ALB15732 S.L.C. 114TH CONGRESS 1ST SESSION S. ll To amend title 35, United States Code, and the Leahy-Smith America Invents Act to make improvements and technical corrections, and for other purposes. IN THE SENATE OF THE UNITED STATES llllllllll Mr. GRASSLEY (for himself, Mr. LEAHY, Mr. CORNYN, Mr. SCHUMER, Mr. LEE, Mr. HATCH, and Ms. KLOBUCHAR) introduced the following bill; which was read twice and referred to the Committee on llllllllll A BILL To amend title 35, United States Code, and the LeahySmith America Invents Act to make improvements and technical corrections, and for other purposes. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 3 4 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.—This Act may be cited as the 5 ‘‘Protecting American Talent and Entrepreneurship Act 6 of 2015’’ or the ‘‘PATENT Act’’. 7 (b) TABLE OF CONTENTS.—The table of contents for 8 this Act is as follows: Sec. 1. Short title; table of contents. ALB15732 S.L.C. 2 Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. 1 2. 3. 4. 5. 6. Definitions. Pleading requirements for patent infringement actions. Customer-suit exception. Discovery limits. Procedures and practices to implement recommendations of the Judicial Conference. 7. Fees and other expenses. 8. Requirement of clarity and specificity in demand letters. 9. Abusive demand letters. 10. Transparency of patent transfer. 11. Protection of intellectual property licenses in bankruptcy. 12. Small business education, outreach, and information access. 13. Studies on patent transactions, quality, and examination. 14. Technical corrections to the Leahy-Smith America Invents Act and other improvements. 15. Effective date. 16. Severability. SEC. 2. DEFINITIONS. 2 (1) DIRECTOR.—The term ‘‘Director’’ means 3 the Under Secretary of Commerce for Intellectual 4 Property and Director of the United States Patent 5 and Trademark Office. 6 7 8 9 10 (2) OFFICE.—The term ‘‘Office’’ means the United States Patent and Trademark Office. SEC. 3. PLEADING REQUIREMENTS FOR PATENT INFRINGEMENT ACTIONS. (a) ELIMINATION OF FORM 18.—Not later than 1 11 month after the date of enactment of this Act, the Su12 preme Court, using existing resources, shall eliminate 13 Form 18 in the Appendix to the Federal Rules of Civil 14 Procedure (Complaint for Patent Infringement). 15 (b) PLEADING REQUIREMENTS.— ALB15732 S.L.C. 3 1 (1) AMENDMENT.—Chapter 29 of title 35, 2 United States Code, is amended by inserting after 3 section 281 the following: 4 ‘‘§ 281A. Pleading requirements for patent infringe5 6 ment actions ‘‘(a) PLEADING REQUIREMENTS.—In a civil action in 7 which a party asserts a claim for relief arising under any 8 Act of Congress relating to patents, a party alleging in9 fringement shall include in a complaint, counterclaim, or 10 cross-claim for patent infringement, except as provided in 11 subsection (c), the following: 12 13 ‘‘(1) An identification of each patent allegedly infringed. 14 ‘‘(2) An identification of each claim of each pat- 15 ent identified under paragraph (1) that is allegedly 16 infringed. 17 ‘‘(3) For each claim identified under paragraph 18 (2), an identification of each accused process, ma- 19 chine, manufacture, or composition of matter (re- 20 ferred to in this section as an ‘accused instrumen- 21 tality’) alleged to infringe the claim. 22 ‘‘(4) For each accused instrumentality identi- 23 fied under paragraph (3), an identification with par- 24 ticularity, if known, of— ALB15732 S.L.C. 4 1 ‘‘(A) the name or model number (or a rep- 2 resentative model number) of each accused in- 3 strumentality; or 4 ‘‘(B) if there is no name or model number, 5 a description of each accused instrumentality. 6 ‘‘(5) For each claim identified under paragraph 7 (2), a description of the elements thereof that are al- 8 leged to be infringed by the accused instrumentality 9 and how the accused instrumentality is alleged to in- 10 fringe those elements. 11 ‘‘(6) For each claim of indirect infringement, a 12 description of the acts of the alleged infringer that 13 are alleged to contribute to or induce the direct in- 14 fringement. 15 ‘‘(b) DISMISSAL FOR FAILURE TO MEET PLEADING 16 REQUIREMENTS.—The court shall, on the motion of any 17 party, dismiss any count or counts of the complaint, coun18 terclaim, or cross-claim for patent infringement if the re19 quirements of paragraphs (1) through (6) of subsection 20 (a) are not met with respect to such count or counts. The 21 fact that a party pleads in accordance with subsection (c) 22 shall not be a basis for dismissal if the party nonetheless 23 states a plausible claim for relief sufficient under the Fed24 eral Rules of Civil Procedure. ALB15732 S.L.C. 5 1 ‘‘(c) INFORMATION NOT ACCESSIBLE.—If some sub- 2 set of information required to comply with subsection (a) 3 is not accessible to a party after an inquiry reasonable 4 under the circumstances, consistent with rule 11 of the 5 Federal Rules of Civil Procedure, an allegation requiring 6 that information may be based upon a general description 7 of that information, along with a statement as to why the 8 information is not accessible. 9 ‘‘(d) AMENDMENT OF PLEADINGS.—Nothing in this 10 provision shall be construed to affect a party’s leave to 11 amend pleadings as specified in the Federal Rules of Civil 12 Procedure. Amendments permitted by the court are sub13 ject to the pleading requirements set forth in this section. 14 ‘‘(e) CONFIDENTIAL INFORMATION.—A party re- 15 quired to disclose information described under subsection 16 (a) may file information believed to be confidential under 17 seal, with a motion setting forth good cause for such seal18 ing. If such motion is denied by the court, the party may 19 seek to file an amended pleading. 20 ‘‘(f) EXEMPTION.—Subsection (a) shall not apply to 21 a civil action that includes a claim for relief arising under 22 section 271(e)(2). 23 ‘‘§ 281B. Early disclosure requirements for patent in24 25 fringement actions ‘‘(a) DEFINITIONS.—In this section— ALB15732 S.L.C. 6 1 2 ‘‘(1) the term ‘financial interest’— ‘‘(A) means— 3 ‘‘(i) with regard to a patent or pat- 4 ents, the right of a person to receive pro- 5 ceeds from the assertion of the patent or 6 patents, including a fixed or variable por- 7 tion of such proceeds; and 8 ‘‘(ii) with regard to the patentee, di- 9 rect or indirect ownership or control by a 10 person of more than 20 percent of the pat- 11 entee; and 12 ‘‘(B) does not mean— 13 ‘‘(i) ownership of shares or other in- 14 terests in a mutual or common investment 15 fund, unless the owner of such interest 16 participates in the management of such 17 fund; or 18 ‘‘(ii) the proprietary interest of a pol- 19 icyholder in a mutual insurance company 20 or a depositor in a mutual savings associa- 21 tion, or a similar proprietary interest, un- 22 less the outcome of the proceeding could 23 substantially affect the value of such inter- 24 est; ALB15732 S.L.C. 7 1 ‘‘(2) the term ‘patentee’ means a party in a 2 civil action that files a pleading subject to the re- 3 quirements of section 281A; 4 ‘‘(3) the term ‘proceeding’ means all stages of 5 a civil action, including pretrial and trial proceedings 6 and appellate review; and 7 ‘‘(4) the term ‘ultimate parent entity’ has the 8 meaning given the term in section 261A. 9 ‘‘(b) EARLY DISCLOSURE REQUIREMENTS.