[Congressional Record: November 17, 1999 (House)] [Page H12586-H12609] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr17no99pt2-12] [[pp. H12586-H12609]] Congressional Record [[Continued from page H12585]] [[Page H12585]] and Thailand, the United States will negotiate concessions in the form of cash compensation, services, waiver of charges otherwise payable by the U.S. Government, and other items of value. During 1995 and 1996, the U.S. Government traded $66,620,000 in obsolete and surplus equipment to the Republic of Korea for a like sum in concessions. These concessions included reclamation of equipment that was deemed surplus or obsolete but for which a need subsequently arose, minus the costs associated with storing the items by the Republic of Korea. Additionally, the Republic of Korea demilitarized equipment at no cost to the United States and accepted older equipment such as the M48A5 tanks and the M-110A2 Howitzer from the stockpiles which were missing spares and no longer supportable. Section 1232 requires fair market value compensation to the United States for surplus and obsolete munitions. It also will relieve the U.S. Government of financial indebtedness for back storage costs and other stockpile maintenance costs, and save millions in cost avoidance to demilitarize, destroy, or retrograde the munitions and equipment back to the United States. Section 1232 requires the Department of Defense to submit a report to the Foreign Relations Committee of the Senate and the International Relations Committee of the House of Representatives at least 30 days prior to any transfer by the Department of Defense to the Republic of Korea or the Government of Thailand, detailing such transfer and the negotiated concessions for excess or obsolete equipment. A more comprehensive accounting of such concessions is expected than was previously provided pursuant to authority contained in the Fiscal Year 1994-95 Foreign Relations Authorization Act (Public Law 103-236). Defense Offsets Disclosure DEFENSE OFFSETS DISCLOSURE ACT OF 1999 Subtitle D of Title XII (sections 1241-1248) establishes United States policy on economic offsets, revises executive branch reporting requirements to Congress on such matters, expands the existing prohibition within the Arms Export Control Act relating to incentive payments, and establishes a National Commission on the Use of Offsets in Defense Trade to assess all aspects of the issue. The term ``offsets'' refers to the practice by foreign countries of demanding economic concessions as incentives to buy U.S. defense products. Notably, the demand by foreign nations for ``offsets'' in defense trade costs jobs and hurts the United States economy. However, it is also noted that, in this highly-competitive era, offsets may prove necessary. As long as foreign competitors are willing to offer economic concessions and incentives, U.S. companies risk losing important sales if they refuse to do likewise. The Defense Offsets Disclosure Act of 1999 adopts a prudent, business-friendly approach to a matter that is of extreme sensitivity to United States companies. While the long-term objective of Subtitle D is to curtail the use of offsets in defense trade, as a practical matter the Act simply establishes a process whereby the President should seek multilateral agreement on standards for the use of offsets and may, if he concurs with the findings of a commission of experts, commence negotiation of a treaty to address the issue. Automated Export System Relating to Export Information PROLIFERATION PREVENTION ENHANCEMENT ACT OF 1999 Subtitle E of Title XII (sections 1251-1256) creates an electronic filing system for shippers export declarations made to the U.S. Customs Service. Specifically, the Act mandates use of an automated export system that has been in existence since 1995, but which is only used by roughly 10 percent of the U.S. shipping community. Creation of an internet-based electronic system will enable the United States Government to track sophisticated efforts by nations to acquire sensitive technology. Currently, the United States is hampered in its efforts to track foreign acquisition efforts because the current export declaration process is paper-intensive, and because foreign nations seldom engage in ``one stop shopping.'' Indeed, many nations engage in diffuse procurement schemes to acquire components and materials from a wide array of sources. It is very difficult for those agencies within the executive branch tasked with monitoring foreign weapons programs to cull through mountains of paper to discover important patterns and linkages. The establishment of an internet system will assist in this effort. It also will, in the long-run, prove more ``business friendly'' than the current system. Section 1252 ensures that ``on-line'' help is given to those who must use the system, which must be secure and capable of handling the expected volume of information, and allows for printed hard copies of documents for business records. The Department of Commerce is expected to keep the Foreign Relations Committee of the Senate and the International Relations Committee of the House completely informed on the system's electronic architecture, and section 1254 requires the Department of Commerce to consult with other relevant agencies and submit a report on how the system can be optimized for law enforcement and nonproliferation purposes, consistent with the need to ensure the confidentiality of business information. Section 1255 also addresses concerns of the U.S. business community by eliminating current salary limitations for the Office of Defense Trade Controls of the Department of State. These limitations, imposed by the Office of Personnel Management, have severely impaired the ability of ODTC to recruit and retain licensing officers and other individuals. It is anticipated that the flexibility provided under section 1255, together with the additional resources made available to ODTC under section 1310, will enable the Department of State to improve the efficiency of ODTC. INTERNATIONAL ARMS SALES CODE OF CONDUCT ACT OF 1999 Subtitle F of Title XII (sections 1261 and 1262) directs the President to pursue negotiations to establish an international regime to promote global transparency with respect to arms transfers, and to limit, restrict, or prohibit arms transfers to countries that do not observe certain fundamentals of human liberty, peace, and international stability. While the President is given discretion in preparing a United States negotiating position, section 1262(b) enumerates criteria which should factor prominently. In order to maintain momentum for negotiation of an international code of conduct, section 1612(c) requires frequent reports detailing the progress made, if any, throughout such negotiations. Further, this section directs that the annual human rights report prepared pursuant to the Foreign Assistance Act describe the extent to which foreign nations meet the criteria established under section 1262(b). Transfer of Naval Vessels to Certain Foreign Countries AUTHORITY TO TRANSFER NAVAL VESSELS Section 1271 makes technical and conforming amendments to existing law relating to the transfer of naval vessels to foreign nations. Transfers of naval vessels, like the transfer of all military equipment, are subject to the jurisdiction of the Committee on Foreign Relations of the Senate and International Relations of the House of Representatives. However, for budgetary scoring reasons, the Congressional defense committees authorized a series of ship transfers under section 1018 of the National Defense Authorization Act for Fiscal Year 2000. That section authorizes the Secretary of the Navy to transfer naval vessels when, in fact, the authority should be given to the President in order to remain consistent with the requirements of the Foreign Assistance Act and the Arms Export Control Act. Section 1271 makes this minor technical amendment; it also transfers the authority to exempt naval vessel transfers from excess defense article limitations from the defense bill to the foreign affairs bill, which is the appropriate legislative vehicle for such an authority. Miscellaneous Provisions PUBLICATION OF ARMS SALES CERTIFICATIONS Section 1301 amends section 36 of the Arms Export Control Act to ensure that the full unclassified text of all certifications of arms sales, including foreign military sales, commercial sales, and the provision of defense services, is published in the Federal Register in a timely fashion. This section also requires that if portions of such certifications are classified, pursuant to section 36(b) and (c), the classified information be accompanied by a description of the damage to the national security that could be expected to result from public disclosure of the information. NOTIFICATION REQUIREMENTS FOR COMMERCIAL EXPORT OF ITEMS ON UNITED STATES MUNITIONS LIST Section 1302 requires U.S. commercial defense exporters to submit information to the Department of State which will help to improve arms export shipment data. This provision is necessary to address the long-standing problem of incomplete commercial arms delivery data. ENFORCEMENT OF ARMS EXPORT CONTROL ACT Section 1303 strengthens enforcement of civil violations of the Arms Export Control Act. The Department of State relies on the Department of Justice to prosecute criminal violations of the AECA, but lacks resources to pursue administrative proceedings relating to civil violations as vigorously as would be desired. In order to streamline the procedures in a manner that would continue to ensure a fair opportunity for persons and firms to represent their views, while simultaneously encouraging the viable and vigorous enforcement that is critical to protecting U.S. national security, the Secretary of State is provided with authority similar to that used to enforce other statutes, including the International Emergency Economic Powers Act, to assess civil penalties directly in accordance with regulations. It is expected that the Department of State will still be required to commence a civil action in order to recover such any such disputed penalties, thereby continuing to afford parties an opportunity to contest the assessment in court. It is further expected that the Department will provide draft regulations proposed to implement this section to the Committees on International Relations and Foreign Relations for review, thereby affording defense exporters the ability to provide input. Such regulations should permit the parties to explain their actions and make known their views fully through written submissions and provide ample opportunity for settlement. This provision is not intended to erode due process for defense exporters, and such exporters, under regulations promulgated to [[Page H12586]] implement this section, will be provided a fair and transparent process to understand and address any charges being asserted against them. VIOLATIONS RELATING TO MATERIAL SUPPORT TO TERRORISTS Section 1304 modifies section 38 of the Arms Export Control Act to ensure that the Office of Defense Trade Controls within the Department of State, which issues commercial defense export licenses, is fully informed of any person that is subject to an indictment or has been convicted of a violation of law regarding providing material support to terrorists. AUTHORITY TO CONSENT TO THIRD PARTY TRANSFER OF EX-U.S.S. BOWMAN COUNTY TO USS LST SHIP MEMORIAL, INC. Section 1305 enables a nonprofit veterans association to bring back to the United States from Greece a World War II Tank Landing Ship--the ex-U.S.S. Bowman County. This vessel will have its guns demilitarized prior to re-transfer and will be transformed into a movable museum that will dock at predetermined locations to teach children, and adults, about the crucial role played by tank landing ships and their crews during the Second World War. There is no more fitting a war memorial than a museum that is owned and operated by a group of its own veterans who are willing to dedicate their time to educating the citizens of the United States. ANNUAL MILITARY ASSISTANCE REPORT Section 1306 expands and clarifies the information relating to military assistance and military exports that the President is required to transmit to Congress each February 1, pursuant to section 655 of the Foreign Assistance Act of 1961. Currently, this report includes information about the International Military Education and Training (IMET) program, but not about other military education and training activities that the United States conducts with foreign countries. It is intended that future reports include information about activities under Title 10 of the U.S. Code, such as the Military-to-Military Contacts Program (MMCP) and the Joint Combined Exchange Training (JCET) program. This provision is not intended, however, to cover joint military exercises or NATO operations. Section 1306 also requires separate identification of defense articles furnished with the financial assistance of the U.S. government, such as Foreign Military Financing loans and U.S. government-backed loan guarantees. These items are currently grouped together with commercial sales. Finally, the provision requires that the report be published in unclassified form on the internet through the State Department. ANNUAL FOREIGN MILITARY TRAINING REPORT Section 1307 creates a new report to be jointly prepared by the Departments of State and Defense. The report is to cover all military training provided to foreign military personnel by the Departments of Defense and State. The provision also requires that the report be published in unclassified form on the State Department's internet website. SECURITY ASSISTANCE FOR THE PHILIPPINES Section 1308 establishes United States policy for the transfer of excess defense articles to the Philippines and authorizes $5,000,000 in foreign military financing for each of fiscal years 2000 and 2001. The section encourages the President to transfer to the Philippines, on a grant basis, UH-1H helicopters, A-4 aircraft, amphibious landing craft, and other naval vessels that become available under the excess defense articles program. Section 1309 is viewed as a way of expressing Congressional support for reinvigorating our security relationship with the Philippines. EFFECTIVE REGULATION OF SATELLITE EXPORT ACTIVITIES Section 1309 establishes a requirement for the Department of State to expedite the export of commercial communications satellites (and related equipment) to NATO and major non-NATO allies when appropriate. It is intended that the determination of appropriateness reside with the Department of State. Section 1309 establishes four criteria that should denote a satellite or satellite-related license as eligible for expedited consideration. However, section 1309 makes clear that U.S. national security considerations and U.S. obligations under the Missile Technology Control Regime are given priority in the evaluation of any license, regardless of its end-user or time-sensitive nature. Further, the provision makes clear that the Department of State is, at all times, to provide such time as is necessary for U.S. national security agencies to fully review a license. Section 1309 also seeks to expedite the licensing of United States Munitions List items across the board by applying additional resources to the Office of Defense Trade Controls within the Department of State. The provision authorizes $9,000,000 for ODTC for each of fiscal years 2000 and 2001. Additional resources are intended to be used to hire licensing officers and enforcement personnel, and to update ODTC's computer systems. Frequent, periodic briefings on ODTC plans and expenditures are expected and there is interest in progress toward implementing an internet-based filing and review system for Munitions List items. STUDY ON LICENSING PROCESS UNDER THE ARMS EXPORT CONTROL ACT Section 1310 requests that the Department of State undertake a highly-technical, highly-detailed analysis of the defense trade licensed by the Department of State. The broad scope of the information sought under section 1310 is intended to provide the Congress with information that will assist the committees of jurisdiction in working with the Department of State to improve the licensing process. REPORT CONCERNING PROLIFERATION OF SMALL ARMS Section 1311 requires the Department of State to complete an analysis of the global trade in small arms. The illicit transfer of small and light arms constitutes a source of global instability, but recognize that the monitoring of such trafficking is difficult. It is expected that Assistant Secretary for Verification and Compliance to be responsible for preparing portions of this report, including that relating to United States monitoring of the compliance of foreign governments with their commitments under international agreements. CONFORMING AMENDMENT Section 1312 is a conforming amendment to the Fiscal Year 1999 Defense Authorization Act. Specifically, section 1312 ensures that the Foreign Relations Committee of the Senate and the International Relations Committee of the House will be notified of developments in the pursuit of alternatives to anti-personnel land mines. SENSE OF CONGRESS LANGUAGE Sense of Senate or Sense of the Congress provisions approved in previous authorization bills were not included in the final bill. The House and Senate provisions, as passed, reflect the views of each of the respective houses of Congress. The conference agreement would enact the provisions of H.R. 3428, as introduced on November 17, 1999. The text of that bill follows: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. USE OF OPTION 1A AS PRICE STRUCTURE FOR CLASS I MILK UNDER CONSOLIDATED FEDERAL MILK MARKETING ORDERS. (a) Final Rule Defined.--In this section, the term ``final rule'' means the final rule for the consolidation and reform of Federal milk marketing orders that was published in the Federal Register on September 1, 1999 (64 Fed. Reg. 47897- 48021), to comply with section 143 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7253). (b) Implementation of Final Rule for Milk Order Reform.-- Subject to subsection (c), the final rule shall take effect, and be implemented by the Secretary of Agriculture, on the first day of the first month beginning at least 30 days after the date of the enactment of this Act. (c) Use of Option 1A for Pricing Class I Milk.--In lieu of the Class I price differentials specified in the final rule, the Secretary of Agriculture shall price fluid or Class I milk under the Federal milk marketing orders using the Class I price differentials identified as Option 1A ``Location- Specific Differentials Analysis'' in the proposed rule published in the Federal Register on January 30, 1998 (63 Fed. Reg. 4802, 4809), except that the Secretary shall include the corrections and modifications to such Class I differentials made by the Secretary through April 2, 1999. (d) Effect of Prior Announcement of Minimum Prices.--If the Secretary of Agriculture announces minimum prices for milk under Federal milk marketing orders pursuant to section 1000.50 of title 7, Code of Federal Regulations, before the effective date specified in subsection (b), the minimum prices so announced before that date shall be the only applicable minimum prices under Federal milk marketing orders for the month or months for which the prices have been announced. (e) Implementation of Requirement.--The implementation of the final rule, as modified by subsection (c), shall not be subject to any of the following: (1) The notice and hearing requirements of section 8c(3) of the Agricultural Adjustment Act (7 U.S.C. 608c(3)), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, or the notice and comment provisions of section 553 of title 5, United States Code. (2) A referendum conducted by the Secretary of Agriculture pursuant to subsections (17) or (19) of section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937. (3) The Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking. (4) Chapter 35 of title 44, United States Code (commonly known as the Paperwork Reduction Act). (5) Any decision, restraining order, or injunction issued by a United States court before the date of the enactment of this Act. SEC. 2. FURTHER RULEMAKING TO DEVELOP PRICING METHODS FOR CLASS III AND CLASS IV MILK UNDER MARKETING ORDERS. (a) Congressional Finding.--The Class III and Class IV milk pricing formulas included in the final decision for the consolidation and reform of Federal milk marketing orders, as published in the Federal Register on April 2, 1999 (64 Fed. Reg. 16025), do not adequately reflect public comment on the original proposed rule published in the Federal Register on January 30, 1998 (63 Fed. Reg. 4802), and are sufficiently different from the proposed rule and any comments submitted with regard to the proposed rule that further emergency rulemaking is merited. (b) Rulemaking Required.--The Secretary of Agriculture shall conduct rulemaking, on the [[Page H12587]] record after an opportunity for an agency hearing, to reconsider the Class III and Class IV milk pricing formulas included in the final rule for the consolidation and reform of Federal milk marketing orders that was published in the Federal Register on September 1, 1999 (64 Fed. Reg. 47897- 48021). (c) Time Period for Rulemaking.--On December 1, 2000, the Secretary of Agriculture shall publish in the Federal Register a final decision on the Class III and Class IV milk pricing formulas. The resulting formulas shall take effect, and be implemented by the Secretary, on January 1, 2001. (d) Effect of Court Order.--The actions authorized by subsections (b) and (c) are intended to ensure the timely publication and implementation of new pricing formulas for Class III and Class IV milk. In the event that the Secretary of Agriculture is enjoined or otherwise restrained by a court order from implementing a final decision within the time period specified in subsection (c), the length of time for which that injunction or other restraining order is effective shall be added to the time limitations specified in subsection (c) thereby extending those time limitations by a period of time equal to the period of time for which the injunction or other restraining order is effective. (e) Failure To Timely Complete Rulemaking.--If the Secretary of Agriculture fails to implement new Class III and Class IV milk pricing formulas within the time period required under subsection (c) (plus any additional period provided under subsection (d)), the Secretary may not assess or collect assessments from milk producers or handlers under section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, for marketing order administration and services provided under such section after the end of that period until the pricing formulas are implemented. The Secretary may not reduce the level of services provided under that section on account of the prohibition against assessments, but shall rather cover the cost of marketing order administration and services through funds available for the Agricultural Marketing Service of the Department. (f) Implementation of Requirement.--The implementation of the final decision on new Class III and Class IV milk pricing formulas shall not be subject to congressional review under chapter 8 of title 5, United States Code. SEC. 3. DAIRY FORWARD PRICING PROGRAM. The Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended by adding at the end the following new section: ``SEC. 23. DAIRY FORWARD PRICING PILOT PROGRAM. ``(a) Pilot Program Required.--Not later than 90 days after the date of the enactment of this section, the Secretary of Agriculture shall establish a temporary pilot program under which milk producers and cooperatives are authorized to voluntarily enter into forward price contracts with milk handlers. ``(b) Minimum Milk Price Requirements.--Payments made by milk handlers to milk producers and cooperatives, and prices received by milk producers and cooperatives, under the forward contracts shall be deemed to satisfy-- ``(1) all regulated minimum milk price requirements of paragraphs (B) and (F) of subsection (5) of section 8c; and ``(2) the requirement of paragraph (C) of such subsection regarding total payments by each handler. ``(c) Milk Covered by Pilot Program.-- ``(1) Covered milk.--The pilot program shall apply only with respect to the marketing of federally regulated milk that-- ``(A) is not classified as Class I milk or otherwise intended for fluid use; and ``(B) is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects interstate or foreign commerce in federally regulated milk. ``(2) Relation to class i milk.--To assist milk handlers in complying with the limitation in paragraph (1)(A) without having to segregate or otherwise individually track the source and disposition of milk, a milk handler may allocate milk receipts from producers, cooperatives, and other sources that are not subject to a forward contract to satisfy the handler's obligations with regard to Class I milk usage. ``(d) Duration.--The authority of the Secretary of Agriculture to carry out the pilot program shall terminate on December 31, 2004. No forward price contract entered into under the program may extend beyond that date. ``(e) Study and Report on Effect of Pilot Program.-- ``(1) Study.--The Secretary of Agriculture shall conduct a study on forward contracting between milk producers and cooperatives and milk handlers to determine the impact on milk prices paid to producers in the United States. To obtain information for the study, the Secretary may use the authorities available to the Secretary under section 8d, subject to the confidentiality requirements of subsection (2) of such section. ``(2) Report.--Not later than April 30, 2002, the Secretary shall submit to the Committee on Agriculture, Nutrition and Forestry of the Senate and the Committee on Agriculture of the House of Representatives a report containing the results of the study.''. SEC. 4. CONTINUATION OF CONGRESSIONAL CONSENT FOR NORTHEAST INTERSTATE DAIRY COMPACT. Section 147(3) of the Agricultural Market Transition Act (7 U.S.C. 7256(3)) is amended by striking ``concurrent with'' and all that follows through the period at the end and inserting ``on September 30, 2001.''. Following is explanatory language on S. 1948 as introduced on November 17, 1999. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) Short Title.--This Act may be cited as the ``Intellectual Property and Communications Omnibus Reform Act of 1999''. (b) Table of Contents.