,,ii #aafth ,,congress #ast ,session ,s4 #bjhb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #aj1 #bjai,mr4 ,coons 7for himself1 ,mr4 ,cotton1 ,mr4 ,durbin1 ,ms4 ,hirono1 ,mr4 ,kennedy1 and ,mr4 ,cramer7 introduced the following bill2 which was read twice and referred to the ,committee on the ,judiciary ,a ,,bill ,to strengthen the position of the ,united ,states as the world's leading innovator by amending title #ce1 ,united ,states ,code1 to protect the property rights of the inventors that grow the country's economy4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,support ,technology and ,research for ,our ,nation's ,growth and ,economic ,resilience ,patents ,act of #bjai or the ,,stronger ,patents ,act of #bjai4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,,title ,i--,,stronger ,patents ,act ,sec4 #aja4 ,findings4 ,sec4 #ajb4 ,inter partes review4 ,sec4 #ajc4 ,post-grant review4 ,sec4 #ajd4 ,composition of post-grant review and inter partes review panels4 ,sec4 #aje4 ,reexamination of patents4 ,sec4 #ajf4 ,restoration of patents as property rights4 ,sec4 #ajg4 ,elimination of ,,uspto fee diversion4 ,sec4 #ajh4 ,institutions of higher education4 ,sec4 #aji4 ,assisting small businesses in the ,u4,s4 patent system4 ,,title ,,ii--,targeting ,rogue and ,opaque ,letters ,sec4 #bja4 ,definitions4 ,sec4 #bjb4 ,unfair or deceptive acts or practices in connection with the assertion of a ,united ,states patent4 ,sec4 #bjc4 ,enforcement by ,federal ,trade ,commission4 ,sec4 #bjd4 ,preemption of ,state laws on patent demand letters and enforcement by ,state attorneys general4 ,i ,,stronger ,patents ,act #aja4 ,findings ,congress finds that-- 7#a7 the patent property rights enshrined in the ,constitution of the ,united ,states provide the foundation for the exceptional innovation environment in the ,united ,states2 7#b7 strong patent rights encourage ,united ,states inventors to invest their resources in creating new inventions2 7#c7 patent protection has led to patient cures1 positive changes to the standard of living for all people in the ,united ,states1 and improvements to the agricultural1 telecommunications1 and electronics industries1 among others2 7#d7 the ,united ,states patent system is an essential part of the country's economic success2 7#e7 strong patent protection improves the chances of success for small companies and increases their chances of securing financing from investors2 7#f7 intellectual property-intensive industries in the ,united ,states generate tens of millions of jobs for individuals in the ,united ,states2 7#g7 intellectual property-intensive industries in the ,united ,states account for more than one-third of the country's gross domestic product2 7#h7 in the highly competitive global economy1 the ,united ,states needs to uphold strong patent protections to maintain its position as the world's premier innovative country2 7#i7 ,congress last enacted comprehensive reforms of the patent system in #bjaa2 7#aj7 unintended consequences of the comprehensive #bjaa reform of patent laws are continuing to become evident1 including the strategic filing of post-grant review proceedings to depress stock prices and extort settlements1 the filing of repetitive petitions for inter partes and post-grant reviews that have the effect of harassing patent owners1 and the unnecessary duplication of work by the district courts of the ,united ,states and the ,patent ,trial and ,appeal ,board2 7#aa7 the ,judicial ,conference of the ,united ,states has made significant revisions to rules governing pleadings and discovery in the ,federal ,rules of ,civil ,procedure1 which took effect in ,december #bjae2 7#ab7 the ,supreme ,court issued rulings in ,octane ,fitness1 ,,llc v4 ,icon ,health ,fitness1 ,inc41 #acd ,s4,ct4 #agdi 7#bjad7 and ,highmark ,inc4 v4 ,allcare ,health ,management ,system1 ,inc41 #acd ,s4,ct4 #agdd 7#bjad7 that significantly reduced the burden on an alleged infringer to recover attorney fees from the patent owner1 and increased the incidence of fees shifted to the losing party2 and 7#ac7 efforts by ,congress to reform the patent system without careful scrutiny create a serious risk of making it more costly and difficult for legitimate innovators to protect their patents from infringement1 thereby weakening ,united ,states companies and the ,united ,states economy4 #ajb4 ,inter partes review 7a7 ,claim construction ,section #caf7;a7 of title #ce1 ,united ,states ,code1 is amended-- 7#a7 in paragraph 7#i71 by inserting after substitute claims1 the following3 including the standard for how substitute claims should be construed12 7#b7 in paragraph 7#ab71 by striking 2 and and inserting a semicolon2 7#c7 in paragraph 7#ac71 by striking the period at the end and inserting 2 and2 and 7#d7 by adding at the end the following new paragraph3 7#ad7 providing that for all purposes under this chapter-- 7,a7 each challenged claim of a patent1 or claim proposed in a motion to amend1 shall be construed as the claim would be construed under section #bhb7;b7 in an action to invalidate a patent1 including by construing each such