal Board shall
terminate the post-grant review.''.
(2) Technical and conforming amendments.--Chapter 32 of
title 35, United States Code, is amended--
(A) in section 326(a)(11), by striking ``section
325(c)'' and inserting ``section 325(d)''; and
(B) in section 327(a), by striking ``section
325(e)'' and inserting ``section 325(f)''.
(i) Amendment of Claims.--
(1) Post-grant review amendment practice.--Chapter 32 of
title 35, United States Code, is amended by inserting after
section 326 the following new section:
``Sec. 326A. Post-grant review amendment practice
``(a) Actions Permitted.--During a post-grant review instituted
under this chapter, the patent owner may move to take one or more of
the following actions with respect to any challenged patent claim being
reviewed:
``(1) Cancel the claim.
``(2) Propose a reasonable number of substitute claims
whose patentability will be adjudicated by the Patent Trial and
Appeal Board in accordance with subsection (c).
``(3) Propose a reasonable number of substitute claims to
be examined in an expedited PGR (in this section referred to as
`expedited PGR') reexamination in accordance with subsection
(d).
``(b) Scope of Claims.--An amendment to a patent under this section
may not enlarge the scope of the claims of the patent or introduce new
matter.
``(c) Amendment Practice Before the Patent Trial and Appeal
Board.--
``(1) Patent owner's initial motion.--For each challenged
claim for which the patent owner seeks to propose a reasonable
number of substitute claims, the patent owner shall be required
to make a prima facie showing that each substitute claim--
``(A) responds to each ground of unpatentability on
which the post-grant review was instituted;
``(B) meets the written description requirement
under section 112(a); and
``(C) meets the requirement under subsection (b) of
this section.
``(2) New evidence.--
``(A) Petitioner.--The petitioner may respond to
the patent owner's initial motion under paragraph (1)
by presenting new evidence.
``(B) Patent owner.--The patent owner shall have at
least 1 opportunity to respond to any new evidence
presented under subparagraph (A).
``(3) Expedited patentability report.--
``(A) In general.--Upon the filing of a motion
under paragraph (1), the Patent Trial and Appeal Board
may order an expedited patentability report from a
patent examiner on a substitute claim.
``(B) Contents of report.--In ordering an expedited
patentability report, the Patent Trial and Appeal Board
may--
``(i) order examination of any ground of
patentability that is assessed by a patent
examiner under chapter 12; and
``(ii) request a non-binding recommendation
as to the patentability of a substitute claim.
``(C) Right of reply.--Any party to the post-grant
review may file supplemental briefing, including new
evidence, addressing the expedited patentability
report.
``(D) Timing.--The production of the expedited
patentability report shall be expedited.
``(E) Good cause.--The ordering of an expedited
patentability report shall constitute good cause, for
purposes of section 326(a)(11), to extend the 1-year
period for the post-grant review.
``(4) Adjudication of patentability.--
``(A) No rebuttal.--A patent owner shall be
entitled to a substitute claim if the prima facie
showing required under paragraph (1) is not rebutted.
``(B) Additional evidence.--If additional evidence
of record is presented, the patent owner shall be
entitled to a substitute claim unless a preponderance
of that evidence proves that the patent owner is not so
entitled.
``(5) Patent trial and appeal board's discretion to order
expedited pgr reexamination.--Upon issuing a final written
decision with respect to each challenged claim, the Patent
Trial and Appeal Board may order an expedited PGR reexamination
to be conducted under section (d)(2) to consider a substitute
claim in lieu of issuing a final written decision on that
claim.
``(6) Amendments to advance settlement.--The Patent Trial
and Appeal Board may consider additional motions to amend upon
the joint request of the petitioner and the patent owner to
materially advance the settlement of a proceeding under section
327 if the patent owner makes the prima facie showing required
under paragraph (1).
``(d) Amendment Practice Before a Patent Examiner.--
``(1) Motion to convert to expedited pgr examination.--
``(A) In general.--If the Director determines to
institute a post-grant review on a challenged claim
under section 324, a patent owner may, before any
further substantive briefing on the patentability of an
instituted claim, move to terminate the post-grant
review in favor of an expedited PGR reexamination under
paragraph (2) of this subsection.