--The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I--SATELLITE HOME VIEWER IMPROVEMENT Sec. 1001. Short title. Sec. 1002. Limitations on exclusive rights; secondary transmissions by satellite carriers within local markets. Sec. 1003. Extension of effect of amendments to section 119 of title 17, United States Code. Sec. 1004. Computation of royalty fees for satellite carriers. Sec. 1005. Distant signal eligibility for consumers. Sec. 1006. Public broadcasting service satellite feed. Sec. 1007. Application of Federal Communications Commission regulations. Sec. 1008. Rules for satellite carriers retransmitting television broadcast signals. Sec. 1009. Retransmission consent. Sec. 1010. Severability. Sec. 1011. Technical amendments. Sec. 1012. Effective dates. TITLE II--RURAL LOCAL TELEVISION SIGNALS Sec. 2001. Short title. Sec. 2002. Local television service in unserved and underserved markets. TITLE III--TRADEMARK CYBERPIRACY PREVENTION Sec. 3001. Short title; references. Sec. 3002. Cyberpiracy prevention. Sec. 3003. Damages and remedies. Sec. 3004. Limitation on liability. Sec. 3005. Definitions. Sec. 3006. Study on abusive domain name registrations involving personal names. Sec. 3007. Historic preservation. Sec. 3008. Savings clause. Sec. 3009. Technical and conforming amendments. Sec. 3010. Effective date. TITLE IV--INVENTOR PROTECTION Sec. 4001. Short title. Subtitle A--Inventors' Rights Sec. 4101. Short title. Sec. 4102. Integrity in invention promotion services. Sec. 4103. Effective date. Subtitle B--Patent and Trademark Fee Fairness Sec. 4201. Short title. Sec. 4202. Adjustment of patent fees. Sec. 4203. Adjustment of trademark fees. Sec. 4204. Study on alternative fee structures. Sec. 4205. Patent and Trademark Office Funding. Sec. 4206. Effective date. Subtitle C--First Inventor Defense Sec. 4301. Short title. Sec. 4302. Defense to patent infringement based on earlier inventor. Sec. 4303. Effective date and applicability. Subtitle D--Patent Term Guarantee Sec. 4401. Short title. Sec. 4402. Patent term guarantee authority. Sec. 4403. Continued examination of patent applications. Sec. 4404. Technical clarification. Sec. 4405. Effective date. Subtitle E--Domestic Publication of Patent Applications Published Abroad Sec. 4501. Short title. Sec. 4502. Publication. Sec. 4503. Time for claiming benefit of earlier filing date. Sec. 4504. Provisional rights. Sec. 4505. Prior art effect of published applications. Sec. 4506. Cost recovery for publication. Sec. 4507. Conforming amendments. Sec. 4508. Effective date. Subtitle F--Optional Inter Partes Reexamination Procedure Sec. 4601. Short title. Sec. 4602. Ex parte reexamination of patents. Sec. 4603. Definitions. Sec. 4604. Optional inter partes reexamination procedures. Sec. 4605. Conforming amendments. Sec. 4606. Report to Congress. Sec. 4607. Estoppel effect of reexamination. Sec. 4608. Effective date. Subtitle G--Patent and Trademark Office Sec. 4701. Short title. Chapter 1--United States Patent and Trademark Office Sec. 4711. Establishment of Patent and Trademark Office. Sec. 4712. Powers and duties. Sec. 4713. Organization and management. Sec. 4714. Public advisory committees. Sec. 4715. Conforming amendments. Sec. 4716. Trademark Trial and Appeal Board. Sec. 4717. Board of Patent Appeals and Interferences. Sec. 4718. Annual report of Director. Sec. 4719. Suspension or exclusion from practice. Sec. 4720. Pay of Director and Deputy Director. Chapter 2--Effective Date; Technical Amendments Sec. 4731. Effective date. Sec. 4732. Technical and conforming amendments. Chapter 3--Miscellaneous Provisions Sec. 4741. References. [[Page H12588]] Sec. 4742. Exercise of authorities. Sec. 4743. Savings provisions. Sec. 4744. Transfer of assets. Sec. 4745. Delegation and assignment. Sec. 4746. Authority of Director of the Office of Management and Budget with respect to functions transferred. Sec. 4747. Certain vesting of functions considered transfers. Sec. 4748. Availability of existing funds. Sec. 4749. Definitions. Subtitle H--Miscellaneous Patent Provisions Sec. 4801. Provisional applications. Sec. 4802. International applications. Sec. 4803. Certain limitations on damages for patent infringement not applicable. Sec. 4804. Electronic filing and publications. Sec. 4805. Study and report on biological deposits in support of biotechnology patents. Sec. 4806. Prior invention. Sec. 4807. Prior art exclusion for certain commonly assigned patents. Sec. 4808. Exchange of copies of patents with foreign countries. TITLE V--MISCELLANEOUS PROVISIONS Sec. 5001. Commission on online child protection. Sec. 5002. Privacy protection for donors to public broadcasting entities. Sec. 5003. Completion of biennial regulatory review. Sec. 5004. Public broadcasting entities. Sec. 5005. Technical amendments relating to vessel hull design protection. Sec. 5006. Informal rulemaking of copyright determination. Sec. 5007. Service of process for surety corporations. Sec. 5008. Low-power television. TITLE VI--SUPERFUND RECYCLING EQUITY Sec. 6001. Superfund recycling equity. TITLE I--SATELLITE HOME VIEWER IMPROVEMENT SEC. 1001. SHORT TITLE. This title may be cited as the ``Satellite Home Viewer Improvement Act of 1999''. SEC. 1002. LIMITATIONS ON EXCLUSIVE RIGHTS; SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS WITHIN LOCAL MARKETS. (a) In General.--Chapter 1 of title 17, United States Code, is amended by adding after section 121 the following new section: ``Sec. 122. Limitations on exclusive rights; secondary transmissions by satellite carriers within local markets ``(a) Secondary Transmissions of Television Broadcast Stations by Satellite Carriers.--A secondary transmission of a performance or display of a work embodied in a primary transmission of a television broadcast station into the station's local market shall be subject to statutory licensing under this section if-- ``(1) the secondary transmission is made by a satellite carrier to the public; ``(2) with regard to secondary transmissions, the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing the carriage of television broadcast station signals; and ``(3) the satellite carrier makes a direct or indirect charge for the secondary transmission to-- ``(A) each subscriber receiving the secondary transmission; or ``(B) a distributor that has contracted with the satellite carrier for direct or indirect delivery of the secondary transmission to the public. ``(b) Reporting Requirements.-- ``(1) Initial lists.--A satellite carrier that makes secondary transmissions of a primary transmission made by a network station under subsection (a) shall, within 90 days after commencing such secondary transmissions, submit to the network that owns or is affiliated with the network station a list identifying (by name in alphabetical order and street address, including county and zip code) all subscribers to which the satellite carrier makes secondary transmissions of that primary transmission under subsection (a). ``(2) Subsequent lists.--After the list is submitted under paragraph (1), the satellite carrier shall, on the 15th of each month, submit to the network a list identifying (by name in alphabetical order and street address, including county and zip code) any subscribers who have been added or dropped as subscribers since the last submission under this subsection. ``(3) Use of subscriber information.--Subscriber information submitted by a satellite carrier under this subsection may be used only for the purposes of monitoring compliance by the satellite carrier with this section. ``(4) Requirements of networks.--The submission requirements of this subsection shall apply to a satellite carrier only if the network to which the submissions are to be made places on file with the Register of Copyrights a document identifying the name and address of the person to whom such submissions are to be made. The Register of Copyrights shall maintain for public inspection a file of all such documents. ``(c) No Royalty Fee Required.--A satellite carrier whose secondary transmissions are subject to statutory licensing under subsection (a) shall have no royalty obligation for such secondary transmissions. ``(d) Noncompliance With Reporting and Regulatory Requirements.--Notwithstanding subsection (a), the willful or repeated secondary transmission to the public by a satellite carrier into the local market of a television broadcast station of a primary transmission embodying a performance or display of a work made by that television broadcast station is actionable as an act of infringement under section 501, and is fully subject to the remedies provided under sections 502 through 506 and 509, if the satellite carrier has not complied with the reporting requirements of subsection (b) or with the rules, regulations, and authorizations of the Federal Communications Commission concerning the carriage of television broadcast signals. ``(e) Willful Alterations.--Notwithstanding subsection (a), the secondary transmission to the public by a satellite carrier into the local market of a television broadcast station of a performance or display of a work embodied in a primary transmission made by that television broadcast station is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and sections 509 and 510, if the content of the particular program in which the performance or display is embodied, or any commercial advertising or station announcement transmitted by the primary transmitter during, or immediately before or after, the transmission of such program, is in any way willfully altered by the satellite carrier through changes, deletions, or additions, or is combined with programming from any other broadcast signal. ``(f ) Violation of Territorial Restrictions on Statutory License for Television Broadcast Stations.-- ``(1) Individual violations.--The willful or repeated secondary transmission to the public by a satellite carrier of a primary transmission embodying a performance or display of a work made by a television broadcast station to a subscriber who does not reside in that station's local market, and is not subject to statutory licensing under section 119 or a private licensing agreement, is actionable as an act of infringement under section 501 and is fully subject to the remedies provided by sections 502 through 506 and 509, except that-- ``(A) no damages shall be awarded for such act of infringement if the satellite carrier took corrective action by promptly withdrawing service from the ineligible subscriber; and ``(B) any statutory damages shall not exceed $5 for such subscriber for each month during which the violation occurred. ``(2) Pattern of violations.--If a satellite carrier engages in a willful or repeated pattern or practice of secondarily transmitting to the public a primary transmission embodying a performance or display of a work made by a television broadcast station to subscribers who do not reside in that station's local market, and are not subject to statutory licensing under section 119 or a private licensing agreement, then in addition to the remedies under paragraph (1)-- ``(A) if the pattern or practice has been carried out on a substantially nationwide basis, the court-- ``(i) shall order a permanent injunction barring the secondary transmission by the satellite carrier of the primary transmissions of that television broadcast station (and if such television broadcast station is a network station, all other television broadcast stations affiliated with such network); and ``(ii) may order statutory damages not exceeding $250,000 for each 6-month period during which the pattern or practice was carried out; and ``(B) if the pattern or practice has been carried out on a local or regional basis with respect to more than one television broadcast station, the court-- ``(i) shall order a permanent injunction barring the secondary transmission in that locality or region by the satellite carrier of the primary transmissions of any television broadcast station; and ``(ii) may order statutory damages not exceeding $250,000 for each 6-month period during which the pattern or practice was carried out. ``(g) Burden of Proof.--In any action brought under subsection (f ), the satellite carrier shall have the burden of proving that its secondary transmission of a primary transmission by a television broadcast station is made only to subscribers located within that station's local market or subscribers being served in compliance with section 119 or a private licensing agreement. ``(h) Geographic Limitations on Secondary Transmissions.-- The statutory license created by this section shall apply to secondary transmissions to locations in the United States. ``(i) Exclusivity With Respect to Secondary Transmissions of Broadcast Stations by Satellite to Members of the Public.--No provision of section 111 or any other law (other than this section and section 119) shall be construed to contain any authorization, exemption, or license through which secondary transmissions by satellite carriers of programming contained in a primary transmission made by a television broadcast station may be made without obtaining the consent of the copyright owner. ``( j) Definitions.--In this section-- ``(1) Distributor.--The term `distributor' means an entity which contracts to distribute secondary transmissions from a satellite carrier and, either as a single channel or in a package with other programming, provides the secondary transmission either directly to individual subscribers or indirectly through other program distribution entities. ``(2) Local market.-- ``(A) In general.--The term `local market', in the case of both commercial and noncommercial television broadcast stations, means the designated market area in which a station is located, and-- ``(i) in the case of a commercial television broadcast station, all commercial television broadcast stations licensed to a community within the same designated market area are within the same local market; and ``(ii) in the case of a noncommercial educational television broadcast station, the market [[Page H12589]] includes any station that is licensed to a community within the same designated market area as the noncommercial educational television broadcast station. ``(B) County of license.--In addition to the area described in subparagraph (A), a station's local market includes the county in which the station's community of license is located. ``(C) Designated market area.--For purposes of subparagraph (A), the term `designated market area' means a designated market area, as determined by Nielsen Media Research and published in the 1999-2000 Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates or any successor publication. ``(3) Network station; satellite carrier; secondary transmission.--The terms `network station', `satellite carrier', and `secondary transmission' have the meanings given such terms under section 119(d). ``(4) Subscriber.--The term `subscriber' means a person who receives a secondary transmission service from a satellite carrier and pays a fee for the service, directly or indirectly, to the satellite carrier or to a distributor. ``(5) Television broadcast station.--The term `television broadcast station'-- ``(A) means an over-the-air, commercial or noncommercial television broadcast station licensed by the Federal Communications Commission under subpart E of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator television station; and ``(B) includes a television broadcast station licensed by an appropriate governmental authority of Canada or Mexico if the station broadcasts primarily in the English language and is a network station as defined in section 119(d)(2)(A).''. (b) Infringement of Copyright.--Section 501 of title 17, United States Code, is amended by adding at the end the following new subsection: ``(f )(1) With respect to any secondary transmission that is made by a satellite carrier of a performance or display of a work embodied in a primary transmission and is actionable as an act of infringement under section 122, a television broadcast station holding a copyright or other license to transmit or perform the same version of that work shall, for purposes of subsection (b) of this section, be treated as a legal or beneficial owner if such secondary transmission occurs within the local market of that station. ``(2) A television broadcast station may file a civil action against any satellite carrier that has refused to carry television broadcast signals, as required under section 122(a)(2), to enforce that television broadcast station's rights under section 338(a) of the Communications Act of 1934.''. (c) Technical and Conforming Amendments.--The table of sections for chapter 1 of title 17, United States Code, is amended by adding after the item relating to section 121 the following: ``122. Limitations on exclusive rights; secondary transmissions by satellite carriers within local market.''. SEC. 1003. EXTENSION OF EFFECT OF AMENDMENTS TO SECTION 119 OF TITLE 17, UNITED STATES CODE. Section 4(a) of the Satellite Home Viewer Act of 1994 (17 U.S.C. 119 note; Public Law 103-369; 108 Stat. 3481) is amended by striking ``December 31, 1999'' and inserting ``December 31, 2004''. SEC. 1004. COMPUTATION OF ROYALTY FEES FOR SATELLITE CARRIERS. Section 119(c) of title 17, United States Code, is amended by adding at the end the following new paragraph: ``(4) Reduction.-- ``(A) Superstation.--The rate of the royalty fee in effect on January 1, 1998, payable in each case under subsection (b)(1)(B)(i) shall be reduced by 30 percent. ``(B) Network and public broadcasting satellite feed.--The rate of the royalty fee in effect on January 1, 1998, payable under subsection (b)(1)(B)(ii) shall be reduced by 45 percent. ``(5) Public broadcasting service as agent.--For purposes of section 802, with respect to royalty fees paid by satellite carriers for retransmitting the Public Broadcasting Service satellite feed, the Public Broadcasting Service shall be the agent for all public television copyright claimants and all Public Broadcasting Service member stations.''. SEC. 1005. DISTANT SIGNAL ELIGIBILITY FOR CONSUMERS. (a) Unserved Household.-- (1) In general.--Section 119(d) of title 17, United States Code, is amended by striking paragraph (10) and inserting the following: ``(10) Unserved household.--The term `unserved household', with respect to a particular television network, means a household that-- ``(A) cannot receive, through the use of a conventional, stationary, outdoor rooftop receiving antenna, an over-the- air signal of a primary network station affiliated with that network of Grade B intensity as defined by the Federal Communications Commission under section 73.683(a) of title 47 of the Code of Federal Regulations, as in effect on January 1, 1999; ``(B) is subject to a waiver granted under regulations established under section 339(c)(2) of the Communications Act of 1934; ``(C) is a subscriber to whom subsection (e) applies; ``(D) is a subscriber to whom subsection (a)(11) applies; or ``(E) is a subscriber to whom the exemption under subsection (a)(2)(B)(iii) applies.''. (2) Conforming amendment.--Section 119(a)(2)(B) of title 17, United States Code, is amended to read as follows: ``(B) Secondary transmissions to unserved households.-- ``(i) In general.--The statutory license provided for in subparagraph (A) shall be limited to secondary transmissions of the signals of no more than two network stations in a single day for each television network to persons who reside in unserved households. ``(ii) Accurate determinations of eligibility.-- ``(I) Accurate predictive model.--In determining presumptively whether a person resides in an unserved household under subsection (d)(10)(A), a court shall rely on the Individual Location Longley-Rice model set forth by the Federal Communications Commission in Docket No. 98-201, as that model may be amended by the Commission over time under section 339(c)(3) of the Communications Act of 1934 to increase the accuracy of that model. ``(II) Accurate measurements.--For purposes of site measurements to determine whether a person resides in an unserved household under subsection (d)(10)(A), a court shall rely on section 339(c)(4) of the Communications Act of 1934. ``(iii) C-band exemption to unserved households.-- ``(I) In general.--The limitations of clause (i) shall not apply to any secondary transmissions by C-band services of network stations that a subscriber to C-band service received before any termination of such secondary transmissions before October 31, 1999. ``(II) Definition.--In this clause the term `C-band service' means a service that is licensed by the Federal Communications Commission and operates in the Fixed Satellite Service under part 25 of title 47 of the Code of Federal Regulations.''. (b) Exception to Limitation on Secondary Transmissions.-- Section 119(a)(5) of title 17, United States Code, is amended by adding at the end the following: ``(E) Exception.--The secondary transmission by a satellite carrier of a performance or display of a work embodied in a primary transmission made by a network station to subscribers who do not reside in unserved households shall not be an act of infringement if-- ``(i) the station on May 1, 1991, was retransmitted by a satellite carrier and was not on that date owned or operated by or affiliated with a television network that offered interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more States; ``(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the statutory license of this section; and ``(iii) the station is not owned or operated by or affiliated with a television network that, as of January 1, 1995, offered interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more States.''. (c) Moratorium on Copyright Liability.--Section 119(e) of title 17, United States Code, is amended to read as follows: ``(e) Moratorium on Copyright Liability.--Until December 31, 2004, a subscriber who does not receive a signal of Grade A intensity (as defined in the regulations of the Federal Communications Commission under section 73.683(a) of title 47 of the Code of Federal Regulations, as in effect on January 1, 1999, or predicted by the Federal Communications Commission using the Individual Location Longley-Rice methodology described by the Federal Communications Commission in Docket No. 98-201) of a local network television broadcast station shall remain eligible to receive signals of network stations affiliated with the same network, if that subscriber had satellite service of such network signal terminated after July 11, 1998, and before October 31, 1999, as required by this section, or received such service on October 31, 1999.''. (d) Recreational Vehicle and Commercial Truck Exemption.-- Section 119(a) of title 17, United States Code, is amended by adding at the end the following: ``(11) Service to recreational vehicles and commercial trucks.-- ``(A) Exemption.-- ``(i) In general.--For purposes of this subsection, and subject to clauses (ii) and (iii), the term `unserved household' shall include-- ``(I) recreational vehicles as defined in regulations of the Secretary of Housing and Urban Development under section 3282.8 of title 24 of the Code of Federal Regulations; and ``(II) commercial trucks that qualify as commercial motor vehicles under regulations of the Secretary of Transportation under section 383.5 of title 49 of the Code of Federal Regulations. ``(ii) Limitation.--Clause (i) shall apply only to a recreational vehicle or commercial truck if any satellite carrier that proposes to make a secondary transmission of a network station to the operator of such a recreational vehicle or commercial truck complies with the documentation requirements under subparagraphs (B) and (C). ``(iii) Exclusion.--For purposes of this subparagraph, the terms `recreational vehicle' and `commercial truck' shall not include any fixed dwelling, whether a mobile home or otherwise. ``(B) Documentation requirements.--A recreational vehicle or commercial truck shall be deemed to be an unserved household beginning 10 days after the relevant satellite carrier provides to the network that owns or is affiliated with the network station that will be secondarily transmitted to the recreational vehicle or commercial truck the following documents: ``(i) Declaration.--A signed declaration by the operator of the recreational vehicle or commercial truck that the satellite dish is permanently attached to the recreational vehicle or commercial truck, and will not be used to receive satellite programming at any fixed dwelling. ``(ii) Registration.--In the case of a recreational vehicle, a copy of the current State vehicle registration for the recreational vehicle. ``(iii) Registration and license.--In the case of a commercial truck, a copy of-- [[Page H12590]] ``(I) the current State vehicle registration for the truck; and ``(II) a copy of a valid, current commercial driver's license, as defined in regulations of the Secretary of Transportation under section 383 of title 49 of the Code of Federal Regulations, issued to the operator. ``(C) Updated documentation requirements.--If a satellite carrier wishes to continue to make secondary transmissions to a recreational vehicle or commercial truck for more than a 2- year period, that carrier shall provide each network, upon request, with updated documentation in the form described under subparagraph (B) during the 90 days before expiration of that 2-year period.''. (e) Conforming Amendment.--Section 119(d)(11) of title 17, United States Code, is amended to read as follows: ``(11) Local market.--The term `local market' has the meaning given such term under section 122( j).''. SEC. 1006. PUBLIC BROADCASTING SERVICE SATELLITE FEED. (a) Secondary Transmissions.--Section 119(a)(1) of title 17, United States Code, is amended-- (1) by striking the paragraph heading and inserting ``(1) Superstations and pbs satellite feed.--''; (2) by inserting ``or by the Public Broadcasting Service satellite feed'' after ``superstation''; and (3) by adding at the end the following: ``In the case of the Public Broadcasting Service satellite feed, the statutory license shall be effective until January 1, 2002.''. (b) Royalty Fees.--Section 119(b)(1)(B)(iii) of title 17, United States Code, is amended by inserting ``or the Public Broadcasting Service satellite feed'' after ``network station''. (c) Definitions.--Section 119(d) of title 17, United States Code, is amended-- (1) by amending paragraph (9) to read as follows: ``(9) Superstation.--The term `superstation'-- ``(A) means a television broadcast station, other than a network station, licensed by the Federal Communications Commission that is secondarily transmitted by a satellite carrier; and ``(B) except for purposes of computing the royalty fee, includes the Public Broadcasting Service satellite feed.''; and (2) by adding at the end the following: ``(12) Public broadcasting service satellite feed.--The term `Public Broadcasting Service satellite feed' means the national satellite feed distributed and designated for purposes of this section by the Public Broadcasting Service consisting of educational and informational programming intended for private home viewing, to which the Public Broadcasting Service holds national terrestrial broadcast rights.''. SEC. 1007. APPLICATION OF FEDERAL COMMUNICATIONS COMMISSION REGULATIONS. Section 119(a) of title 17, United States Code, is amended-- (1) in paragraph (1), by inserting ``with regard to secondary transmissions the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing the carriage of television broadcast station signals,'' after ``satellite carrier to the public for private home viewing,''; (2) in paragraph (2), by inserting ``with regard to secondary transmissions the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing the carriage of television broadcast station signals,'' after ``satellite carrier to the public for private home viewing,''; and (3) by adding at the end of such subsection (as amended by section 1005(e) of this Act) the following new paragraph: ``(12) Statutory license contingent on compliance with fcc rules and remedial steps.--Notwithstanding any other provision of this section, the willful or repeated secondary transmission to the public by a satellite carrier of a primary transmission embodying a performance or display of a work made by a broadcast station licensed by the Federal Communications Commission is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and 509, if, at the time of such transmission, the satellite carrier is not in compliance with the rules, regulations, and authorizations of the Federal Communications Commission concerning the carriage of television broadcast station signals.''. SEC. 1008. RULES FOR SATELLITE CARRIERS RETRANSMITTING TELEVISION BROADCAST SIGNALS. (a) Amendments to Communications Act of 1934.--Title III of the Communications Act of 1934 is amended by inserting after section 337 (47 U.S.C. 337) the following new sections: ``SEC. 338. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE CARRIERS. ``(a) Carriage Obligations.-- ``(1) In general.--Subject to the limitations of paragraph (2), each satellite carrier providing, under section 122 of title 17, United States Code, secondary transmissions to subscribers located within the local market of a television broadcast station of a primary transmission made by that station shall carry upon request the signals of all television broadcast stations located within that local market, subject to section 325(b). ``(2) Remedies for failure to carry.--The remedies for any failure to meet the obligations under this subsection shall be available exclusively under section 501(f ) of title 17, United States Code. ``(3) Effective date.--No satellite carrier shall be required to carry local television broadcast stations under paragraph (1) until January 1, 2002. ``(b) Good Signal Required.