claim in accordance with-- 7i7 the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains2 and 7ii7 the prosecution history pertaining to the patent2 and 7,b7 if a court has previously construed a challenged claim of a patent or a challenged claim term in a civil action to which the patent owner was a party1 the ,office shall consider that claim construction4 4 7b7 ,burden of proof ,section #caf7;e7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7e7 ,evidentiary standards 7#a7 ,presumption of validity ,the presumption of validity under section #bhb7;a7 shall apply to a previously issued claim that is challenged during an inter partes review under this chapter4 7#b7 ,burden of proof ,in an inter partes review instituted under this chapter1 the petitioner shall have the burden of proving a proposition of unpatentability of a previously issued claim by clear and convincing evidence4 4 7c7 ,standing ,section #caa of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7d7 ,persons that may petition 7#a7 ,definition ,in this subsection1 the term charged with infringement means a real and substantial controversy regarding infringement of a patent exists such that the petitioner would have standing to bring a declaratory judgment action in ,federal court4 7#b7 ,necessary conditions ,a person may not file with the ,office a petition to institute an inter partes review of a patent unless the person1 or a real party in interest or privy of the person1 has been-- 7,a7 sued for infringement of the patent2 or 7,b7 charged with infringement under the patent4 4 7d7 ,limitation on reviews ,section #cad7;a7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7a7 ,threshold 7#a7 ,likelihood of prevailing ,subject to paragraph 7#b71 the ,director may not authorize an inter partes review to be instituted unless the ,director determines that the information presented in the petition filed under section #caa and any response filed under section #cac show that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition4 7#b7 ,previous institution ,the ,director may not authorize an inter partes review to be instituted on a claim challenged in a petition if the ,director has previously instituted an inter partes review or post-grant review with respect to that claim4 4 7e7 ,reviewability of institution decisions ,section #cad of title #ce1 ,united ,states ,code1 is amended by striking subsection 7d7 and inserting the following3 7d7 ,no appeal 7#a7 ,nonappealable determinations 7,a7 ,threshold determination ,a determination by the ,director on the reasonable likelihood that the petitioner will prevail under subsection 7a77#a7 shall be final and nonappealable4 7,b7 ,denials of institution ,a determination by the ,director not to institute an inter partes review under this section shall be final and nonappealable4 7#b7 ,appealable determinations ,any aspect of a determination by the ,director to institute an inter partes review under this section1 other than a determination described in paragraph 7#a77;,a71 may be reviewed during an appeal of a final written decision issued under section #cah7;a74 4 7f7 ,eliminating repetitive proceedings ,section #cae7;e7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7e7 ,estoppel 7#a7 ,proceedings before the ,office ,a person petitioning for an inter partes review of a claim in a patent under this chapter1 or the real party in interest or privy of the petitioner1 may not petition for a subsequent inter partes review before the ,office with respect to that patent on any ground that the petitioner raised or reasonably could have raised in the initial petition1 unless1 after the filing of the initial petition1 the petitioner1 or the real party in interest or privy of the petitioner1 is charged with infringement of additional claims of the patent4 7#b7 ,civil actions and other proceedings ,a person petitioning for an inter partes review of a claim in a patent under this chapter that results in an institution decision under section #cad1 or the real party in interest or privy of the petitioner1 may not assert either in a civil action arising in whole or in part under section #acch of title #bh or in a proceeding before the ,international ,trade ,commission under section #ccg of the ,tariff ,act of #aicj 7#ai ,u4,s4,c4 #accg7 that the claim is invalid based on section #ajb or #ajc of this title1 unless the invalidity argument is based on allegations that the claimed invention was in public use1 on sale1 or otherwise available to the public before the effective filing date of the claimed invention4 4 7g7 ,real party in interest 7#a7 ,clarification of definition ,section #cae of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7f7 ,petitioner ,for purposes of this chapter1 a person that directly or through an affiliate1 subsidiary1 or proxy makes a financial contribution to the preparation for1 or conduct during1 an inter partes review on behalf of the petitioner shall be considered a real party in interest of the petitioner4 4 7#b7 ,discovery of real party in interest ,section #caf7;a77#e7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7#e7 