—Not- 10 withstanding the requirements of section 299B, a patentee 11 shall disclose to the court and each adverse party, not later 12 than 14 days after the date on which the patentee serves 13 or files the pleading subject to the requirements of section 14 281A— 15 16 17 ‘‘(1) the identity of each— ‘‘(A) assignee of the patent or patents at issue, and any ultimate parent entity thereof; 18 ‘‘(B) entity with a right to sublicense to 19 unaffiliated entities or to enforce the patent or 20 patents at issue, and any ultimate parent entity 21 thereof; and 22 ‘‘(C) entity, other than an entity the ulti- 23 mate parent of which is disclosed under sub- 24 paragraph (A) or (B), that the patentee knows 25 to have a financial interest in— ALB15732 S.L.C. 8 1 ‘‘(i) the patent or patents at issue; or 2 ‘‘(ii) the patentee, and any ultimate 3 4 5 parent entity thereof; and ‘‘(2) for each patent that the patentee alleges to be infringed— 6 ‘‘(A) a list of each complaint, counterclaim, 7 or cross-claim filed by the patentee or an affil- 8 iate thereof in the United States during the 3- 9 year period preceding the date of the filing of 10 the action, and any other complaint, counter- 11 claim, or cross-claim filed in the United States 12 during that period of which the patentee has 13 knowledge, that asserts or asserted such patent, 14 including— 15 ‘‘(i) the caption; 16 ‘‘(ii) civil action number; 17 ‘‘(iii) the court where the action was 18 19 filed; and ‘‘(iv) if applicable, any court to which 20 the action was transferred; 21 ‘‘(B) a statement as to whether the patent 22 is subject to an assurance made by the party to 23 a standards development organization to license 24 others under such patent if— ALB15732 S.L.C. 9 1 2 ‘‘(i) the assurance specifically identifies such patent or claims therein; and 3 ‘‘(ii) the allegation of infringement re- 4 lates to such standard; and 5 ‘‘(C) a statement as to whether the Fed- 6 eral Government has imposed specific licensing 7 requirements with respect to such patent. 8 ‘‘(c) DISCLOSURE OF FINANCIAL INTEREST.— 9 ‘‘(1) PUBLICLY TRADED.—For purposes of sub- 10 section (b)(1)(C), if the financial interest is held by 11 a corporation traded on a public stock exchange, an 12 identification of the name of the corporation and the 13 public exchange listing shall satisfy the disclosure re- 14 quirement. 15 ‘‘(2) NOT PUBLICLY TRADED.—For purposes of 16 subsection (b)(1)(C), if the financial interest is not 17 held by a publicly traded corporation, the disclosure 18 shall satisfy the disclosure requirement if the infor- 19 mation identifies— 20 ‘‘(A) in the case of a partnership, the 21 name of the partnership, the address of the 22 principal place of business, and the name and 23 correspondence address of the registered agent; 24 ‘‘(B) in the case of a corporation, the 25 name of the corporation, the location of incor- ALB15732 S.L.C. 10 1 poration, and the address of the principal place 2 of business; and 3 ‘‘(C) for each individual, the name and 4 5 correspondence address of that individual. ‘‘(d) PROVISION 6 STATES PATENT OF AND INFORMATION TO THE UNITED TRADEMARK OFFICE.—Not later 7 than 1 month after the date on which the disclosures re8 quired under subsection (b) are made, the patentee shall 9 provide to the United States Patent and Trademark Office 10 a filing containing the information disclosed pursuant to 11 subsection (b)(1). 12 ‘‘(e) CONFIDENTIAL INFORMATION.— 13 ‘‘(1) IN GENERAL.—A patentee required to dis- 14 close information under subsection (b) may file, 15 under seal, information believed to be confidential, 16 with a motion setting forth good cause for such seal- 17 ing. 18 ‘‘(2) HOME ADDRESS INFORMATION.—For pur- 19 poses of this section, the home address of an indi- 20 vidual shall be considered to be confidential informa- 21 tion.’’. 22 (2) CONFORMING AMENDMENT.—The table of 23 sections for chapter 29 of title 35, United States 24 Code, is amended by inserting after the item relating 25 to section 281 the following new items: ALB15732 S.L.C. 11 ‘‘281A. Pleading requirements for patent infringement actions. ‘‘281B. Early disclosure requirements for patent infringement actions.’’. 1 (c) EFFECTIVE DATE.—The amendments made by 2 this section shall take effect on the date of enactment of 3 this Act and shall apply to any action for which a com4 plaint is filed on or after that date. 5 6 SEC. 4. CUSTOMER-SUIT EXCEPTION. (a) IN GENERAL.—Chapter 29 of title 35, United 7 States Code, is amended by adding at the end the fol8 lowing: 9 ‘‘§ 299A. Customer stay 10 ‘‘(a) DEFINITIONS.—In this section— 11 ‘‘(1) the term ‘covered customer’ means a re- 12 tailer or end user that is accused of infringing a pat- 13 ent or patents in dispute based on— 14 ‘‘(A) the sale, or offer for sale, of a covered 15 product or covered process without material 16 modification of the product or process in a 17 manner that is alleged to infringe a patent or 18 patents in dispute; or 19 ‘‘(B) the use by such retailer, the retailer’s 20 end user customer, or an end user of a covered 21 product or covered process without material 22 modification of the product or process in a 23 manner that is alleged to infringe a patent or 24 patents in dispute; ALB15732 S.L.C. 12 1 ‘‘(2) the term ‘covered manufacturer’ means a 2 person who manufactures or supplies, or causes the 3 manufacture or supply of, a covered product or cov- 4 ered process, or a relevant part thereof; 5 ‘‘(3) the term ‘covered process’ means a proc- 6 ess, method, or a relevant part thereof, that is al- 7 leged to infringe the patent or patents in dispute 8 where such process, method, or relevant part thereof 9 is implemented by an apparatus, material, system, 10 software or other instrumentality that is provided by 11 the covered manufacturer; 12 ‘‘(4) the term ‘covered product’ means a compo- 13 nent, product, system, service, or a relevant part 14 thereof, that— 15 16 17 ‘‘(A) is alleged to infringe the patent or patents in dispute; or ‘‘(B) implements a process alleged to in- 18 fringe the patent or patents in dispute; 19 ‘‘(5) for purposes of this section, the term ‘end 20 user’ shall include an affiliate of such an end user, 21 but shall not include an entity that manufactures or 22 causes the manufacture of a covered product or cov- 23 ered process or a relevant part thereof; 24 ‘‘(6) the term ‘retailer’ means an entity that 25 generates its revenues predominately through the ALB15732 S.L.C. 13 1 sale to the public of consumer goods or services, or 2 an affiliate of such entity, but shall not include an 3 entity that manufactures or causes the manufacture 4 of a covered product or covered process or a relevant 5 part thereof; and 6 ‘‘(7) for purposes of the definitions in subpara- 7 graphs (5) and (6), the terms ‘use’ and ‘sale’ mean 8 the use and the sale, respectively, within the mean- 9 ings given those terms under section 271. 10 ‘‘(b) MOTION FOR STAY.—In a civil action in which 11 a party asserts a claim for relief arising under any Act 12 of Congress relating to patents (other than an action that 13 includes a cause of action described in section 271(e)), the 14 court shall grant a motion to stay at least the portion of 15 the action against a covered customer that relates to in16 fringement of a patent involving a covered product or cov17 ered process if— 18 ‘‘(1) the covered manufacturer is a party to the 19 action or a separate action in a Federal court of the 20 United States involving the same patent or patents 21 relating to the same covered product or covered 22 process; 23 ‘‘(2) the covered customer agrees to be bound 24 as to issues determined in an action described in 25 paragraph (1) without a full and fair opportunity to ALB15732 S.L.C. 14 1 separately litigate any such issue, but only as to 2 those issues for which all other elements of the com- 3 mon law doctrine of issue preclusion are met; and 4 5 ‘‘(3) the motion is filed after the first pleading in the action but not later than the later of— 6 ‘‘(A) 120 days after service of the first 7 pleading or paper in the action that specifically 8 identifies the covered product or covered proc- 9 ess as a basis for the alleged infringement of 10 the patent by the covered customer, and specifi- 11 cally identifies how the covered product or cov- 12 ered process is alleged to infringe the patent; or 13 ‘‘(B) the date on which the first scheduling 14 15 order in the case is entered. ‘‘(c) MANUFACTURER CONSENT IN CERTAIN 16 CASES.