,,ii #aadth ,,congress #ast ,session ,s4 #aacg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,april #bi1 #bjae,mr4 ,grassley 7for himself1 ,mr4 ,leahy1 ,mr4 ,cornyn1 ,mr4 ,schumer1 ,mr4 ,lee1 ,mr4 ,hatch1 and ,ms4 ,klobuchar7 introduced the following bill2 which was read twice and referred to the ,committee on the ,judiciary ,a ,,bill ,to amend title #ce1 ,united ,states ,code1 and the ,leahy-,smith ,america ,invents ,act to make improvements and technical corrections1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,protecting ,american ,talent and ,entrepreneurship ,act of #bjae or the ,,patent ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,definitions4 ,sec4 #c4 ,pleading requirements for patent infringement actions4 ,sec4 #d4 ,customer-suit exception4 ,sec4 #e4 ,discovery limits4 ,sec4 #f4 ,procedures and practices to implement recommendations of the ,judicial ,conference4 ,sec4 #g4 ,fees and other expenses4 ,sec4 #h4 ,requirement of clarity and specificity in demand letters4 ,sec4 #i4 ,abusive demand letters4 ,sec4 #aj4 ,transparency of patent transfer4 ,sec4 #aa4 ,protection of intellectual property licenses in bankruptcy4 ,sec4 #ab4 ,small business education1 outreach1 and information access4 ,sec4 #ac4 ,studies on patent transactions1 quality1 and examination4 ,sec4 #ad4 ,technical corrections to the ,leahy-,smith ,america ,invents ,act and other improvements4 ,sec4 #ae4 ,effective date4 ,sec4 #af4 ,severability4 #b4 ,definitions 7#a7 ,director ,the term ,director means the ,under ,secretary of ,commerce for ,intellectual ,property and ,director of the ,united ,states ,patent and ,trademark ,office4 7#b7 ,office ,the term ,office means the ,united ,states ,patent and ,trademark ,office4 #c4 ,pleading requirements for patent infringement actions 7a7 ,elimination of ,form #ah ,not later than #a month after the date of enactment of this ,act1 the ,supreme ,court1 using existing resources1 shall eliminate ,form #ah in the ,appendix to the ,federal ,rules of ,civil ,procedure 7,complaint for ,patent ,infringement74 7b7 ,pleading requirements 7#a7 ,amendment ,chapter #bi of title #ce1 ,united ,states ,code1 is amended by inserting after section #bha the following3 #bha;,a4 ,pleading requirements for patent infringement actions 7a7 ,pleading requirements ,in a civil action in which a party asserts a claim for relief arising under any ,act of ,congress relating to patents1 a party alleging infringement shall include in a complaint1 counterclaim1 or cross-claim for patent infringement1 except as provided in subsection 7c71 the following3 7#a7 ,an identification of each patent allegedly infringed4 7#b7 ,an identification of each claim of each patent identified under paragraph 7#a7 that is allegedly infringed4 7#c7 ,for each claim identified under paragraph 7#b71 an identification of each accused process1 machine1 manufacture1 or composition of matter 7referred to in this section as an accused instrumentality7 alleged to infringe the claim4 7#d7 ,for each accused instrumentality identified under paragraph 7#c71 an identification with particularity1 if known1 of-- 7,a7 the name or model number 7or a representative model number7 of each accused instrumentality2 or 7,b7 if there is no name or model number1 a description of each accused instrumentality4 7#e7 ,for each claim identified under paragraph 7#b71 a description of the elements thereof that are alleged to be infringed by the accused instrumentality and how the accused instrumentality is alleged to infringe those elements4 7#f7 ,for each claim of indirect infringement1 a description of the acts of the alleged infringer that are alleged to contribute to or induce the direct infringement4 7b7 ,dismissal for failure ,to meet pleading requirements ,the court shall1 on the motion of any party1 dismiss any count or counts of the complaint1 counterclaim1 or cross-claim for patent infringement if the requirements of paragraphs 7#a7 through 7#f7 of subsection 7a7 are not met with respect to such count or counts4 ,the fact that a party pleads in accordance with subsection 7c7 shall not be a basis for dismissal if the party nonetheless states a plausible claim for relief sufficient under the ,federal ,rules of ,civil ,procedure4 7c7 ,information not accessible ,if some subset of information required to comply with subsection 7a7 is not accessible to a party after an inquiry reasonable under the circumstances1 consistent with rule #aa of the ,federal ,rules of ,civil ,procedure1 an allegation requiring that information may be based upon a general description of that information1 along with a statement as to why the information is not accessible4 7d7 ,amendment of pleadings ,nothing in this provision shall be construed to affect a party's leave to amend pleadings as specified in the ,federal ,rules of ,civil ,procedure4 ,amendments permitted by the court are subject to the pleading requirements set forth in this section4 7e7 ,confidential information ,a party required to disclose information described under subsection 7a7 may file information believed to be confidential under seal1 with a motion setting forth good cause for such sealing4 ,if such motion is denied by the court1 the party may seek to file an amended pleading4 7f7 ,exemption ,subsection 7a7 shall not apply to a civil action that includes a claim for relief arising under section #bga7;e77#b74 #bha;,b4 ,early disclosure requirements for patent infringement actions 7a7 ,definitions ,in this section-- 7#a7 the term financial interest-- 7,a7 means-- 7i7 with regard to a patent or patents1 the right of a person to receive proceeds from the assertion of the patent or patents1 including a fixed or variable portion of such proceeds2 and 7ii7 with regard to the patentee1 direct or indirect ownership or control by a person of more than #bj percent of the patentee2 and 7,b7 does not mean-- 7i7 ownership of shares or other interests in a mutual or common investment fund1 unless the owner of such interest participates in the management of such fund2 or 7ii7 the proprietary interest of a policyholder in a mutual insurance company or a depositor in a mutual savings association1 or a similar proprietary interest1 unless the outcome of the proceeding could substantially affect the value of such interest2 7#b7 the term patentee means a party in a civil action that files a pleading subject to the requirements of section #bha;,a2 7#c7 the term proceeding means all stages of a civil action1 including pretrial and trial proceedings and appellate review2 and 7#d7 the term ultimate parent entity has the meaning given the term in section #bfa;,a4 7b7 ,early disclosure requirements ,notwithstanding the requirements of section #bii;,b1 a patentee shall disclose to the court and each adverse party1 not later than #ad days after the date on which the patentee serves or files the pleading subject to the requirements of section #bha;,a-- 7#a7 the identity of each-- 7,a7 assignee of the patent or patents at issue1 and any ultimate parent entity thereof2 7,b7 entity with a right to sublicense to unaffiliated entities or to enforce the patent or patents at issue1 and any ultimate parent