setting forth standards and procedures for discovery of relevant evidence1 including that such discovery shall be limited to-- 7,a7 the deposition of witnesses submitting affidavits or declarations2 7,b7 evidence identifying the petitioner's real parties in interest2 and 7,c7 what is otherwise necessary in the interest of justice2 4 7h7 ,priority of ,federal court validity determinations 7#a7 ,in general ,section #cae of title #ce1 ,united ,states ,code1 as amended by subsections 7f7 and 7g71 is further amended-- 7,a7 by redesignating subsections 7c7 through 7f7 as subsections 7d7 through 7g71 respectively2 and 7,b7 by inserting after subsection 7b7 the following new subsection3 7c7 ,federal court validity determinations 7#a7 ,institution barred ,an inter partes review of a patent claim may not be instituted if1 in a civil action arising in whole or in part under section #acch of title #bh or in a proceeding before the ,international ,trade ,commission under section #ccg of the ,tariff ,act of #aicj 7#ai ,u4,s4,c4 #accg71 a court has entered a final judgment-- 7,a7 that decides the validity of the patent claim with respect to section #ajb or #ajc2 and 7,b7 from which an appeal under section #abie of title #bh may be taken1 or from which an appeal under section #abie of title #bh was previously available but is no longer available4 7#b7 ,stay of proceedings 7,a7 ,in general ,if1 in a civil action arising in whole or in part under section #acch of title #bh or in a proceeding before the ,international ,trade ,commission under section #ccg of the ,tariff ,act of #aicj 7#ai ,u4,s4,c4 #accg71 a court has entered a final judgment that decides the validity of a patent claim with respect to section #ajb or #ajc and from which an appeal under section #abie of title #bh may be taken1 the ,patent ,trial and ,appeal ,board shall stay any ongoing inter partes review of that patent claim pending a final decision4 7,b7 ,termination ,if the validity of a patent claim described in subparagraph 7,a7 is finally upheld by a court or the ,international ,trade ,commission1 as applicable1 the ,patent ,trial and ,appeal ,board shall terminate the inter partes review4 4 7#b7 ,technical and conforming amendments ,chapter #ca of title #ce1 ,united ,states ,code1 is amended-- 7,a7 in section #cae7;b71 by striking subsection 7c7 and inserting subsection 7d72 7,b7 in section #caf7;a7-- 7i7 in paragraph 7#aa71 by striking section #cae7;c7 and inserting section #cae7;d72 and 7ii7 in paragraph 7#ab71 by striking section #cae7;c7 and inserting section #cae7;d72 and 7,c7 in section #cag7;a71 by striking section #cae7;e7 and inserting section #cae7;f74 #ajc4 ,post-grant review 7a7 ,claim construction ,section #cbf7;a7 of title #ce1 ,united ,states ,code1 is amended-- 7#a7 in paragraph 7#i71 by inserting after substitute claims1 the following3 including the standard for how substitute claims should be construed12 7#b7 in paragraph 7#aa71 by striking 2 and and inserting a semicolon2 7#c7 in paragraph 7#ab71 by striking the period at the end and inserting 2 and2 and 7#d7 by adding at the end the following new paragraph3 7#ac7 providing that for all purposes under this chapter-- 7,a7 each challenged claim of a patent shall be construed as the claim would be construed under section #bhb7;b7 in an action to invalidate a patent1 including by construing each challenged claim of the patent in accordance with-- 7i7 the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains2 and 7ii7 the prosecution history pertaining to the patent2 and 7,b7 if a court has previously construed a challenged claim of a patent or a challenged claim term in a civil action to which the patent owner was a party1 the ,office shall consider that claim construction4 4 7b7 ,burden of proof ,section #cbf7;e7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7e7 ,evidentiary standards 7#a7 ,presumption of validity ,the presumption of validity under section #bhb7;a7 shall apply to a previously issued claim that is challenged during a proceeding under this chapter4 7#b7 ,burden of proof ,in a post-grant review instituted under this chapter1 the petitioner shall have the burden of proving a proposition of unpatentability of a previously issued claim by clear and convincing evidence4 4 7c7 ,standing ,section #cba of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7d7 ,persons that may petition 7#a7 ,definition ,in this subsection1 the term charged with infringement means a real and substantial controversy regarding infringement of a patent exists such that the petitioner would have standing to bring a declaratory judgment action in ,federal court4 7#b7 ,necessary conditions ,a person may not file with the ,office a petition to institute a post-grant review of a patent unless the person1 or a real party in interest or privy of the person1 demonstrates-- 7,a7 a reasonable possibility of being-- 7i7 sued for infringement of the patent2 or 7ii7 charged with infringement under the patent2 or 7,b7 a competitive harm related to the validity of the patent4 4 7d7 ,limitation on reviews ,section #cbd7;a7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7a7 ,threshold 7#a7 ,likelihood of prevailing ,subject to paragraph 7#b71 the ,director may not authorize a post-grant review to be instituted unless the ,director determines that the information presented in the petition filed under section #cba1 if such information is not rebutted1 would demonstrate that it is more likely than not that at least one of the claims challenged in the petition is unpatentable4 7#b7 ,previous institution ,the ,director may not authorize a post-grant review to be instituted on a claim challenged in a petition if the ,director has previously instituted an inter partes review or post-grant review with respect to that claim4 4 7e7 ,reviewability of institution decisions ,section #cbd of title #ce1 ,united ,states ,code1 is amended by striking subsection 7e7 and inserting the following3 7e7 ,no appeal 7#a7 ,non-appealable determinations 7,a7 ,threshold determination ,a determination by the ,director on the likelihood that the petitioner will prevail under subsection 7a77#a7 shall be final and nonappealable4 7,b7 ,exercise of discretion ,a determination by the ,director not to institute a post-grant review under this section shall be final and nonappealable4 7#b7 ,appealable determinations ,any aspect of a determination by the ,director to institute a post-grant review under this section1 other than a determination described in paragraph 7#a77;,a71 may be reviewed during an appeal of a final written decision issued under section #cbh7;a74 4 7f7 ,eliminating repetitive proceedings ,section #cbe7;e77#a7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7#a7 ,proceedings before the ,office ,a person petitioning for a post-grant review of a claim in a patent under this chapter1 or the real party in interest or privy of the petitioner1 may not petition for a subsequent post-grant review before the ,office with respect to that patent on any ground that the petitioner raised or reasonably could have raised in the initial petition1 unless1 after the filing of the initial petition1 the petitioner1 or the real party in interest or privy of the petitioner1 is charged with infringement of additional claims of the patent4 4 7g7 ,real party in interest 7#a7 ,clarification of definition ,section #cbe of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7g7 ,real party in interest ,for purposes of this chapter1 a person that directly or through an affiliate1 subsidiary1 or proxy1 makes a financial contribution to the preparation for1 or conduct during1 a post-grant review on behalf of the petitioner shall be considered a real party in interest of the petitioner4 4 7#b7 ,discovery of real party in interest ,section #cbf7;a77#e7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7#e7 setting forth standards and procedures for discovery of relevant evidence1 including that such discovery shall be limited to-- 7,a7 the deposition of witnesses submitting affidavits or declarations2 7,b7 evidence identifying the petitioner's real parties in interest2 and 7,c7 what is otherwise necessary in the interest of justice2 4 7h7 ,priority of ,federal court validity determinations 7#a7 ,in general ,section #cbe of title #ce1 ,united ,states ,code1 as amended by subsections 7f7 and 7g71 is further amended-- 7,a7 by redesignating subsections 7c7 through 7g7 as subsections 7d7 through 7h71 respectively2 and 7,b7 by inserting after subsection 7b7 the following new subsection3 7c7 ,federal court validity determinations 7#a7 ,institution barred ,a post-grant review of a patent claim may not be instituted if1 in a civil action arising in whole or in part under section #acch of title #bh or in a proceeding before the ,international ,trade ,commission under section #ccg of the ,tariff ,act of #aicj 7#ai ,u4,s4,c4 #accg71 a court has entered a final judgment-- 7,a7 that decides the validity of the patent claim with respect to section #ajb or #ajc2 and 7,b7 from which an appeal under section #abie of title #bh may be taken1 or from which an appeal under section #abie of title #bh was previously available but is no longer available4 7#b7 ,stay of proceedings 7,a7 ,in general ,if1 in a civil action arising in whole or in part under section #acch of title #bh or in a proceeding before the ,international ,trade ,commission under section #ccg of the ,tariff ,act of #aicj 7#ai ,u4,s4,c4 #accg71 a court has entered a final judgment that decides the validity of a patent claim with respect to section #ajb or #ajc and from which an appeal under section #abie of title #bh may be taken1 the ,patent ,trial and ,appeal ,board shall stay any ongoing post-grant review of that patent claim pending a final decision4 7,b7 ,termination ,if the validity of a patent claim described in subparagraph 7,a7 is finally upheld by a court or the ,international ,trade ,commission1 as applicable1 the ,patent ,trial and ,appeal ,board shall terminate the post-grant review4 4 7#b7 ,technical and conforming amendments ,chapter #cb of title #ce1 ,united ,states ,code1 is amended-- 7,a7 in section #cbf7;a77#aa71 by striking section #cbe7;c7 and inserting section #cbe7;d72 and 7,b7 in section #cbg7;a71 by striking section #cbe7;e7 and inserting section #cbe7;f74 #ajd4 ,composition of post-grant review and inter partes review panels ,section #f7;c7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7c7 #c-,member panels 7#a7 ,in general ,each appeal1 derivation proceeding1 post-grant review1 and inter partes review shall be heard by at least #c members of the ,patent ,trial and ,appeal ,board1 who shall be designated by the ,director4 7#b7 ,ineligibility to hear review ,a member of the ,patent ,trial and ,appeal ,board who participates in the decision to institute a post-grant review or an inter partes review of a patent shall be ineligible to hear the review4 7#c7 ,rehearings ,only the ,patent ,trial and ,appeal ,board may grant rehearings4 4 #aje4 ,reexamination of patents 7a7 ,request for reexamination ,section #cjb of title #ce1 ,united ,states ,code1 is amended to read as follows3 #cjb4 ,request for reexamination ,any person at any time may file a request for reexamination by the ,office of any claim of a patent on the basis of any prior art cited under the provisions of section #cja4 ,the request must be in writing and must be accompanied by payment of a reexamination fee established by the ,director pursuant to the provisions of section #da4 ,the request must identify all real parties in interest and certify that reexamination is not barred under section #cjc7;d74 ,the request must set forth the pertinency and manner of applying cited prior art to every claim for which reexamination is requested4 ,unless the requesting person is the owner of the patent1 the ,director promptly will send a copy of the request to the owner of record of the patent4 4 7b7 ,reexamination barred by civil action ,section #cjc of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7d7 ,an ex parte reexamination may not be instituted if the request for reexamination is filed more than #a year after the date on which the requester or a real party in interest or privy of the requester is served with a complaint alleging infringement of the patent4 4 #ajf4 ,restoration of patents as property rights ,section #bhc of title #ce1 ,united ,states ,code1 is amended-- 7#a7 by striking ,the several courts and inserting the following3 7a7 ,in general ,the several courts 2 and 7#b7 by adding at the end the following3 7b7 ,injunction ,upon a finding by a court of infringement of a patent not proven invalid or unenforceable1 the court shall presume that-- 7#a7 further infringement of the patent would cause irreparable injury2 and 7#b7 remedies available at law are inadequate to compensate for that injury4 4 #ajg4 ,elimination of ,,uspto fee diversion 7a7 ,funding ,section #db of title #ce1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a71 by striking ,all fees and inserting ,fees for service by ,,pto4--,all fees2 7#b7 in subsection 7b7-- 7,a7 by striking ,all fees and inserting ,innovation promotion fund4--,all fees2 and 7,b7 by striking ,patent and ,trademark ,office ,appropriation ,account and inserting ,united ,states ,patent and ,trademark ,office ,innovation ,promotion ,fund2 7#c7 in subsection 7c7-- 7,a7 by striking 7c77#a7 and all that follows through the end of paragraph 7#a7 and inserting the following3 7c7 ,collection of funds for ,,pto activities4-- 7#a7 ,in general ,fees authorized in this title or any other ,act to be charged or established by the ,director shall be collected by the ,director and shall be available to the ,director until expended to carry out the activities of the ,patent and ,trademark ,office4 2 7,b7 by striking paragraph 7#b72 7,c7 by striking 7#c77;,a7 ,any and inserting the following3 7#b7 ,use of fees4-- 7,a7 ,patent fees ,any 2 and 7,d7 by striking 7,b7 ,any fees that are collected under section #ca of the ,trademark ,act of #aidf and inserting the following3 7,b7 ,trademark fees ,any fees that are collected under section #ca of the ,trademark ,act of #aidf 7as defined in subsection 7d77 7#ae ,u4,s4,c4 #aaac7 2 7#d7 by redesignating subsections 7d7 and 7e7 as subsections 7e7 and 7f71 respectively2 7#e7 by inserting after subsection 7c7 the following new subsection3 7d7 ,revolving fund 7#a7 ,definitions ,in this subsection-- 7,a7 the term ,fund means the ,united ,states ,patent and ,trademark ,office ,innovation ,promotion ,fund established under paragraph 7#b72 and 7,b7 the term ,trademark ,act of #aidf means the ,act entitled ,an ,act to provide for the registration and protection of trademarks used in commerce1 to carry out the provisions of certain international conventions1 and for other purposes1 approved ,july #e1 #aidf 7#ae ,u4,s4,c4 #ajea et seq47 7commonly referred to as the ,trademark ,act of #aidf or the ,lanham ,act74 7#b7 ,establishment ,there is established in the ,treasury a revolving fund to be known as the ,united ,states ,patent and ,trademark ,office ,innovation ,promotion ,fund4 7#c7 ,derivation of resources ,there shall be deposited into the ,fund any fees collected under-- 7,a7 this title2 or 7,b7 the ,trademark ,act of #aidf4 7#d7 ,expenses ,amounts deposited into the ,fund under paragraph 7#c7 shall be available1 without fiscal year limitation1 to cover-- 7,a7 all expenses to the extent consistent with the limitation on the use of fees set forth in subsection 7c71 including all administrative and operating expenses1 determined in the discretion of the ,director to be ordinary and reasonable1 incurred by the ,director for the continued operation of all services1 programs1 activities1 and duties of the ,office relating to patents and trademarks1 as such services1 programs1 activities1 and duties are described under-- 7i7 this title2 and 7ii7 the ,trademark ,act of #aidf2 and 7,b7 all expenses incurred pursuant to any obligation1 representation1 or other commitment of the ,office4 2 7#f7 in subsection 7e71 as redesignated1 by striking ,the ,director and inserting ,refunds4--,the ,director2 and 7#g7 in subsection 7f71 as redesignated1 by striking ,the ,secretary and inserting ,report4--,the ,secretary4 7b7 ,effective date2 transfer from and termination of obsolete funds 7#a7 ,effective date ,the amendments made by subsection 7a7 shall take effect on the first day of the first fiscal year that begins on or after the date of the enactment of this ,act4 7#b7 ,remaining balances ,on the effective date described in paragraph 7#a71 there shall be deposited in the ,united ,states ,patent and ,trademark ,office ,innovation ,promotion ,fund established under section #db7;d77#b7 of title #ce1 ,united ,states ,code 7as added by subsection 7a771 any available unobligated balances remaining in the ,patent and ,trademark ,office ,appropriation ,account1 and in the ,patent and ,trademark ,fee ,reserve ,fund established under section #db7;c77#b7 of title #ce1 ,united ,states ,code1 as in effect on the date before the effective date4 7#c7 ,termination of ,reserve ,fund ,upon the payment of all obligated amounts in the ,patent and ,trademark ,fee ,reserve ,fund under paragraph 7#b71 the ,patent and ,trademark ,fee ,reserve ,fund shall be terminated4 #ajh4 ,institutions of higher education ,section #abc7;d7 of title #ce1 ,united ,states ,code1 is amended to read as follows3 7d7 ,institutions of higher education ,for purposes of this section1 a micro entity shall include an applicant who certifies that-- 7#a7 the applicant's employer1 from which the applicant obtains the majority of the applicant's income1 is an institution of higher education as defined in section #aja7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja7;a772 7#b7 the applicant has assigned1 granted1 conveyed1 or is under an obligation by contract or law1 to assign1 grant1 or convey1 a license or other ownership interest in the particular applications to such an institution of higher education2 7#c7 the applicant is such an institution of higher education2 or 7#d7 the applicant is an organization described in section #eja7;c77#c7 of the ,internal ,revenue ,code of #aihf and exempt from taxation under section #eja7;a7 of such ,code that holds title to patents and patent applications on behalf of such an institution of higher education for the purpose of facilitating commercialization of the technologies of the patents and patent applications4 4 #aji4 ,assisting small businesses in the ,u4,s4 patent system 7a7 ,definition ,in this section1 the term small business concern has the meaning given the term in section #c of the ,small ,business ,act 7#ae ,u4,s4,c4 #fcb74 7b7 ,small ,business ,administration report ,not later than #a year after the date of the enactment of this ,act1 the ,small ,business ,administration1 using existing resources1 shall submit to the ,committee on ,small ,business and ,entrepreneurship of the ,senate and the ,committee on ,small ,business of the ,house of ,representatives a report analyzing the impact of-- 7#a7 patent ownership by small business concerns2 and 7#b7 civil actions against small business concerns arising under title #ce1 ,united ,states ,code1 relating to patent infringement4 7c7 ,expansion of patent pilot program in certain district courts 7#a7 ,in general ,not later than #ahj days after the date of the enactment of this ,act1 the ,director of the ,administrative ,office of the ,united ,states ,courts shall designate not fewer than #f of the district courts of the ,united ,states that are participating in the patent cases pilot program established under section #a of ,public ,law #aaa-cdi 7#bh ,u4,s4,c4 #acg note7 for the purpose of expanding that program to address special issues raised in patent infringement suits against individuals or small business concerns4 7#b7 ,procedures for small businesses ,not later than #b years after the date of the enactment of this ,act1 each district court designated under paragraph 7#a7 shall develop procedures for expediting cases in which an individual or small business concern is accused of patent infringement4 7#c7 ,participating judges 7,a7 ,in general ,in each district court designated under paragraph 7#a71 each district court judge participating in the patent cases pilot program established under section #a of ,public ,law #aaa-cdi may appoint #a