-- ``(1) Costs.--A television broadcast station asserting its right to carriage under subsection (a) shall be required to bear the costs associated with delivering a good quality signal to the designated local receive facility of the satellite carrier or to another facility that is acceptable to at least one-half the stations asserting the right to carriage in the local market. ``(2) Regulations.--The regulations issued under subsection (g) shall set forth the obligations necessary to carry out this subsection. ``(c) Duplication Not Required.-- ``(1) Commercial stations.--Notwithstanding subsection (a), a satellite carrier shall not be required to carry upon request the signal of any local commercial television broadcast station that substantially duplicates the signal of another local commercial television broadcast station which is secondarily transmitted by the satellite carrier within the same local market, or to carry upon request the signals of more than one local commercial television broadcast station in a single local market that is affiliated with a particular television network unless such stations are licensed to communities in different States. ``(2) Noncommercial stations.--The Commission shall prescribe regulations limiting the carriage requirements under subsection (a) of satellite carriers with respect to the carriage of multiple local noncommercial television broadcast stations. To the extent possible, such regulations shall provide the same degree of carriage by satellite carriers of such multiple stations as is provided by cable systems under section 615. ``(d) Channel Positioning.--No satellite carrier shall be required to provide the signal of a local television broadcast station to subscribers in that station's local market on any particular channel number or to provide the signals in any particular order, except that the satellite carrier shall retransmit the signal of the local television broadcast stations to subscribers in the stations' local market on contiguous channels and provide access to such station's signals at a nondiscriminatory price and in a nondiscriminatory manner on any navigational device, on- screen program guide, or menu. ``(e) Compensation for Carriage.--A satellite carrier shall not accept or request monetary payment or other valuable consideration in exchange either for carriage of local television broadcast stations in fulfillment of the requirements of this section or for channel positioning rights provided to such stations under this section, except that any such station may be required to bear the costs associated with delivering a good quality signal to the local receive facility of the satellite carrier. ``(f ) Remedies.-- ``(1) Complaints by broadcast stations.--Whenever a local television broadcast station believes that a satellite carrier has failed to meet its obligations under subsections (b) through (e) of this section, such station shall notify the carrier, in writing, of the alleged failure and identify its reasons for believing that the satellite carrier failed to comply with such obligations. The satellite carrier shall, within 30 days after such written notification, respond in writing to such notification and comply with such obligations or state its reasons for believing that it is in compliance with such obligations. A local television broadcast station that disputes a response by a satellite carrier that it is in compliance with such obligations may obtain review of such denial or response by filing a complaint with the Commission. Such complaint shall allege the manner in which such satellite carrier has failed to meet its obligations and the basis for such allegations. ``(2) Opportunity to respond.--The Commission shall afford the satellite carrier against which a complaint is filed under paragraph (1) an opportunity to present data and arguments to establish that there has been no failure to meet its obligations under this section. ``(3) Remedial actions; dismissal.--Within 120 days after the date a complaint is filed under paragraph (1), the Commission shall determine whether the satellite carrier has met its obligations under subsections (b) through (e). If the Commission determines that the satellite carrier has failed to meet such obligations, the Commission shall order the satellite carrier to take appropriate remedial action. If the Commission determines that the satellite carrier has fully met the requirements of such subsections, the Commission shall dismiss the complaint. ``(g) Regulations by Commission.--Within 1 year after the date of the enactment of this section, the Commission shall issue regulations implementing this section following a rulemaking proceeding. The regulations prescribed under this section shall include requirements on satellite carriers that are comparable to the requirements on cable operators under sections 614(b)(3) and (4) and 615(g)(1) and (2). ``(h) Definitions.--As used in this section: ``(1) Distributor.--The term `distributor' means an entity which contracts to distribute secondary transmissions from a satellite carrier and, either as a single channel or in a package with other programming, provides the secondary transmission either directly to individual subscribers or indirectly through other program distribution entities. ``(2) Local receive facility.--The term `local receive facility' means the reception point in each local market which a satellite carrier designates for delivery of the signal of the station for purposes of retransmission. ``(3) Local market.--The term `local market' has the meaning given that term under section 122( j) of title 17, United States Code. ``(4) Satellite carrier.--The term `satellite carrier' has the meaning given such term under section 119(d) of title 17, United States Code. ``(5) Secondary transmission.--The term `secondary transmission' has the meaning given [[Page H12591]] such term in section 119(d) of title 17, United States Code. ``(6) Subscriber.--The term `subscriber' has the meaning given that term under section 122( j) of title 17, United States Code. ``(7) Television broadcast station.--The term `television broadcast station' has the meaning given such term in section 325(b)(7). ``SEC. 339. CARRIAGE OF DISTANT TELEVISION STATIONS BY SATELLITE CARRIERS. ``(a) Provisions Relating to Carriage of Distant Signals.-- ``(1) Carriage permitted.-- ``(A) In general.--Subject to section 119 of title 17, United States Code, any satellite carrier shall be permitted to provide the signals of no more than two network stations in a single day for each television network to any household not located within the local markets of those network stations. ``(B) Additional service.--In addition to signals provided under subparagraph (A), any satellite carrier may also provide service under the statutory license of section 122 of title 17, United States Code, to the local market within which such household is located. The service provided under section 122 of such title may be in addition to the two signals provided under section 119 of such title. ``(2) Penalty for violation.--Any satellite carrier that knowingly and willfully provides the signals of television stations to subscribers in violation of this subsection shall be liable for a forfeiture penalty under section 503 in the amount of $50,000 for each violation or each day of a continuing violation. ``(b) Extension of Network Nonduplication, Syndicated Exclusivity, and Sports Blackout to Satellite Retransmission.-- ``(1) Extension of protections.--Within 45 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall commence a single rulemaking proceeding to establish regulations that-- ``(A) apply network nonduplication protection (47 CFR 76.92) syndicated exclusivity protection (47 CFR 76.151), and sports blackout protection (47 CFR 76.67) to the retransmission of the signals of nationally distributed superstations by satellite carriers to subscribers; and ``(B) to the extent technically feasible and not economically prohibitive, apply sports blackout protection (47 CFR 76.67) to the retransmission of the signals of network stations by satellite carriers to subscribers. ``(2) Deadline for action.--The Commission shall complete all actions necessary to prescribe regulations required by this section so that the regulations shall become effective within 1 year after such date of enactment. ``(c) Eligibility for Retransmission.-- ``(1) Signal standard for satellite carrier purposes.--For the purposes of identifying an unserved household under section 119(d)(10) of title 17, United States Code, within 1 year after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall conclude an inquiry to evaluate all possible standards and factors for determining eligibility for retransmissions of the signals of network stations, and, if appropriate-- ``(A) recommend modifications to the Grade B intensity standard for analog signals set forth in section 73.683(a) of its regulations (47 CFR 73.683(a)), or recommend alternative standards or factors for purposes of determining such eligibility; and ``(B) make a further recommendation relating to an appropriate standard for digital signals. ``(2) Waivers.--A subscriber who is denied the retransmission of a signal of a network station under section 119 of title 17, United States Code, may request a waiver from such denial by submitting a request, through such subscriber's satellite carrier, to the network station asserting that the retransmission is prohibited. The network station shall accept or reject a subscriber's request for a waiver within 30 days after receipt of the request. The subscriber shall be permitted to receive such retransmission under section 119(d)(10)(B) of title 17, United States Code, if such station agrees to the waiver request and files with the satellite carrier a written waiver with respect to that subscriber allowing the subscriber to receive such retransmission. If a television network station fails to accept or reject a subscriber's request for a waiver within the 30-day period after receipt of the request, that station shall be deemed to agree to the waiver request and have filed such written waiver. ``(3) Establishment of improved predictive model required.--Within 180 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall take all actions necessary, including any reconsideration, to develop and prescribe by rule a point-to- point predictive model for reliably and presumptively determining the ability of individual locations to receive signals in accordance with the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code. In prescribing such model, the Commission shall rely on the Individual Location Longley-Rice model set forth by the Federal Communications Commission in Docket No. 98-201 and ensure that such model takes into account terrain, building structures, and other land cover variations. The Commission shall establish procedures for the continued refinement in the application of the model by the use of additional data as it becomes available. ``(4) Objective verification.-- ``(A) In general.--If a subscriber's request for a waiver under paragraph (2) is rejected and the subscriber submits to the subscriber's satellite carrier a request for a test verifying the subscriber's inability to receive a signal that meets the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code, the satellite carrier and the network station or stations asserting that the retransmission is prohibited with respect to that subscriber shall select a qualified and independent person to conduct a test in accordance with section 73.686(d) of its regulations (47 CFR 73.686(d)), or any successor regulation. Such test shall be conducted within 30 days after the date the subscriber submits a request for the test. If the written findings and conclusions of a test conducted in accordance with such section (or any successor regulation) demonstrate that the subscriber does not receive a signal that meets or exceeds the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code, the subscriber shall not be denied the retransmission of a signal of a network station under section 119 of title 17, United States Code. ``(B) Designation of tester and allocation of costs.--If the satellite carrier and the network station or stations asserting that the retransmission is prohibited are unable to agree on such a person to conduct the test, the person shall be designated by an independent and neutral entity designated by the Commission by rule. Unless the satellite carrier and the network station or stations otherwise agree, the costs of conducting the test under this paragraph shall be borne by the satellite carrier, if the station's signal meets or exceeds the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code, or by the network station, if its signal fails to meet or exceed such standard. ``(C) Avoidance of undue burden.-- Commission regulations prescribed under this paragraph shall seek to avoid any undue burden on any party. ``(d) Definitions.--For the purposes of this section: ``(1) Local market.--The term `local market' has the meaning given that term under section 122( j) of title 17, United States Code. ``(2) Nationally distributed superstation.--The term `nationally distributed superstation' means a television broadcast station, licensed by the Commission, that-- ``(A) is not owned or operated by or affiliated with a television network that, as of January 1, 1995, offered interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more States; ``(B) on May 1, 1991, was retransmitted by a satellite carrier and was not a network station at that time; and ``(C) was, as of July 1, 1998, retransmitted by a satellite carrier under the statutory license of section 119 of title 17, United States Code. ``(3) Network station.--The term `network station' has the meaning given such term under section 119(d) of title 17, United States Code. ``(4) Satellite carrier.--The term `satellite carrier' has the meaning given such term under section 119(d) of title 17, United States Code. ``(5) Television network.--The term `television network' means a television network in the United States which offers an interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated broadcast stations in 10 or more States.''. (b) Network Station Definition.--Section 119(d)(2) of title 17, United States Code, is amended-- (1) in subparagraph (B) by striking the period and inserting a semicolon; and (2) by adding after subparagraph (B) the following: ``except that the term does not include the signal of the Alaska Rural Communications Service, or any successor entity to that service.''. SEC. 1009. RETRANSMISSION CONSENT. (a) In General.--Section 325(b) of the Communications Act of 1934 (47 U.S.C. 325(b)) is amended-- (1) by amending paragraphs (1) and (2) to read as follows: ``(b)(1) No cable system or other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or any part thereof, except-- ``(A) with the express authority of the originating station; ``(B) under section 614, in the case of a station electing, in accordance with this subsection, to assert the right to carriage under such section; or ``(C) under section 338, in the case of a station electing, in accordance with this subsection, to assert the right to carriage under such section. ``(2) This subsection shall not apply-- ``(A) to retransmission of the signal of a noncommercial television broadcast station; ``(B) to retransmission of the signal of a television broadcast station outside the station's local market by a satellite carrier directly to its subscribers, if-- ``(i) such station was a superstation on May 1, 1991; ``(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the statutory license of section 119 of title 17, United States Code; and ``(iii) the satellite carrier complies with any network nonduplication, syndicated exclusivity, and sports blackout rules adopted by the Commission under section 339(b) of this Act; ``(C) until December 31, 2004, to retransmission of the signals of network stations directly to a home satellite antenna, if the subscriber receiving the signal-- ``(i) is located in an area outside the local market of such stations; and ``(ii) resides in an unserved household; ``(D) to retransmission by a cable operator or other multichannel video provider, other than a satellite carrier, of the signal of a television broadcast station outside the station's local market if such signal was obtained from a satellite carrier and-- ``(i) the originating station was a superstation on May 1, 1991; and ``(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the statutory license of section 119 of title 17, United States Code; or [[Page H12592]] ``(E) during the 6-month period beginning on the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, to the retransmission of the signal of a television broadcast station within the station's local market by a satellite carrier directly to its subscribers under the statutory license of section 122 of title 17, United States Code. For purposes of this paragraph, the terms `satellite carrier' and `superstation' have the meanings given those terms, respectively, in section 119(d) of title 17, United States Code, as in effect on the date of the enactment of the Cable Television Consumer Protection and Competition Act of 1992, the term `unserved household' has the meaning given that term under section 119(d) of such title, and the term `local market' has the meaning given that term in section 122( j) of such title.''; (2) by adding at the end of paragraph (3) the following new subparagraph: ``(C) Within 45 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall commence a rulemaking proceeding to revise the regulations governing the exercise by television broadcast stations of the right to grant retransmission consent under this subsection, and such other regulations as are necessary to administer the limitations contained in paragraph (2). The Commission shall complete all actions necessary to prescribe such regulations within 1 year after such date of enactment. Such regulations shall-- ``(i) establish election time periods that correspond with those regulations adopted under subparagraph (B) of this paragraph; and ``(ii) until January 1, 2006, prohibit a television broadcast station that provides retransmission consent from engaging in exclusive contracts for carriage or failing to negotiate in good faith, and it shall not be a failure to negotiate in good faith if the television broadcast station enters into retransmission consent agreements containing different terms and conditions, including price terms, with different multichannel video programming distributors if such different terms and conditions are based on competitive marketplace considerations.''; (3) in paragraph (4), by adding at the end the following new sentence: ``If an originating television station elects under paragraph (3)(C) to exercise its right to grant retransmission consent under this subsection with respect to a satellite carrier, section 338 shall not apply to the carriage of the signal of such station by such satellite carrier.''; (4) in paragraph (5), by striking ``614 or 615'' and inserting ``338, 614, or 615''; and (5) by adding at the end the following new paragraph: ``(7) For purposes of this subsection, the term-- ``(A) `network station' has the meaning given such term under section 119(d) of title 17, United States Code; and ``(B) `television broadcast station' means an over-the-air commercial or noncommercial television broadcast station licensed by the Commission under subpart E of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator television station.''. (b) Enforcement Provisions for Consent for Retransmissions.--Section 325 of the Communications Act of 1934 (47 U.S.C. 325) is amended by adding at the end the following new subsection: ``(e) Enforcement Proceedings Against Satellite Carriers Concerning Retransmissions of Television Broadcast Stations in the Respective Local Markets of Such Carriers.-- ``(1) Complaints by television broadcast stations.--If after the expiration of the 6-month period described under subsection (b)(2)(E) a television broadcast station believes that a satellite carrier has retransmitted its signal to any person in the local market of such station in violation of subsection (b)(1), the station may file with the Commission a complaint providing-- ``(A) the name, address, and call letters of the station; ``(B) the name and address of the satellite carrier; ``(C) the dates on which the alleged retransmission occurred; ``(D) the street address of at least one person in the local market of the station to whom the alleged retransmission was made; ``(E) a statement that the retransmission was not expressly authorized by the television broadcast station; and ``(F) the name and address of counsel for the station. ``(2) Service of complaints on satellite carriers.--For purposes of any proceeding under this subsection, any satellite carrier that retransmits the signal of any broadcast station shall be deemed to designate the Secretary of the Commission as its agent for service of process. A television broadcast station may serve a satellite carrier with a complaint concerning an alleged violation of subsection (b)(1) through retransmission of a station within the local market of such station by filing the original and two copies of the complaint with the Secretary of the Commission and serving a copy of the complaint on the satellite carrier by means of two commonly used overnight delivery services, each addressed to the chief executive officer of the satellite carrier at its principal place of business, and each marked `URGENT LITIGATION MATTER' on the outer packaging. Service shall be deemed complete one business day after a copy of the complaint is provided to the delivery services for overnight delivery. On receipt of a complaint filed by a television broadcast station under this subsection, the Secretary of the Commission shall send the original complaint by United States mail, postage prepaid, receipt requested, addressed to the chief executive officer of the satellite carrier at its principal place of business. ``(3) Answers by satellite carriers.--Within five business days after the date of service, the satellite carrier shall file an answer with the Commission and shall serve the answer by a commonly used overnight delivery service and by United States mail, on the counsel designated in the complaint at the address listed for such counsel in the complaint. ``(4) Defenses.-- ``(A) Exclusive defenses.--The defenses under this paragraph are the exclusive defenses available to a satellite carrier against which a complaint under this subsection is filed. ``(B) Defenses.--The defenses referred to under subparagraph (A) are the defenses that-- ``(i) the satellite carrier did not retransmit the television broadcast station to any person in the local market of the station during the time period specified in the complaint; ``(ii) the television broadcast station had, in a writing signed by an officer of the television broadcast station, expressly authorized the retransmission of the station by the satellite carrier to each person in the local market of the television broadcast station to which the satellite carrier made such retransmissions for the entire time period during which it is alleged that a violation of subsection (b)(1) has occurred; ``(iii) the retransmission was made after January 1, 2002, and the television broadcast station had elected to assert the right to carriage under section 338 as against the satellite carrier for the relevant period; or ``(iv) the station being retransmitted is a noncommercial television broadcast station. ``(5) Counting of violations.--The retransmission without consent of a particular television broadcast station on a particular day to one or more persons in the local market of the station shall be considered a separate violation of subsection (b)(1). ``(6) Burden of proof.--With respect to each alleged violation, the burden of proof shall be on a television broadcast station to establish that the satellite carrier retransmitted the station to at least one person in the local market of the station on the day in question. The burden of proof shall be on the satellite carrier with respect to all defenses other than the defense under paragraph (4)(B)(i). ``(7) Procedures.-- ``(A) Regulations.--Within 60 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall issue procedural regulations implementing this subsection which shall supersede procedures under section 312. ``(B) Determinations.-- ``(i) In general.--Within 45 days after the filing of a complaint, the Commission shall issue a final determination in any proceeding brought under this subsection. The Commission's final determination shall specify the number of violations committed by the satellite carrier. The Commission shall hear witnesses only if it clearly appears, based on written filings by the parties, that there is a genuine dispute about material facts. Except as provided in the preceding sentence, the Commission may issue a final ruling based on written filings by the parties. ``(ii) Discovery.--The Commission may direct the parties to exchange pertinent documents, and if necessary to take prehearing depositions, on such schedule as the Commission may approve, but only if the Commission first determines that such discovery is necessary to resolve a genuine dispute about material facts, consistent with the obligation to make a final determination within 45 days. ``(8) Relief.--If the Commission determines that a satellite carrier has retransmitted the television broadcast station to at least one person in the local market of such station and has failed to meet its burden of proving one of the defenses under paragraph (4) with respect to such retransmission, the Commission shall be required to-- ``(A) make a finding that the satellite carrier violated subsection (b)(1) with respect to that station; and ``(B) issue an order, within 45 days after the filing of the complaint, containing-- ``(i) a cease-and-desist order directing the satellite carrier immediately to stop making any further retransmissions of the television broadcast station to any person within the local market of such station until such time as the Commission determines that the satellite carrier is in compliance with subsection (b)(1) with respect to such station; ``(ii) if the satellite carrier is found to have violated subsection (b)(1) with respect to more than two television broadcast stations, a cease-and-desist order directing the satellite carrier to stop making any further retransmission of any television broadcast station to any person within the local market of such station, until such time as the Commission, after giving notice to the station, that the satellite carrier is in compliance with subsection (b)(1) with respect to such stations; and ``(iii) an award to the complainant of that complainant's costs and reasonable attorney's fees. ``(9) Court proceedings on enforcement of commission order.-- ``(A) In general.--On entry by the Commission of a final order granting relief under this subsection-- ``(i) a television broadcast station may apply within 30 days after such entry to the United States District Court for the Eastern District of Virginia for a final judgment enforcing all relief granted by the Commission; and ``(ii) the satellite carrier may apply within 30 days after such entry to the United States District Court for the Eastern District of Virginia for a judgment reversing the Commission's order. [[Page H12593]] ``(B) Appeal.