entity thereof2 and 7,c7 entity1 other than an entity the ultimate parent of which is disclosed under subparagraph 7,a7 or 7,b71 that the patentee knows to have a financial interest in-- 7i7 the patent or patents at issue2 or 7ii7 the patentee1 and any ultimate parent entity thereof2 and 7#b7 for each patent that the patentee alleges to be infringed-- 7,a7 a list of each complaint1 counterclaim1 or cross-claim filed by the patentee or an affiliate thereof in the ,united ,states during the #c-year period preceding the date of the filing of the action1 and any other complaint1 counterclaim1 or cross-claim filed in the ,united ,states during that period of which the patentee has knowledge1 that asserts or asserted such patent1 including-- 7i7 the caption2 7ii7 civil action number2 7iii7 the court where the action was filed2 and 7iv7 if applicable1 any court to which the action was transferred2 7,b7 a statement as to whether the patent is subject to an assurance made by the party to a standards development organization to license others under such patent if-- 7i7 the assurance specifically identifies such patent or claims therein2 and 7ii7 the allegation of infringement relates to such standard2 and 7,c7 a statement as to whether the ,federal ,government has imposed specific licensing requirements with respect to such patent4 7c7 ,disclosure of financial interest 7#a7 ,publicly traded ,for purposes of subsection 7b77#a77;,c71 if the financial interest is held by a corporation traded on a public stock exchange1 an identification of the name of the corporation and the public exchange listing shall satisfy the disclosure requirement4 7#b7 ,not publicly traded ,for purposes of subsection 7b77#a77;,c71 if the financial interest is not held by a publicly traded corporation1 the disclosure shall satisfy the disclosure requirement if the information identifies-- 7,a7 in the case of a partnership1 the name of the partnership1 the address of the principal place of business1 and the name and correspondence address of the registered agent2 7,b7 in the case of a corporation1 the name of the corporation1 the location of incorporation1 and the address of the principal place of business2 and 7,c7 for each individual1 the name and correspondence address of that individual4 7d7 ,provision of information to the ,united ,states ,patent and ,trademark ,office ,not later than #a month after the date on which the disclosures required under subsection 7b7 are made1 the patentee shall provide to the ,united ,states ,patent and ,trademark ,office a filing containing the information disclosed pursuant to subsection 7b77#a74 7e7 ,confidential information 7#a7 ,in general ,a patentee required to disclose information under subsection 7b7 may file1 under seal1 information believed to be confidential1 with a motion setting forth good cause for such sealing4 7#b7 ,home address information ,for purposes of this section1 the home address of an individual shall be considered to be confidential information4 4 7#b7 ,conforming amendment ,the table of sections for chapter #bi of title #ce1 ,united ,states ,code1 is amended by inserting after the item relating to section #bha the following new items3 #bha;,a4 ,pleading requirements for patent infringement actions4 #bha;,b4 ,early disclosure requirements for patent infringement actions4 4 7c7 ,effective date ,the amendments made by this section shall take effect on the date of enactment of this ,act and shall apply to any action for which a complaint is filed on or after that date4 #d4 ,customer-suit exception 7a7 ,in general ,chapter #bi of title #ce1 ,united ,states ,code1 is amended by adding at the end the following3 #bii;,a4 ,customer stay 7a7 ,definitions ,in this section-- 7#a7 the term covered customer means a retailer or end user that is accused of infringing a patent or patents in dispute based on-- 7,a7 the sale1 or offer for sale1 of a covered product or covered process without material modification of the product or process in a manner that is alleged to infringe a patent or patents in dispute2 or 7,b7 the use by such retailer1 the retailer's end user customer1 or an end user of a covered product or covered process without material modification of the product or process in a manner that is alleged to infringe a patent or patents in dispute2 7#b7 the term covered manufacturer means a person who manufactures or supplies1 or causes the manufacture or supply of1 a covered product or covered process1 or a relevant part thereof2 7#c7 the term covered process means a process1 method1 or a relevant part thereof1 that is alleged to infringe the patent or patents in dispute where such process1 method1 or relevant part thereof is implemented by an apparatus1 material1 system1 software or other instrumentality that is provided by the covered manufacturer2 7#d7 the term covered product means a component1 product1 system1 service1 or a relevant part thereof1 that-- 7,a7 is alleged to infringe the patent or patents in dispute2 or 7,b7 implements a process alleged to infringe the patent or patents in dispute2 7#e7 for purposes of this section1 the term end user shall include an affiliate of such an end user1 but shall not include an entity that manufactures or causes the manufacture of a covered product or covered process or a relevant part thereof2 7#f7 the term retailer means an entity that generates its revenues predominately through the sale to the public of consumer goods or services1 or an affiliate of such entity1 but shall not include an entity that manufactures or causes the manufacture of a covered product or covered process or a relevant part thereof2 and 7#g7 for purposes of the definitions in paragraphs 7#e7 and 7#f71 the terms use and sale mean the use and the sale1 respectively1 within the meanings given those terms under section #bga4 7b7 ,motion for stay ,in a civil action in which a party asserts a claim for relief arising under any ,act of ,congress relating to patents 7other than an action that includes a cause of action described in section #bga7;e771 the court shall grant a motion to stay at least the portion of the action against a covered customer that relates to infringement of a patent involving a covered product or covered process if-- 7#a7 the covered manufacturer is a party to the action or a separate action in a ,federal court of the ,united ,states involving the same patent or patents relating to the same covered product or covered process2 7#b7 the covered customer agrees to be bound as to issues determined in an action described in paragraph 7#a7 without a full and fair opportunity to separately litigate any such issue1 but only as to those issues for which all other elements of the common law doctrine of issue preclusion are met2 and 7#c7 the motion is filed after the first pleading in the action but not later than the later of-- 7,a7 #abj days after service of the first pleading or paper in the action that specifically identifies the covered product or covered process as a basis for the alleged infringement of the patent by the covered customer1 and specifically identifies how the covered product or covered process is alleged to infringe