additional law clerk or secretary in excess of any other limitation on the number of such employees4 7,b7 ,education and training ,the ,federal ,judicial ,center1 using existing resources1 shall prepare educational and training materials to assist district court judges described in subparagraph 7,a7 in developing expertise in patent and plant variety protection cases4 7#d7 ,funds ,there are authorized to be appropriated such sums as may be necessary to carry out paragraph 7#c77;,a74 7d7 ,free online availability of public search facility materials ,section #da7;i7 of title #ce1 ,united ,states ,code1 is amended by adding at the end the following new paragraph3 7#e7 ,free online availability of public search facility materials ,the ,director shall make available online and at no charge all patent and trademark information that is available at the ,public ,search ,facility of the ,office located in ,alexandria1 ,virginia1 including1 except to the extent that licenses with third-party contractors would make such provision financially unviable-- 7,a7 search tools and databases2 7,b7 informational materials2 and 7,c7 training classes and materials4 4 ,,ii ,targeting ,rogue and ,opaque ,letters #bja4 ,definitions ,in this title3 7#a7 ,bad faith ,the term bad faith means1 with respect to section #bjb7;a71 that the sender-- 7,a7 made knowingly false or knowingly misleading statements1 representations1 or omissions2 7,b7 made statements1 representations1 or omissions with reckless indifference as to the false or misleading nature of such statements1 representations1 or omissions2 or 7,c7 made statements1 representations1 or omissions with awareness of the high probability of the statements1 representations1 or omissions to deceive and the sender intentionally avoided the truth4 7#b7 ,commission ,the term ,commission means the ,federal ,trade ,commission4 7#c7 ,final determination ,the term final determination means1 with respect to the invalidity or unenforceability of a patent1 that the invalidity or unenforceability has been determined by a court of the ,united ,states or the ,united ,states ,patent and ,trademark ,office in a final decision that is unappealable or for which any opportunity for appeal is no longer available4 #bjb4 ,unfair or deceptive acts or practices in connection with the assertion of a ,united ,states patent 7a7 ,in general ,it shall be 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#a77 for a person1 in connection with the assertion of a ,united ,states patent1 to engage in a pattern or practice of sending written communications that state or represent that the recipients are or may be infringing1 or have or may have infringed1 the patent and bear liability or owe compensation to another1 if-- 7#a7 the sender of the communications1 in bad faith1 states or represents in the communications that-- 7,a7 the sender is a person with the right to license or enforce the patent at the time the communications are sent1 and the sender is not a person with such a right2 7,b7 a civil action asserting a claim of infringement of the patent has been filed against the recipient2 7,c7 a civil action asserting a claim of infringement of the patent has been filed against other persons2 7,d7 legal action for infringement of the patent will be taken against the recipient2 7,e7 the sender is the exclusive licensee of the patent asserted in the communications2 7,f7 persons other than the recipient purchased a license for the patent asserted in the communications2 7,g7 persons other than the recipient purchased a license1 and the sender does not disclose that such license is unrelated to the alleged infringement or the patent asserted in the communications2 7,h7 an investigation of the recipient's alleged infringement occurred2 or 7,i7 the sender or an affiliate of the sender previously filed a civil action asserting a claim of infringement of the patent based on the activity that is the subject of the written communication when the sender knew such activity was held1 in a final determination1 not to infringe the patent2 7#b7 the sender of the communications1 in bad faith1 seeks compensation for-- 7,a7 a patent claim that has been held to be unenforceable due to inequitable conduct1 invalid1 or otherwise unenforceable against the recipient1 in a final determination2 7,b7 activities undertaken by the recipient after expiration of the patent asserted in the communications2 or 7,c7 activity of the recipient that the sender knew was authorized1 with respect to the patent claim or claims that are the subject of the communications1 by a person with the right to license the patent2 or 7#c7 the sender of the communications1 in bad faith1 fails to include-- 7,a7 the identity of the person asserting a right to license the patent to1 or enforce the patent against1 the recipient1 including the identity of any parent entity and the ultimate parent entity of such person1 unless such person is a public company and the name of the public company is identified2 7,b7 an identification of at least one patent issued by the ,united ,states ,patent and ,trademark ,office