``(B) Contents of motion.--A patent owner shall be
required to show good cause for why an expedited PGR
reexamination would further the goals of the patent
system, including consideration of whether there are
substantial--
``(i) investments in research directly
related to the claimed invention;
``(ii) secondary indicia of non-
obviousness, such as commercial success, long-
felt but unsolved needs, or failures of persons
skilled in the art to develop the claimed
invention; or
``(iii) changes in case law governing
relevant substantive patentability requirements
since the patent was issued.
``(C) New evidence allowed.--The opening motion and
opposition briefs under this paragraph may include new
evidence, and further rebuttal evidence may be allowed
by the Patent Trial and Appeal Board.
``(2) Conduct of expedited pgr examination.--
``(A) In general.--If the Patent Trial and Appeal
Board grants a motion filed under paragraph (1), the
patent owner shall cancel each instituted claim and
submit a reasonable number of substitute claims for
consideration by the patent examiner in an expedited
PGR examination under this paragraph.
``(B) Timing.--A patent examiner shall complete an
expedited PGR examination, excluding any time for
appeals, within 18 months after the date on which any
substitute claim is submitted under subparagraph (A).
``(C) Procedures.--Consideration of the substitute
claims in an expedited PGR examination shall follow the
procedures established for initial examination under
sections 132 and 133, subject to subsection (b) of this
section and modified as necessary to ensure that the
procedures are expedited.
``(D) Appeal.--
``(i) Patent examiner decision.--If the
final decision of a patent examiner in an
expedited PGR examination is adverse to the
patentability of a substitute claim, the patent
owner may appeal the decision to the Patent
Trial and Appeal Board under section 134(c).
``(ii) Patent trial and appeal board
decision.--If the final decision in an appeal
of an expedited PGR reexamination to the Patent
Trial and Appeal Board under section 134(c) is
adverse to the patentability of a substitute
claim, the patent owner may appeal the decision
to the United States Court of Appeals for the
Federal Circuit in accordance with sections 141
through 144.
``(E) Certificate.--If the patent examiner
determines in an expedited PGR examination that a
substitute claim is patentable, and the time for appeal
has expired or any appeal proceeding has terminated,
the Director shall issue and publish a certificate
incorporating in the patent the substitute claim.
``(F) Intervening rights.--Any substitute claim
determined to be patentable and incorporated into a
patent following an expedited PGR examination 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
the substitute claim, or who made substantial
preparation therefor, prior to issuance of a
certificate under subparagraph (E).''.
(2) Technical and conforming amendments.--
(A) Expedited pgr examination appeals.--
(i) Appeals to patent trial and appeal
board.--Section 134 of title 35, United States
Code, as amended by section 102(i)(2), is
further amended by adding at the end the
following new subsection:
``(d) Patent Owner in Expedited PGR Examination.--A patent owner
may appeal from the final rejection of any substitute claim by the
primary examiner in an expedited PGR examination under section 326A(d)
to the Patent Trial and Appeal Board, having once paid the fee for such
appeal.''.
(ii) Appeals to federal circuit.--Section
141 of title 35, United States Code, as amended
by section 102(i)(2), is further amended--
(I) by redesignating subsections
(d) and (e) as subsections (e) and (f);
and
(II) by inserting after subsection
(c) the following new subsection:
``(d) Expedited PGR Examinations.--A patent owner who is
dissatisfied with the final decision in an appeal to the Patent Trial
and Appeal Board under section 134(c) of an expedited PGR examination
may appeal the Board's decision to the United States Court of Appeals
for the Federal Circuit.''.
(B) Conduct of post-grant review.--Section 326 of
title 35, United States Code, is amended--
(i) in subsection (a)(9), by striking
``subsection (d)'' each place that term appears
and inserting ``section 326A'';
(ii) by striking subsection (d); and
(iii) by redesignating subsection (e) as
subsection (d).
(C) Decision of the board.--Section 328(a) of title
35, United States Code, is amended--
(i) by striking ``If'' and inserting
``Except as provided in section 326A(c)(5),
if''; and
(ii) by striking ``section 326(d)'' and
inserting ``section 326A''.
(D) Table of sections.--The table of sections for
chapter 32 of title 35, United States Code, is amended
by inserting after the item relating to section 326 the
following new item:
``326A. Post-grant review amendment practice.''.
SEC. 104. COMPOSITION OF POST-GRANT REVIEW AND INTER PARTES REVIEW
PANELS.