the patent2 or 7,b7 the date on which the first scheduling order in the case is entered4 7c7 ,manufacturer consent in certain cases ,if the covered manufacturer has been made a party to the action on motion by the covered customer1 then a motion under subsection 7b7 may only be granted if the covered manufacturer and the covered customer agree in writing to the stay4 7d7 ,lift of stay 7#a7 ,in general ,a stay entered under this section may be lifted upon grant of a motion based on a showing that-- 7,a7 the action involving the covered manufacturer will not resolve major issues in the suit against the covered customer1 such as that a covered product or covered process identified in the motion to lift the stay is not a material part of the claimed invention or inventions in the patent or patents in dispute2 or 7,b7 the stay unreasonably prejudices or would be manifestly unjust to the party seeking to lift the stay4 7#b7 ,separate actions ,in the case of a stay entered under this section based on the participation of the covered manufacturer in a separate action described in subsection 7b77#a71 a motion under paragraph 7#a7 may only be granted if the court in such separate action determines that the showing required under paragraph 7#a7 has been made4 7e7 ,waiver of estoppel effect ,if1 following the grant of a motion to stay under this section1 the covered manufacturer in an action described in subsection 7b77#a7-- 7#a7 obtains or consents to entry of a consent judgment involving one or more of the issues that gave rise to the stay2 or 7#b7 fails to prosecute to a final1 non-appealable judgment a final decision as to one or more of the issues that gave rise to the stay1 the court may1 upon motion1 determine that such consent judgment or unappealed final decision shall not be binding on the covered customer with respect to one or more of the issues that gave rise to the stay based on a showing that such an outcome would unreasonably prejudice or be manifestly unjust to the covered customer in light of the circumstances of the case4 7f7 ,rule of construction ,nothing in this section shall be construed to limit the ability of a court to grant any stay1 expand any stay granted pursuant to this section1 or grant any motion to intervene1 if otherwise permitted by law4 4 7b7 ,conforming amendment ,the table of sections for chapter #bi of title #ce1 ,united ,states ,code1 is amended by adding at the end the following3 #bii;,a4 ,customer stay4 4 #e4 ,discovery limits 7a7 ,amendment ,chapter #bi of title #ce1 ,united ,states ,code1 as amended by section #d1 is amended by adding at the end the following3 #bii;,b4 ,discovery in patent infringement action 7a7 ,discovery in patent infringement action 7#a7 ,in general ,except as provided in subsections 7b7 and 7c71 in a civil action arising under any ,act of ,congress relating to patents1 discovery shall be stayed during the pendency of #a or more motions described in paragraph 7#b7 if the motion or motions were filed prior to the first responsive pleading4 7#b7 ,motions described ,the motions described in this paragraph are-- 7,a7 a motion to dismiss2 7,b7 a motion to transfer venue2 and 7,c7 a motion to sever accused infringers4 7b7 ,discretion ,to expand scope of discovery 7#a7 ,resolution of motions ,a court may allow limited discovery necessary to resolve a motion described in subsection 7a7 or a motion for preliminary relief properly raised by a party before or during the pendency of a motion described in subsection 7a74 7#b7 ,additional discovery ,on motion1 a court may allow additional discovery if the court finds that such discovery is necessary to preserve evidence or otherwise prevent specific prejudice to a party4 7c7 ,exclusion from discovery limitation 7#a7 ,voluntary exclusion ,the parties to an action described in subsection 7a7 may voluntarily consent to be excluded1 in whole or in part1 from the limitation on discovery under subsection 7a74 7#b7 ,claims under section #bga7;e7 ,this section shall not apply to a civil action that includes a claim for relief arising under section #bga7;e74 7d7 ,rules of construction 7#a7 ,timeline for responsive pleadings ,nothing in this section shall be construed to alter the time provided by the ,federal ,rules of ,civil ,procedure for the filing of responsive pleadings4 7#b7 ,exchange of contentions ,nothing in this section shall prohibit a court from ordering or local rules from requiring the exchange of contentions regarding infringement1 non-infringement1 invalidity or other issues1 by interrogatories or other written initial disclosures1 at an appropriate time determined by the court4 4 7b7 ,conforming amendment ,the table of sections for chapter #bi of title #ce1 ,united ,states ,code1 as amended by section #d1 is amended by inserting after the item relating to section #bii;,a the following3 #bii;,b4 ,discovery in patent infringement action4 4 7c7 ,effective date ,the amendments made by this section shall take effect on the date of enactment of this ,act and shall apply to any action for which a complaint is filed on or after that date4 #f4 ,procedures and practices to implement recommendations of the ,judicial ,conference 7a7 ,judicial ,conference rules and procedures on discovery burdens and costs 7#a7 ,rules and procedures ,the ,judicial ,conference of the ,united ,states1 using existing resources1 should develop rules and procedures to implement the discovery proposals described in paragraph 7#b7 to address concerns regarding the asymmetries in discovery burdens and costs that may arise in a civil action arising under any ,act of ,congress relating to patents4 7#b7 ,rules and procedures to be considered ,the rules and procedures to be developed under paragraph 7#a7 should address each of the following3 7,a7 ,discovery of core documentary evidence ,to what extent each party to the action is entitled to receive core documentary evidence and should be responsible for the costs of producing core documentary evidence within the possession or control of each such party1 and to what extent each party to the action may seek noncore documentary discovery as otherwise provided in the ,federal ,rules of ,civil ,procedure4 7,b7 ,electronic communication ,if the parties request discovery of electronic communication1 how such discovery should be phased to occur relative to the exchange of initial disclosures and core documentary evidence1 and appropriate limitations to apply to such discovery4 7,c7 ,additional document discovery ,the manner and extent to which the following should apply3 7i7 ,in general ,each party to the action may seek any additional document discovery beyond core documentary evidence as permitted under the ,federal ,rules of ,civil ,procedure1 if such party bears the reasonable costs1 including reasonable attorney's fees1 of the additional document discovery4 7ii7 ,requirements for additional document discovery ,unless the parties mutually agree otherwise1 no party may be permitted additional document discovery unless such a party posts a bond1 or provides other security1 in an amount sufficient to cover the expected costs of such additional document discovery1 or makes