—If the covered manufacturer has been made a 17 party to the action on motion by the covered customer, 18 then a motion under subsection (b) may only be granted 19 if the covered manufacturer and the covered customer 20 agree in writing to the stay. 21 22 ‘‘(d) LIFT OF STAY.— ‘‘(1) IN GENERAL.—A stay entered under this 23 section may be lifted upon grant of a motion based 24 on a showing that— ALB15732 S.L.C. 15 1 ‘‘(A) the action involving the covered man- 2 ufacturer will not resolve major issues in the 3 suit against the covered customer, such as that 4 a covered product or covered process identified 5 in the motion to lift the stay is not a material 6 part of the claimed invention or inventions in 7 the patent or patents in dispute; or 8 ‘‘(B) the stay unreasonably prejudices or 9 would be manifestly unjust to the party seeking 10 to lift the stay. 11 ‘‘(2) SEPARATE ACTIONS.—In the case of a stay 12 entered under this section based on the participation 13 of the covered manufacturer in a separate action de- 14 scribed in subsection (b)(1), a motion under para- 15 graph (1) may only be granted if the court in such 16 separate action determines that the showing re- 17 quired under paragraph (1) has been made. 18 ‘‘(e) WAIVER OF ESTOPPEL EFFECT.—If, following 19 the grant of a motion to stay under this section, the cov20 ered manufacturer in an action described in subsection 21 (b)(1)— 22 ‘‘(1) obtains or consents to entry of a consent 23 judgment involving one or more of the issues that 24 gave rise to the stay; or ALB15732 S.L.C. 16 1 ‘‘(2) fails to prosecute to a final, non-appealable 2 judgment a final decision as to one or more of the 3 issues that gave rise to the stay, 4 the court may, upon motion, determine that such consent 5 judgment or unappealed final decision shall not be binding 6 on the covered customer with respect to one or more of 7 the issues that gave rise to the stay based on a showing 8 that such an outcome would unreasonably prejudice or be 9 manifestly unjust to the covered customer in light of the 10 circumstances of the case. 11 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec- 12 tion shall be construed to limit the ability of a court to 13 grant any stay, expand any stay granted pursuant to this 14 section, or grant any motion to intervene, if otherwise per15 mitted by law.’’. 16 (b) CONFORMING AMENDMENT.—The table of sec- 17 tions for chapter 29 of title 35, United States Code, is 18 amended by adding at the end the following: ‘‘299A. Customer stay.’’. 19 20 SEC. 5. DISCOVERY LIMITS. (a) AMENDMENT.—Chapter 29 of title 35, United 21 States Code, as amended by section 4, is amended by add22 ing at the end the following: 23 ‘‘§ 299B. Discovery in patent infringement action 24 25 ‘‘(a) DISCOVERY TION.— IN PATENT INFRINGEMENT AC- ALB15732 S.L.C. 17 1 ‘‘(1) IN GENERAL.—Except as provided in sub- 2 sections (b) and (c), in a civil action arising under 3 any Act of Congress relating to patents, discovery 4 shall be stayed during the pendency of 1 or more 5 motions described in paragraph (2) if the motion or 6 motions were filed prior to the first responsive plead- 7 ing. 8 9 ‘‘(2) MOTIONS DESCRIBED.—The motions de- scribed in this paragraph are— 10 ‘‘(A) a motion to dismiss; 11 ‘‘(B) a motion to transfer venue; and 12 ‘‘(C) a motion to sever accused infringers. 13 14 ‘‘(b) DISCRETION TO EXPAND SCOPE ‘‘(1) RESOLUTION OF MOTIONS.—A OF DIS- COVERY.— 15 court may 16 allow limited discovery necessary to resolve a motion 17 described in subsection (a) or a motion for prelimi- 18 nary relief properly raised by a party before or dur- 19 ing the pendency of a motion described in subsection 20 (a). 21 ‘‘(2) ADDITIONAL DISCOVERY.—On motion, a 22 court may allow additional discovery if the court 23 finds that such discovery is necessary to preserve 24 evidence or otherwise prevent specific prejudice to a 25 party. ALB15732 S.L.C. 18 1 2 ‘‘(c) EXCLUSION FROM DISCOVERY LIMITATION.— ‘‘(1) VOLUNTARY EXCLUSION.—The parties to 3 an action described in subsection (a) may voluntarily 4 consent to be excluded, in whole or in part, from the 5 limitation on discovery under subsection (a). 6 ‘‘(2) CLAIMS UNDER SECTION 271(e).—This sec- 7 tion shall not apply to a civil action that includes a 8 claim for relief arising under section 271(e). 9 ‘‘(d) RULES OF CONSTRUCTION.— 10 ‘‘(1) TIMELINE FOR RESPONSIVE PLEADINGS.— 11 Nothing in this section shall be construed to alter 12 the time provided by the Federal Rules of Civil Pro- 13 cedure for the filing of responsive pleadings. 14 ‘‘(2) EXCHANGE OF CONTENTIONS.—Nothing 15 in this section shall prohibit a court from ordering 16 or local rules from requiring the exchange of conten- 17 tions regarding infringement, non-infringement, in- 18 validity or other issues, by interrogatories or other 19 written initial disclosures, at an appropriate time de- 20 termined by the court.’’. 21 (b) CONFORMING AMENDMENT.—The table of sec- 22 tions for chapter 29 of title 35, United States Code, as 23 amended by section 4, is amended by inserting after the 24 item relating to section 299A the following: ‘‘299B. Discovery in patent infringement action.’’. ALB15732 S.L.C. 19 1 (c) EFFECTIVE DATE.—The amendments made by 2 this section shall take effect on the date of enactment of 3 this Act and shall apply to any action for which a com4 plaint is filed on or after that date. 5 SEC. 6. PROCEDURES AND PRACTICES TO IMPLEMENT REC- 6 OMMENDATIONS 7 FERENCE. 8 9 10 OF THE JUDICIAL (a) JUDICIAL CONFERENCE RULES DURES ON AND CON- PROCE- DISCOVERY BURDENS AND COSTS.— (1) RULES AND PROCEDURES.—The Judicial 11 Conference of the United States, using existing re- 12 sources, should develop rules and procedures to im- 13 plement the discovery proposals described in para- 14 graph (2) to address concerns regarding the 15 asymmetries in discovery burdens and costs that 16 may arise in a civil action arising under any Act of 17 Congress relating to patents. 18 (2) RULES AND PROCEDURES TO BE CONSID- 19 ERED.—The 20 under paragraph (1) should address each of the fol- 21 lowing: 22 rules and procedures to be developed (A) DISCOVERY OF CORE DOCUMENTARY 23 EVIDENCE.—To 24 action is entitled to receive core documentary 25 evidence and should be responsible for the costs what extent each party to the ALB15732 S.L.C. 20 1 of producing core documentary evidence within 2 the possession or control of each such party, 3 and to what extent each party to the action 4 may seek noncore documentary discovery as 5 otherwise provided in the Federal Rules of Civil 6 Procedure. 7 (B) ELECTRONIC COMMUNICATION.—If the 8 parties request discovery of electronic commu- 9 nication, how such discovery should be phased 10 to occur relative to the exchange of initial dis- 11 closures and core documentary evidence, and 12 appropriate limitations to apply to such dis- 13 covery. 14 (C) ADDITIONAL DOCUMENT DISCOVERY.— 15 The manner and extent to which the following 16 should apply: 17 (i) IN GENERAL.—Each party to the 18 action may seek any additional document 19 discovery beyond core documentary evi- 20 dence as permitted under the Federal 21 Rules of Civil Procedure, if such party 22 bears the reasonable costs, including rea- 23 sonable attorney’s fees, of the additional 24 document discovery. ALB15732 S.L.C. 21 1 (ii) REQUIREMENTS FOR ADDITIONAL 2 DOCUMENT DISCOVERY.