Section 6(c) of title 35, United States Code, is amended to read as
follows:
``(c) 3-Member Panels.--
``(1) In general.--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.
``(2) Ineligibility to hear review.--A member of the Patent
Trial and Appeal Board who participates in the decision to
institute a post-grant review or an inter partes review of a
patent shall be ineligible to hear the review.
``(3) Rehearings.--Only the Patent Trial and Appeal Board
may grant rehearings.''.
SEC. 105. REEXAMINATION OF PATENTS.
(a) Request for Reexamination.--Section 302 of title 35, United
States Code, is amended to read as follows:
``Sec. 302. Request for reexamination
``Any person at any time may file a request for reexamination by
the Office of any claim of a patent on the basis of any prior art cited
under the provisions of section 301. The request must be in writing and
must be accompanied by payment of a reexamination fee established by
the Director pursuant to the provisions of section 41. The request must
identify all real parties in interest and certify that reexamination is
not barred under section 303(d). The request must set forth the
pertinency and manner of applying cited prior art to every claim for
which reexamination is requested. Unless the requesting person is the
owner of the patent, the Director promptly will send a copy of the
request to the owner of record of the patent.''.
(b) Reexamination Barred by Civil Action.--Section 303 of title 35,
United States Code, is amended by adding at the end the following new
subsection:
``(d) An ex parte reexamination may not be instituted if the
request for reexamination is filed more than 1 year after the date on
which the requester or a real party in interest or privy of the
requester is served with a complaint alleging infringement of the
patent.''.
SEC. 106. RESTORATION OF PATENTS AS PROPERTY RIGHTS.
Section 283 of title 35, United States Code, is amended--
(1) by striking ``The several courts'' and inserting the
following:
``(a) In General.--The several courts''; and
(2) by adding at the end the following:
``(b) Injunction.--Upon a finding by a court of infringement of a
patent not proven invalid or unenforceable, the court shall presume
that--
``(1) further infringement of the patent would cause
irreparable injury; and
``(2) remedies available at law are inadequate to
compensate for that injury.''.
SEC. 107. ELIMINATION OF USPTO FEE DIVERSION.
(a) Funding.--Section 42 of title 35, United States Code, is
amended--
(1) in subsection (a), by striking ``All fees'' and
inserting ``Fees for Service by PTO.--All fees'';
(2) in subsection (b)--
(A) by striking ``All fees'' and inserting
```Innovation Promotion Fund.--All fees'''; and
(B) by striking ``Patent and Trademark Office
Appropriation Account'' and inserting ``United States
Patent and Trademark Office Innovation Promotion
Fund'';
(3) in subsection (c)--
(A) by striking ``(c)'' and inserting ``(c)
Collection of Funds for PTO Activities.''
(B) in paragraph (1)--
(i) by striking ``To the extent'' and all
that follows through ``fees'' and inserting
``Fees''; and
(ii) by striking ``shall be collected by
and shall, subject to paragraph (2), be
available to the Director'' and inserting
``shall be collected by the Director and shall
be available to the Director until expended'';
(C) by striking paragraph (2); and
(D) by redesignating paragraph (3) as paragraph
(2);
(4) by redesignating subsections (d) and (e) as subsections
(e) and (f), respectively;
(5) by inserting after subsection (c) the following new
subsection:
``(d) Revolving Fund.--
``(1) Definitions.--In this subsection--
``(A) the term `Fund' means the United States
Patent and Trademark Office Innovation Promotion Fund
established under paragraph (2); and
``(B) 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').
``(2) Establishment.--There is established in the Treasury
a revolving fund to be known as the `United States Patent and
Trademark Office Innovation Promotion Fund'.
``(3) Derivation of resources.--There shall be deposited
into the Fund any fees collected under--
``(A) this title; or
``(B) the Trademark Act of 1946.
``(4) Expenses.--Amounts deposited into the Fund under
paragraph (3) shall be available, without fiscal year
limitation, to cover--
``(A) all expenses to the extent consistent with
the limitation on the use of fees set forth in
subsection (c), including all administrative and
operating expenses, determined in the discretion of the
Director to be ordinary and reasonable, incurred by the
Director for the continued operation of all services,
programs, activities, and duties of the Office relating
to patents and trademarks, as such services, programs,
activities, and duties are described under--
``(i) this title; and
``(ii) the Trademark Act of 1946; and
``(B) all expenses incurred pursuant to any
obligation, representation, or other commitment of the
Office.'';
(6) in subsection (e), as redesignated, by striking ``The
Director'' and inserting ``Refunds.--The Director''; and
(7) in subsection (f), as redesignated, by striking ``The
Secretary'' and inserting ``Report.--The Secretary''.