alleged to have been infringed2 7,c7 an identification1 to the extent reasonable under the circumstances1 of at least one product1 service1 or other activity of the recipient that is alleged to infringe the identified patent2 7,d7 a description1 to the extent reasonable under the circumstances1 of how the product1 service1 or other activity of the recipient infringes an identified patent and patent claim2 or 7,e7 a name and contact information for a person the recipient may contact about the assertions or claims relating to the patent contained in the communications4 7b7 ,affirmative defense ,with respect to subsection 7a71 there shall be an affirmative defense that statements1 representations1 or omissions were not made in bad faith 7as defined in subparagraphs 7,b7 and 7,c7 of section #bja7a77 if the sender can demonstrate that such statements1 representations1 or omissions were mistakes made in good faith4 ,evidence that the sender in the usual course of business sends written communications that do not violate the provisions of this title shall be sufficient to demonstrate good faith4 ,good faith may also be demonstrated by other evidence4 7c7 ,rule of construction ,for purposes of sections #bjc and #bjd1 the commission of an act or practice that is declared under this section to be an unfair or deceptive act or practice within the meaning of section #e7;a77#a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#a77 shall be considered to be a violation of this section4 #bjc4 ,enforcement by ,federal ,trade ,commission 7a7 ,violation of rule ,a violation of section #bjb shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section #ah7;a77#a77;,b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #eg;a7a77#a77;,b774 7b7 ,powers of ,commission ,the ,commission shall enforce this title 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 title4 ,any person who violates section #bjb shall be subject to the penalties and entitled to the privileges and immunities provided in the ,federal ,trade ,commission ,act4 7c7 ,effect on other laws ,nothing in this title shall be construed in any way to limit or affect the authority of the ,commission under any other provision of law4 #bjd4 ,preemption of ,state laws on patent demand letters and enforcement by ,state attorneys general 7a7 ,preemption 7#a7 ,in general ,this title preempts any law1 rule1 regulation1 requirement1 standard1 or other provision having the force and effect of law of any ,state1 or political subdivision of a ,state1 expressly relating to the transmission or contents of communications relating to the assertion of patent rights4 7#b7 ,effect on other ,state laws ,except as provided in paragraph 7#a71 this title shall not be construed to preempt or limit any provision of any ,state law1 including any ,state consumer protection law1 any ,state law relating to acts of fraud or deception1 and any ,state trespass1 contract1 or tort law4 7b7 ,enforcement by ,state attorneys general 7#a7 ,in general ,in any case in which the attorney general of a ,state has reason to believe that an interest of the residents of that ,state has been adversely affected by any person who violates section #bjb1 the attorney general of the ,state may bring a civil action on behalf of such residents of the ,state in a district court of the ,united ,states of appropriate jurisdiction-- 7,a7 to enjoin further such violation by the defendant2 or 7,b7 to obtain civil penalties on behalf of recipients who suffered actual damages as a result of such violation4 7#b7 ,maximum civil penalty ,notwithstanding the number of actions which may be brought against a person under this subsection1 a person may not be liable for a total of more than #e1jjj1jjj for a series of related violations of section #bjb4 7#c7 ,intervention by the ,,ftc 7,a7 ,notice and intervention ,the attorney general of a ,state shall provide prior written notice of any action under paragraph 7#a7 to the ,commission and provide the ,commission with a copy of the complaint in the action1 except in any case in which such prior notice is not feasible1 in which case the attorney general shall serve such notice immediately upon instituting such action4 ,the ,commission shall have the right-- 7i7 to intervene in the action2 7ii7 upon so intervening1 to be heard on all matters arising therein2 and 7iii7 to file petitions for appeal4 7,b7 ,limitation on ,state action while ,federal action is pending ,if the ,commission has instituted a civil action for violation of section #bjb1 no ,state attorney general may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the ,commission for any violation of such section alleged in the complaint4 7#d7 ,construction ,for purposes of bringing any civil action under paragraph 7#a71 nothing in this title shall be construed to prevent the attorney general of a ,state from exercising the powers conferred on the attorney general by the laws of that ,state to-- 7,a7 conduct investigations2 7,b7 administer oaths or affirmations2 or 7,c7 compel the attendance of witnesses or the production of documentary and other evidence4