—Unless 3 ties mutually agree otherwise, no party 4 may be permitted additional document dis- 5 covery unless such a party posts a bond, or 6 provides other security, in an amount suffi- 7 cient to cover the expected costs of such 8 additional document discovery, or makes a 9 showing to the court that such party has 10 the financial capacity to pay the costs of 11 such additional document discovery. 12 (iii) GOOD the par- CAUSE MODIFICATION.—A 13 court, upon motion and for good cause 14 shown, may modify the requirements of 15 subparagraphs (A) and (B) and any defini- 16 tion under paragraph (3). Not later than 17 30 days after the pretrial conference under 18 rule 16 of the Federal Rules of Civil Pro- 19 cedure, the parties shall jointly submit any 20 proposed modifications of the requirements 21 of subparagraphs (A) and (B) and any def- 22 inition under paragraph (3), unless the 23 parties do not agree, in which case each 24 party shall submit any proposed modifica- ALB15732 S.L.C. 22 1 tion of such party and a summary of the 2 disagreement over the modification. 3 (iv) COMPUTER CODE.—A court, upon 4 motion and for good cause shown, may de- 5 termine that computer code should be in- 6 cluded in the discovery of core documen- 7 tary evidence. The discovery of computer 8 code shall occur after the parties have ex- 9 changed initial disclosures and other core 10 documentary evidence. 11 (D) DISCOVERY SEQUENCE AND SCOPE.— 12 The manner and extent to which the parties 13 shall discuss and address in the written report 14 filed pursuant to rule 26(f) of the Federal 15 Rules of Civil Procedure the views and pro- 16 posals of each party on the following: 17 18 (i) When the discovery of core documentary evidence should be completed. 19 (ii) Whether additional document dis- 20 covery will be sought under subparagraph 21 (C). 22 (iii) Any issues about infringement, 23 invalidity, or damages that, if resolved be- 24 fore the additional discovery described in ALB15732 S.L.C. 23 1 subparagraph (C) commences, might sim- 2 plify or streamline the case. 3 (3) SCOPE OF DOCUMENTARY EVIDENCE.—In 4 developing rules or procedures under this section, 5 the Judicial Conference should consider which kinds 6 of evidence constitute ‘‘core documentary evidence’’. 7 (4) DEFINITIONS.—In this subsection the term 8 ‘‘electronic communication’’ means any form of elec- 9 tronic communication, including email, text message, 10 or instant message. 11 (b) JUDICIAL CONFERENCE PATENT CASE MANAGE- 12 MENT.—The Judicial Conference of the United States, 13 using existing resources, should develop case management 14 procedures to be implemented by the United States dis15 trict courts and the United States Court of Federal Claims 16 for any civil action arising under any Act of Congress re17 lating to patents, including initial disclosure and early case 18 management conference practices that— 19 20 (1) will identify any potential dispositive issues of the case; and 21 (2) focus on early summary judgment motions 22 when resolution of issues may lead to expedited dis- 23 position of the case. ALB15732 S.L.C. 24 1 2 SEC. 7. FEES AND OTHER EXPENSES. (a) SENSE OF CONGRESS.—It is the sense of Con- 3 gress that, in patent cases, reasonable attorney fees should 4 be paid by a non-prevailing party whose litigation position 5 or conduct is not objectively reasonable. As the Supreme 6 Court wrote in adopting this legal standard in the context 7 of fee shifting under section 1447 of title 28, United 8 States Code, this standard is intended to strike a balance; 9 in patent cases, a more appropriate balance between pro10 tecting the right of a patent holder to enforce its patent 11 on the one hand, and deterring abuses in patent litigation 12 and threats thereof on the other. 13 (b) AMENDMENT.—Section 285 of title 35, United 14 States Code, is amended to read as follows: 15 ‘‘§ 285. Fees and other expenses 16 ‘‘(a) AWARD.—In connection with a civil action in 17 which any party asserts a claim for relief arising under 18 any Act of Congress relating to patents, upon motion by 19 a prevailing party, the court shall determine whether the 20 position of the non-prevailing party was objectively reason21 able in law and fact, and whether the conduct of the non22 prevailing party was objectively reasonable. If the court 23 finds that the position of the non-prevailing party was not 24 objectively reasonable in law or fact or that the conduct 25 of the non-prevailing party was not objectively reasonable, 26 the court shall award reasonable attorney fees to the pre- ALB15732 S.L.C. 25 1 vailing party unless special circumstances would make an 2 award unjust. 3 ‘‘(b) COVENANT NOT TO SUE.—A party to a civil ac- 4 tion who asserts a claim for relief arising under any Act 5 of Congress relating to patents against another party, and 6 who subsequently unilaterally (i) seeks dismissal of the ac7 tion without consent of the other party and (ii) extends 8 to such other party a covenant not to sue for infringement 9 with respect to the patent or patents at issue, may be the 10 subject of a motion for attorney fees under subsection (a) 11 as if it were a non-prevailing party, unless the party as12 serting such claim would have been entitled, at the time 13 that such covenant was extended, to dismiss voluntarily 14 the action without a court order under rule 41 of the Fed15 eral Rules of Civil Procedure, or the interests of justice 16 require otherwise. 17 18 19 20 ‘‘(c) RECOVERY OF AWARD.— ‘‘(1) CERTIFICATION; DISCLOSURE OF INTER- ESTED PARTIES.— ‘‘(A) INITIAL STATEMENT.—A party de- 21 fending against a claim of infringement may 22 file, not later than 14 days before a scheduling 23 conference is to be held or a scheduling order 24 is due under rule 16(b) of the Federal Rules of 25 Civil Procedure, a statement that such party ALB15732 S.L.C. 26 1 holds a good faith belief, based on publicly- 2 available information and any other information 3 known to such party, that the primary business 4 of the party alleging infringement is the asser- 5 tion and enforcement of patents or the licensing 6 resulting therefrom. 7 ‘‘(B) CERTIFICATION.—Not later than 45 8 days after being served with an initial state- 9 ment under subparagraph (A), a party alleging 10 infringement shall file a certification that— 11 ‘‘(i) establishes and certifies to the 12 court, under oath, that it will have suffi- 13 cient funds available to satisfy any award 14 of reasonable attorney fees under this sec- 15 tion if an award is assessed; 16 ‘‘(ii) demonstrates that its primary 17 business is not the assertion and enforce- 18 ment of patents or the licensing resulting 19 therefrom; 20 ‘‘(iii) identifies interested parties, if 21 any, as defined in paragraph (2) of this 22 subsection; or 23 24 ‘‘(iv) states that it has no such interested parties. ALB15732 S.L.C. 27 1 A party alleging infringement shall have an on- 2 going obligation to supplement its certification 3 under this subparagraph within 30 days after a 4 material change to the information provided in 5 its certification. 6 ‘‘(C) NOTICE TO INTERESTED PARTY.—A 7 party that files a certification under subpara- 8 graph (B)(iii) shall, prior to filing the certifi- 9 cation, provide each identified interested party 10 actual notice in writing by service of notice in 11 any district where the interested party may be 12 found, such that jurisdiction shall be estab- 13 lished over each interested party to the action 14 for purposes of enforcing an award of attorney 15 fees under this section, consistent with the Con- 16 stitution of the United States. The notice shall 17 identify the action, the parties, the patents at 18 issue, and the interest qualifying the party to 19 be an interested party. The notice shall inform 20 the recipient that the recipient may be held ac- 21 countable under this subsection for any award 22 of attorney fees, or a portion thereof, resulting 23 from the action in the event the party alleging 24 infringement cannot satisfy the full amount of 25 such an award, unless the recipient renounces ALB15732 S.L.C. 28 1 its interest pursuant to subparagraph (E) or is 2 otherwise exempt from the applicability of this 3 subsection. 