(b) Effective Date; Transfer From and Termination of Obsolete
Funds.--
(1) Effective date.--The amendments made by subsection (a)
shall take effect on the first day of the first fiscal year
that begins on or after the date of the enactment of this Act.
(2) Remaining balances.--There shall be deposited in the
Fund, on the effective date described in paragraph (1), any
available unobligated balances remaining in the Patent and
Trademark Office Appropriation Account, and in the Patent and
Trademark Fee Reserve Fund established under section 42(c)(2)
of title 35, United States Code, as in effect on the date
before the effective date.
(3) Termination of reserve fund.--Upon the payment of all
obligated amounts in the Patent and Trademark Fee Reserve Fund
under paragraph (2), the Patent and Trademark Fee Reserve Fund
shall be terminated.
SEC. 108. INFRINGEMENT OF PATENT.
Section 271 of title 35, United States Code, is amended--
(1) by striking subsection (b) and inserting the following:
``(b) Whoever actively induces infringement of a patent shall be
liable as an infringer upon a showing that the accused infringer
intended to cause the acts that constitute infringement, without regard
to whether the accused infringer knew of the patent.'';
(2) in subsection (f), by adding at the end the following
new paragraph:
``(3)(A) Whoever, without authority, supplies or causes to be
supplied in or from the United States a design for a product embodying
a patented invention in such manner as to actively induce the making of
that product outside the United States in a manner that would infringe
the patent if made in the United States, shall be liable as an
infringer.
``(B) Whoever, without authority, supplies or causes to be supplied
in or from the United States a specification for performing a patented
process or method in such manner as to actively induce the performance
of that process or method outside the United States in a manner that
would infringe the patent if performed in the United States, shall be
liable as an infringer.''; and
(3) by adding at the end the following:
``(j) For a finding of liability for actively inducing infringement
of a process patent under subsection (b), or for contributory
infringement of a process patent under subsection (c), it shall not be
a requirement that the steps of the patented process be practiced by a
single entity.''.
SEC. 109. INSTITUTIONS OF HIGHER EDUCATION.
Section 123(d) of title 35, United States Code, is amended to read
as follows:
``(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));
``(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;
``(3) the applicant is such an institution of higher
education; or
``(4) the applicant is an organization described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code that holds title to
patents and patent applications on behalf of such an
institution of higher education for the purpose of facilitating
commercialization of the technologies of the patents and patent
applications.''.
SEC. 110. ASSISTING SMALL BUSINESSES IN THE U.S. PATENT SYSTEM.
(a) Definition.--In this section, the term ``small business
concern'' has the meaning given the term in section 3 of the Small
Business Act (15 U.S.C. 632).
(b) Small Business Administration Report.--Not later than 1 year
after the date of enactment of this Act, the Small Business
Administration, using existing resources, shall submit to the Committee
on Small Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives a report analyzing
the impact of--
(1) patent ownership by small business concerns; and
(2) civil actions against small business concerns arising
under title 35, United States Code, relating to patent
infringement.
(c) Expansion of Patent Pilot Program in Certain District Courts.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the Director of the Administrative
Office of the United States Courts shall designate not fewer
than 6 of the district courts of the United States that are
participating in the patent cases pilot program established
under section 1 of Public Law 111-349 (28 U.S.C. 137 note) for
the purpose of expanding that program to address special issues
raised in patent infringement suits against individuals or
small business concerns.
(2) Procedures for small businesses.--Not later than 2
years after the date of the enactment of this Act, each
district court designated under paragraph (1) shall develop
procedures for expediting cases in which an individual or small
business concern is accused of patent infringement.
(3) Participating judges.--
(A) In general.--In each district court designated
under paragraph (1), each district court judge
participating in the patent cases pilot program
established under section 1 of Public Law 111-349 may
appoint 1 additional law clerk or secretary in excess
of any other limitation on the number of such
employees.