--The procedure for an appeal under this paragraph by the satellite carrier shall supersede any other appeal rights under Federal or State law. A United States district court shall be deemed to have personal jurisdiction over the satellite carrier if the carrier, or a company under common control with the satellite carrier, has delivered television programming by satellite to more than 30 customers in that district during the preceding 4-year period. If the United States District Court for the Eastern District of Virginia does not have personal jurisdiction over the satellite carrier, an enforcement action or appeal shall be brought in the United States District Court for the District of Columbia, which may find personal jurisdiction based on the satellite carrier's ownership of licenses issued by the Commission. An application by a television broadcast station for an order enforcing any cease-and-desist relief granted by the Commission shall be resolved on a highly expedited schedule. No discovery may be conducted by the parties in any such proceeding. The district court shall enforce the Commission order unless the Commission record reflects manifest error and an abuse of discretion by the Commission. ``(10) Civil action for statutory damages.--Within 6 months after issuance of an order by the Commission under this subsection, a television broadcast station may file a civil action in any United States district court that has personal jurisdiction over the satellite carrier for an award of statutory damages for any violation that the Commission has determined to have been committed by a satellite carrier under this subsection. Such action shall not be subject to transfer under section 1404(a) of title 28, United States Code. On finding that the satellite carrier has committed one or more violations of subsection (b), the District Court shall be required to award the television broadcast station statutory damages of $25,000 per violation, in accordance with paragraph (5), and the costs and attorney's fees incurred by the station. Such statutory damages shall be awarded only if the television broadcast station has filed a binding stipulation with the court that such station will donate the full amount in excess of $1,000 of any statutory damage award to the United States Treasury for public purposes. Notwithstanding any other provision of law, a station shall incur no tax liability of any kind with respect to any amounts so donated. Discovery may be conducted by the parties in any proceeding under this paragraph only if and to the extent necessary to resolve a genuinely disputed issue of fact concerning one of the defenses under paragraph (4). In any such action, the defenses under paragraph (4) shall be exclusive, and the burden of proof shall be on the satellite carrier with respect to all defenses other than the defense under paragraph (4)(B)(i). A judgment under this paragraph may be enforced in any manner permissible under Federal or State law. ``(11) Appeals.-- ``(A) In general.--The nonprevailing party before a United States district court may appeal a decision under this subsection to the United States Court of Appeals with jurisdiction over that district court. The Court of Appeals shall not issue any stay of the effectiveness of any decision granting relief against a satellite carrier unless the carrier presents clear and convincing evidence that it is highly likely to prevail on appeal and only after posting a bond for the full amount of any monetary award assessed against it and for such further amount as the Court of Appeals may believe appropriate. ``(B) Appeal.--If the Commission denies relief in response to a complaint filed by a television broadcast station under this subsection, the television broadcast station filing the complaint may file an appeal with the United States Court of Appeals for the District of Columbia Circuit. ``(12) Sunset.--No complaint or civil action may be filed under this subsection after December 31, 2001. This subsection shall continue to apply to any complaint or civil action filed on or before such date.''. SEC. 1010. SEVERABILITY. If any provision of section 325(b) of the Communications Act of 1934 (47 U.S.C. 325(b)), or the application of that provision to any person or circumstance, is held by a court of competent jurisdiction to violate any provision of the Constitution of the United States, then the other provisions of that section, and the application of that provision to other persons and circumstances, shall not be affected. SEC. 1011. TECHNICAL AMENDMENTS. (a) Technical Amendments Relating to Cable Systems.--Title 17, United States Code, is amended as follows: (1) Such title is amended by striking ``programing'' each place it appears and inserting ``programming''. (2) Section 111 is amended by striking ``compulsory'' each place it appears and inserting ``statutory''. (3) Section 510(b) is amended by striking ``compulsory'' and inserting ``statutory''. (b) Technical Amendments Relating to Performance or Displays Of Works.-- (1) Section 111 of title 17, United States Code, is amended-- (A) in subsection (a), in the matter preceding paragraph (1), by striking ``primary transmission embodying a performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission''; (B) in subsection (b), in the matter preceding paragraph (1), by striking ``primary transmission embodying a performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission''; and (C) in subsection (c)-- (i) in paragraph (1)-- (I) by inserting ``a performance or display of a work embodied in'' after ``by a cable system of''; and (II) by striking ``and embodying a performance or display of a work''; and (ii) in paragraphs (3) and (4)-- (I) by striking ``a primary transmission'' and inserting ``a performance or display of a work embodied in a primary transmission''; and (II) by striking ``and embodying a performance or display of a work''. (2) Section 119(a) of title 17, United States Code, is amended-- (A) in paragraph (1), by striking ``primary transmission made by a superstation and embodying a performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission made by a superstation''; (B) in paragraph (2)(A), by striking ``programming'' and all that follows through ``a work'' and inserting ``a performance or display of a work embodied in a primary transmission made by a network station''; (C) in paragraph (4)-- (i) by inserting ``a performance or display of a work embodied in'' after ``by a satellite carrier of''; and (ii) by striking ``and embodying a performance or display of a work''; and (D) in paragraph (6)-- (i) by inserting ``performance or display of a work embodied in'' after ``by a satellite carrier of''; and (ii) by striking ``and embodying a performance or display of a work''. (3) Section 501(e) of title 17, United States Code, is amended by striking ``primary transmission embodying the performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission''. (c) Conforming Amendment.--Section 119(a)(2)(C) of title 17, United States Code, is amended in the first sentence by striking ``currently''. (d) Work Made for Hire.--Section 101 of title 17, United States Code, is amended in the definition relating to work for hire in paragraph (2) by inserting ``as a sound recording,'' after ``audiovisual work''. SEC. 1012. EFFECTIVE DATES. Sections 1001, 1003, 1005, 1007, 1008, 1009, 1010, and 1011 (and the amendments made by such sections) shall take effect on the date of the enactment of this Act. The amendments made by sections 1002, 1004, and 1006 shall be effective as of July 1, 1999. TITLE II--RURAL LOCAL TELEVISION SIGNALS SEC. 2001. SHORT TITLE. This title may be cited as the ``Rural Local Broadcast Signal Act''. SEC. 2002. LOCAL TELEVISION SERVICE IN UNSERVED AND UNDERSERVED MARKETS. (a) In General.--Not later than 1 year after the date of the enactment of this Act, the Federal Communications Commission (``the Commission'') shall take all actions necessary to make a determination regarding licenses or other authorizations for facilities that will utilize, for delivering local broadcast television station signals to satellite television subscribers in unserved and underserved local television markets, spectrum otherwise allocated to commercial use. (b) Rules.-- (1) Form of business.--To the extent not inconsistent with the Communications Act of 1934 and the Commission's rules, the Commission shall permit applicants under subsection (a) to engage in partnerships, joint ventures, and similar operating arrangements for the purpose of carrying out subsection (a). (2) Harmful interference.--The Commission shall ensure that no facility licensed or authorized under subsection (a) causes harmful interference to the primary users of that spectrum or to public safety spectrum use. (3) Limitation on commission.--Except as provided in paragraphs (1) and (2), the Commission may not restrict any entity granted a license or other authorization under subsection (a) from using any reasonable compression, reformatting, or other technology. (c) Report.--Not later than January 1, 2001, the Commission shall report to the Agriculture, Appropriations, and the Judiciary Committees of the Senate and the House of Representatives, the Senate Committee on Commerce, Science, and Transportation, and the House of Representatives Committee on Commerce, on the extent to which licenses and other authorizations under subsection (a) have facilitated the delivery of local signals to satellite television subscribers in unserved and underserved local television markets. The report shall include-- (1) an analysis of the extent to which local signals are being provided by direct-to-home satellite television providers and by other multichannel video program distributors; (2) an enumeration of the technical, economic, and other impediments each type of multichannel video programming distributor has encountered; and (3) recommendations for specific measures to facilitate the provision of local signals to subscribers in unserved and underserved markets by direct-to-home satellite television providers and by other distributors of multichannel video programming service. TITLE III--TRADEMARK CYBERPIRACY PREVENTION SEC. 3001. SHORT TITLE; REFERENCES. (a) Short Title.--This title may be cited as the ``Anticybersquatting Consumer Protection Act''. (b) References to the Trademark Act of 1946.--Any reference in this title to the Trademark Act of 1946 shall be a reference to the Act entitled ``An Act to provide for the registration [[Page H12594]] and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes'', approved July 5, 1946 (15 U.S.C. 1051 et seq.). SEC. 3002. CYBERPIRACY PREVENTION. (a) In General.--Section 43 of the Trademark Act of 1946 (15 U.S.C. 1125) is amended by inserting at the end the following: ``(d)(1)(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person-- ``(i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and ``(ii) registers, traffics in, or uses a domain name that-- ``(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark; ``(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or ``(III) is a trademark, word, or name protected by reason of section 706 of title 18, United States Code, or section 220506 of title 36, United States Code. ``(B)(i) In determining whether a person has a bad faith intent described under subparagraph (A), a court may consider factors such as, but not limited to-- ``(I) the trademark or other intellectual property rights of the person, if any, in the domain name; ``(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person; ``(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; ``(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name; ``(V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site; ``(VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct; ``(VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct; ``(VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and ``(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of section 43. ``(ii) Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful. ``(C) In any civil action involving the registration, trafficking, or use of a domain name under this paragraph, a court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark. ``(D) A person shall be liable for using a domain name under subparagraph (A) only if that person is the domain name registrant or that registrant's authorized licensee. ``(E) As used in this paragraph, the term `traffics in' refers to transactions that include, but are not limited to, sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration. ``(2)(A) The owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located if-- ``(i) the domain name violates any right of the owner of a mark registered in the Patent and Trademark Office, or protected under subsection (a) or (c); and ``(ii) the court finds that the owner-- ``(I) is not able to obtain in personam jurisdiction over a person who would have been a defendant in a civil action under paragraph (1); or ``(II) through due diligence was not able to find a person who would have been a defendant in a civil action under paragraph (1) by-- ``(aa) sending a notice of the alleged violation and intent to proceed under this paragraph to the registrant of the domain name at the postal and e-mail address provided by the registrant to the registrar; and ``(bb) publishing notice of the action as the court may direct promptly after filing the action. ``(B) The actions under subparagraph (A)(ii) shall constitute service of process. ``(C) In an in rem action under this paragraph, a domain name shall be deemed to have its situs in the judicial district in which-- ``(i) the domain name registrar, registry, or other domain name authority that registered or assigned the domain name is located; or ``(ii) documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are deposited with the court. ``(D)(i) The remedies in an in rem action under this paragraph shall be limited to a court order for the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark. Upon receipt of written notification of a filed, stamped copy of a complaint filed by the owner of a mark in a United States district court under this paragraph, the domain name registrar, domain name registry, or other domain name authority shall-- ``(I) expeditiously deposit with the court documents sufficient to establish the court's control and authority regarding the disposition of the registration and use of the domain name to the court; and ``(II) not transfer, suspend, or otherwise modify the domain name during the pendency of the action, except upon order of the court. ``(ii) The domain name registrar or registry or other domain name authority shall not be liable for injunctive or monetary relief under this paragraph except in the case of bad faith or reckless disregard, which includes a willful failure to comply with any such court order. ``(3) The civil action established under paragraph (1) and the in rem action established under paragraph (2), and any remedy available under either such action, shall be in addition to any other civil action or remedy otherwise applicable. ``(4) The in rem jurisdiction established under paragraph (2) shall be in addition to any other jurisdiction that otherwise exists, whether in rem or in personam.''. (b) Cyberpiracy Protections for Individuals.-- (1) In general.-- (A) Civil liability.--Any person who registers a domain name that consists of the name of another living person, or a name substantially and confusingly similar thereto, without that person's consent, with the specific intent to profit from such name by selling the domain name for financial gain to that person or any third party, shall be liable in a civil action by such person. (B) Exception.--A person who in good faith registers a domain name consisting of the name of another living person, or a name substantially and confusingly similar thereto, shall not be liable under this paragraph if such name is used in, affiliated with, or related to a work of authorship protected under title 17, United States Code, including a work made for hire as defined in section 101 of title 17, United States Code, and if the person registering the domain name is the copyright owner or licensee of the work, the person intends to sell the domain name in conjunction with the lawful exploitation of the work, and such registration is not prohibited by a contract between the registrant and the named person. The exception under this subparagraph shall apply only to a civil action brought under paragraph (1) and shall in no manner limit the protections afforded under the Trademark Act of 1946 (15 U.S.C. 1051 et seq.) or other provision of Federal or State law. (2) Remedies.--In any civil action brought under paragraph (1), a court may award injunctive relief, including the forfeiture or cancellation of the domain name or the transfer of the domain name to the plaintiff. The court may also, in its discretion, award costs and attorneys fees to the prevailing party. (3) Definition.--In this subsection, the term ``domain name'' has the meaning given that term in section 45 of the Trademark Act of 1946 (15 U.S.C. 1127). (4) Effective date.--This subsection shall apply to domain names registered on or after the date of the enactment of this Act. SEC. 3003. DAMAGES AND REMEDIES. (a) Remedies in Cases of Domain Name Piracy.-- (1) Injunctions.--Section 34(a) of the Trademark Act of 1946 (15 U.S.C. 1116(a)) is amended in the first sentence by striking ``(a) or (c)'' and inserting ``(a), (c), or (d)''. (2) Damages.--Section 35(a) of the Trademark Act of 1946 (15 U.S.C. 1117(a)) is amended in the first sentence by inserting ``, (c), or (d)'' after ``section 43(a)''. (b) Statutory Damages.--Section 35 of the Trademark Act of 1946 (15 U.S.C. 1117) is amended by adding at the end the following: ``(d) In a case involving a violation of section 43(d)(1), the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits, an award of statutory damages in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just. SEC. 3004. LIMITATION ON LIABILITY. Section 32(2) of the Trademark Act of 1946 (15 U.S.C. 1114) is amended-- (1) in the matter preceding subparagraph (A) by striking ``under section 43(a)'' and inserting ``under section 43(a) or (d)''; and (2) by redesignating subparagraph (D) as subparagraph (E) and inserting after subparagraph (C) the following: ``(D)(i)(I) A domain name registrar, a domain name registry, or other domain name registration authority that takes any action described under clause (ii) affecting a domain name shall not be liable for monetary relief or, except as provided in subclause (II), for injunctive relief, to any person for such action, regardless of whether the domain name is finally determined to infringe or dilute the mark. ``(II) A domain name registrar, domain name registry, or other domain name registration authority described in subclause (I) may be subject [[Page H12595]] to injunctive relief only if such registrar, registry, or other registration authority has-- ``(aa) not expeditiously deposited with a court, in which an action has been filed regarding the disposition of the domain name, documents sufficient for the court to establish the court's control and authority regarding the disposition of the registration and use of the domain name; ``(bb) transferred, suspended, or otherwise modified the domain name during the pendency of the action, except upon order of the court; or ``(cc) willfully failed to comply with any such court order. ``(ii) An action referred to under clause (i)(I) is any action of refusing to register, removing from registration, transferring, temporarily disabling, or permanently canceling a domain name-- ``(I) in compliance with a court order under section 43(d); or ``(II) in the implementation of a reasonable policy by such registrar, registry, or authority prohibiting the registration of a domain name that is identical to, confusingly similar to, or dilutive of another's mark. ``(iii) A domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name. ``(iv) If a registrar, registry, or other registration authority takes an action described under clause (ii) based on a knowing and material misrepresentation by any other person that a domain name is identical to, confusingly similar to, or dilutive of a mark, the person making the knowing and material misrepresentation shall be liable for any damages, including costs and attorney's fees, incurred by the domain name registrant as a result of such action. The court may also grant injunctive relief to the domain name registrant, including the reactivation of the domain name or the transfer of the domain name to the domain name registrant. ``(v) A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this Act. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.''. SEC. 3005. DEFINITIONS. Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is amended by inserting after the undesignated paragraph defining the term ``counterfeit'' the following: ``The term `domain name' means any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet. ``The term `Internet' has the meaning given that term in section 230(f )(1) of the Communications Act of 1934 (47 U.S.C. 230(f )(1)).''. SEC. 3006. STUDY ON ABUSIVE DOMAIN NAME REGISTRATIONS INVOLVING PERSONAL NAMES. (a) In General.--Not later than 180 days after the date of the enactment of this Act, the Secretary of Commerce, in consultation with the Patent and Trademark Office and the Federal Election Commission, shall conduct a study and report to Congress with recommendations on guidelines and procedures for resolving disputes involving the registration or use by a person of a domain name that includes the personal name of another person, in whole or in part, or a name confusingly similar thereto, including consideration of and recommendations for-- (1) protecting personal names from registration by another person as a second level domain name for purposes of selling or otherwise transferring such domain name to such other person or any third party for financial gain; (2) protecting individuals from bad faith uses of their personal names as second level domain names by others with malicious intent to harm the reputation of the individual or the goodwill associated with that individual's name; (3) protecting consumers from the registration and use of domain names that include personal names in the second level domain in manners which are intended or are likely to confuse or deceive the public as to the affiliation, connection, or association of the domain name registrant, or a site accessible under the domain name, with such other person, or as to the origin, sponsorship, or approval of the goods, services, or commercial activities of the domain name registrant; (4) protecting the public from registration of domain names that include the personal names of government officials, official candidates, and potential official candidates for Federal, State, or local political office in the United States, and the use of such domain names in a manner that disrupts the electoral process or the public's ability to access accurate and reliable information regarding such individuals; (5) existing remedies, whether under State law or otherwise, and the extent to which such remedies are sufficient to address the considerations described in paragraphs (1) through (4); and (6) the guidelines, procedures, and policies of the Internet Corporation for Assigned Names and Numbers and the extent to which they address the considerations described in paragraphs (1) through (4). (b) Guidelines and Procedures.--The Secretary of Commerce shall, under its Memorandum of Understanding with the Internet Corporation for Assigned Names and Numbers, collaborate to develop guidelines and procedures for resolving disputes involving the registration or use by a person of a domain name that includes the personal name of another person, in whole or in part, or a name confusingly similar thereto. SEC. 3007. HISTORIC PRESERVATION. Section 101(a)(1)(A) of the National Historic Preservation Act (16 U.S.C. 470a(a)(1)(A)) is amended by adding at the end the following: ``Notwithstanding section 43(c) of the Act entitled `An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes', approved July 5, 1946 (commonly known as the `Trademark Act of 1946' (15 U.S.C. 1125(c))), buildings and structures on or eligible for inclusion on the National Register of Historic Places (either individually or as part of a historic district), or designated as an individual landmark or as a contributing building in a historic district by a unit of State or local government, may retain the name historically associated with the building or structure.''. SEC. 3008. SAVINGS CLAUSE. Nothing in this title shall affect any defense available to a defendant under the Trademark Act of 1946 (including any defense under section 43(c)(4) of such Act or relating to fair use) or a person's right of free speech or expression under the first amendment of the United States Constitution. SEC. 3009. TECHNICAL AND CONFORMING AMENDMENTS. Chapter 85 of title 28, United States Code, is amended as follows: (1) Section 1338 of title 28, United States Codes, is amended-- (A) in the section heading by striking ``trade-marks'' and inserting ``trademarks''; (B) in subsection (a) by striking ``trade-marks'' and inserting ``trademarks''; and (C) in subsection (b) by striking ``trade-mark'' and inserting ``trademark''. (2) The item relating to section 1338 in the table of sections for chapter 85 of title 28, United States Code, is amended by striking ``trade-marks'' and inserting ``trademarks''. SEC. 3010. EFFECTIVE DATE. Sections 3002(a), 3003, 3004, 3005, and 3008 of this title shall apply to all domain names registered before, on, or after the date of the enactment of this Act, except that damages under subsection (a) or (d) of section 35 of the Trademark Act of 1946 (15 U.S.C. 1117), as amended by section 3003 of this title, shall not be available with respect to the registration, trafficking, or use of a domain name that occurs before the date of the enactment of this Act. TITLE IV--INVENTOR PROTECTION SEC. 4001. SHORT TITLE. This title may be cited as the ``American Inventors Protection Act of 1999''. Subtitle A--Inventors' Rights SEC. 4101. SHORT TITLE. This subtitle may be cited as the ``Inventors' Rights Act of 1999''. SEC. 4102. INTEGRITY IN INVENTION PROMOTION SERVICES. (a) In General.--Chapter 29 of title 35, United States Code, is amended by adding at the end the following new section: ``Sec. 297. Improper and deceptive invention promotion ``(a) In General.--An invention promoter shall have a duty to disclose the following information to a customer in writing, prior to entering into a contract for invention promotion services: ``(1) the total number of inventions evaluated by the invention promoter for commercial potential in the past 5 years, as well as the number of those inventions that received positive evaluations, and the number of those inventions that received negative evaluations; ``(2) the total number of customers who have contracted with the invention promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other nonmarketing services from the invention promoter, or who have defaulted in their payment to the invention promoter; ``(3) the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter; ``(4) the total number of customers known by the invention promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by such invention promoter; and ``(5) the names and addresses of all previous invention promotion companies with which the invention promoter or its officers have collectively or individually been affiliated in the previous 10 years. ``(b) Civil Action.--(1) Any customer who enters into a contract with an invention promoter and who is found by a court to have been injured by any material false or fraudulent statement or representation, or any omission of material fact, by that invention promoter (or any agent, employee, director, officer, partner, or independent contractor of such invention promoter), or by the failure of that invention promoter to disclose such information as required under subsection (a), may recover in a civil action against the invention promoter (or the officers, directors, or partners of such invention promoter), in addition to reasonable costs and attorneys' fees-- ``(A) the amount of actual damages incurred by the customer; or ``(B) at the election of the customer at any time before final judgment is rendered, statutory damages in a sum of not more than $5,000, as the court considers just. ``(2) Notwithstanding paragraph (1), in a case where the customer sustains the burden of [[Page H12596]] proof, and the court finds, that the invention promoter intentionally misrepresented or omitted a material fact to such customer, or willfully failed to disclose such information as required under subsection (a), with the purpose of deceiving that customer, the court may increase damages to not more than three times the amount awarded, taking into account past complaints made against the invention promoter that resulted in regulatory sanctions or other corrective actions based on those records compiled by the Commissioner of Patents under subsection (d). ``(c) Definitions.