4 ‘‘(D) ACCOUNTABILITY FOR INTERESTED 5 PARTIES.—Any 6 ly served with actual notice pursuant to sub- 7 paragraph (C) and do not renounce their inter- 8 ests pursuant to subparagraph (E) or are not 9 otherwise exempt from the applicability of this 10 subsection may be held accountable for any 11 fees, or a portion thereof, awarded under this 12 section in the event that the party alleging in- 13 fringement cannot satisfy the full amount of the 14 award. If a true and correct certification under 15 clause (i) or (ii) of subparagraph (B) is timely 16 filed with the court, interested parties shall not 17 be subject to this subparagraph. 18 ‘‘(E) RENUNCIATION interested parties who are time- OF INTEREST.—Any 19 recipient of a notice under subparagraph (C) 20 may submit a statement of renunciation of in- 21 terest in a binding document with notice to the 22 court and parties in the action not later than 23 120 days after receipt of the notice under sub- 24 paragraph (C). The statement shall be required ALB15732 S.L.C. 29 1 to renounce only such interest as would qualify 2 the recipient as an interested party. 3 ‘‘(F) INSTITUTIONS OF HIGHER EDU- 4 CATION EXCEPTION.—Any 5 education (as defined in section 101(a) of the 6 Higher Education Act of 1965 (20 U.S.C. 7 1001(a)) or under equivalent laws in foreign ju- 8 risdictions), or a non-profit technology transfer 9 organization whose primary purpose is to facili- 10 tate the commercialization of technologies devel- 11 oped by 1 or more institutions of higher edu- 12 cation, may exempt itself from the applicability 13 of this subsection by filing a certification that 14 it qualifies for the exception provided for in this 15 subparagraph with the court and providing no- 16 tice to the parties. 17 ‘‘(G) INTEREST institution of higher OF JUSTICE EXCEPTION.— 18 Any recipient of a notice under subparagraph 19 (C) may intervene in the action for purposes of 20 contesting its identification as an interested 21 party or its liability under this subsection, and 22 a court may exempt any party identified as an 23 interested party from the applicability of this 24 subsection as the interest of justice requires. ALB15732 S.L.C. 30 1 2 ‘‘(2) INTERESTED PARTY.—In this section, the term ‘interested party’— 3 ‘‘(A) means a person who has a substantial 4 financial interest related to the proceeds from 5 any settlement, license, or damages award re- 6 sulting from the enforcement of the patent in 7 the action by the party alleging infringement; 8 ‘‘(B) does not include an attorney or law 9 firm providing legal representation in the action 10 if the sole basis for the financial interest of the 11 attorney or law firm in the outcome of the ac- 12 tion arises from the attorney or law firm’s re- 13 ceipt of compensation reasonably related to the 14 provision of the legal representation; 15 ‘‘(C) does not include a person who has as- 16 signed all right, title, and interest in a patent, 17 except for passive receipt of income, to an enti- 18 ty described in paragraph (1)(F), or who has a 19 right to receive any portion of such passive in- 20 come; and 21 ‘‘(D) does not include a person who would 22 be an interested party under subparagraph (A) 23 but whose financial interest is based solely on 24 an equity or security interest established when 25 the party alleging infringement’s primary busi- ALB15732 S.L.C. 31 1 ness was not the assertion and enforcement of 2 patents or the licensing resulting therefrom. 3 ‘‘(d) CLAIMS UNDER SECTION 271(e).— 4 ‘‘(1) APPLICABILITY.—Subsections (a), (b), and 5 (c) shall not apply to a civil action that includes a 6 claim for relief arising under section 271(e). 7 ‘‘(2) AWARD IN CERTAIN CLAIMS UNDER SEC- 8 TION 271(E).—In 9 for relief arising under section 271(e), the court may 10 in exceptional cases award reasonable attorney fees 11 to the prevailing party.’’. 12 (c) CONFORMING AMENDMENT 13 a civil action that includes a claim (1) CONFORMING AND AMENDMENT.— AMENDMENT.—The item re- 14 lating to section 285 of the table of sections for 15 chapter 29 of title 35, United States Code, is 16 amended to read as follows: ‘‘285. Fees and other expenses.’’. 17 (2) AMENDMENT.—Section 273 of title 35, 18 United States Code, is amended by striking sub- 19 sections (f) and (g). 20 (d) EFFECTIVE DATE.—The amendments made by 21 this section shall take effect on the date of enactment of 22 this Act and shall apply to any action filed on or after 23 such date. ALB15732 S.L.C. 32 1 SEC. 8. REQUIREMENT OF CLARITY AND SPECIFICITY IN 2 3 DEMAND LETTERS. (a) IN GENERAL.—Chapter 29 of title 35, United 4 States Code, as amended by section 5, is amended by add5 ing at the end the following: 6 ‘‘§ 299C. Pre-suit written notice 7 ‘‘(a) APPLICABILITY.—Subsection (b) shall not 8 apply— 9 10 ‘‘(1) to written communication between parties— 11 ‘‘(A) regarding existing licensing agree- 12 ments; 13 ‘‘(B) as part of an ongoing licensing nego- 14 tiation, provided that the initial written notice 15 complied with the requirements of subsection 16 (b) of this section; or 17 ‘‘(C) sent after the initial written notice, 18 provided that the initial written notice complied 19 with the requirements of subsection (b) of this 20 section; or 21 ‘‘(2) if the court determines it is in the interest 22 of justice to waive the requirements of subsection 23 (b). 24 ‘‘(b) WRITTEN NOTIFICATION REQUIREMENTS.— 25 26 ‘‘(1) IN GENERAL.—In a civil action alleging in- fringement of a patent in which the plaintiff has ALB15732 S.L.C. 33 1 provided written notice of the accusation of infringe- 2 ment to the party accused of infringement prior to 3 filing the action, the initial written notice shall con- 4 tain the information required under paragraph (2) 5 or be subject to paragraph (3). 6 ‘‘(2) REQUIRED INFORMATION PROVIDED IN 7 INITIAL WRITTEN NOTICE.—The 8 tice described in paragraph (1) shall contain, at a 9 minimum— 10 initial written no- ‘‘(A) an identification of— 11 ‘‘(i) each patent believed to be in- 12 fringed, including the patent number; and 13 ‘‘(ii) at least one claim of each patent 14 that is believed to be infringed; 15 ‘‘(B) an identification of each product, 16 process, apparatus, or chemical composition, in- 17 cluding any manufacturer thereof, that is be- 18 lieved to infringe one or more claims of each 19 patent under subparagraph (A); 20 ‘‘(C) a clear and detailed description of the 21 reasons why the plaintiff believes each patent 22 identified under subparagraph (A) is infringed; 23 ‘‘(D) notice to the intended recipient that 24 the intended recipient may have the right to a ALB15732 S.L.C. 34 1 stay of any suit in accordance with section 2 299A; 3 ‘‘(E) the identity of any person with the 4 right to enforce each patent under subpara- 5 graph (A); and 6 ‘‘(F) if compensation is proposed, a short 7 and plain statement as to how that proposed 8 compensation was determined. 9 ‘‘(3) ADDITIONAL TIME TO RESPOND.—If the 10 initial written notice provided to the defendant prior 11 to the filing of the civil action did not contain the 12 information required by paragraph (2), the defend- 13 ant’s time to respond to the complaint shall be ex- 14 tended by an additional 30 days.’’. 15 (b) CONFORMING AMENDMENT.—The table of sec- 16 tions for chapter 29 of title 35, United States Code, as 17 amended by section 5, is amended by adding at the end 18 the following: ‘‘299C. Pre-suit written notice.’’