a showing to the court that such party has the financial capacity to pay the costs of such additional document discovery4 7iii7 ,good cause modification ,a court1 upon motion and for good cause shown1 may modify the requirements of subparagraphs 7,a7 and 7,b7 and any definition under paragraph 7#c74 ,not later than #cj days after the pretrial conference under rule #af of the ,federal ,rules of ,civil ,procedure1 the parties shall jointly submit any proposed modifications of the requirements of subparagraphs 7,a7 and 7,b7 and any definition under paragraph 7#c71 unless the parties do not agree1 in which case each party shall submit any proposed modification of such party and a summary of the disagreement over the modification4 7iv7 ,computer code ,a court1 upon motion and for good cause shown1 may determine that computer code should be included in the discovery of core documentary evidence4 ,the discovery of computer code shall occur after the parties have exchanged initial disclosures and other core documentary evidence4 7,d7 ,discovery sequence and scope ,the manner and extent to which the parties shall discuss and address in the written report filed pursuant to rule #bf7;f7 of the ,federal ,rules of ,civil ,procedure the views and proposals of each party on the following3 7i7 ,when the discovery of core documentary evidence should be completed4 7ii7 ,whether additional document discovery will be sought under subparagraph 7,c74 7iii7 ,any issues about infringement1 invalidity1 or damages that1 if resolved before the additional discovery described in subparagraph 7,c7 commences1 might simplify or streamline the case4 7#c7 ,scope of documentary evidence ,in developing rules or procedures under this section1 the ,judicial ,conference should consider which kinds of evidence constitute core documentary evidence4 7#d7 ,definitions ,in this subsection the term electronic communication means any form of electronic communication1 including email1 text message1 or instant message4 7b7 ,judicial ,conference patent case management ,the ,judicial ,conference of the ,united ,states1 using existing resources1 should develop case management procedures to be implemented by the ,united ,states district courts and the ,united ,states ,court of ,federal ,claims for any civil action arising under any ,act of ,congress relating to patents1 including initial disclosure and early case management conference practices that-- 7#a7 will identify any potential dispositive issues of the case2 and 7#b7 focus on early summary judgment motions when resolution of issues may lead to expedited disposition of the case4 #g4 ,fees and other expenses 7a7 ,sense of ,congress ,it is the sense of ,congress that1 in patent cases1 reasonable attorney fees should be paid by a non-prevailing party whose litigation position or conduct is not objectively reasonable4 ,as the ,supreme ,court wrote in adopting this legal standard in the context of fee shifting under section #addg of title #bh1 ,united ,states ,code1 this standard is intended to strike a balance2 in patent cases1 a more appropriate balance between protecting the right of a patent holder to enforce its patent on the one hand1 and deterring abuses in patent litigation and threats thereof on the other4 7b7 ,amendment ,section #bhe of title #ce1 ,united ,states ,code1 is amended to read as follows3 #bhe4 ,fees and other expenses 7a7 ,award ,in connection with a civil action in which any party asserts a claim for relief arising under any ,act of ,congress relating to patents1 upon motion by a prevailing party1 the court shall determine whether the position of the non-prevailing party was objectively reasonable in law and fact1 and whether the conduct of the non-prevailing party was objectively reasonable4 ,if the court finds that the position of the non-prevailing party was not objectively reasonable in law or fact or that the conduct of the non-prevailing party was not objectively reasonable1 the court shall award reasonable attorney fees to the prevailing party unless special circumstances would make an award unjust4 7b7 ,covenant not ,to sue ,a party to a civil action who asserts a claim for relief arising under any ,act of ,congress relating to patents against another party1 and who subsequently unilaterally 7i7 seeks dismissal of the action without consent of the other party and 7ii7 extends to such other party a covenant not to sue for infringement with respect to the patent or patents at issue1 may be the subject of a motion for attorney fees under subsection 7a7 as if it were a non-prevailing party1 unless the party asserting such claim would have been entitled1 at the time that such covenant was extended1 to dismiss voluntarily the action without a court order under rule #da of the ,federal ,rules of ,civil ,procedure1 or the interests of justice require otherwise4 7c7 ,recovery of award 7#a7 ,certification2 disclosure of interested parties 7,a7 ,initial statement ,a party defending against a claim of infringement may file1 not later than #ad days before a scheduling conference is to be held or a scheduling order is due under rule #af7;b7 of the ,federal ,rules of ,civil ,procedure1 a statement that such party holds a good faith belief1 based on publicly-available information and any other information known to such party1 that the primary business of the party alleging infringement is the assertion and enforcement of patents or the licensing resulting therefrom4 7,b7 ,certification ,not later than #de days after being served with an initial statement under subparagraph 7,a71 a party alleging infringement shall file a certification that-- 7i7 establishes and certifies to the court1 under oath1 that it will have sufficient funds available to satisfy any award of reasonable attorney fees under this section if an award is assessed2 7ii7 demonstrates that its primary business is not the assertion and enforcement of patents or the licensing resulting therefrom2 7iii7 identifies interested parties1 if any1 as defined in paragraph 7#b7 of this subsection2 or 7iv7 states that it has no such interested parties4 ,a party alleging infringement shall have an ongoing obligation to supplement its certification under this subparagraph within #cj days after a material change to the information provided in its certification4 7,c7 ,notice to interested party ,a party that files a certification under subparagraph 7,b77iii7 shall1 prior to filing the certification1 provide each identified interested party actual notice in writing by service of notice in any district where the interested party may be found1 such that jurisdiction shall be established over each interested party to the action for purposes of enforcing an award of attorney fees under this section1 consistent with the ,constitution of the ,united ,states4 ,the notice shall identify the action1 the parties1 the patents at issue1 and the interest qualifying the party to be an interested party4 ,the notice shall inform the recipient that the recipient may be held accountable under this subsection for any award of attorney fees1 or a portion thereof1 resulting from the action in the event the party alleging infringement