Bill summaries are authored by CRS.

Shown Here:
Reported to House amended (09/12/1996)

TABLE OF CONTENTS:

Title I: Patent and Trademark Office Government Corporation

Subtitle A: United States Patent and Trademark Office

Subtitle B: Effective Date; Technical Amendments

Subtitle C: Miscellaneous Provisions

Title II: Early Publication of Patent Applications

Title III: Prior Domestic Commercial Use

Title IV: Inventor Protection

Title V: Patent Reexamination Reform

Title VI: Miscellaneous Patent Provisions

Moorhead-Schroeder Patent Reform Act - Title I: Patent and Trademark Office Government Corporation - Patent and Trademark Office Government Corporation Act of 1996 - Subtitle A: United States Patent and Trademark Office - Reestablishes the Patent and Trademark Office as a wholly owned Government corporation under the policy guidance of the Secretary of Commerce, except as otherwise provided in this title.

Requires the Office to maintain an office in the District of Columbia metropolitan area. Makes the Office responsible, with the concurrence of the Secretary of State, for authorizing the transfer of not to exceed $100,000 in any year to the State Department to make special payments to international intergovernmental organizations for studies and programs for advancing international cooperation concerning patents, trademarks, and related matters. Authorizes the Office to retain and use all of its revenues and receipts, subject to the Omnibus Budget Reconciliation Act of 1990.

(Sec. 113) Vests management of the Office in the Commissioner of Patents and Trademarks who shall be appointed by the President for a five-year term. Directs the Commissioner to designate a Deputy Commissioner for Patents, a Deputy Commissioner for Trademarks, and an Inspector General.

Exempts the Office from any administratively or statutorily imposed limitation on positions or personnel. Provides that Office employees shall not be subject to provisions governing Federal employees, except for provisions governing: (1) employment of relatives (restrictions); (2) withholding pay; (3) employment limitations and political activities; (4) labor-management relations (under specified conditions); (5) political recommendations; and (6) flexible and compressed work schedules.

(Sec. 114) Requires the Office to have a Management Advisory Board to review and report annually to the President and specified congressional committees on the Office's policies, goals, performance, budget, and user fees and to advise the Commissioner.

(Sec. 115) Repeals provisions subjecting the Commissioner's performance (including regulations governing agents and attorneys representing the Office) to the direction or approval of the Secretary of Commerce.

(Sec. 116) Revises the composition of the Trademark Trial and Appeal Board to include the Commissioner, the Deputy Commissioner for Patents, the Deputy Commissioner for Trademarks, and appointed members.

(Sec. 117) Sets forth provisions regarding: (1) revised membership of the Board of Patent Appeals and Interferences; (2) suits by, and against, the Office; (3) annual report disclosure of the purposes for which receipts were spent; (4) the Commissioner's discretion to designate attorneys who are officers or employees of the Office to conduct hearings relating to suspension or exclusion from practice of certain individuals; (5) receipts, expenditures, and borrowing authority of the Office; (6) annual audit and congressional reporting requirements; and (7) the transfer to the Office of Department of Commerce functions, powers, duties, funds, and property related to the authority and functions which are vested in the Office by this title.

Subtitle B: Effective Date: Technical Amendments - Makes this title effective four months after its enactment.

(Sec. 132) Makes technical and conforming amendments.

Subtitle C: Miscellaneous Provisions - Makes existing appropriations and funds for the performance of functions, programs, and activities terminated pursuant to this title available for their duration for necessary expenses in connection with such actions.

Title II: Early Publication of Patent Applications - Patent Application Publication Act of 1996 - Requires each patent application, except applications for design patents and provisional applications, to be published as soon as possible after 18 months from the earliest filing date for which a benefit is sought, except for an application that is no longer pending or one subject to a secrecy order. Permits earlier publication at the applicant's request. Prohibits disclosure of information concerning published applications except as determined by the Commissioner. Prohibits, upon request by certain independent inventors at the time of filing, the publication of rejected applications, with specified exceptions, until three months after the Commissioner notifies the applicant. Requires the applicant to certify that no application was or will be filed in a foreign country for the invention.

Authorizes the Commissioner to establish appropriate procedures to ensure that this title does not create new opportunities for pre- issuance opposition that did not exist before its adoption.

(Sec. 203) Entitles a patent application to claim the benefit of an earlier filing date in a foreign country if a claim, identifying the original foreign application by specifying its application number, country, and the day, month, and year of its filing, is filed in the Patent and Trademark Office (PTO) at any such time during the pendency of the application as is required by the Commissioner. Allows the Commissioner to: (1) consider the failure of the applicant to file a timely claim for priority as a waiver of any such claim; (2) require the payment of a surcharge as a condition of accepting an untimely claim during such pendency; and (3) require a certified copy of the original foreign application, specification, and drawings upon which it is based, a translation if not in the English language, and such other information as necessary.