. 19 (c) WILLFUL INFRINGEMENT.—Section 284 of title 20 35, United States Code, is amended— 21 (1) in the first undesignated paragraph, by 22 striking ‘‘Upon finding’’ and inserting ‘‘(a) IN GEN- 23 ERAL.—Upon finding’’; 24 (2) in the second undesignated paragraph, by 25 striking ‘‘When the damages’’ and inserting ‘‘(b) AS- ALB15732 S.L.C. 35 1 SESSMENT BY 2 the damages’’; 3 COURT; TREBLE DAMAGES.—When (3) by inserting after subsection (b), as des- 4 ignated by subparagraph (B), the following: 5 ‘‘(c) WILLFUL INFRINGEMENT.—A claimant seeking 6 to establish willful infringement may not rely on evidence 7 of pre-suit notification of infringement unless that notifi8 cation complies with the standards set out in section 9 299C(b)(2).’’; and 10 (4) in the last undesignated paragraph, by 11 striking ‘‘The court’’ and inserting ‘‘(d) EXPERT 12 TESTIMONY.—The court’’. 13 (d) EFFECTIVE DATE.—The amendments made by 14 this section shall take effect on the date that is 1 year 15 after the date of enactment of this Act and shall apply 16 to any action for which a complaint is filed on or after 17 that date. 18 19 SEC. 9. ABUSIVE DEMAND LETTERS. (a) BAD-FAITH DEMAND LETTERS.—Chapter 29 of 20 title 35, United States Code, as amended by section 8, 21 is amended by adding at the end the following: 22 ‘‘§ 299D. Bad-faith demand letters 23 ‘‘(a) DEFINITION.—In this section, the term ‘affili- 24 ated person’ means a person affiliated with the intended 25 recipient of a written communication. ALB15732 S.L.C. 36 1 2 ‘‘(b) CIVIL PENALTIES FOR CERTAIN UNFAIR OR DECEPTIVE ACTS OR PRACTICES IN CONNECTION WITH 3 ABUSIVE DEMAND LETTERS.—A person who commits an 4 unfair or deceptive act or practice within the meaning of 5 section 5(a)(1) of the Federal Trade Commission Act (15 6 U.S.C. 45(a)(1)), in connection with the assertion of a 7 United States patent, and who engages in the widespread 8 sending of written communications representing that the 9 intended recipients, or any persons affiliated with those 10 recipients, are or may be infringing, or have or may have 11 infringed, the patent and may bear liability or owe com12 pensation to another, shall be deemed to have violated a 13 rule defining an unfair or deceptive act or practice de14 scribed under section 18(a)(1)(B) of the Federal Trade 15 Commission Act (15 U.S.C. 57a(a)(1)(B)) if— 16 ‘‘(1)(A) the communications falsely— 17 ‘‘(i) represent that administrative or judi- 18 cial relief has been sought against the recipient 19 or others; or 20 ‘‘(ii) threaten litigation if compensation is 21 not paid, the infringement issue is not other- 22 wise resolved, or the communication is not re- 23 sponded to; and 24 ‘‘(B) there is a pattern of false statements or 25 threats described in subparagraph (A) having been ALB15732 S.L.C. 37 1 made without litigation or other relief then having 2 been pursued; 3 ‘‘(2) the assertions contained in the commu- 4 nications lack a reasonable basis in fact or law, be- 5 cause— 6 ‘‘(A) the person asserting the patent is not 7 a person, or does not represent a person, with 8 the current right to license the patent to, or to 9 enforce the patent against, the intended recipi- 10 ents or any affiliated persons; 11 ‘‘(B) the communications seek compensa- 12 tion on account of activities undertaken after 13 the patent has expired; 14 ‘‘(C) the communications seek compensa- 15 tion for a patent that has been held to be in- 16 valid or unenforceable in a final judicial or ad- 17 ministrative proceeding that is unappealable or 18 for which any opportunity for appeal is no 19 longer available; 20 ‘‘(D) the communications seek compensa- 21 tion for activities by the recipient that the send- 22 er knows do not infringe the patent because 23 such activities are authorized by the patentee; ALB15732 S.L.C. 38 1 ‘‘(E) the communications falsely represent 2 that an investigation of the recipient’s alleged 3 infringement has occurred; or 4 ‘‘(F) the communications falsely state that 5 litigation has been filed against, or a license has 6 been paid by persons similarly situated to the 7 recipient; or 8 ‘‘(3) the content of the written communications 9 is likely to materially mislead a reasonable recipient 10 because the content fails to include facts reasonably 11 necessary to inform the recipient— 12 ‘‘(A) of the identity of the person asserting 13 a right to license the patent to, or enforce the 14 patent against, the intended recipient or any af- 15 filiated person; 16 ‘‘(B) of the patent issued by the United 17 States Patent and Trademark Office alleged to 18 have been infringed; and 19 ‘‘(C) if infringement or the need to pay 20 compensation for a license is alleged, of an 21 identification of at least one product, service, or 22 other activity of the recipient that is alleged to 23 infringe the identified patent or patents and, 24 unless the information is not readily accessible, 25 an explanation of the basis for such allegation. ALB15732 S.L.C. 39 1 2 ‘‘(c) ENFORCEMENT BY FEDERAL TRADE COMMIS- SION.— 3 ‘‘(1) POWERS OF COMMISSION.—The Federal 4 Trade Commission shall enforce this section in the 5 same manner, by the same means, and with the 6 same jurisdiction, powers, and duties as though all 7 applicable terms and provisions of the Federal Trade 8 Commission Act (15 U.S.C. 41 et seq.) were incor- 9 porated into and made a part of this section. 10 ‘‘(2) PRIVILEGES AND IMMUNITIES.—Any per- 11 son who engages in an act or practice described in 12 subsection (b) shall be subject to the penalties and 13 entitled to the privileges and immunities provided in 14 the Federal Trade Commission Act (15 U.S.C. 41 et 15 seq.).’’. 16 (b) TECHNICAL AND CONFORMING AMENDMENT.— 17 The table of sections for chapter 29 of title 35, United 18 States Code, as amended by section 8, is amended by in19 serting after the item relating to section 299C the fol20 lowing: ‘‘299D. Bad-faith demand letters.’’. 21 SEC. 10. TRANSPARENCY OF PATENT TRANSFER. 22 (a) 23 CEEDINGS.— PATENT AND TRADEMARK OFFICE PRO- ALB15732 S.L.C. 40 1 (1) IN GENERAL.—Chapter 26 of title 35, 2 United States Code, is amended by inserting after 3 section 261 the following: 4 ‘‘§ 261A. Disclosure of information relating to patent 5 6 7 ownership ‘‘(a) DEFINITIONS.—In this section: ‘‘(1) PERIOD OF NONCOMPLIANCE.—The term 8 ‘period of noncompliance’ refers to a period of time 9 during which the assignee or the ultimate parent en- 10 tity of an assignee of a patent has not been disclosed 11 to the United States Patent and Trademark Office 12 in accordance with this section. 13 14 ‘‘(2) ULTIMATE ‘‘(A) IN PATENT ENTITY.— GENERAL.—Except as provided in 15 subparagraph (B), the term ‘ultimate parent 16 entity’ has the meaning given such term in sec- 17 tion 801.1(a)(3) of title 16, Code of Federal 18 Regulations, or any successor regulation. 19 ‘‘(B) MODIFICATION OF DEFINITION.—The 20 Director may by regulation modify the defini- 21 tion of the term ‘ultimate parent entity’. 22 ‘‘(b) REQUIREMENT TO DISCLOSE ASSIGNMENT.— 23 An assignment of all substantial rights in an issued patent 24 shall be recorded in the Patent and Trademark Office— ALB15732 S.L.C. 41 1 2 ‘‘(1) not later than the date on which the patent is issued; and 3 ‘‘(2) when any subsequent assignment is made 4 that results in a change to the ultimate parent enti- 5 ty— 6 7 ‘‘(A) not later than 3 months after the date on which such assignment is made; or 8 ‘‘(B) in the case of an assignment made as 9 part of a corporate acquisition that meets the 10 reporting thresholds under section 7A(a)(2) of 11 the Clayton Act (15 U.S.C. 18a(a)(2)), not 12 later than 6 months after the closing date of 13 such acquisition. 14 ‘‘(c) DISCLOSURE REQUIREMENTS.