cannot satisfy the full amount of such an award1 unless the recipient renounces its interest pursuant to subparagraph 7,e7 or is otherwise exempt from the applicability of this subsection4 7,d7 ,accountability for interested parties ,any interested parties who are timely served with actual notice pursuant to subparagraph 7,c7 and do not renounce their interests pursuant to subparagraph 7,e7 or are not otherwise exempt from the applicability of this subsection may be held accountable for any fees1 or a portion thereof1 awarded under this section in the event that the party alleging infringement cannot satisfy the full amount of the award4 ,if a true and correct certification under clause 7i7 or 7ii7 of subparagraph 7,b7 is timely filed with the court1 interested parties shall not be subject to this subparagraph4 7,e7 ,renunciation of interest ,any recipient of a notice under subparagraph 7,c7 may submit a statement of renunciation of interest in a binding document with notice to the court and parties in the action not later than #abj days after receipt of the notice under subparagraph 7,c74 ,the statement shall be required to renounce only such interest as would qualify the recipient as an interested party4 7,f7 ,institutions of higher education exception ,any institution of higher education 7as defined in section #aja7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja7;a77 or under equivalent laws in foreign jurisdictions71 or a non-profit technology transfer organization whose primary purpose is to facilitate the commercialization of technologies developed by #a or more institutions of higher education1 may exempt itself from the applicability of this subsection by filing a certification that it qualifies for the exception provided for in this subparagraph with the court and providing notice to the parties4 7,g7 ,interest of justice exception ,any recipient of a notice under subparagraph 7,c7 may intervene in the action for purposes of contesting its identification as an interested party or its liability under this subsection1 and a court may exempt any party identified as an interested party from the applicability of this subsection as the interest of justice requires4 7#b7 ,interested party ,in this section1 the term interested party-- 7,a7 means a person who has a substantial financial interest related to the proceeds from any settlement1 license1 or damages award resulting from the enforcement of the patent in the action by the party alleging infringement2 7,b7 does not include an attorney or law firm providing legal representation in the action if the sole basis for the financial interest of the attorney or law firm in the outcome of the action arises from the attorney or law firm's receipt of compensation reasonably related to the provision of the legal representation2 7,c7 does not include a person who has assigned all right1 title1 and interest in a patent1 except for passive receipt of income1 to an entity described in paragraph 7#a77;,f71 or who has a right to receive any portion of such passive income2 and 7,d7 does not include a person who would be an interested party under subparagraph 7,a7 but whose financial interest is based solely on an equity or security interest established when the party alleging infringement's primary business was not the assertion and enforcement of patents or the licensing resulting therefrom4 7d7 ,claims under section #bga7;e7 7#a7 ,applicability ,subsections 7a71 7b71 and 7c7 shall not apply to a civil action that includes a claim for relief arising under section #bga7;e74 7#b7 ,award in certain claims under section #bga7;e7 ,in a civil action that includes a claim for relief arising under section #bga7;e71 the court may in exceptional cases award reasonable attorney fees to the prevailing party4 4 7c7 ,conforming amendment and amendment 7#a7 ,conforming amendment ,the item relating to section #bhe of the table of sections for chapter #bi of title #ce1 ,united ,states ,code1 is amended to read as follows3 #bhe4 ,fees and other expenses4 4 7#b7 ,amendment ,section #bgc of title #ce1 ,united ,states ,code1 is amended by striking subsections 7f7 and 7g74 7d7 ,effective date ,the amendments made by this section shall take effect on the date of enactment of this ,act and shall apply to any action filed on or after such date4 #h4 ,requirement of clarity and specificity in demand letters 7a7 ,in general ,chapter #bi of title #ce1 ,united ,states ,code1 as amended by section #e1 is amended by adding at the end the following3 #bii;,c4 ,pre-suit written notice 7a7 ,applicability ,subsection 7b7 shall not apply-- 7#a7 to written communication between parties-- 7,a7 regarding existing licensing agreements2 7,b7 as part of an ongoing licensing negotiation1 provided that the initial written notice complied with the requirements of subsection 7b7 of this section2 or 7,c7 sent after the initial written notice1 provided that the initial written notice complied with the requirements of subsection 7b7 of this section2 or 7#b7 if the court determines it is in the interest of justice to waive the requirements of subsection 7b74 7b7 ,written notification requirements 7#a7 ,in general ,in a civil action alleging infringement of a patent in which the plaintiff has provided written notice of the accusation of infringement to the party accused of infringement prior to filing the action1 the initial written notice shall contain the information required under paragraph 7#b7 or be subject to paragraph 7#c74 7#b7 ,required information provided in initial written notice ,the initial written notice described in paragraph 7#a7 shall contain1 at a minimum-- 7,a7 an identification of-- 7i7 each patent believed to be infringed1 including the patent number2 and 7ii7 at least one claim of each patent that is believed to be infringed2 7,b7 an identification of each product1 process1 apparatus1 or chemical composition1 including any manufacturer thereof1 that is believed to infringe one or more claims of each patent under subparagraph 7,a72 7,c7 a clear and detailed description of the reasons why the plaintiff believes each patent identified under subparagraph 7,a7 is infringed2 7,d7 notice to the intended recipient that the intended recipient may have the right to a stay of any suit in accordance with section #bii;,a2 7,e7 the identity of any person with the right to enforce each patent under subparagraph 7,a72 and 7,f7 if compensation is proposed1 a short and plain statement as to how that proposed compensation was determined4 7#c7 ,additional time to respond ,if the initial written notice provided to the defendant prior to the filing of the civil action did not contain the information required by paragraph 7#b71 the defendant's time to respond to the complaint shall be extended by an additional #cj days4 4 7b7 ,conforming amendment ,the table of sections for chapter #bi of title #ce1 ,united ,states ,code1 as amended by section #e1 is amended by adding at the end the following3 #bii;,c4 ,pre-suit written notice4 4 7c7 ,willful infringement ,section #bhd of title #ce1 ,united ,states ,code1 is amended-- 7#a7 in the first undesignated paragraph1 by striking ,upon finding and inserting 7a7 ,in general4--,upon finding2 7#b7 in the second undesignated paragraph1 by striking ,when the damages and inserting 7b7 ,assessment by court2 treble damages4--,when the damages2 7#c7 by inserting after subsection 7b71 as designated by subparagraph 7,b71 the following3 7c7 ,willful infringement ,a claimant seeking to establish willful infringement may not rely on evidence of pre-suit notification of infringement unless that notification complies with the standards set out in section #bii;,c7b77#b74 2 and 7#d7 in the last undesignated paragraph1 by striking ,the court and inserting 7d7 ,expert testimony4--,the court4 7d7 ,effective date ,the amendments made by this section shall take effect on the date that is #a year after the date of enactment of this ,act and shall apply to any action for which a complaint is filed on or after that date4 #i4 ,abusive demand letters 7a7 ,bad-,faith demand letters ,chapter #bi of title #ce1 ,united ,states ,code1 as amended by section #h1 is amended by adding at the end the following3 #bii;,d4 ,bad-faith demand letters 7a7 ,definition ,in this section1 the term affiliated person means a person affiliated with the intended recipient of a written communication4 7b7 ,civil penalties for certain unfair or deceptive acts or practices in connection with abusive demand letters ,a person who commits an unfair or deceptive act or practice within the meaning of section #e7;a77#a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#a771 in connection with the assertion of a ,united ,states patent1 and who engages in the widespread sending of written communications representing that the intended recipients1 or any persons affiliated with those recipients1 are or may be infringing1 or have or may have infringed1 the patent and may bear liability or owe compensation to another1 shall be deemed to have violated a rule defining an unfair or deceptive act or practice described under section #ah7;a77#a77;,b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #eg;a7a77#a77;,b77 if-- 7#a7 7,a7 the communications falsely-- 7i7 represent that administrative or judicial relief has been sought against the recipient or others2 or 7ii7 threaten litigation if compensation is not paid1 the infringement issue is not otherwise resolved1 or the communication is not responded to2 and 7,b7 there is a pattern of false statements or threats described in subparagraph 7,a7 having been made without litigation or other relief then having been pursued2 7#b7 the assertions contained in the communications lack a reasonable basis in fact or law1 because-- 7,a7 the person asserting the patent is not a person1 or does not represent a person1 with the current right to license the patent to1 or to enforce the patent against1 the intended recipients or any affiliated persons2 7,b7 the communications seek compensation on account of activities undertaken after the patent has expired2 7,c7 the communications seek compensation for a patent that has been held to be invalid or unenforceable in a final judicial or administrative proceeding that is unappealable or for which any opportunity for appeal is no longer available2 7,d7 the communications seek compensation for activities by the recipient that the sender knows do not infringe the patent because such activities are authorized by the patentee2 7,e7 the communications falsely represent that an investigation of the recipient's alleged infringement has occurred2 or 7,f7 the communications falsely state that litigation has been filed against1 or a license has been paid by persons similarly situated to the recipient2 or 7#c7 the content of the written communications is likely to materially mislead a reasonable recipient because the content fails to include facts reasonably necessary to inform the recipient-- 7,a7 of the identity of the person asserting a right to license the patent to1 or enforce the patent against1 the intended recipient or any affiliated person2 7,b7 of the patent issued by the ,united ,states ,patent and ,trademark ,office alleged to have been infringed2 and 7,c7 if infringement or the need to pay compensation for a license is alleged1 of an identification of at least one product1 service1 or other activity of the recipient that is alleged to infringe the identified patent or patents and1 unless the information is not readily accessible1 an explanation of the basis for such allegation4 7c7 ,enforcement by ,federal ,trade ,commission 7#a7 ,powers of ,commission ,the ,federal ,trade ,commission shall enforce this section in the same manner1 by the same means1 and with the same jurisdiction1 powers1 and duties as though all applicable terms and provisions of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 were incorporated into and made a part of this section4 7#b7 ,privileges and immunities ,any person who engages in an act or practice described in subsection 7b7 shall be subject to the penalties and entitled to the privileges and immunities provided in the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq474 4 7b7 ,technical and conforming amendment ,the table of sections for chapter #bi of title #ce1 ,united ,states ,code1 as amended by section #h1 is amended by inserting after the item relating to section #bii;,c the following3 #bii;,d4 ,bad-faith demand letters4 4 #aj4 ,transparency of patent transfer 7a7 ,patent and ,trademark ,office proceedings 7#a7 ,in general ,chapter #bf of title #ce1 ,united ,states ,code1 is amended by inserting after section #bfa the following3 #bfa;,a4 ,disclosure of information relating to patent ownership 7a7 ,definitions ,in this section3 7#a7 ,period of noncompliance ,the term period of noncompliance refers to a period of time during which the assignee or the ultimate parent entity of an assignee of a patent has not been disclosed to the ,united ,states ,patent and ,trademark ,office in accordance with this section4 7#b7 ,ultimate patent entity 7,a7 ,in general ,except as provided in subparagraph 7,b71 the term ultimate parent entity has the meaning given such term in section #hja4a7;a77#c7 of title #af1 ,code of ,federal ,regulations1 or any successor regulation4 7,b7 ,modification of definition ,the ,director may by regulation modify the definition of the term ultimate parent entity4 7b7 ,requirement ,to disclose assignment ,an assignment of all substantial rights in an issued patent shall be recorded in the ,patent and ,trademark ,office-- 7#a7 not later than the date on which the patent is issued2 and 7#b7 when any subsequent assignment is made that results in a change to the ultimate parent entity-- 7,a7 not later than #c months after the date on which such assignment is made2 or 7,b7 in the case of an assignment made as part of a corporate acquisition that meets the reporting thresholds under section #g;,a7a77#b7 of the ,clayton ,act 7#ae ,u4,s4,c4 #ah;a7a77#b771 not later than #f months after the closing date of such acquisition4 7c7 ,disclosure requirements ,a disclosure under subsection 7b7 shall include the name of the assignee and the ultimate parent entity of the assignee4 7d7 ,failure ,to comply ,in a civil action in which a party asserts