--For purposes of this section-- ``(1) a `contract for invention promotion services' means a contract by which an invention promoter undertakes invention promotion services for a customer; ``(2) a `customer' is any individual who enters into a contract with an invention promoter for invention promotion services; ``(3) the term `invention promoter' means any person, firm, partnership, corporation, or other entity who offers to perform or performs invention promotion services for, or on behalf of, a customer, and who holds itself out through advertising in any mass media as providing such services, but does not include-- ``(A) any department or agency of the Federal Government or of a State or local government; ``(B) any nonprofit, charitable, scientific, or educational organization, qualified under applicable State law or described under section 170(b)(1)(A) of the Internal Revenue Code of 1986; ``(C) any person or entity involved in the evaluation to determine commercial potential of, or offering to license or sell, a utility patent or a previously filed nonprovisional utility patent application; ``(D) any party participating in a transaction involving the sale of the stock or assets of a business; or ``(E) any party who directly engages in the business of retail sales of products or the distribution of products; and ``(4) the term `invention promotion services' means the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer. ``(d) Records of Complaints.-- ``(1) Release of complaints.--The Commissioner of Patents shall make all complaints received by the Patent and Trademark Office involving invention promoters publicly available, together with any response of the invention promoters. The Commissioner of Patents shall notify the invention promoter of a complaint and provide a reasonable opportunity to reply prior to making such complaint publicly available. ``(2) Request for complaints.--The Commissioner of Patents may request complaints relating to invention promotion services from any Federal or State agency and include such complaints in the records maintained under paragraph (1), together with any response of the invention promoters.''. (b) Conforming Amendment.--The table of sections at the beginning of chapter 29 of title 35, United States Code, is amended by adding at the end the following new item: ``297. Improper and deceptive invention promotion.''. SEC. 4103. EFFECTIVE DATE. This subtitle and the amendments made by this subtitle shall take effect 60 days after the date of the enactment of this Act. Subtitle B--Patent and Trademark Fee Fairness SEC. 4201. SHORT TITLE. This subtitle may be cited as the ``Patent and Trademark Fee Fairness Act of 1999''. SEC. 4202. ADJUSTMENT OF PATENT FEES. (a) Original Filing Fee.--Section 41(a)(1)(A) of title 35, United States Code, relating to the fee for filing an original patent application, is amended by striking ``$760'' and inserting ``$690''. (b) Reissue Fee.--Section 41(a)(4)(A) of title 35, United States Code, relating to the fee for filing for a reissue of a patent, is amended by striking ``$760'' and inserting ``$690''. (c) National Fee for Certain International Applications.-- Section 41(a)(10) of title 35, United States Code, relating to the national fee for certain international applications, is amended by striking ``$760'' and inserting ``$690''. (d) Maintenance Fees.--Section 41(b)(1) of title 35, United States Code, relating to certain maintenance fees, is amended by striking ``$940'' and inserting ``$830''. SEC. 4203. ADJUSTMENT OF TRADEMARK FEES. Notwithstanding the second sentence of section 31(a) of the Trademark Act of 1946 (15 U.S.C. 111(a)), the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office is authorized in fiscal year 2000 to adjust trademark fees without regard to fluctuations in the Consumer Price Index during the preceding 12 months. SEC. 4204. STUDY ON ALTERNATIVE FEE STRUCTURES. The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall conduct a study of alternative fee structures that could be adopted by the United States Patent and Trademark Office to encourage maximum participation by the inventor community in the United States. The Director shall submit such study to the Committees on the Judiciary of the House of Representatives and the Senate not later than 1 year after the date of the enactment of this Act. SEC. 4205. PATENT AND TRADEMARK OFFICE FUNDING. Section 42(c) of title 35, United States Code, is amended in the second sentence-- (1) by striking ``Fees available'' and inserting ``All fees available''; and (2) by striking ``may'' and inserting ``shall''. SEC. 4206. EFFECTIVE DATE. (a) In General.--Except as provided in subsection (b), the amendments made by this subtitle shall take effect on the date of the enactment of this Act. (b) Section 4202.--The amendments made by section 4202 of this subtitle shall take effect 30 days after the date of the enactment of this Act. Subtitle C--First Inventor Defense SEC. 4301. SHORT TITLE. This subtitle may be cited as the ``First Inventor Defense Act of 1999''. SEC. 4302. DEFENSE TO PATENT INFRINGEMENT BASED ON EARLIER INVENTOR. (a) Defense.--Chapter 28 of title 35, United States Code, is amended by adding at the end the following new section: ``Sec. 273. Defense to infringement based on earlier inventor ``(a) Definitions.--For purposes of this section-- ``(1) the terms `commercially used' and `commercial use' mean use of a method in the United States, so long as such use is in connection with an internal commercial use or an actual arm's-length sale or other arm's-length commercial transfer of a useful end result, whether or not the subject matter at issue is accessible to or otherwise known to the public, except that the subject matter for which commercial marketing or use is subject to a premarketing regulatory review period during which the safety or efficacy of the subject matter is established, including any period specified in section 156(g), shall be deemed `commercially used' and in `commercial use' during such regulatory review period; ``(2) in the case of activities performed by a nonprofit research laboratory, or nonprofit entity such as a university, research center, or hospital, a use for which the public is the intended beneficiary shall be considered to be a use described in paragraph (1), except that the use-- ``(A) may be asserted as a defense under this section only for continued use by and in the laboratory or nonprofit entity; and ``(B) may not be asserted as a defense with respect to any subsequent commercialization or use outside such laboratory or nonprofit entity; ``(3) the term `method' means a method of doing or conducting business; and ``(4) the `effective filing date' of a patent is the earlier of the actual filing date of the application for the patent or the filing date of any earlier United States, foreign, or international application to which the subject matter at issue is entitled under section 119, 120, or 365 of this title. ``(b) Defense to Infringement.-- ``(1) In general.--It shall be a defense to an action for infringement under section 271 of this title with respect to any subject matter that would otherwise infringe one or more claims for a method in the patent being asserted against a person, if such person had, acting in good faith, actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent. ``(2) Exhaustion of right.--The sale or other disposition of a useful end product produced by a patented method, by a person entitled to assert a defense under this section with respect to that useful end result shall exhaust the patent owner's rights under the patent to the extent such rights would have been exhausted had such sale or other disposition been made by the patent owner. ``(3) Limitations and qualifications of defense.--The defense to infringement under this section is subject to the following: ``(A) Patent.--A person may not assert the defense under this section unless the invention for which the defense is asserted is for a method. ``(B) Derivation.--A person may not assert the defense under this section if the subject matter on which the defense is based was derived from the patentee or persons in privity with the patentee. ``(C) Not a general license.--The defense asserted by a person under this section is not a general license under all claims of the patent at issue, but extends only to the specific subject matter claimed in the patent with respect to which the person can assert a defense under this chapter, except that the defense shall also extend to variations in the quantity or volume of use of the claimed subject matter, and to improvements in the claimed subject matter that do not infringe additional specifically claimed subject matter of the patent. ``(4) Burden of proof.--A person asserting the defense under this section shall have the burden of establishing the defense by clear and convincing evidence. ``(5) Abandonment of use.--A person who has abandoned commercial use of subject matter may not rely on activities performed before the date of such abandonment in establishing a defense under this section with respect to actions taken after the date of such abandonment. ``(6) Personal defense.--The defense under this section may be asserted only by the person who performed the acts necessary to establish the defense and, except for any transfer to the patent owner, the right to assert the defense shall not be licensed or assigned or transferred to another person except as an ancillary and subordinate part of a good faith assignment or transfer for other reasons of the entire enterprise or line of business to which the defense relates. ``(7) Limitation on sites.--A defense under this section, when acquired as part of a good faith assignment or transfer of an entire enterprise or line of business to which the defense relates, may only be asserted for uses at sites [[Page H12597]] where the subject matter that would otherwise infringe one or more of the claims is in use before the later of the effective filing date of the patent or the date of the assignment or transfer of such enterprise or line of business. ``(8) Unsuccessful assertion of defense.--If the defense under this section is pleaded by a person who is found to infringe the patent and who subsequently fails to demonstrate a reasonable basis for asserting the defense, the court shall find the case exceptional for the purpose of awarding attorney fees under section 285 of this title. ``(9) Invalidity.--A patent shall not be deemed to be invalid under section 102 or 103 of this title solely because a defense is raised or established under this section.''. (b) Conforming Amendment.--The table of sections at the beginning of chapter 28 of title 35, United States Code, is amended by adding at the end the following new item: ``273. Defense to infringement based on earlier inventor.''. SEC. 4303. EFFECTIVE DATE AND APPLICABILITY. This subtitle and the amendments made by this subtitle shall take effect on the date of the enactment of this Act, but shall not apply to any action for infringement that is pending on such date of enactment or with respect to any subject matter for which an adjudication of infringement, including a consent judgment, has been made before such date of enactment. Subtitle D--Patent Term Guarantee SEC. 4401. SHORT TITLE. This subtitle may be cited as the ``Patent Term Guarantee Act of 1999''. SEC. 4402. PATENT TERM GUARANTEE AUTHORITY. (a) Adjustment of Patent Term.--Section 154(b) of title 35, United States Code, is amended to read as follows: ``(b) Adjustment of Patent Term.-- ``(1) Patent term guarantees.-- ``(A) Guarantee of prompt patent and trademark office responses.--Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the Patent and Trademark Office to-- ``(i) provide at least one of the notifications under section 132 of this title or a notice of allowance under section 151 of this title not later than 14 months after-- ``(I) the date on which an application was filed under section 111(a) of this title; or ``(II) the date on which an international application fulfilled the requirements of section 371 of this title; ``(ii) respond to a reply under section 132, or to an appeal taken under section 134, within 4 months after the date on which the reply was filed or the appeal was taken; ``(iii) act on an application within 4 months after the date of a decision by the Board of Patent Appeals and Interferences under section 134 or 135 or a decision by a Federal court under section 141, 145, or 146 in a case in which allowable claims remain in the application; or ``(iv) issue a patent within 4 months after the date on which the issue fee was paid under section 151 and all outstanding requirements were satisfied, the term of the patent shall be extended 1 day for each day after the end of the period specified in clause (i), (ii), (iii), or (iv), as the case may be, until the action described in such clause is taken. ``(B) Guarantee of no more than 3-year application pendency.--Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years after the actual filing date of the application in the United States, not including-- ``(i) any time consumed by continued examination of the application requested by the applicant under section 132(b); ``(ii) any time consumed by a proceeding under section 135(a), any time consumed by the imposition of an order under section 181, or any time consumed by appellate review by the Board of Patent Appeals and Interferences or by a Federal court; or ``(iii) any delay in the processing of the application by the United States Patent and Trademark Office requested by the applicant except as permitted by paragraph (3)(C), the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued. ``(C) Guarantee or adjustments for delays due to interferences, secrecy orders, and appeals.--Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to-- ``(i) a proceeding under section 135(a); ``(ii) the imposition of an order under section 181; or ``(iii) appellate review by the Board of Patent Appeals and Interferences or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability, the term of the patent shall be extended 1 day for each day of the pendency of the proceeding, order, or review, as the case may be. ``(2) Limitations.-- ``(A) In general.--To the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed. ``(B) Disclaimed term.--No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer. ``(C) Reduction of period of adjustment.-- ``(i) The period of adjustment of the term of a patent under paragraph (1) shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. ``(ii) With respect to adjustments to patent term made under the authority of paragraph (1)(B), an applicant shall be deemed to have failed to engage in reasonable efforts to conclude processing or examination of an application for the cumulative total of any periods of time in excess of 3 months that are taken to respond to a notice from the Office making any rejection, objection, argument, or other request, measuring such 3-month period from the date the notice was given or mailed to the applicant. ``(iii) The Director shall prescribe regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application. ``(3) Procedures for patent term adjustment determination.-- ``(A) The Director shall prescribe regulations establishing procedures for the application for and determination of patent term adjustments under this subsection. ``(B) Under the procedures established under subparagraph (A), the Director shall-- ``(i) make a determination of the period of any patent term adjustment under this subsection, and shall transmit a notice of that determination with the written notice of allowance of the application under section 151; and ``(ii) provide the applicant one opportunity to request reconsideration of any patent term adjustment determination made by the Director. ``(C) The Director shall reinstate all or part of the cumulative period of time of an adjustment under paragraph (2)(C) if the applicant, prior to the issuance of the patent, makes a showing that, in spite of all due care, the applicant was unable to respond within the 3-month period, but in no case shall more than three additional months for each such response beyond the original 3-month period be reinstated. ``(D) The Director shall proceed to grant the patent after completion of the Director's determination of a patent term adjustment under the procedures established under this subsection, notwithstanding any appeal taken by the applicant of such determination. ``(4) Appeal of patent term adjustment determination.-- ``(A) An applicant dissatisfied with a determination made by the Director under paragraph (3) shall have remedy by a civil action against the Director filed in the United States District Court for the District of Columbia within 180 days after the grant of the patent. Chapter 7 of title 5, United States Code, shall apply to such action. Any final judgment resulting in a change to the period of adjustment of the patent term shall be served on the Director, and the Director shall thereafter alter the term of the patent to reflect such change. ``(B) The determination of a patent term adjustment under this subsection shall not be subject to appeal or challenge by a third party prior to the grant of the patent.''. (b) Conforming Amendments.-- (1) Section 282 of title 35, United States Code, is amended in the fourth paragraph by striking ``156 of this title'' and inserting ``154(b) or 156 of this title''. (2) Section 1295(a)(4)(C) of title 28, United States Code, is amended by striking ``145 or 146'' and inserting ``145, 146, or 154(b)''. SEC. 4403. CONTINUED EXAMINATION OF PATENT APPLICATIONS. Section 132 of title 35, United States Code, is amended-- (1) in the first sentence by striking ``Whenever'' and inserting ``(a) Whenever''; and (2) by adding at the end the following: ``(b) The Director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant. The Director may establish appropriate fees for such continued examination and shall provide a 50 percent reduction in such fees for small entities that qualify for reduced fees under section 41(h)(1) of this title.''. SEC. 4404. TECHNICAL CLARIFICATION. Section 156(a) of title 35, United States Code, is amended in the matter preceding paragraph (1) by inserting ``, which shall include any patent term adjustment granted under section 154(b),'' after ``the original expiration date of the patent''. SEC. 4405. EFFECTIVE DATE. (a) Amendments Made by Sections 4402 and 4404.--The amendments made by sections 4402 and 4404 shall take effect on the date that is 6 months after the date of the enactment of this Act and, except for a design patent application filed under chapter 16 of title 35, United States Code, shall apply to any application filed on or after the date that is 6 months after the date of the enactment of this Act. (b) Amendments Made by Section 4403.--The amendments made by section 4403-- (1) shall take effect on the date that is 6 months after the date of the enactment of this Act, and shall apply to all applications filed under section 111(a) of title 35, United States Code, on or after June 8, 1995, and all applications complying with section 371 of title 35, United States Code, that resulted from international applications filed on or after June 8, 1995; and (2) do not apply to applications for design patents under chapter 16 of title 35, United States Code. Subtitle E--Domestic Publication of Patent Applications Published Abroad SEC. 4501. SHORT TITLE. This subtitle may be cited as the ``Domestic Publication of Foreign Filed Patent Applications Act of 1999''. SEC. 4502. PUBLICATION. (a) Publication.--Section 122 of title 35, United States Code, is amended to read as follows: [[Page H12598]] ``Sec. 122. Confidential status of applications; publication of patent applications ``(a) Confidentiality.--Except as provided in subsection (b), applications for patents shall be kept in confidence by the Patent and Trademark Office and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of an Act of Congress or in such special circumstances as may be determined by the Director. ``(b) Publication.-- ``(1) In general.--(A) Subject to paragraph (2), each application for a patent shall be published, in accordance with procedures determined by the Director, promptly after the expiration of a period of 18 months from the earliest filing date for which a benefit is sought under this title. At the request of the applicant, an application may be published earlier than the end of such 18-month period. ``(B) No information concerning published patent applications shall be made available to the public except as the Director determines. ``(C) Notwithstanding any other provision of law, a determination by the Director to release or not to release information concerning a published patent application shall be final and nonreviewable. ``(2) Exceptions.--(A) An application shall not be published if that application is-- ``(i) no longer pending; ``(ii) subject to a secrecy order under section 181 of this title; ``(iii) a provisional application filed under section 111(b) of this title; or ``(iv) an application for a design patent filed under chapter 16 of this title. ``(B)(i) If an applicant makes a request upon filing, certifying that the invention disclosed in the application has not and will not be the subject of an application filed in another country, or under a multilateral international agreement, that requires publication of applications 18 months after filing, the application shall not be published as provided in paragraph (1). ``(ii) An applicant may rescind a request made under clause (i) at any time. ``(iii) An applicant who has made a request under clause (i) but who subsequently files, in a foreign country or under a multilateral international agreement specified in clause (i), an application directed to the invention disclosed in the application filed in the Patent and Trademark Office, shall notify the Director of such filing not later than 45 days after the date of the filing of such foreign or international application. A failure of the applicant to provide such notice within the prescribed period shall result in the application being regarded as abandoned, unless it is shown to the satisfaction of the Director that the delay in submitting the notice was unintentional. ``(iv) If an applicant rescinds a request made under clause (i) or notifies the Director that an application was filed in a foreign country or under a multilateral international agreement specified in clause (i), the application shall be published in accordance with the provisions of paragraph (1) on or as soon as is practical after the date that is specified in clause (i). ``(v) If an applicant has filed applications in one or more foreign countries, directly or through a multilateral international agreement, and such foreign filed applications corresponding to an application filed in the Patent and Trademark Office or the description of the invention in such foreign filed applications is less extensive than the application or description of the invention in the application filed in the Patent and Trademark Office, the applicant may submit a redacted copy of the application filed in the Patent and Trademark Office eliminating any part or description of the invention in such application that is not also contained in any of the corresponding applications filed in a foreign country. The Director may only publish the redacted copy of the application unless the redacted copy of the application is not received within 16 months after the earliest effective filing date for which a benefit is sought under this title. The provisions of section 154(d) shall not apply to a claim if the description of the invention published in the redacted application filed under this clause with respect to the claim does not enable a person skilled in the art to make and use the subject matter of the claim. ``(c) Protest and Pre-Issuance Opposition.--The Director shall establish appropriate procedures to ensure that no protest or other form of pre-issuance opposition to the grant of a patent on an application may be initiated after publication of the application without the express written consent of the applicant. ``(d) National Security.--No application for patent shall be published under subsection (b)(1) if the publication or disclosure of such invention would be detrimental to the national security. The Director shall establish appropriate procedures to ensure that such applications are promptly identified and the secrecy of such inventions is maintained in accordance with chapter 17 of this title.''. (b) Study.-- (1) In general.--The Comptroller General shall conduct a 3- year study of the applicants who file only in the United States on or after the effective date of this subtitle and shall provide the results of such study to the Judiciary Committees of the House of Representatives and the Senate. (2) Contents.--The study conducted under paragraph (1) shall-- (A) consider the number of such applicants in relation to the number of applicants who file in the United States and outside of the United States; (B) examine how many domestic-only filers request at the time of filing not to be published; (C) examine how many such filers rescind that request or later choose to file abroad; (D) examine the status of the entity seeking an application and any correlation that may exist between such status and the publication of patent applications; and (E) examine the abandonment/issuance ratios and length of application pendency before patent issuance or abandonment for published versus unpublished applications. SEC. 4503. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE. (a) In a Foreign Country.--Section 119(b) of title 35, United States Code, is amended to read as follows: ``(b)(1) No application for patent shall be entitled to this right of priority unless a claim is filed in the Patent and Trademark Office, identifying the foreign application by specifying the application number on that foreign application, the intellectual property authority or country in or for which the application was filed, and the date of filing the application, at such time during the pendency of the application as required by the Director. ``(2) The Director may consider the failure of the applicant to file a timely claim for priority as a waiver of any such claim. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed claim under this section. ``(3) The Director may require a certified copy of the original foreign application, specification, and drawings upon which it is based, a translation if not in the English language, and such other information as the Director considers necessary. Any such certification shall be made by the foreign intellectual property authority in which the foreign application was filed and show the date of the application and of the filing of the specification and other papers.''. (b) In the United States.-- (1) In general.--Section 120 of title 35, United States Code, is amended by adding at the end the following: ``No application shall be entitled to the benefit of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this section. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this section.''. (2) Right of priority.--Section 119(e)(1) of title 35, United States Code, is amended by adding at the end the following: ``No application shall be entitled to the benefit of an earlier filed provisional application under this subsection unless an amendment containing the specific reference to the earlier filed provisional application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this subsection. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this subsection during the pendency of the application.''. SEC. 4504. PROVISIONAL RIGHTS. Section 154 of title 35, United States Code, is amended-- (1) in the section caption by inserting ``; provisional rights'' after ``patent''; and (2) by adding at the end the following new subsection: ``(d) Provisional Rights.-- ``(1) In general.--In addition to other rights provided by this section, a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application for such patent under section 122(b), or in the case of an international application filed under the treaty defined in section 351(a) designating the United States under Article 21(2)(a) of such treaty, the date of publication of the application, and ending on the date the patent is issued-- ``(A)(i) makes, uses, offers for sale, or sells in the United States the invention as claimed in the published patent application or imports such an invention into the United States; or ``(ii) if the invention as claimed in the published patent application is a process, uses, offers for sale, or sells in the United States or imports into the United States products made by that process as claimed in the published patent application; and ``(B) had actual notice of the published patent application and, in a case in which the right arising under this paragraph is based upon an international application designating the United States that is published in a language other than English, had a translation of the international application into the English language. ``(2) Right based on substantially identical inventions.-- The right under paragraph (1) to obtain a reasonable royalty shall not be available under this subsection unless the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application. ``(3) Time limitation on obtaining a reasonable royalty.-- The right under paragraph (1) to obtain a reasonable royalty shall be available only in an action brought not later than 6 years after the patent is issued. The right under paragraph (1) to obtain a reasonable royalty shall not be affected by the duration of the period described in paragraph (1). ``(4) Requirements for international applications.-- ``(A) Effective date.--The right under paragraph (1) to obtain a reasonable royalty based upon the publication under the treaty defined in section 351(a) of an international application [[Page H12599]] designating the United States shall commence on the date on which the Patent and Trademark Office receives a copy of the publication under the treaty of the international application, or, if the publication under the treaty of the international application is in a language other than English, on the date on which the Patent and Trademark Office receives a translation of the international application in the English language. ``(B) Copies.--The Director may require the applicant to provide a copy of the international application and a translation thereof.''. SEC. 4505. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS. Section 102(e) of title 35, United States Code, is amended to read as follows: ``(e) The invention was described in-- ``(1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351(a) shall have the effect under this subsection of a national application published under section 122(b) only if the international application designating the United States was published under Article 21(2)(a) of such treaty in the English language; or ``(2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that a patent shall not be deemed filed in the United States for the purposes of this subsection based on the filing of an international application filed under the treaty defined in section 351(a); or''. SEC. 4506. COST RECOVERY FOR PUBLICATION. The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall recover the cost of early publication required by the amendment made by section 4502 by charging a separate publication fee after notice of allowance is given under section 151 of title 35, United States Code. SEC. 4507. CONFORMING AMENDMENTS. The following provisions of title 35, United States Code, are amended: (1) Section 11 is amended in paragraph 1 of subsection (a) by inserting ``and published applications for patents'' after ``Patents''. (2) Section 12 is amended-- (A) in the section caption by inserting ``and applications'' after ``patents''; and (B) by inserting ``and published applications for patents'' after ``patents''. (3) Section 13 is amended-- (A) in the section caption by inserting ``and applications'' after ``patents''; and (B) by inserting ``and published applications for patents'' after ``patents''. (4) The items relating to sections 12 and 13 in the table of sections for chapter 1 are each amended by inserting ``and applications'' after ``patents''. (5) The item relating to section 122 in the table of sections for chapter 11 is amended by inserting ``; publication of patent applications'' after ``applications''. (6) The item relating to section 154 in the table of sections for chapter 14 is amended by inserting ``; provisional rights'' after ``patent''. (7) Section 181 is amended-- (A) in the first undesignated paragraph-- (i) by inserting ``by the publication of an application or'' after ``disclosure''; and (ii) by inserting ``the publication of the application or'' after ``withhold''; (B) in the second undesignated paragraph by inserting ``by the publication of an application or'' after ``disclosure of an invention''; (C) in the third undesignated paragraph-- (i) by inserting ``by the publication of the application or'' after ``disclosure of the invention''; and (ii) by inserting ``the publication of the application or'' after ``withhold''; and (D) in the fourth undesignated paragraph by inserting ``the publication of an application or'' after ``and'' in the first sentence. (8) Section 252 is amended in the first undesignated paragraph by inserting ``substantially'' before ``identical'' each place it appears. (9) Section 284 is amended by adding at the end of the second undesignated paragraph the following: ``Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title.''. (10) Section 374 is amended to read as follows: ``Sec. 374. Publication of international application ``The publication under the treaty defined in section 351(a) of this title, of an international application designating the United States shall confer the same rights and shall have the same effect under this title as an application for patent published under section 122(b), except as provided in sections 102(e) and 154(d) of this title.''. (11) Section 135(b) is amended-- (A) by inserting ``(1)'' after ``(b)''; and (B) by adding at the end the following: ``(2) A claim which is the same as, or for the same or substantially the same subject matter as, a claim of an application published under section 122(b) of this title may be made in an application filed after the application is published only if the claim is made before 1 year after the date on which the application is published.''. SEC. 4508. EFFECTIVE DATE. Sections 4502 through 4507, and the amendments made by such sections, shall take effect on the date that is 1 year after the date of the enactment of this Act and shall apply to all applications filed under section 111 of title 35, United States Code, on or after that date, and all applications complying with section 371 of title 35, United States Code, that resulted from international applications filed on or after that date. The amendments made by sections 4504 and 4505 shall apply to any such application voluntarily published by the applicant under procedures established under this subtitle that is pending on the date that is 1 year after the date of the enactment of this Act. The amendment made by section 4504 shall also apply to international applications designating the United States that are filed on or after the date that is 1 year after the date of the enactment of this Act. Subtitle F--Optional Inter Partes Reexamination Procedure SEC. 4601. SHORT TITLE. This subtitle may be cited as the ``Optional Inter Partes Reexamination Procedure Act of 1999''. SEC. 4602. EX PARTE REEXAMINATION OF PATENTS. The chapter heading for chapter 30 of title 35, United States Code, is amended by inserting ``EX PARTE'' before ``REEXAMINATION OF PATENTS''. SEC. 4603. DEFINITIONS. Section 100 of title 35, United States Code, is amended by adding at the end the following new subsection: ``(e) The term `third-party requester' means a person requesting ex parte reexamination under section 302 or inter partes reexamination under section 311 who is not the patent owner.''. SEC. 4604. OPTIONAL INTER PARTES REEXAMINATION PROCEDURES. (a) In General.--Part 3 of title 35, United States Code, is amended by adding after chapter 30 the following new chapter: ``CHAPTER 31--OPTIONAL INTER PARTES REEXAMINATION PROCEDURES ``Sec. ``311. Request for inter partes reexamination. ``312. Determination of issue by Director. ``313. Inter partes reexamination order by Director. ``314. Conduct of inter partes reexamination proceedings. ``315. Appeal. ``316. Certificate of patentability, unpatentability, and claim cancellation. ``317. Inter partes reexamination prohibited. ``318. Stay of litigation. ``Sec. 311. Request for inter partes reexamination ``(a) In General.--Any person at any time may file a request for inter partes reexamination by the Office of a patent on the basis of any prior art cited under the provisions of section 301. ``(b) Requirements.--The request shall-- ``(1) be in writing, include the identity of the real party in interest, and be accompanied by payment of an inter partes reexamination fee established by the Director under section 41; and ``(2) set forth the pertinency and manner of applying cited prior art to every claim for which reexamination is requested. ``(c) Copy.--Unless the requesting person is the owner of the patent, the Director promptly shall send a copy of the request to the owner of record of the patent. ``Sec. 312. Determination of issue by Director ``(a) Reexamination.--Not later than 3 months after the filing of a request for inter partes reexamination under section 311, the Director shall determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request, with or without consideration of other patents or printed publications. On the Director's initiative, and at any time, the Director may determine whether a substantial new question of patentability is raised by patents and publications. ``(b) Record.--A record of the Director's determination under subsection (a) shall be placed in the official file of the patent, and a copy shall be promptly given or mailed to the owner of record of the patent and to the third-party requester, if any. ``(c) Final Decision.--A determination by the Director under subsection (a) shall be final and non-appealable. Upon a determination that no substantial new question of patentability has been raised, the Director may refund a portion of the inter partes reexamination fee required under section 311. ``Sec. 313. Inter partes reexamination order by Director ``If, in a determination made under section 312(a), the Director finds that a substantial new question of patentability affecting a claim of a patent is raised, the determination shall include an order for inter partes reexamination of the patent for resolution of the question. The order may be accompanied by the initial action of the Patent and Trademark Office on the merits of the inter partes reexamination conducted in accordance with section 314. ``Sec. 314. Conduct of inter partes reexamination proceedings ``(a) In General.--Except as otherwise provided in this section, reexamination shall be conducted according to the procedures established for initial examination under the provisions of sections 132 and 133. In any inter partes reexamination proceeding under this chapter, the patent owner shall be permitted to propose any amendment to the patent and a new claim or claims, except that no proposed amended or new claim enlarging the scope of the claims of the patent shall be permitted. ``(b) Response.--(1) This subsection shall apply to any inter partes reexamination proceeding in which the order for inter partes reexamination is based upon a request by a third-party requester. ``(2) With the exception of the inter partes reexamination request, any document filed by either the patent owner or the third-party requester shall be served on the other party. In [[Page H12600]] addition, the third-party requester shall receive a copy of any communication sent by the Office to the patent owner concerning the patent subject to the inter partes reexamination proceeding. ``(3) Each time that the patent owner files a response to an action on the merits from the Patent and Trademark Office, the third-party requester shall have one opportunity to file written comments addressing issues raised by the action of the Office or the patent owner's response thereto, if those written comments are received by the Office within 30 days after the date of service of the patent owner's response. ``(c) Special Dispatch.--Unless otherwise provided by the Director for good cause, all inter partes reexamination proceedings under this section, including any appeal to the Board of Patent Appeals and Interferences, shall be conducted with special dispatch within the Office. ``Sec. 315. Appeal ``(a) Patent Owner.--The patent owner involved in an inter partes reexamination proceeding under this chapter-- ``(1) may appeal under the provisions of section 134 and may appeal under the provisions of sections 141 through 144, with respect to any decision adverse to the patentability of any original or proposed amended or new claim of the patent; and ``(2) may be a party to any appeal taken by a third-party requester under subsection (b). ``(b) Third-Party Requester.--A third-party requester may-- ``(1) appeal under the provisions of section 134 with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; or ``(2) be a party to any appeal taken by the patent owner under the provisions of section 134, subject to subsection (c). ``(c) Civil Action.--A third-party requester whose request for an inter partes reexamination results in an order under section 313 is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, United States Code, the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third- party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings. ``Sec. 316. Certificate of patentability, unpatentability, and claim cancellation ``(a) In General.--In an inter partes reexamination proceeding under this chapter, when the time for appeal has expired or any appeal proceeding has terminated, the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent any proposed amended or new claim determined to be patentable. ``(b) Amended or New Claim.--Any proposed amended or new claim determined to be patentable and incorporated into a patent following an inter partes reexamination proceeding shall have the same effect as that specified in section 252 of this title for reissued patents on the right of any person who made, purchased, or used within the United States, or imported into the United States, anything patented by such proposed amended or new claim, or who made substantial preparation therefor, prior to issuance of a certificate under the provisions of subsection (a) of this section. ``Sec. 317. Inter partes reexamination prohibited ``(a) Order for Reexamination.--Notwithstanding any provision of this chapter, once an order for inter partes reexamination of a patent has been issued under section 313, neither the patent owner nor the third-party requester, if any, nor privies of either, may file a subsequent request for inter partes reexamination of the patent until an inter partes reexamination certificate is issued and published under section 316, unless authorized by the Director. ``(b) Final Decision.--Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, United States Code, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third- party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings. ``Sec. 318. Stay of litigation ``Once an order for inter partes reexamination of a patent has been issued under section 313, the patent owner may obtain a stay of any pending litigation which involves an issue of patentability of any claims of the patent which are the subject of the inter partes reexamination order, unless the court before which such litigation is pending determines that a stay would not serve the interests of justice.''. (b) Conforming Amendment.--The table of chapters for part III of title 25, United States Code, is amended by striking the item relating to chapter 30 and inserting the following: ``30. Prior Art Citations to Office and Ex Parte Reexamination of Patents.....................................................301.... ``31. Optional Inter Partes Reexamination of Patents.........311''..... SEC. 4605. CONFORMING AMENDMENTS. (a) Patent Fees; Patent Search Systems.--Section 41(a)(7) of title 35, United States Code, is amended to read as follows: ``(7) On filing each petition for the revival of an unintentionally abandoned application for a patent, for the unintentionally delayed payment of the fee for issuing each patent, or for an unintentionally delayed response by the patent owner in any reexamination proceeding, $1,210, unless the petition is filed under section 133 or 151 of this title, in which case the fee shall be $110.''. (b) Appeal to the Board of Patents Appeals and Interferences.--Section 134 of title 35, United States Code, is amended to read as follows: ``Sec. 134. Appeal to the Board of Patent Appeals and Interferences ``(a) Patent Applicant.--An applicant for a patent, any of whose claims has been twice rejected, may appeal from the decision of the administrative patent judge to the Board of Patent Appeals and Interferences, having once paid the fee for such appeal. ``(b) Patent Owner.--A patent owner in any reexamination proceeding may appeal from the final rejection of any claim by the administrative patent judge to the Board of Patent Appeals and Interferences, having once paid the fee for such appeal. ``(c) Third-Party.--A third-party requester in an inter partes proceeding may appeal to the Board of Patent Appeals and Interferences from the final decision of the administrative patent judge favorable to the patentability of any original or proposed amended or new claim of a patent, having once paid the fee for such appeal. The third-party requester may not appeal the decision of the Board of Patent Appeals and Interferences.''. (c) Appeal to Court of Appeals for the Federal Circuit.-- Section 141 of title 35, United States Code, is amended by adding the following after the second sentence: ``A patent owner in any reexamination proceeding dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.''. (d) Proceedings on Appeal.--Section 143 of title 35, United States Code, is amended by amending the third sentence to read as follows: ``In any reexamination case, the Director shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all the issues involved in the appeal.''. (e) Civil Action To Obtain Patent.--Section 145 of title 35, United States Code, is amended in the first sentence by inserting ``(a)'' after ``section 134''. SEC. 4606. REPORT TO CONGRESS. Not later than 5 years after the date of the enactment of this Act, the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall submit to the Congress a report evaluating whether the inter partes reexamination proceedings established under the amendments made by this subtitle are inequitable to any of the parties in interest and, if so, the report shall contain recommendations for changes to the amendments made by this subtitle to remove such inequity. SEC. 4607. ESTOPPEL EFFECT OF REEXAMINATION. Any party who requests an inter partes reexamination under section 311 of title 35, United States Code, is estopped from challenging at a later time, in any civil action, any fact determined during the process of such reexamination, except with respect to a fact determination later proved to be erroneous based on information unavailable at the time of the inter partes reexamination decision. If this section is held to be unenforceable, the enforceability of the remainder of this subtitle or of this title shall not be denied as a result. SEC. 4608. EFFECTIVE DATE. (a) In General.--Subject to subsection (b), this subtitle and the amendments made by this subtitle shall take effect on the date of the enactment of this Act and shall apply to any patent that issues from an original application filed in the United States on or after that date. (b) Section 4605(a).--The amendments made by section 4605(a) shall take effect on the date that is 1 year after the date of the enactment of this Act. Subtitle G--Patent and Trademark Office SEC. 4701. SHORT TITLE. This subtitle may be cited as the ``Patent and Trademark Office Efficiency Act''. CHAPTER 1--UNITED STATES PATENT AND TRADEMARK OFFICE SEC. 4711. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE. Section 1 of title 35, United States Code, is amended to read as follows: ``Sec. 1. Establishment ``(a) Establishment.--The United States Patent and Trademark Office is established as an agency of the United States, within the Department of Commerce. In carrying out its functions, the United States Patent and Trademark Office shall be subject to the policy direction of the Secretary of Commerce, but otherwise shall retain responsibility for decisions regarding the [[Page H12601]] management and administration of its operations and shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions in accordance with this title and applicable provisions of law. Those operations designed to grant and issue patents and those operations which are designed to facilitate the registration of trademarks shall be treated as separate operating units within the Office. ``(b) Offices.--The United States Patent and Trademark Office shall maintain its principal office in the metropolitan Washington, D.C., area, for the service of process and papers and for the purpose of carrying out its functions. The United States Patent and Trademark Office shall be deemed, for purposes of venue in civil actions, to be a resident of the district in which its principal office is located, except where jurisdiction is otherwise provided by law. The United States Patent and Trademark Office may establish satellite offices in such other places in the United States as it considers necessary and appropriate in the conduct of its business. ``(c) Reference.--For purposes of this title, the United States Patent and Trademark Office shall also be referred to as the `Office' and the `Patent and Trademark Office'.''. SEC. 4712. POWERS AND DUTIES. Section 2 of title 35, United States Code, is amended to read as follows: ``Sec. 2. Powers and duties ``(a) In General.--The United States Patent and Trademark Office, subject to the policy direction of the Secretary of Commerce-- ``(1) shall be responsible for the granting and issuing of patents and the registration of trademarks; and ``(2) shall be responsible for disseminating to the public information with respect to patents and trademarks. ``(b) Specific Powers.--The Office-- ``(1) shall adopt and use a seal of the Office, which shall be judicially noticed and with which letters patent, certificates of trademark registrations, and papers issued by the Office shall be authenticated; ``(2) may establish regulations, not inconsistent with law, which-- ``(A) shall govern the conduct of proceedings in the Office; ``(B) shall be made in accordance with section 553 of title 5, United States Code; ``(C) shall facilitate and expedite the processing of patent applications, particularly those which can be filed, stored, processed, searched, and retrieved electronically, subject to the provisions of section 122 relating to the confidential status of applications; ``(D) may govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office, and may require them, before being recognized as representatives of applicants or other persons, to show that they are of good moral character and reputation and are possessed of the necessary qualifications to render to applicants or other persons valuable service, advice, and assistance in the presentation or prosecution of their applications or other business before the Office; ``(E) shall recognize the public interest in continuing to safeguard broad access to the United States patent system through the reduced fee structure for small entities under section 41(h)(1) of this title; and ``(F) provide for the development of a performance-based process that includes quantitative and qualitative measures and standards for evaluating cost-effectiveness and is consistent with the principles of impartiality and competitiveness; ``(3) may acquire, construct, purchase, lease, hold, manage, operate, improve, alter, and renovate any real, personal, or mixed property, or any interest therein, as it considers necessary to carry out its functions; ``(4)(A) may make such purchases, contracts for the construction, maintenance, or management and operation of facilities, and contracts for supplies or services, without regard to the provisions of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.), the Public Buildings Act (40 U.S.C. 601 et seq.), and the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301 et seq.); and ``(B) may enter into and perform such purchases and contracts for printing services, including the process of composition, platemaking, presswork, silk screen processes, binding, microform, and the products of such processes, as it considers necessary to carry out the functions of the Office, without regard to sections 501 through 517 and 1101 through 1123 of title 44, United States Code; ``(5) may use, with their consent, services, equipment, personnel, and facilities of other departments, agencies, and instrumentalities of the Federal Government, on a reimbursable basis, and cooperate with such other departments, agencies, and instrumentalities in the establishment and use of services, equipment, and facilities of the Office; ``(6) may, when the Director determines that it is practicable, efficient, and cost-effective to do so, use, with the consent of the United States and the agency, instrumentality, Patent and Trademark Office, or international organization concerned, the services, records, facilities, or personnel of any State or local government agency or instrumentality or foreign patent and trademark office or international organization to perform functions on its behalf; ``(7) may retain and use all of its revenues and receipts, including revenues from the sale, lease, or disposal of any real, personal, or mixed property, or any interest therein, of the Office; ``(8) shall advise the President, through the Secretary of Commerce, on national and certain international intellectual property policy issues; ``(9) shall advise Federal departments and agencies on matters of intellectual property policy in the United States and intellectual property protection in other countries; ``(10) shall provide guidance, as appropriate, with respect to proposals by agencies to assist foreign governments and international intergovernmental organizations on matters of intellectual property protection; ``(11) may conduct programs, studies, or exchanges of items or services regarding domestic and international intellectual property law and the effectiveness of intellectual property protection domestically and throughout the world; ``(12)(A) shall advise the Secretary of Commerce on programs and studies relating to intellectual property policy that are conducted, or authorized to be conducted, cooperatively with foreign intellectual property offices and international intergovernmental organizations; and ``(B) may conduct programs and studies described in subparagraph (A); and ``(13)(A) in coordination with the Department of State, may conduct programs and studies cooperatively with foreign intellectual property offices and international intergovernmental organizations; and ``(B) with the concurrence of the Secretary of State, may authorize the transfer of not to exceed $100,000 in any year to the Department of State for the purpose of making special payments to international intergovernmental organizations for studies and programs for advancing international cooperation concerning patents, trademarks, and other matters. ``(c) Clarification of Specific Powers.