—A disclosure 15 under subsection (b) shall include the name of the assignee 16 and the ultimate parent entity of the assignee. 17 ‘‘(d) FAILURE TO COMPLY.—In a civil action in 18 which a party asserts a claim for infringement of a patent, 19 if there was a failure to comply with subsection (b) for 20 the patent— 21 ‘‘(1) the party asserting infringement of the 22 patent may not recover increased damages under 23 section 284 or attorney fees under section 285 with 24 respect to infringing activities taking place during 25 any period of noncompliance, unless the denial of ALB15732 S.L.C. 42 1 such damages or fees would be manifestly unjust; 2 and 3 ‘‘(2) the court shall award to a prevailing ac- 4 cused infringer reasonable attorney fees and ex- 5 penses incurred in discovering the identity of any 6 undisclosed entity required to be disclosed under 7 subsection (b), unless such sanctions would be mani- 8 festly unjust.’’. 9 (2) APPLICABILITY.—The amendment made by 10 paragraph (1) shall apply to any patent for which a 11 notice of allowance is issued on or after the date of 12 enactment of this Act. 13 (3) CONFORMING AMENDMENT.—The table of 14 sections for chapter 26 of title 35, United States 15 Code, is amended by adding at the end the following 16 new item: ‘‘261A. Disclosure of information relating to patent ownership.’’. 17 (b) REGULATIONS.—The Director may promulgate 18 such regulations as are necessary to establish a registra19 tion fee in an amount sufficient to recover the estimated 20 costs of administering section 261A of title 35, United 21 States Code, as added by subsection (a), to facilitate the 22 collection and maintenance of the information required by 23 the amendments made by this section and section 3(b) of 24 this Act, and to ensure the timely disclosure of such infor25 mation to the public. ALB15732 S.L.C. 43 1 SEC. 11. PROTECTION OF INTELLECTUAL PROPERTY LI- 2 3 CENSES IN BANKRUPTCY. (a) IN GENERAL.—Section 1522 of title 11, United 4 States Code, is amended by adding at the end the fol5 lowing: 6 ‘‘(e) Section 365(n) shall apply to cases under this 7 chapter. If the foreign representative rejects or repudiates 8 a contract under which the debtor is a licensor of intellec9 tual property, the licensee under such contract shall be 10 entitled to make the election and exercise the rights de11 scribed in section 365(n).’’. 12 13 14 (b) TRADEMARKS.— (1) AMENDMENT.—Section 101(35A) of title 11, United States Code, is amended— 15 (A) in subparagraph (E), by striking ‘‘or’’; 16 (B) in subparagraph (F), by adding ‘‘or’’ 17 18 19 at the end; and (C) by adding after subparagraph (F) the following new subparagraph: 20 ‘‘(G) a trademark, service mark, or trade 21 name, as those terms are defined in section 45 22 of the Act of July 5, 1946 (commonly referred 23 to as the ‘Trademark Act of 1946’ (15 U.S.C. 24 1127);’’. ALB15732 S.L.C. 44 1 (2) CONFORMING AMENDMENT.—Section 2 365(n)(2) of title 11, United States Code, is amend- 3 ed— 4 (A) in subparagraph (B)— 5 (i) by striking ‘‘royalty payments’’ 6 and inserting ‘‘royalty or other payments’’; 7 and 8 9 (ii) by striking ‘‘and’’ after the semicolon; 10 (B) in subparagraph (C), by striking the 11 period at the end of clause (ii) and inserting ‘‘; 12 and’’; and 13 14 (C) by adding at the end the following new subparagraph: 15 ‘‘(D) in the case of a trademark, service 16 mark, or trade name, the licensee shall not be 17 relieved of any of its obligations to maintain the 18 quality of the products and services offered 19 under or in connection with the licensed trade- 20 mark, service mark or trade name, and the 21 trustee shall retain the right to oversee and en- 22 force quality control for said products and/or 23 services.’’. 24 (c) EFFECTIVE DATE.—The amendments made by 25 this section shall take effect on the date of enactment of ALB15732 S.L.C. 45 1 this Act and shall apply to any case that is pending on, 2 or for which a petition or complaint is filed on or after, 3 such date of enactment. 4 SEC. 12. SMALL BUSINESS EDUCATION, OUTREACH, AND IN- 5 6 7 8 FORMATION ACCESS. (a) SMALL BUSINESS EDUCATION AND OUT- REACH.— (1) RESOURCES FOR SMALL BUSINESS.—Using 9 existing resources, the Director shall develop edu- 10 cational resources for small businesses to address 11 concerns arising from patent infringement. 12 (2) SMALL BUSINESS PATENT OMBUDSMAN.— 13 The existing small business patent outreach pro- 14 grams of the Office, in consultation with the relevant 15 offices at the Small Business Administration and the 16 Minority Business Development Agency, shall pro- 17 vide education and awareness regarding resources 18 available for those persons responding to allegations 19 of patent infringement. 20 (b) IMPROVING INFORMATION TRANSPARENCY FOR 21 SMALL BUSINESS AND THE UNITED STATES PATENT AND 22 TRADEMARK OFFICE USERS.— 23 (1) WEB SITE.—Using existing resources, the 24 Director shall create a user-friendly section on the 25 official Web site of the Office to notify the public ALB15732 S.L.C. 46 1 when a patent case is brought in Federal court and, 2 with respect to each patent at issue in such case, the 3 Director shall include— 4 (A) information disclosed under section 5 261A of title 35, United States Code, as added 6 by section 10, and section 281B(b) of title 35, 7 United States Code, as added by section 3; and 8 (B) any other information the Director de- 9 termines to be relevant. 10 (2) FORMAT.—In order to promote accessibility 11 for the public, the information described in para- 12 graph (1) shall be searchable by patent number, pat- 13 ent art area, and entity. 14 SEC. 13. STUDIES ON PATENT TRANSACTIONS, QUALITY, 15 AND EXAMINATION. 16 (a) STUDY ON SECONDARY MARKET OVERSIGHT FOR 17 PATENT TRANSACTIONS TO PROMOTE TRANSPARENCY 18 19 AND ETHICAL BUSINESS PRACTICES.— (1) STUDY REQUIRED.—The Director, in con- 20 sultation with the Secretary of Commerce, the Sec- 21 retary of the Treasury, the Chairman of the Securi- 22 ties and Exchange Commission, the heads of other 23 relevant agencies, and interested parties, shall, using 24 existing resources of the Office, conduct a study— ALB15732 S.L.C. 47 1 (A) to develop legislative recommendations 2 to ensure greater transparency and account- 3 ability in patent transactions occurring on the 4 secondary market; 5 (B) to examine the economic impact that 6 the patent secondary market has on the United 7 States; 8 (C) to examine licensing and other over- 9 sight requirements that may be placed on the 10 patent secondary market, including on the par- 11 ticipants in such markets, to ensure that the 12 market is a level playing field and that brokers 13 in the market have the requisite expertise and 14 adhere to ethical business practices; and 15 (D) to examine the requirements placed on 16 other markets. 17 (2) REPORT ON STUDY.—Not later than 18 18 months after the date of enactment of this Act, the 19 Director shall submit a report to the Committee on 20 the Judiciary of the House of Representatives and 21 the Committee on the Judiciary of the Senate on the 22 findings and recommendations of the Director from 23 the study required under paragraph (1). 24 (b) STUDY 25 DURES.— ON PATENT SMALL CLAIMS PROCE- ALB15732 S.L.C. 48 1 2 (1) STUDY REQUIRED.— (A) IN GENERAL.—The Director of the 3 Administrative Office of the United States 4 Courts, in consultation with the Director of the 5 Federal Judicial Center and the United States 6 Patent and Trademark Office, shall, using ex- 7 isting resources, conduct a study to examine the 8 idea of developing a pilot program for patent 9 small claims procedures in certain judicial dis- 10 tricts within the existing patent pilot program 11 mandated by Public Law 111–349. 12 13 14 15 (B) CONTENTS OF STUDY.