a claim for infringement of a patent1 if there was a failure to comply with subsection 7b7 for the patent-- 7#a7 the party asserting infringement of the patent may not recover increased damages under section #bhd or attorney fees under section #bhe with respect to infringing activities taking place during any period of noncompliance1 unless the denial of such damages or fees would be manifestly unjust2 and 7#b7 the court shall award to a prevailing accused infringer reasonable attorney fees and expenses incurred in discovering the identity of any undisclosed entity required to be disclosed under subsection 7b71 unless such sanctions would be manifestly unjust4 4 7#b7 ,applicability ,the amendment made by paragraph 7#a7 shall apply to any patent for which a notice of allowance is issued on or after the date of enactment of this ,act4 7#c7 ,conforming amendment ,the table of sections for chapter #bf of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new item3 #bfa;,a4 ,disclosure of information relating to patent ownership4 4 7b7 ,regulations ,the ,director may promulgate such regulations as are necessary to establish a registration fee in an amount sufficient to recover the estimated costs of administering section #bfa;,a of title #ce1 ,united ,states ,code1 as added by subsection 7a71 to facilitate the collection and maintenance of the information required by the amendments made by this section and section #c7;b7 of this ,act1 and to ensure the timely disclosure of such information to the public4 #aa4 ,protection of intellectual property licenses in bankruptcy 7a7 ,in general ,section #aebb of title #aa1 ,united ,states ,code1 is amended by adding at the end the following3 7e7 ,section #cfe7n7 shall apply to cases under this chapter4 ,if the foreign representative rejects or repudiates a contract under which the debtor is a licensor of intellectual property1 the licensee under such contract shall be entitled to make the election and exercise the rights described in section #cfe7n74 4 7b7 ,trademarks 7#a7 ,amendment ,section #aja7ce;,a7 of title #aa1 ,united ,states ,code1 is amended-- 7,a7 in subparagraph 7,e71 by striking or2 7,b7 in subparagraph 7,f71 by adding or at the end2 and 7,c7 by adding after subparagraph 7,f7 the following new subparagraph3 7,g7 a trademark1 service mark1 or trade name1 as those terms are defined in section #de of the ,act of ,july #e1 #aidf 7commonly referred to as the ,trademark ,act of #aidf 7#ae ,u4,s4,c4 #aabg772 4 7#b7 ,conforming amendment ,section #cfe7n77#b7 of title #aa1 ,united ,states ,code1 is amended-- 7,a7 in subparagraph 7,b7-- 7i7 by striking royalty payments and inserting royalty or other payments2 and 7ii7 by striking and after the semicolon2 7,b7 in subparagraph 7,c71 by striking the period at the end of clause 7ii7 and inserting 2 and2 and 7,c7 by adding at the end the following new subparagraph3 7,d7 in the case of a trademark1 service mark1 or trade name1 the licensee shall not be relieved of any of its obligations to maintain the quality of the products and services offered under or in connection with the licensed trademark1 service mark or trade name1 and the trustee shall retain the right to oversee and enforce quality control for said products and_/or services4 4 7c7 ,effective date ,the amendments made by this section shall take effect on the date of enactment of this ,act and shall apply to any case that is pending on1 or for which a petition or complaint is filed on or after1 such date of enactment4 #ab4 ,small business education1 outreach1 and information access 7a7 ,small business education and outreach 7#a7 ,resources for small business ,using existing resources1 the ,director shall develop educational resources for small businesses to address concerns arising from patent infringement4 7#b7 ,small business patent ombudsman ,the existing small business patent outreach programs of the ,office1 in consultation with the relevant offices at the ,small ,business ,administration and the ,minority ,business ,development ,agency1 shall provide education and awareness regarding resources available for those persons responding to allegations of patent infringement4 7b7 ,improving ,information ,transparency for ,small ,business and the ,united ,states ,patent and ,trademark ,office users 7#a7 ,web site ,using existing resources1 the ,director shall create a user-friendly section on the official ,web site of the ,office to notify the public when a patent case is brought in ,federal court and1 with respect to each patent at issue in such case1 the ,director shall include-- 7,a7 information disclosed under section #bfa;,a of title #ce1 ,united ,states ,code1 as added by section #aj1 and section #bha;,b7b7 of title #ce1 ,united ,states ,code1 as added by section #c2 and 7,b7 any other information the ,director determines to be relevant4 7#b7 ,format ,in order to promote accessibility for the public1 the information described in paragraph 7#a7 shall be searchable by patent number1 patent art area1 and entity4 #ac4 ,studies on patent transactions1 quality1 and examination 7a7 ,study on ,secondary ,market ,oversight for ,patent ,transactions ,to ,promote ,transparency and ,ethical ,business ,practices 7#a7 ,study required ,the ,director1 in consultation with the ,secretary of ,commerce1 the ,secretary of the ,treasury1 the ,chairman of the ,securities and ,exchange ,commission1 the heads of other relevant agencies1 and interested parties1 shall1 using existing resources of the ,office1 conduct a study-- 7,a7 to develop legislative recommendations to ensure greater transparency and accountability in patent transactions occurring on the secondary market2 7,b7 to examine the economic impact that the patent secondary market has on the ,united ,states2 7,c7 to examine licensing and other oversight requirements that may be placed on the patent secondary market1 including on the participants in such markets1 to ensure that the market is a level playing field and that brokers in the market have the requisite expertise and adhere to ethical business practices2 and 7,d7 to examine the requirements placed on other markets4 7#b7 ,report on study ,not later than #ah months after the date of enactment of this ,act1 the ,director shall submit a report to the ,committee on the ,judiciary of the ,house of ,representatives and the ,committee on the ,judiciary of the ,senate on the findings and recommendations of the ,director from the study required under paragraph 7#a74 7b7 ,study on ,patent ,small ,claims procedures 7#a7 ,study ,required 7,a7 ,in general ,the ,director of the ,administrative ,office of the ,united ,states ,courts1 in consultation with the ,director of the ,federal ,judicial ,center and the ,united ,states ,patent and ,trademark ,office1 shall1 using existing resources1 conduct a study to examine the idea of developing a pilot program for patent small claims procedures in certain judicial districts within the existing patent pilot program mandated by ,public ,law #aaa-cdi4 7,b7 ,contents of study ,the study under subparagraph 7,a7 shall examine-- 7i7 the necessary criteria for using small claims procedures2 7ii7 the costs that