Authorizes the Commissioner to determine the time period within which an amendment containing the specific reference to an earlier filed application shall be submitted.

(Sec. 204) Specifies that a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application or, in the case of an international application designating the United States, the date of its international publication until issue of the patent: (1) makes, uses, or sells in the United States the invention as claimed in the published application or imports such an invention into the United States, or if the invention as claimed in the published application is a process, uses or sells in or imports into the United States products made by that process as claimed in such application; and (2) had actual notice of the published patent application and, where the right arising under this paragraph is based upon an international application designating the United States that is published in a language other than English, a translation of such application into the English language. Makes the right to obtain a reasonable royalty: (1) unavailable unless the invention claimed in the patent is substantially identical to that claimed in the published application; and (2) available only in an action brought within six years after the patent is issued. Specifies the commencement date of the period for obtaining a royalty based upon the publication under the treaty of an international application designating the United States.

(Sec. 205)Provides that a person shall not be entitled to a patent if the invention was described in a published patent application by another filed in the United States, or in a published international application, before the invention thereof by the applicant.

Provides that: (1) an international application filed under the Patent Cooperation Treaty of 1970 shall have the same effect as a published national application only if such application designating the United States was published under such Treaty in the English language; and (2) a patent granted on such application shall have the same effect.

(Sec. 206) Directs the Commissioner to recover the cost of early publication by adjusting the filing, issue, and maintenance fees, by charging a separate publication fee, or by any combination of such fees.

(Sec. 208) Provides for the extension of the term of a patent the issue of which is delayed due to an unusual administrative delay by the PTO. Limits to ten years the total duration of extensions which result from administrative or judicial review, an unusual administrative delay by PTO, or from both instances.

Reduces the extension period by an amount equal to the time in which the applicant failed to engage in reasonable efforts (current law provides a reduction for lack of due diligence) to conclude processing of the application.

Prohibits the extension of a patent the term of which has been disclaimed beyond the expiration date of the disclaimer.

(Sec. 209) Requires the Commissioner to prescribe regulations to provide for the further limited reexamination of a patent application. Allows the Commissioner to establish appropriate fees for such activity and to provide a 50 percent reduction in such fees for small qualified entities.

Title III: Prior Domestic Commercial Use - Prior Domestic Commercial Use Act of 1996 - Amends Federal patent law to create a defense to patent infringement with respect to any subject matter that would otherwise infringe one or more claims in the patent being asserted, if a person had, acting in good faith, commercially used the subject matter before the effective filing date of such patent.

Specifies that the sale or other disposition of the subject matter of a patent by a person entitled to assert the defense shall exhaust the patent owner's rights to the extent they would have been exhausted had such disposition been made by the patent owner. Subjects the defense to specified limitations and qualifications, including that the defense asserted is not a general license under all claims of the patent at issue, but extends only to the subject matter claimed in the patent, and that a person may not assert such a defense unless the subject matter on which the defense is based had been commercially used or reduced to practice more than one year prior to the effective date of the filing of the patent by the person asserting the defense. Specifies other limitations regarding: (1) the burden of proof (on the person asserting the defense); (2) abandonment of use; (3) who may assert the defense (it is a personal defense); (4) unsuccessful assertion of the defense (directs the court to find the case exceptional for purposes of awarding attorney's fees); and (5) invalidity of a patent (a patent shall not be deemed invalid solely because a defense is established under this title).

Title IV: Inventor Protection - Inventor Protection Act of 1996 - Requires that every contract for invention development services be in writing and that a copy of the signed written contract be given to the customer at the time the customer enters into the contract.

Directs the invention developer to: (1) state in the contract whether the usual business practice is either to seek more than one contract in connection with an invention or to seek to perform services in one or more phases; and (2) supply to the customer a copy of the written document, including the usual business terms of contracts and the approximate amount of the usual fees for services provided.

Allows a customer to terminate the contract by sending a written letter to the invention developer stating the individual's intent to cancel. (Requires the letter to be deposited with the U.S. Postal Service on or before five business days after the execution date of the contract, whichever is later.)

Calls for the invention developer or a third party representing the invention developer to deem delivery of a promissory note, check, bill of exchange, or negotiable instrument of any kind as payment on the date received.

Prescribes language and information that must be included in a cover notice on every such contract.

Requires the developer to deliver at quarterly intervals a written report for every contract which shall include: (1) a description of the services performed and those yet to be performed; and (2) the name and address of each entity to whom the subject matter has been disclosed.