--(1) The special payments under subsection (b)(13)(B) shall be in addition to any other payments or contributions to international organizations described in subsection (b)(13)(B) and shall not be subject to any limitations imposed by law on the amounts of such other payments or contributions by the United States Government. ``(2) Nothing in subsection (b) shall derogate from the duties of the Secretary of State or from the duties of the United States Trade Representative as set forth in section 141 of the Trade Act of 1974 (19 U.S.C. 2171). ``(3) Nothing in subsection (b) shall derogate from the duties and functions of the Register of Copyrights or otherwise alter current authorities relating to copyright matters. ``(4) In exercising the Director's powers under paragraphs (3) and (4)(A) of subsection (b), the Director shall consult with the Administrator of General Services. ``(5) In exercising the Director's powers and duties under this section, the Director shall consult with the Register of Copyrights on all copyright and related matters. ``(d) Construction.--Nothing in this section shall be construed to nullify, void, cancel, or interrupt any pending request-for-proposal let or contract issued by the General Services Administration for the specific purpose of relocating or leasing space to the United States Patent and Trademark Office.''. SEC. 4713. ORGANIZATION AND MANAGEMENT. Section 3 of title 35, United States Code, is amended to read as follows: ``Sec. 3. Officers and employees ``(a) Under Secretary and Director.-- ``(1) In general.--The powers and duties of the United States Patent and Trademark Office shall be vested in an Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (in this title referred to as the `Director'), who shall be a citizen of the United States and who shall be appointed by the President, by and with the advice and consent of the Senate. The Director shall be a person who has a professional background and experience in patent or trademark law. ``(2) Duties.-- ``(A) In general.--The Director shall be responsible for providing policy direction and management supervision for the Office and for the issuance of patents and the registration of trademarks. The Director shall perform these duties in a fair, impartial, and equitable manner. ``(B) Consulting with the public advisory committees.--The Director shall consult with the Patent Public Advisory Committee established in section 5 on a regular basis on matters relating to the patent operations of the Office, shall consult with the Trademark Public Advisory Committee established in section 5 on a regular basis on matters relating to the trademark operations of the Office, and shall consult with the respective Public Advisory Committee before submitting budgetary proposals to the Office of Management and Budget or changing or proposing to change patent or trademark user fees or patent or trademark regulations which are subject to the requirement to provide notice and opportunity for public comment under section 553 of title 5, United States Code, as the case may be. ``(3) Oath.--The Director shall, before taking office, take an oath to discharge faithfully the duties of the Office. ``(4) Removal.--The Director may be removed from office by the President. The President shall provide notification of any such removal to both Houses of Congress. ``(b) Officers and Employees of the Office.-- ``(1) Deputy under secretary and deputy director.--The Secretary of Commerce, upon nomination by the Director, shall appoint a Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office who shall be vested with the authority to act in the capacity of the Director in the event of the absence or incapacity of the Director. The Deputy Director shall be a citizen of the United States who has a professional background and experience in patent or trademark law. ``(2) Commissioners.-- [[Page H12602]] ``(A) Appointment and duties.--The Secretary of Commerce shall appoint a Commissioner for Patents and a Commissioner for Trademarks, without regard to chapter 33, 51, or 53 of title 5, United States Code. The Commissioner for Patents shall be a citizen of the United States with demonstrated management ability and professional background and experience in patent law and serve for a term of 5 years. The Commissioner for Trademarks shall be a citizen of the United States with demonstrated management ability and professional background and experience in trademark law and serve for a term of 5 years. The Commissioner for Patents and the Commissioner for Trademarks shall serve as the chief operating officers for the operations of the Office relating to patents and trademarks, respectively, and shall be responsible for the management and direction of all aspects of the activities of the Office that affect the administration of patent and trademark operations, respectively. The Secretary may reappoint a Commissioner to subsequent terms of 5 years as long as the performance of the Commissioner as set forth in the performance agreement in subparagraph (B) is satisfactory. ``(B) Salary and performance agreement.--The Commissioners shall be paid an annual rate of basic pay not to exceed the maximum rate of basic pay for the Senior Executive Service established under section 5382 of title 5, United States Code, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of title 5, United States Code. The compensation of the Commissioners shall be considered, for purposes of section 207(c)(2)(A) of title 18, United States Code, to be the equivalent of that described under clause (ii) of section 207(c)(2)(A) of title 18, United States Code. In addition, the Commissioners may receive a bonus in an amount of up to, but not in excess of, 50 percent of the Commissioners' annual rate of basic pay, based upon an evaluation by the Secretary of Commerce, acting through the Director, of the Commissioners' performance as defined in an annual performance agreement between the Commissioners and the Secretary. The annual performance agreements shall incorporate measurable organization and individual goals in key operational areas as delineated in an annual performance plan agreed to by the Commissioners and the Secretary. Payment of a bonus under this subparagraph may be made to the Commissioners only to the extent that such payment does not cause the Commissioners' total aggregate compensation in a calendar year to equal or exceed the amount of the salary of the Vice President under section 104 of title 3, United States Code. ``(C) Removal.--The Commissioners may be removed from office by the Secretary for misconduct or nonsatisfactory performance under the performance agreement described in subparagraph (B), without regard to the provisions of title 5, United States Code. The Secretary shall provide notification of any such removal to both Houses of Congress. ``(3) Other officers and employees.--The Director shall-- ``(A) appoint such officers, employees (including attorneys), and agents of the Office as the Director considers necessary to carry out the functions of the Office; and ``(B) define the title, authority, and duties of such officers and employees and delegate to them such of the powers vested in the Office as the Director may determine. The Office shall not be subject to any administratively or statutorily imposed limitation on positions or personnel, and no positions or personnel of the Office shall be taken into account for purposes of applying any such limitation. ``(4) Training of examiners.--The Office shall submit to the Congress a proposal to provide an incentive program to retain as employees patent and trademark examiners of the primary examiner grade or higher who are eligible for retirement, for the sole purpose of training patent and trademark examiners. ``(5) National security positions.--The Director, in consultation with the Director of the Office of Personnel Management, shall maintain a program for identifying national security positions and providing for appropriate security clearances, in order to maintain the secrecy of certain inventions, as described in section 181, and to prevent disclosure of sensitive and strategic information in the interest of national security. ``(c) Continued Applicability of Title 5, United States Code.--Officers and employees of the Office shall be subject to the provisions of title 5, United States Code, relating to Federal employees. ``(d) Adoption of Existing Labor Agreements.--The Office shall adopt all labor agreements which are in effect, as of the day before the effective date of the Patent and Trademark Office Efficiency Act, with respect to such Office (as then in effect). ``(e) Carryover of Personnel.-- ``(1) From pto.--Effective as of the effective date of the Patent and Trademark Office Efficiency Act, all officers and employees of the Patent and Trademark Office on the day before such effective date shall become officers and employees of the Office, without a break in service. ``(2) Other personnel.--Any individual who, on the day before the effective date of the Patent and Trademark Office Efficiency Act, is an officer or employee of the Department of Commerce (other than an officer or employee under paragraph (1)) shall be transferred to the Office, as necessary to carry out the purposes of this Act, if-- ``(A) such individual serves in a position for which a major function is the performance of work reimbursed by the Patent and Trademark Office, as determined by the Secretary of Commerce; ``(B) such individual serves in a position that performed work in support of the Patent and Trademark Office during at least half of the incumbent's work time, as determined by the Secretary of Commerce; or ``(C) such transfer would be in the interest of the Office, as determined by the Secretary of Commerce in consultation with the Director. Any transfer under this paragraph shall be effective as of the same effective date as referred to in paragraph (1), and shall be made without a break in service. ``(f ) Transition Provisions.-- ``(1) Interim appointment of director.--On or after the effective date of the Patent and Trademark Office Efficiency Act, the President shall appoint an individual to serve as the Director until the date on which a Director qualifies under subsection (a). The President shall not make more than one such appointment under this subsection. ``(2) Continuation in office of certain officers.--(A) The individual serving as the Assistant Commissioner for Patents on the day before the effective date of the Patent and Trademark Office Efficiency Act may serve as the Commissioner for Patents until the date on which a Commissioner for Patents is appointed under subsection (b). ``(B) The individual serving as the Assistant Commissioner for Trademarks on the day before the effective date of the Patent and Trademark Office Efficiency Act may serve as the Commissioner for Trademarks until the date on which a Commissioner for Trademarks is appointed under subsection (b).''. SEC. 4714. PUBLIC ADVISORY COMMITTEES. Chapter 1 of part I of title 35, United States Code, is amended by inserting after section 4 the following: ``Sec. 5. Patent and Trademark Office Public Advisory Committees ``(a) Establishment of Public Advisory Committees.-- ``(1) Appointment.--The United States Patent and Trademark Office shall have a Patent Public Advisory Committee and a Trademark Public Advisory Committee, each of which shall have nine voting members who shall be appointed by the Secretary of Commerce and serve at the pleasure of the Secretary of Commerce. Members of each Public Advisory Committee shall be appointed for a term of 3 years, except that of the members first appointed, three shall be appointed for a term of 1 year, and three shall be appointed for a term of 2 years. In making appointments to each Committee, the Secretary of Commerce shall consider the risk of loss of competitive advantage in international commerce or other harm to United States companies as a result of such appointments. ``(2) Chair.--The Secretary shall designate a chair of each Advisory Committee, whose term as chair shall be for 3 years. ``(3) Timing of appointments.--Initial appointments to each Advisory Committee shall be made within 3 months after the effective date of the Patent and Trademark Office Efficiency Act. Vacancies shall be filled within 3 months after they occur. ``(b) Basis for Appointments.--Members of each Advisory Committee-- ``(1) shall be citizens of the United States who shall be chosen so as to represent the interests of diverse users of the United States Patent and Trademark Office with respect to patents, in the case of the Patent Public Advisory Committee, and with respect to trademarks, in the case of the Trademark Public Advisory Committee; ``(2) shall include members who represent small and large entity applicants located in the United States in proportion to the number of applications filed by such applicants, but in no case shall members who represent small entity patent applicants, including small business concerns, independent inventors, and nonprofit organizations, constitute less than 25 percent of the members of the Patent Public Advisory Committee, and such members shall include at least one independent inventor; and ``(3) shall include individuals with substantial background and achievement in finance, management, labor relations, science, technology, and office automation. In addition to the voting members, each Advisory Committee shall include a representative of each labor organization recognized by the United States Patent and Trademark Office. Such representatives shall be nonvoting members of the Advisory Committee to which they are appointed. ``(c) Meetings.--Each Advisory Committee shall meet at the call of the chair to consider an agenda set by the chair. ``(d) Duties.--Each Advisory Committee shall-- ``(1) review the policies, goals, performance, budget, and user fees of the United States Patent and Trademark Office with respect to patents, in the case of the Patent Public Advisory Committee, and with respect to Trademarks, in the case of the Trademark Public Advisory Committee, and advise the Director on these matters; ``(2) within 60 days after the end of each fiscal year-- ``(A) prepare an annual report on the matters referred to in paragraph (1); ``(B) transmit the report to the Secretary of Commerce, the President, and the Committees on the Judiciary of the Senate and the House of Representatives; and ``(C) publish the report in the Official Gazette of the United States Patent and Trademark Office. ``(e) Compensation.--Each member of each Advisory Committee shall be compensated for each day (including travel time) during which such member is attending meetings or conferences of that Advisory Committee or otherwise engaged in the business of that Advisory Committee, at the rate which is the daily equivalent of the annual rate of basic pay in effect [[Page H12603]] for level III of the Executive Schedule under section 5314 of title 5, United States Code. While away from such member's home or regular place of business such member shall be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code. ``(f ) Access to Information.--Members of each Advisory Committee shall be provided access to records and information in the United States Patent and Trademark Office, except for personnel or other privileged information and information concerning patent applications required to be kept in confidence by section 122. ``(g) Applicability of Certain Ethics Laws.--Members of each Advisory Committee shall be special Government employees within the meaning of section 202 of title 18, United States Code. ``(h) Inapplicability of Federal Advisory Committee Act.-- The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to each Advisory Committee. ``(i) Open Meetings.--The meetings of each Advisory Committee shall be open to the public, except that each Advisory Committee may by majority vote meet in executive session when considering personnel or other confidential information.''. SEC. 4715. CONFORMING AMENDMENTS. (a) Duties.--Chapter 1 of title 35, United States Code, is amended by striking section 6. (b) Regulations for Agents and Attorneys.--Section 31 of title 35, United States Code, and the item relating to such section in the table of sections for chapter 3 of title 35, United States Code, are repealed. (c) Suspension or Exclusion From Practice.--Section 32 of title 35, United States Code, is amended by striking ``31'' and inserting ``2(b)(2)(D)''. SEC. 4716. TRADEMARK TRIAL AND APPEAL BOARD. Section 17 of the Act of July 5, 1946 (commonly referred to as the ``Trademark Act of 1946'') (15 U.S.C. 1067) is amended to read as follows: ``Sec. 17. (a) In every case of interference, opposition to registration, application to register as a lawful concurrent user, or application to cancel the registration of a mark, the Director shall give notice to all parties and shall direct a Trademark Trial and Appeal Board to determine and decide the respective rights of registration. ``(b) The Trademark Trial and Appeal Board shall include the Director, the Commissioner for Patents, the Commissioner for Trademarks, and administrative trademark judges who are appointed by the Director.''. SEC. 4717. BOARD OF PATENT APPEALS AND INTERFERENCES. Chapter 1 of title 35, United States Code, is amended-- (1) by striking section 7 and redesignating sections 8 through 14 as sections 7 through 13, respectively; and (2) by inserting after section 5 the following: ``Sec. 6. Board of Patent Appeals and Interferences ``(a) Establishment and Composition.--There shall be in the United States Patent and Trademark Office a Board of Patent Appeals and Interferences. The Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges shall constitute the Board. The administrative patent judges shall be persons of competent legal knowledge and scientific ability who are appointed by the Director. ``(b) Duties.--The Board of Patent Appeals and Interferences shall, on written appeal of an applicant, review adverse decisions of examiners upon applications for patents and shall determine priority and patentability of invention in interferences declared under section 135(a). Each appeal and interference shall be heard by at least three members of the Board, who shall be designated by the Director. Only the Board of Patent Appeals and Interferences may grant rehearings.''. SEC. 4718. ANNUAL REPORT OF DIRECTOR. Section 13 of title 35, United States Code, as redesignated by section 4717 of this subtitle, is amended to read as follows: ``Sec. 13. Annual report to Congress ``The Director shall report to the Congress, not later than 180 days after the end of each fiscal year, the moneys received and expended by the Office, the purposes for which the moneys were spent, the quality and quantity of the work of the Office, the nature of training provided to examiners, the evaluation of the Commissioner of Patents and the Commissioner of Trademarks by the Secretary of Commerce, the compensation of the Commissioners, and other information relating to the Office.''. SEC. 4719. SUSPENSION OR EXCLUSION FROM PRACTICE. Section 32 of title 35, United States Code, is amended by inserting before the last sentence the following: ``The Director shall have the discretion to designate any attorney who is an officer or employee of the United States Patent and Trademark Office to conduct the hearing required by this section.''. SEC. 4720. PAY OF DIRECTOR AND DEPUTY DIRECTOR. (a) Pay of Director.--Section 5314 of title 5, United States Code, is amended by striking: ``Assistant Secretary of Commerce and Commissioner of Patents and Trademarks.''. and inserting: ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.''. (b) Pay of Deputy Director.--Section 5315 of title 5, United States Code, is amended by adding at the end the following: ``Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office.''. CHAPTER 2--EFFECTIVE DATE; TECHNICAL AMENDMENTS SEC. 4731. EFFECTIVE DATE. This subtitle and the amendments made by this subtitle shall take effect 4 months after the date of the enactment of this Act. SEC. 4732. TECHNICAL AND CONFORMING AMENDMENTS. (a) Amendments to Title 35, United States Code.-- (1) The item relating to part I in the table of parts for chapter 35, United States Code, is amended to read as follows: ``I. United States Patent and Trademark Office.................1''..... (2) The heading for part I of title 35, United States Code, is amended to read as follows: ``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''. (3) The table of chapters for part I of title 35, United States Code, is amended by amending the item relating to chapter 1 to read as follows: ``1. Establishment, Officers and Employees, Functions..........1''..... (4) The table of sections for chapter 1 of title 35, United States Code, is amended to read as follows: ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS ``Sec. `` 1. Establishment. `` 2. Powers and duties. `` 3. Officers and employees. `` 4. Restrictions on officers and employees as to interest in patents. `` 5. Patent and Trademark Office Public Advisory Committees. `` 6. Board of Patent Appeals and Interferences. `` 7. Library. `` 8. Classification of patents. `` 9. Certified copies of records. ``10. Publications. ``11. Exchange of copies of patents and applications with foreign countries. ``12. Copies of patents and applications for public libraries. ``13. Annual report to Congress.''. (5) Section 41(h) of title 35, United States Code, is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Director''. (6) Section 155 of title 35, United States Code, is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Director''. (7) Section 155A(c) of title 35, United States Code, is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Director''. (8) Section 302 of title 35, United States Code, is amended by striking ``Commissioner of Patents'' and inserting ``Director''. (9)(A) Section 303 of title 35, United States Code, is amended-- (i) in the section heading by striking ``Commissioner'' and inserting ``Director''; and (ii) by striking ``Commissioner's'' and inserting ``Director's''. (B) The item relating to section 303 in the table of sections for chapter 30 of title 35, United States Code, is amended by striking ``Commissioner'' and inserting ``Director''. (10)(A) Except as provided in subparagraph (B), title 35, United States Code, is amended by striking ``Commissioner'' each place it appears and inserting ``Director''. (B) Chapter 17 of title 35, United States Code, is amended by striking ``Commissioner'' each place it appears and inserting ``Commissioner of Patents''. (11) Section 157(d) of title 35, United States Code, is amended by striking ``Secretary of Commerce'' and inserting ``Director''. (12) Section 202(a) of title 35, United States Code, is amended-- (A) by striking ``iv)'' and inserting ``(iv)''; and (B) by striking the second period after ``Department of Energy'' at the end of the first sentence. (b) Other Provisions of Law.-- (1)(A) Section 45 of the Act of July 5, 1946 (commonly referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1127), is amended by striking ``The term `Commissioner' means the Commissioner of Patents and Trademarks.'' and inserting ``The term `Director' means the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.''. (B) The Act of July 5, 1946 (commonly referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1051 et seq.), except for section 17, as amended by 4716 of this subtitle, is amended by striking ``Commissioner'' each place it appears and inserting ``Director''. (C) Sections 8(e) and 9(b) of the Trademark Act of 1946 are each amended by striking ``Commissioner'' and inserting ``Director''. (2) Section 500(e) of title 5, United States Code, is amended by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''. (3) Section 5102(c)(23) of title 5, United States Code, is amended to read as follows: ``(23) administrative patent judges and designated administrative patent judges in the United States Patent and Trademark Office;''. (4) Section 5316 of title 5, United States Code (5 U.S.C. 5316) is amended by striking ``Commissioner of Patents, Department of Commerce.'', ``Deputy Commissioner of Patents and Trademarks.'', ``Assistant Commissioner for Patents.'', and ``Assistant Commissioner for Trademarks.''. (5) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 638(p)(1)(B)) is amended to read as follows: ``(B) the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; and''. [[Page H12604]] (6) Section 12 of the Act of February 14, 1903 (15 U.S.C. 1511) is amended-- (A) by striking ``(d) Patent and Trademark Office;'' and inserting: ``(4) United States Patent and Trademark Office''; and (B) by redesignating subsections (a), (b), (c), (e), (f ), and (g) as paragraphs (1), (2), (3), (5), (6), and (7), respectively and indenting the paragraphs as so redesignated 2 ems to the right. (7) Section 19 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 831r) is amended-- (A) by striking ``Patent Office of the United States'' and inserting ``United States Patent and Trademark Office''; and (B) by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (8) Section 182(b)(2)(A) of the Trade Act of 1974 (19 U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (9) Section 302(b)(2)(D) of the Trade Act of 1974 (19 U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (10) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) is amended by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''. (11) Sections 505(m) and 512(o) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each amended by striking ``Patent and Trademark Office of the Department of Commerce'' and inserting ``United States Patent and Trademark Office''. (12) Section 702(d) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office'' and by striking ``Commissioner'' and inserting ``Director''. (13) Section 105(e) of the Federal Alcohol Administration Act (27 U.S.C. 205(e)) is amended by striking ``United States Patent Office'' and inserting ``United States Patent and Trademark Office''. (14) Section 1295(a)(4) of title 28, United States Code, is amended-- (A) in subparagraph (A) by inserting ``United States'' before ``Patent and Trademark''; and (B) in subparagraph (B) by striking ``Commissioner of Patents and Trademarks'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (15) Chapter 115 of title 28, United States Code, is amended-- (A) in the item relating to section 1744 in the table of sections by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''; (B) in section 1744-- (i) by striking ``Patent Office'' each place it appears in the text and section heading and inserting ``United States Patent and Trademark Office''; and (ii) by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''; and (C) by striking ``Commissioner'' and inserting ``Director''. (16) Section 1745 of title 28, United States Code, is amended by striking ``United States Patent Office'' and inserting ``United States Patent and Trademark Office''. (17) Section 1928 of title 28, United States Code, is amended by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''. (18) Section 151 of the Atomic Energy Act of 1954 (42 U.S.C. 2181) is amended in subsections c. and d. by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (19) Section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182) is amended by striking ``Commissioner of Patents'' each place it appears and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (20) Section 305 of the National Aeronautics and Space Act of 1958 (42 U.S.C. 2457) is amended-- (A) in subsection (c) by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (hereafter in this section referred to as the `Director')''; and (B) by striking ``Commissioner'' each subsequent place it appears and inserting ``Director''. (21) Section 12(a) of the Solar Heating and Cooling Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by striking ``Commissioner of the Patent Office'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (22) Section 1111 of title 44, United States Code, is amended by striking ``the Commissioner of Patents,''. (23) Section 1114 of title 44, United States Code, is amended by striking ``the Commissioner of Patents,''. (24) Section 1123 of title 44, United States Code, is amended by striking ``the Patent Office,''. (25) Sections 1337 and 1338 of title 44, United States Code, and the items relating to those sections in the table of contents for chapter 13 of such title, are repealed. (26) Section 10(i) of the Trading with the enemy Act (50 U.S.C. App. 10(i)) is amended by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. CHAPTER 3--MISCELLANEOUS PROVISIONS SEC. 4741. REFERENCES. (a) In General.