would be incurred for establishing1 maintaining1 and operating such a pilot program2 and 7iii7 the steps that would be taken to ensure that the procedures used in the pilot program are not misused for abusive patent litigation4 7#b7 ,report on study ,not later than #a year after the date of enactment of this ,act1 the ,director of the ,administrative ,office of the ,united ,states ,courts shall submit a report to the ,committee on the ,judiciary of the ,house of ,representatives and the ,committee on the ,judiciary of the ,senate on the findings and recommendations of the ,director of the ,administrative ,office from the study required under paragraph 7#a74 7c7 ,study on business method patent quality 7#a7 ,,gao study ,the ,comptroller ,general of the ,united ,states shall1 using existing resources1 conduct a study on the volume and nature of litigation involving business method patents4 7#b7 ,contents of study ,the study required under paragraph 7#a7 shall focus on examining the quality of business method patents asserted in suits alleging patent infringement1 and may include an examination of any other areas that the ,comptroller ,general determines to be relevant4 7#c7 ,report to congress ,not later than #a year after the date of enactment of this ,act1 the ,comptroller ,general shall submit to the ,committee on the ,judiciary of the ,house of ,representatives and the ,committee on the ,judiciary of the ,senate a report on the findings and recommendations from the study required by this subsection1 including recommendations for any changes to laws or regulations that the ,comptroller ,general considers appropriate on the basis of the study4 #ad4 ,technical corrections to the ,leahy-,smith ,america ,invents ,act and other improvements 7a7 ,section #cbe7;e77#b7 of title #ce1 ,united ,states ,code1 is amended by striking or reasonably could have raised4 7b7 ,,pto patent reviews 7#a7 ,clarification 7,a7 ,scope of prior art ,section #ah7;a77#a77;,c77i7 of the ,leahy-,smith ,america ,invents ,act 7#ce ,u4,s4,c4 #cba note7 is amended by striking section #ajb7;a7 and inserting subsection 7a7 or 7e7 of section #ajb4 7,b7 ,effective date ,the amendment made by subparagraph 7,a7 shall take effect on the date of the enactment of this ,act and shall apply to any proceeding pending on1 or filed on or after1 such date of enactment4 7#b7 ,authority to waive fee ,subject to available resources1 the ,director may waive payment of a filing fee for a transitional proceeding described under section #ah7;a7 of the ,leahy-,smith ,america ,invents ,act 7#ce ,u4,s4,c4 #cba note74 7c7 ,technical corrections 7#a7 ,novelty 7,a7 ,amendment ,section #ajb7;b77#a77;,a7 of title #ce1 ,united ,states ,code1 is amended by striking the inventor or joint inventor or by another and inserting the inventor or a joint inventor or another4 7,b7 ,effective date ,the amendment made by subparagraph 7,a7 shall be effective as if included in the amendment made by section #c7;b77#a7 of the ,leahy-,smith ,america ,invents ,act 7,public ,law #aab-bi74 7#b7 ,inventor's oath or declaration 7,a7 ,requirement to execute ,section #aae7;a7 of title #ce1 ,united ,states ,code1 is amended in the second sentence by striking shall execute and inserting may be required by the ,director to execute4 7,b7 ,effective date ,the amendment made by subparagraph 7,a7 shall be effective as if included in the amendment made by section #d7;a77#a7 of the ,leahy-,smith ,america ,invents ,act 7,public ,law #aab-bi74 7#c7 ,assignee filers 7,a7 ,benefit of earlier filing date2 right of priority ,section #aai7;e77#a7 of title #ce1 ,united ,states ,code1 is amended1 in the first sentence1 by striking by an inventor or inventors named and inserting that names the inventor or a joint inventor4 7,b7 ,benefit of earlier filing date in the united states ,section #abj of title #ce1 ,united ,states ,code1 is amended1 in the first sentence1 by striking names an inventor or joint inventor and inserting names the inventor or a joint inventor4 7,c7 ,effective date ,the amendments made by this paragraph shall take effect on the date of the enactment of this ,act and shall apply to any patent application1 and any patent issuing from such application1 that is filed on or after ,september #af1 #bjab4 7#d7 ,derived patents 7,a7 ,amendment ,section #bia7;b7 of title #ce1 ,united ,states ,code1 is amended by striking or joint inventor and inserting or a joint inventor4 7,b7 ,effective date ,the amendment made by subparagraph 7,a7 shall be effective as if included in the amendment made by section #c7;h77#a7 of the ,leahy-,smith ,america ,invents ,act 7,public ,law #aab-bi74 7#e7 ,specification ,notwithstanding section #d7;e7 of the ,leahy-,smith ,america ,invents ,act 7,public ,law #aab-bi2 #abe ,stat4 #big71 the amendments made by subsections 7c7 and 7d7 of section #d of such ,act shall apply to any proceeding or matter that is pending on1 or filed on or after1 the date of the enactment of this ,act4 7#f7 ,time limit for commencing misconduct proceedings 7,a7 ,amendment ,the fourth sentence of section #cb of title #ce1 ,united ,states ,code1 is amended by striking #a year and inserting #ah months4 7,b7 ,effective date ,the amendment made by this paragraph shall take effect on the date of the enactment of this ,act and shall apply to any action in which the ,office files a complaint on or after such date of enactment4 7#g7 ,patent owner response 7,a7 ,conduct of inter partes review ,paragraph 7#h7 of section #caf7;a7 of title #ce1 ,united ,states ,code1 is amended by striking the petition under section #cac and inserting the petition under section #caa4 7,b7 ,conduct of post-grant review ,paragraph 7#h7 of section #cbf7;a7 of title #ce1 ,united ,states ,code1 is amended by striking the petition under section #cbc and inserting the petition under section #cba4 7,c7 ,effective date ,the amendments made by this paragraph shall take effect on the date of the enactment of this ,act4 7d7 ,management of the ,united ,states ,patent and ,trademark ,office 7#a7 ,in general ,section #c7;b77#a7 of title #ce1 ,united ,states ,code1 is amended in the first sentence-- 7,a7 by striking be vested with the authority to act in the capacity of the and inserting serve as ,acting12 and 7,b7 by inserting before the period or in the event of a vacancy in the office of the ,director44 7#b7 ,effective date ,the amendments made by paragraph 7#a7 shall take effect on the date of enactment of this ,act and shall apply with respect to appointments and vacancies occurring before1 on1 or after the date of enactment of this ,act4 #ae4 ,effective date ,except as otherwise provided in this ,act1 the provisions of this ,act shall take effect on the date of enactment of this ,act1 and shall apply to any patent issued1 or any action filed1 on or after that date4 #af4 ,severability ,if any provision of this ,act1 or an amendment made by this ,act1 or the application of such provision or amendment to any person or circumstance1 is held to be invalid1 the remainder of this ,act1 or an amendment made by this ,act1 or the application of such provision to other persons or circumstances1 shall not be affected4