Mandates that each contract include: (1) the terms and conditions of payment and contract termination rights; (2) a statement that the customer may avoid entering into the contract by not making a payment to the developer; (3) a concise description of the specific acts or services the developer undertakes; (4) a statement as to whether the developer undertakes to construct, sell, or distribute one or more prototypes, models, or devices embodying the invention; (5) the name and place of business of the developer and any entity that may perform any of the services; (6) a statement of the developer's representation of estimated or projected customer earnings and the data upon which such representation is based; (7) the name and address of the custodian of all records and correspondence relating to the contract; and (8) a statement setting forth a schedule for performance of services.

Renders any such contract voidable if it: (1) does not comply with applicable provisions; (2) is entered into in reliance upon any material false, fraudulent, or misleading information, representation, notice, or advertisement; (3) is made by an unenrolled invention developer; or (4) provides for filing for and obtaining utility, design, or plant patent protection unless the developer offers to perform or performs such act through a registered patent attorney or agent. Deems any waiver by the customer of any provision of this chapter contrary to public policy void, and unenforceable.

Permits any customer who is injured by a developer's violation of this chapter or by any material false or fraudulent statement, representation, or omission of material fact by a developer to recover in a civil action against the developer, in addition to reasonable costs and attorney's fees, the greater of $5,000 or the amount of actual damages sustained by the customer.

Makes an act by invention developers who knowingly provide any false or misleading statement, representation, or omission of material fact to a customer or who fail to make all the disclosures required under this chapter a misdemeanor subject to a $10,000 fine for each offense.

Title V: Patent Reexamination Reform - Patent Reexamination Reform Act of 1996 - Amends Federal patent law to expand reexamination request authority to authorize the filing of such requests by any person on the basis of patent specification requirements except for the best mode requirement. (Current law permits reexamination requests only on the basis of prior art.)

Establishes procedures for reexamination proceedings based upon third-party (persons who are not the patent owner) requests. Requires documents filed in such proceedings, other than the request, to be served on all parties. Grants third-party requesters one opportunity to file written comments not less than one month after the date of service of the patent owner's response to any PTO action on the merits of reexamination.

Grants third-party requesters the right to appeal final reexamination decisions on the same basis that such right is available to patent owners.

Estops a third-party requester who files a notice of appeal or who participates as a party to an appeal from later asserting the invalidity of any claim determined to be patentable on appeal on any ground which was or could have been raised during reexamination.

Bars patent owners and third-party requesters, once an order for reexamination has been issued, from filing a subsequent reexamination request until a reexamination certificate is published.

Prohibits a party, once a final decision has been entered in a civil action that the party has not sustained the burden of proving the invalidity of a patent claim, from requesting reexamination on issues that were or could have been raised in the civil action.

Requires the Board of Patent Appeals and Interferences to review adverse decisions of examiners in reexamination proceedings and authorizes appeals to the Board by patent owners and third-party requesters with respect to reexamination decisions. Permits appeals of Board decisions to the U.S. Court of Appeals for the Federal Circuit.

Title VI: Miscellaneous Patent Provisions - Revises provisions regarding abandonment of provisional applications to allow, notwithstanding the absence of a claim, a provisional application to be treated as a patent application, under specified conditions.

(Sec. 602) Grants, under specified conditions, benefits of an earlier filing date to an invention patent application filed in this country that has previously and regularly been filed for the same invention in a foreign country which affords similar privileges in the case of applications filed in a WTO member country.

Requires the foreign intellectual property authority (currently, patent office of the foreign country) to certify the copy of the original foreign application, specification, and drawings required by the Commissioner with respect to a patent application which claims the benefit of an earlier filing date in a foreign country.

Grants applications for plant breeder's rights filed in a WTO country or by a UPOV Contracting Party the right of priority as a patent application, subject to the same conditions and requirements.

Defines: (1) "WTO member country" as a state or separate customs territory (within the meaning of Article XII of the Agreement Establishing the World Trade Organization entered into on April 15, 1994), with respect to which the United States applies such Agreement; and (2) "UPOV Contracting Party" as a member of the International Convention for the Protection of New Varieties of Plants.

(Sec. 603) Allows a patent to be issued for a tuber propagated plant. Provides that, in the case of a plant patent, the grant shall include the right to exclude others from offering the reproduced plant or any of its parts for sale throughout, or importing the plant so reproduced into, the United States.

(Sec. 604) Amends the Federal judicial code to provide that, for purposes of compensating an owner of a patent for an invention that is used or manufactured unlawfully by or for the United States, reasonable and entire compensation shall include the owner's reasonable costs, including reasonable fees for expert witnesses and attorneys, in pursuing action against the United States in the U.S. Court of Federal Claims if the owner is an independent inventor, a nonprofit organization, or an entity that had no more than 500 employees at any time during the five-year period preceding such use or manufacture.

(Sec. 605) Allows the use of an electronic medium to file papers in the PTO.