(B) Education and training.--The Federal Judicial
Center, using existing resources, shall prepare
educational and training materials to assist district
court judges described in subparagraph (A) in
developing expertise in patent and plant variety
protection cases.
(4) Funds.--There are authorized to be appropriated such
sums as may be necessary to carry out paragraph (3)(A).
(d) Free Online Availability of Public Search Facility Materials.--
Section 41(i) of title 35, United States Code, is amended by adding at
the end the following new paragraph:
``(5) Free online availability of public search facility
materials.--The Director shall make available online and at no
charge all patent and trademark information that is available
at the Public Search Facility of the Office located in
Alexandria, Virginia, including, except to the extent that
licenses with third-party contractors would make such provision
financially unviable--
``(A) search tools and databases;
``(B) informational materials; and
``(C) training classes and materials.''.
TITLE II--TARGETING ROGUE AND OPAQUE LETTERS
SEC. 201. DEFINITIONS.
In this title:
(1) Bad faith.--The term ``bad faith'' means, with respect
to section 202(a), that the sender--
(A) made knowingly false or knowingly misleading
statements, representations, or omissions;
(B) made statements, representations, or omissions
with reckless indifference as to the false or
misleading nature of such statements, representations,
or omissions; or
(C) made statements, representations, or omissions
with awareness of the high probability of the
statements, representations, or omissions to deceive
and the sender intentionally avoided the truth.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Final determination.--The term ``final determination''
means, with respect to the invalidity or unenforceability of a
patent, that the invalidity or unenforceability has been
determined by a court of the United States or the United States
Patent and Trademark Office in a final decision that is
unappealable or for which any opportunity for appeal is no
longer available.
SEC. 202. UNFAIR OR DECEPTIVE ACTS OR PRACTICES IN CONNECTION WITH THE
ASSERTION OF A UNITED STATES PATENT.
(a) In General.--It shall be an unfair or deceptive act or practice
within the meaning of section 5(a)(1) of the Federal Trade Commission
Act (15 U.S.C. 45(a)(1)) for a person, in connection with the assertion
of a United States patent, to engage in a pattern or practice of
sending written communications that state or represent that the
recipients are or may be infringing, or have or may have infringed, the
patent and bear liability or owe compensation to another, if--
(1) the sender of the communications, in bad faith, states
or represents in the communications that--
(A) the sender is a person with the right to
license or enforce the patent at the time the
communications are sent, and the sender is not a person
with such a right;
(B) a civil action asserting a claim of
infringement of the patent has been filed against the
recipient;
(C) a civil action asserting a claim of
infringement of the patent has been filed against other
persons;
(D) legal action for infringement of the patent
will be taken against the recipient;
(E) the sender is the exclusive licensee of the
patent asserted in the communications;
(F) persons other than the recipient purchased a
license for the patent asserted in the communications;
(G) persons other than the recipient purchased a
license, and the sender does not disclose that such
license is unrelated to the alleged infringement or the
patent asserted in the communications;
(H) an investigation of the recipient's alleged
infringement occurred; or
(I) the sender or an affiliate of the sender
previously filed a civil action asserting a claim of
infringement of the patent based on the activity that
is the subject of the written communication when the
sender knew such activity was held, in a final
determination, not to infringe the patent;
(2) the sender of the communications, in bad faith, seeks
compensation for--
(A) a patent claim that has been held to be
unenforceable due to inequitable conduct, invalid, or
otherwise unenforceable against the recipient, in a
final determination;
(B) activities undertaken by the recipient after
expiration of the patent asserted in the
communications; or
(C) activity of the recipient that the sender knew
was authorized, with respect to the patent claim or
claims that are the subject of the communications, by a
person with the right to license the patent; or
(3) the sender of the communications, in bad faith, fails
to include--
(A) the identity of the person asserting a right to
license the patent to, or enforce the patent against,
the recipient, including the identity of any parent
entity and the ultimate parent entity of such person,
unless such person is a public company and the name of
the public company is identified;
(B) an identification of at least one patent issued
by the United States Patent and Trademark Office
alleged to have been infringed;
(C) an identification, to the extent reasonable
under the circumstances, of at least one product,
service, or other activity of the recipient that is
alleged to infringe the identified patent;
(D) a description, to the extent reasonable under
the circumstances, of how the product, service, or
other activity of the recipient infringes an identified
patent and patent claim; or
(E) a name and contact information for a person the
recipient may contact about the assertions or claims
relating to the patent contained in the communications.