—The study under subparagraph (A) shall examine— (i) the necessary criteria for using small claims procedures; 16 (ii) the costs that would be incurred 17 for establishing, maintaining, and oper- 18 ating such a pilot program; and 19 (iii) the steps that would be taken to 20 ensure that the procedures used in the 21 pilot program are not misused for abusive 22 patent litigation. 23 (2) REPORT ON STUDY.—Not later than 1 year 24 after the date of enactment of this Act, the Director 25 of the Administrative Office of the United States ALB15732 S.L.C. 49 1 Courts shall submit a report to the Committee on 2 the Judiciary of the House of Representatives and 3 the Committee on the Judiciary of the Senate on the 4 findings and recommendations of the Director of the 5 Administrative Office from the study required under 6 paragraph (1). 7 (c) STUDY 8 9 ON BUSINESS METHOD PATENT QUAL- ITY.— (1) GAO STUDY.—The Comptroller General of 10 the United States shall, using existing resources, 11 conduct a study on the volume and nature of litiga- 12 tion involving business method patents. 13 (2) CONTENTS OF STUDY.—The study required 14 under paragraph (1) shall focus on examining the 15 quality of business method patents asserted in suits 16 alleging patent infringement, and may include an ex- 17 amination of any other areas that the Comptroller 18 General determines to be relevant. 19 (3) REPORT TO CONGRESS.—Not later than 1 20 year after the date of enactment of this Act, the 21 Comptroller General shall submit to the Committee 22 on the Judiciary of the House of Representatives 23 and the Committee on the Judiciary of the Senate 24 a report on the findings and recommendations from 25 the study required by this subsection, including rec- ALB15732 S.L.C. 50 1 ommendations for any changes to laws or regula- 2 tions that the Comptroller General considers appro- 3 priate on the basis of the study. 4 SEC. 14. TECHNICAL CORRECTIONS TO THE LEAHY-SMITH 5 AMERICA 6 PROVEMENTS. 7 INVENTS ACT AND OTHER IM- (a) Section 325(e)(2) of title 35, United States Code, 8 is amended by striking ‘‘or reasonably could have raised’’. 9 10 11 (b) PTO PATENT REVIEWS.— (1) CLARIFICATION.— (A) SCOPE OF PRIOR ART.—Section 12 18(a)(1)(C)(i) of the Leahy-Smith America In- 13 vents Act (35 U.S.C. 321 note) is amended by 14 striking ‘‘section 102(a)’’ and inserting ‘‘sub- 15 section (a) or (e) of section 102’’. 16 (B) EFFECTIVE DATE.—The amendment 17 made by subparagraph (A) shall take effect on 18 the date of the enactment of this Act and shall 19 apply to any proceeding pending on, or filed on 20 or after, such date of enactment. 21 (2) AUTHORITY TO WAIVE FEE.—Subject to 22 available resources, the Director may waive payment 23 of a filing fee for a transitional proceeding described 24 under section 18(a) of the Leahy-Smith America In- 25 vents Act (35 U.S.C. 321 note). ALB15732 S.L.C. 51 1 2 (c) TECHNICAL CORRECTIONS.— (1) NOVELTY.— 3 (A) AMENDMENT.—Section 102(b)(1)(A) 4 of title 35, United States Code, is amended by 5 striking ‘‘the inventor or joint inventor or by 6 another’’ and inserting ‘‘the inventor or a joint 7 inventor or another’’. 8 (B) EFFECTIVE DATE.—The amendment 9 made by subparagraph (A) shall be effective as 10 if included in the amendment made by section 11 3(b)(1) of the Leahy-Smith America Invents 12 Act (Public Law 112–29). 13 (2) INVENTOR’S 14 OATH OR DECLARATION.— (A) REQUIREMENT TO EXECUTE.—Section 15 115(a) of title 35, United States Code, is 16 amended in the second sentence by striking 17 ‘‘shall execute’’ and inserting ‘‘may be required 18 by the Director to execute’’. 19 (B) EFFECTIVE DATE.—The amendment 20 made by subparagraph (A) shall be effective as 21 if included in the amendment made by section 22 4(a)(1) of the Leahy-Smith America Invents 23 Act (Public Law 112–29). 24 (3) ASSIGNEE FILERS.— ALB15732 S.L.C. 52 1 (A) BENEFIT OF EARLIER FILING DATE; 2 RIGHT OF PRIORITY.—Section 3 35, United States Code, is amended, in the first 4 sentence, by striking ‘‘by an inventor or inven- 5 tors named’’ and inserting ‘‘that names the in- 6 ventor or a joint inventor’’. 7 (B) BENEFIT 119(e)(1) of title OF EARLIER FILING DATE IN 8 THE UNITED STATES.—Section 9 United States Code, is amended, in the first 10 sentence, by striking ‘‘names an inventor or 11 joint inventor’’ and inserting ‘‘names the inven- 12 tor or a joint inventor’’. 13 (C) EFFECTIVE 120 of title 35, DATE.—The amendments 14 made by this paragraph shall take effect on the 15 date of the enactment of this Act and shall 16 apply to any patent application, and any patent 17 issuing from such application, that is filed on or 18 after September 16, 2012. 19 (4) DERIVED PATENTS.— 20 (A) AMENDMENT.—Section 291(b) of title 21 35, United States Code, is amended by striking 22 ‘‘or joint inventor’’ and inserting ‘‘or a joint in- 23 ventor’’. 24 25 (B) EFFECTIVE DATE.—The amendment made by subparagraph (A) shall be effective as ALB15732 S.L.C. 53 1 if included in the amendment made by section 2 3(h)(1) of the Leahy-Smith America Invents 3 Act (Public Law 112–29). 4 (5) SPECIFICATION.—Notwithstanding section 5 4(e) of the Leahy-Smith America Invents Act (Pub- 6 lic Law 112–29; 125 Stat. 297), the amendments 7 made by subsections (c) and (d) of section 4 of such 8 Act shall apply to any proceeding or matter that is 9 pending on, or filed on or after, the date of the en- 10 actment of this Act. 11 (6) TIME 12 LIMIT FOR COMMENCING MISCONDUCT PROCEEDINGS.— 13 (A) AMENDMENT.—The fourth sentence of 14 section 32 of title 35, United States Code, is 15 amended by striking ‘‘1 year’’ and inserting 16 ‘‘18 months’’. 17 (B) EFFECTIVE DATE.—The amendment 18 made by this paragraph shall take effect on the 19 date of the enactment of this Act and shall 20 apply to any action in which the Office files a 21 complaint on or after such date of enactment. 22 (7) PATENT 23 OWNER RESPONSE.— (A) CONDUCT OF INTER PARTES RE- 24 VIEW.—Paragraph 25 35, United States Code, is amended by striking (8) of section 316(a) of title ALB15732 S.L.C. 54 1 ‘‘the petition under section 313’’ and inserting 2 ‘‘the petition under section 311’’. 3 (B) CONDUCT OF POST-GRANT REVIEW.— 4 Paragraph (8) of section 326(a) of title 35, 5 United States Code, is amended by striking 6 ‘‘the petition under section 323’’ and inserting 7 ‘‘the petition under section 321’’. 8 (C) EFFECTIVE 9 date of the enactment of this Act. 11 13 amendments made by this paragraph shall take effect on the 10 12 DATE.—The (d) MANAGEMENT AND OF THE UNITED STATES PATENT TRADEMARK OFFICE.— (1) IN GENERAL.—Section 3(b)(1) of title 35, 14 United States Code, is amended in the first sen- 15 tence— 16 (A) by striking ‘‘be vested with the author- 17 ity to act in the capacity of the’’ and inserting 18 ‘‘serve as Acting,’’; and 19 (B) by inserting before the period ‘‘or in 20 the event of a vacancy in the office of the Di- 21 rector.’’. 22 (2) EFFECTIVE DATE.—The amendments made 23 by paragraph (1) shall take effect on the date of en- 24 actment of this Act and shall apply with respect to ALB15732 S.L.C. 55 1 appointments and vacancies occurring before, on, or 2 after the date of enactment of this Act. 3 4 SEC. 15. EFFECTIVE DATE. Except as otherwise provided in this Act, the provi- 5 sions of this Act shall take effect on the date of enactment 6 of this Act, and shall apply to any patent issued, or any 7 action filed, on or after that date. 8 9 SEC. 16. SEVERABILITY. If any provision of this Act, or an amendment made 10 by this Act, or the application of such provision or amend11 ment to any person or circumstance, is held to be invalid, 12 the remainder of this Act, or an amendment made by this 13 Act, or the application of such provision to other persons 14 or circumstances, shall not be affected.