(b) Affirmative Defense.--With respect to subsection (a), there
shall be an affirmative defense that statements, representations, or
omissions were not made in bad faith (as defined in subparagraphs (B)
and (C) of section 201(1)) if the sender can demonstrate that such
statements, representations, or omissions were mistakes made in good
faith. Evidence that the sender in the usual course of business sends
written communications that do not violate the provisions of this title
shall be sufficient to demonstrate good faith. Good faith may also be
demonstrated by other evidence.
(c) Rule of Construction.--For purposes of sections 203 and 204,
the commission of an act or practice that is declared under this
section to be an unfair or deceptive act or practice within the meaning
of section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C.
45(a)(1)) shall be considered to be a violation of this section.
SEC. 203. ENFORCEMENT BY FEDERAL TRADE COMMISSION.
(a) Violation of Rule.--A violation of section 202 shall be treated
as a violation of a rule defining an unfair or deceptive act or
practice prescribed under section 18(a)(1)(B) of the Federal Trade
Commission Act (15 U.S.C. 57a(a)(1)(B)).
(b) Powers of Commission.--The Commission shall enforce this title
in the same manner, by the same means, and with the same jurisdiction,
powers, and duties as though all applicable terms and provisions of the
Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated
into and made a part of this title. Any person who violates section 202
shall be subject to the penalties and entitled to the privileges and
immunities provided in the Federal Trade Commission Act.
(c) Effect on Other Laws.--Nothing in this title shall be construed
in any way to limit or affect the authority of the Commission under any
other provision of law.
SEC. 204. PREEMPTION OF STATE LAWS ON PATENT DEMAND LETTERS AND
ENFORCEMENT BY STATE ATTORNEYS GENERAL.
(a) Preemption.--
(1) In general.--This title preempts any law, rule,
regulation, requirement, standard, or other provision having
the force and effect of law of any State, or political
subdivision of a State, expressly relating to the transmission
or contents of communications relating to the assertion of
patent rights.
(2) Effect on other state laws.--Except as provided in
paragraph (1), this title shall not be construed to preempt or
limit any provision of any State law, including any State
consumer protection law, any State law relating to acts of
fraud or deception, and any State trespass, contract, or tort
law.
(b) Enforcement by State Attorneys General.--
(1) In general.--In any case in which the attorney general
of a State has reason to believe that an interest of the
residents of that State has been adversely affected by any
person who violates section 202, the attorney general of the
State, may bring a civil action on behalf of such residents of
the State in a district court of the United States of
appropriate jurisdiction--
(A) to enjoin further such violation by the
defendant; or
(B) to obtain civil penalties on behalf of
recipients who suffered actual damages as a result of
such violation.
(2) Maximum civil penalty.--Notwithstanding the number of
actions which may be brought against a person under this
subsection, a person may not be liable for a total of more than
$5,000,000 for a series of related violations of section 202.
(3) Intervention by the ftc.--
(A) Notice and intervention.--The attorney general
of a State shall provide prior written notice of any
action under paragraph (1) to the Commission and
provide the Commission with a copy of the complaint in
the action, except in any case in which such prior
notice is not feasible, in which case the attorney
general shall serve such notice immediately upon
instituting such action. The Commission shall have the
right--
(i) to intervene in the action;
(ii) upon so intervening, to be heard on
all matters arising therein; and
(iii) to file petitions for appeal.
(B) Limitation on state action while federal action
is pending.--If the Commission has instituted a civil
action for violation of section 202, no State attorney
general may bring an action under this subsection
during the pendency of that action against any
defendant named in the complaint of the Commission for
any violation of such section alleged in the complaint.
(4) Construction.--For purposes of bringing any civil
action under paragraph (1), nothing in this title shall be
construed to prevent the attorney general of a State from
exercising the powers conferred on the attorney general by the
laws of that State to--
(A) conduct investigations;
(B) administer oaths or affirmations; or
(C) compel the attendance of witnesses or the
production of documentary and other evidence.
<all>
Introduced in House
Introduced in House
Referred to the Committee on the Judiciary, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Digital Commerce and Consumer Protection.
Referred to the Subcommittee on Courts, Intellectual Property, and the Internet.
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