--Any reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to a department or office from which a function is transferred by this subtitle-- (1) to the head of such department or office is deemed to refer to the head of the department or office to which such function is transferred; or (2) to such department or office is deemed to refer to the department or office to which such function is transferred. (b) Specific References.--Any reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to the Patent and Trademark Office-- (1) to the Commissioner of Patents and Trademarks is deemed to refer to the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; (2) to the Assistant Commissioner for Patents is deemed to refer to the Commissioner for Patents; or (3) to the Assistant Commissioner for Trademarks is deemed to refer to the Commissioner for Trademarks. SEC. 4742. EXERCISE OF AUTHORITIES. Except as otherwise provided by law, a Federal official to whom a function is transferred by this subtitle may, for purposes of performing the function, exercise all authorities under any other provision of law that were available with respect to the performance of that function to the official responsible for the performance of the function immediately before the effective date of the transfer of the function under this subtitle. SEC. 4743. SAVINGS PROVISIONS. (a) Legal Documents.--All orders, determinations, rules, regulations, permits, grants, loans, contracts, agreements, certificates, licenses, and privileges-- (1) that have been issued, made, granted, or allowed to become effective by the President, the Secretary of Commerce, any officer or employee of any office transferred by this subtitle, or any other Government official, or by a court of competent jurisdiction, in the performance of any function that is transferred by this subtitle; and (2) that are in effect on the effective date of such transfer (or become effective after such date pursuant to their terms as in effect on such effective date), shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, any other authorized official, a court of competent jurisdiction, or operation of law. (b) Proceedings.--This subtitle shall not affect any proceedings or any application for any benefits, service, license, permit, certificate, or financial assistance pending on the effective date of this subtitle before an office transferred by this subtitle, but such proceedings and applications shall be continued. Orders shall be issued in such proceedings, appeals shall be taken therefrom, and payments shall be made pursuant to such orders, as if this subtitle had not been enacted, and orders issued in any such proceeding shall continue in effect until modified, terminated, superseded, or revoked by a duly authorized official, by a court of competent jurisdiction, or by operation of law. Nothing in this subsection shall be considered to prohibit the discontinuance or modification of any such proceeding under the same terms and conditions and to the same extent that such proceeding could have been discontinued or modified if this subtitle had not been enacted. (c) Suits.--This subtitle shall not affect suits commenced before the effective date of this subtitle, and in all such suits, proceedings shall be had, appeals taken, and judgments rendered in the same manner and with the same effect as if this subtitle had not been enacted. (d) Nonabatement of Actions.--No suit, action, or other proceeding commenced by or against the Department of Commerce or the Secretary of Commerce, or by or against any individual in the official capacity of such individual as an officer or employee of an office transferred by this subtitle, shall abate by reason of the enactment of this subtitle. (e) Continuance of Suits.--If any Government officer in the official capacity of such officer is party to a suit with respect to a function of the officer, and under this subtitle such function is transferred to any other officer or office, then such suit shall be continued with the other officer or the head of such other office, as applicable, substituted or added as a party. (f ) Administrative Procedure and Judicial Review.--Except as otherwise provided by this subtitle, any statutory requirements relating to notice, hearings, action upon the record, or administrative or judicial review that apply to any function transferred by this subtitle shall apply to the exercise of such function by the head of the Federal agency, and other officers of the agency, to which such function is transferred by this subtitle. SEC. 4744. TRANSFER OF ASSETS. Except as otherwise provided in this subtitle, so much of the personnel, property, records, and unexpended balances of appropriations, allocations, and other funds employed, used, held, available, or to be made available in connection [[Page H12605]] with a function transferred to an official or agency by this subtitle shall be available to the official or the head of that agency, respectively, at such time or times as the Director of the Office of Management and Budget directs for use in connection with the functions transferred. SEC. 4745. DELEGATION AND ASSIGNMENT. Except as otherwise expressly prohibited by law or otherwise provided in this subtitle, an official to whom functions are transferred under this subtitle (including the head of any office to which functions are transferred under this subtitle) may delegate any of the functions so transferred to such officers and employees of the office of the official as the official may designate, and may authorize successive redelegations of such functions as may be necessary or appropriate. No delegation of functions under this section or under any other provision of this subtitle shall relieve the official to whom a function is transferred under this subtitle of responsibility for the administration of the function. SEC. 4746. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET WITH RESPECT TO FUNCTIONS TRANSFERRED. (a) Determinations.--If necessary, the Director of the Office of Management and Budget shall make any determination of the functions that are transferred under this subtitle. (b) Incidental Transfers.--The Director of the Office of Management and Budget, at such time or times as the Director shall provide, may make such determinations as may be necessary with regard to the functions transferred by this subtitle, and to make such additional incidental dispositions of personnel, assets, liabilities, grants, contracts, property, records, and unexpended balances of appropriations, authorizations, allocations, and other funds held, used, arising from, available to, or to be made available in connection with such functions, as may be necessary to carry out the provisions of this subtitle. The Director shall provide for the termination of the affairs of all entities terminated by this subtitle and for such further measures and dispositions as may be necessary to effectuate the purposes of this subtitle. SEC. 4747. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS. For purposes of this subtitle, the vesting of a function in a department or office pursuant to reestablishment of an office shall be considered to be the transfer of the function. SEC. 4748. AVAILABILITY OF EXISTING FUNDS. Existing appropriations and funds available for the performance of functions, programs, and activities terminated pursuant to this subtitle shall remain available, for the duration of their period of availability, for necessary expenses in connection with the termination and resolution of such functions, programs, and activities, subject to the submission of a plan to the Committees on Appropriations of the House and Senate in accordance with the procedures set forth in section 605 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1999, as contained in Public Law 105-277. SEC. 4749. DEFINITIONS. For purposes of this subtitle-- (1) the term ``function'' includes any duty, obligation, power, authority, responsibility, right, privilege, activity, or program; and (2) the term ``office'' includes any office, administration, agency, bureau, institute, council, unit, organizational entity, or component thereof. Subtitle H--Miscellaneous Patent Provisions SEC. 4801. PROVISIONAL APPLICATIONS. (a) Abandonment.--Section 111(b)(5) of title 35, United States Code, is amended to read as follows: ``(5) Abandonment.--Notwithstanding the absence of a claim, upon timely request and as prescribed by the Director, a provisional application may be treated as an application filed under subsection (a). Subject to section 119(e)(3) of this title, if no such request is made, the provisional application shall be regarded as abandoned 12 months after the filing date of such application and shall not be subject to revival after such 12-month period.''. (b) Technical Amendment Relating to Weekends and Holidays.--Section 119(e) of title 35, United States Code, is amended by adding at the end the following: ``(3) If the day that is 12 months after the filing date of a provisional application falls on a Saturday, Sunday, or Federal holiday within the District of Columbia, the period of pendency of the provisional application shall be extended to the next succeeding secular or business day.''. (c) Elimination of Copendency Requirement.--Section 119(e)(2) of title 35, United States Code, is amended by striking ``and the provisional application was pending on the filing date of the application for patent under section 111(a) or section 363 of this title''. (d) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to any provisional application filed on or after June 8, 1995, except that the amendments made by subsections (b) and (c) shall have no effect with respect to any patent which is the subject of litigation in an action commenced before such date of enactment. SEC. 4802. INTERNATIONAL APPLICATIONS. Section 119 of title 35, United States Code, is amended as follows: (1) In subsection (a), insert ``or in a WTO member country,'' after ``or citizens of the United States,''. (2) At the end of section 119 add the following new subsections: ``(f ) Applications for plant breeder's rights filed in a WTO member country (or in a foreign UPOV Contracting Party) shall have the same effect for the purpose of the right of priority under subsections (a) through (c) of this section as applications for patents, subject to the same conditions and requirements of this section as apply to applications for patents. ``(g) As used in this section-- ``(1) the term `WTO member country' has the same meaning as the term is defined in section 104(b)(2) of this title; and ``(2) the term `UPOV Contracting Party' means a member of the International Convention for the Protection of New Varieties of Plants.''. SEC. 4803. CERTAIN LIMITATIONS ON DAMAGES FOR PATENT INFRINGEMENT NOT APPLICABLE. Section 287(c)(4) of title 35, United States Code, is amended by striking ``before the date of enactment of this subsection'' and inserting ``based on an application the earliest effective filing date of which is prior to September 30, 1996''. SEC. 4804. ELECTRONIC FILING AND PUBLICATIONS. (a) Printing of Papers Filed.--Section 22 of title 35, United States Code, is amended by striking ``printed or typewritten'' and inserting ``printed, typewritten, or on an electronic medium''. (b) Publications.--Section 11(a) of title 35, United States Code, is amended by amending the matter preceding paragraph 1 to read as follows: ``(a) The Director may publish in printed, typewritten, or electronic form, the following:''. (c) Copies of Patents for Public Libraries.--Section 13 of title 35, United States Code, is amended by striking ``printed copies of specifications and drawings of patents'' and inserting ``copies of specifications and drawings of patents in printed or electronic form''. (d) Maintenance of Collections.-- (1) Electronic collections.--Section 41(i)(1) of title 35, United States Code, is amended by striking ``paper or microform'' and inserting ``paper, microform, or electronic''. (2) Continuation of maintenance.--The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall not, pursuant to the amendment made by paragraph (1), cease to maintain, for use by the public, paper or microform collections of United States patents, foreign patent documents, and United States trademark registrations, except pursuant to notice and opportunity for public comment and except that the Director shall first submit a report to the Committees on the Judiciary of the Senate and the House of Representatives detailing such plan, including a description of the mechanisms in place to ensure the integrity of such collections and the data contained therein, as well as to ensure prompt public access to the most current available information, and certifying that the implementation of such plan will not negatively impact the public. SEC. 4805. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN SUPPORT OF BIOTECHNOLOGY PATENTS. (a) In General.--Not later than 6 months after the date of the enactment of this Act, the Comptroller General of the United States, in consultation with the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, shall conduct a study and submit a report to Congress on the potential risks to the United States biotechnology industry relating to biological deposits in support of biotechnology patents. (b) Contents.--The study conducted under this section shall include-- (1) an examination of the risk of export and the risk of transfers to third parties of biological deposits, and the risks posed by the change to 18-month publication requirements made by this subtitle; (2) an analysis of comparative legal and regulatory regimes; and (3) any related recommendations. (c) Consideration of Report.--In drafting regulations affecting biological deposits (including any modification of title 37, Code of Federal Regulations, section 1.801 et seq.), the United States Patent and Trademark Office shall consider the recommendations of the study conducted under this section. SEC. 4806. PRIOR INVENTION. Section 102(g) of title 35, United States Code, is amended to read as follows: ``(g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person's invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.''. SEC. 4807. PRIOR ART EXCLUSION FOR CERTAIN COMMONLY ASSIGNED PATENTS. (a) Prior Art Exclusion.--Section 103(c) of title 35, United States Code, is amended by striking ``subsection (f ) or (g)'' and inserting ``one or more of subsections (e), (f ), and (g)''. (b) Effective Date.--The amendment made by this section shall apply to any application for patent filed on or after the date of the enactment of this Act. SEC. 4808. EXCHANGE OF COPIES OF PATENTS WITH FOREIGN COUNTRIES. Section 12 of title 35, United States Code, is amended by adding at the end the following: [[Page H12606]] ``The Director shall not enter into an agreement to provide such copies of specifications and drawings of United States patents and applications to a foreign country, other than a NAFTA country or a WTO member country, without the express authorization of the Secretary of Commerce. For purposes of this section, the terms `NAFTA country' and `WTO member country' have the meanings given those terms in section 104(b).''. TITLE V--MISCELLANEOUS PROVISIONS SEC. 5001. COMMISSION ON ONLINE CHILD PROTECTION. (a) References.--Wherever in this section an amendment is expressed in terms of an amendment to any provision, the reference shall be considered to be made to such provision of section 1405 of the Child Online Protection Act (47 U.S.C. 231 note). (b) Membership.--Subsection (b) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) Industry members.--The Commission shall include 16 members who shall consist of representatives of-- ``(A) providers of Internet filtering or blocking services or software; ``(B) Internet access services; ``(C) labeling or ratings services; ``(D) Internet portal or search services; ``(E) domain name registration services; ``(F) academic experts; and ``(G) providers that make content available over the Internet. Of the members of the Commission by reason of this paragraph, an equal number shall be appointed by the Speaker of the House of Representatives and by the Majority Leader of the Senate. Members of the Commission appointed on or before October 31, 1999, shall remain members.''; and (2) by adding at the end the following new paragraph: ``(3) Prohibition of pay.--Members of the Commission shall not receive any pay by reason of their membership on the Commission.''. (c) Extension of Reporting Deadline.--The matter in subsection (d) that precedes paragraph (1) is amended by striking ``1 year'' and inserting ``2 years''. (d) Termination.--Subsection (f ) is amended by inserting before the period at the end the following: ``or November 30, 2000, whichever occurs earlier''. (e) First Meeting and Chairperson.--Section 1405 is amended-- (1) by striking subsection (e); (2) by redesignating subsections (f ) (as amended by the preceding provisions of this section) and (g) as subsections (l) and (m), respectively; (3) by redesignating subsections (c) and (d) (as amended by the preceding provisions of this section) as subsections (e) and (f ), respectively; and (4) by inserting after subsection (b) the following new subsections: ``(c) First Meeting.--The Commission shall hold its first meeting not later than March 31, 2000. ``(d) Chairperson.--The chairperson of the Commission shall be elected by a vote of a majority of the members, which shall take place not later than 30 days after the first meeting of the Commission.''. (f ) Rules of the Commission.--Section 1405 is amended by inserting after subsection (f ) (as so redesignated by subsection (e)(3) of this section) the following new subsection: ``(g) Rules of the Commission.-- ``(1) Quorum.--Nine members of the Commission shall constitute a quorum for conducting the business of the Commission. ``(2) Meetings.--Any meetings held by the Commission shall be duly noticed at least 14 days in advance and shall be open to the public. ``(3) Opportunities to testify.--The Commission shall provide opportunities for representatives of the general public to testify. ``(4) Additional rules.--The Commission may adopt other rules as necessary to carry out this section.''. SEC. 5002. PRIVACY PROTECTION FOR DONORS TO PUBLIC BROADCASTING ENTITIES. (a) Amendment.--Section 396(k) of the Communications Act of 1934 (47 U.S.C. 396(k)) is amended by adding at the end the following new paragraph: ``(12) Funds may not be distributed under this subsection to any public broadcasting entity that directly or indirectly-- ``(A) rents contributor or donor names (or other personally identifiable information) to or from, or exchanges such names or information with, any Federal, State, or local candidate, political party, or political committee; or ``(B) discloses contributor or donor names, or other personally identifiable information, to any nonaffiliated third party unless-- ``(i) such entity clearly and conspicuously discloses to the contributor or donor that such information may be disclosed to such third party; ``(ii) the contributor or donor is given the opportunity, before the time that such information is initially disclosed, to direct that such information not be disclosed to such third party; and ``(iii) the contributor or donor is given an explanation of how the contributor or donor may exercise that nondisclosure option.''. (b) Effective Date.--The amendment made by subsection (a) shall apply with respect to funds distributed on or after 6 months after the date of the enactment of this Act. SEC. 5003. COMPLETION OF BIENNIAL REGULATORY REVIEW. Within 180 days after the date of the enactment of this Act, the Federal Communications Commission shall complete the first biennial review required by section 202(h) of the Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 111). SEC. 5004. PUBLIC BROADCASTING ENTITIES. (a) Civil Remittance of Damages.--Section 1203(c)(5)(B) of title 17, United States Code, is amended to read as follows: ``(B) Nonprofit library, archives, educational institutions, or public broadcasting entities.-- ``(i) Definition.--In this subparagraph, the term `public broadcasting entity' has the meaning given such term under section 118(g). ``(ii) In general.--In the case of a nonprofit library, archives, educational institution, or public broadcasting entity, the court shall remit damages in any case in which the library, archives, educational institution, or public broadcasting entity sustains the burden of proving, and the court finds, that the library, archives, educational institution, or public broadcasting entity was not aware and had no reason to believe that its acts constituted a violation.''. (b) Criminal Offenses and Penalties.--Section 1204(b) of title 17, United States Code, is amended to read as follows: ``(b) Limitation for Nonprofit Library, Archives, Educational Institution, or Public Broadcasting Entity.-- Subsection (a) shall not apply to a nonprofit library, archives, educational institution, or public broadcasting entity (as defined under section 118(g).''. SEC. 5005. TECHNICAL AMENDMENTS RELATING TO VESSEL HULL DESIGN PROTECTION. (a) In General.-- (1) Section 504(a) of the Digital Millennium Copyright Act (Public Law 105-304) is amended to read as follows: ``(a) In General.--Not later than November 1, 2003, the Register of Copyrights and the Commissioner of Patents and Trademarks shall submit to the Committees on the Judiciary of the Senate and the House of Representatives a joint report evaluating the effect of the amendments made by this title.''. (2) Section 505 of the Digital Millennium Copyright Act is amended by striking ``and shall remain in effect'' and all that follows through the end of the section and inserting a period. (3) Section 1301(b)(3) of title 17, United States Code, is amended to read as follows: ``(3) A `vessel' is a craft-- ``(A) that is designed and capable of independently steering a course on or through water through its own means of propulsion; and ``(B) that is designed and capable of carrying and transporting one or more passengers.''. (4) Section 1313(c) of title 17, United States Code, is amended by adding at the end the following: ``Costs of the cancellation procedure under this subsection shall be borne by the nonprevailing party or parties, and the Administrator shall have the authority to assess and collect such costs.''. (b) Tariff Act of 1930.--Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) is amended-- (1) in subsection (a)-- (A) in paragraph (1)-- (i) in subparagraph (A), by striking ``and (D)'' and inserting ``(D), and (E)''; and (ii) by adding at the end the following: ``(E) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consigner, of an article that constitutes infringement of the exclusive rights in a design protected under chapter 13 of title 17, United States Code.''; and (B) in paragraphs (2) and (3), by striking ``or mask work'' and inserting ``mask work, or design''; and (2) in subsection (l), by striking ``or mask work'' each place it appears and inserting ``mask work, or design''. SEC. 5006. INFORMAL RULEMAKING OF COPYRIGHT DETERMINATION. Section 1201(a)(1)(C) of title 17, United States Code, is amended in the first sentence by striking ``on the record''. SEC. 5007. SERVICE OF PROCESS FOR SURETY CORPORATIONS. Section 9306 of title 31, United States Code, is amended-- (1) in subsection (a) by striking all beginning with ``designates a person by written power of attorney'' through the end of such subsection and inserting the following: ``has a resident agent for service of process for that district. The resident agent-- ``(1) may be an official of the State, the District of Columbia, the territory or possession in which the court sits who is authorized or appointed under the law of the State, District, territory or possession to receive service of process on the corporation; or ``(2) may be an individual who resides in the jurisdiction of the district court for the district in which a surety bond is to be provided and who is appointed by the corporation as provided in subsection (b)''; and (2) in subsection (b) by striking ``The'' and inserting ``If the surety corporation meets the requirement of subsection (a) by appointing an individual under subsection (a)(2), the''. SEC. 5008. LOW-POWER TELEVISION. (a) Short Title.--This section may be cited as the ``Community Broadcasters Protection Act of 1999''. (b) Findings.--Congress finds the following: (1) Since the creation of low-power television licenses by the Federal Communications Commission, a small number of license holders have operated their stations in a manner beneficial to the public good providing broadcasting to their communities that would not otherwise be available. (2) These low-power broadcasters have operated their stations in a manner consistent with the programming objectives and hours of operation of full-power broadcasters providing [[Page H12607]] worthwhile services to their respective communities while under severe license limitations compared to their full- power counterparts. (3) License limitations, particularly the temporary nature of the license, have blocked many low-power broadcasters from having access to capital, and have severely hampered their ability to continue to provide quality broadcasting, programming, or improvements. (4) The passage of the Telecommunications Act of 1996 has added to the uncertainty of the future status of these stations by the lack of specific provisions regarding the permanency of their licenses, or their treatment during the transition to high definition, digital television. (5) It is in the public interest to promote diversity in television programming such as that currently provided by low-power television stations to foreign-language communities. (c) Preservation of Low-Power Community Television Broadcasting.--Section 336 of the Communications Act of 1934 (47 U.S.C. 336) is amended-- (1) by redesignating subsections (f ) and (g) as subsections (g) and (h), respectively; and (2) by inserting after subsection (e) the following new subsection: ``(f ) Preservation of Low-Power Community Television Broadcasting.-- ``(1) Creation of class a licenses.-- ``(A) Rulemaking Required.--Within 120 days after the date of the enactment of the Community Broadcasters Protection Act of 1999, the Commission shall prescribe regulations to establish a class A television license to be available to licensees of qualifying low-power television stations. Such regulations shall provide that-- ``(i) the license shall be subject to the same license terms and renewal standards as the licenses for full-power television stations except as provided in this subsection; and ``(ii) each such class A licensee shall be accorded primary status as a television broadcaster as long as the station continues to meet the requirements for a qualifying low-power station in paragraph (2). ``(B) Notice to and certification by licensees.--Within 30 days after the date of the enactment of the Community Broadcasters Protection Act of 1999, the Commission shall send a notice to the licensees of all low-power televisions licenses that describes the requirements for class A designation. Within 60 days after such date of enactment, licensees intending to seek class A designation shall submit to the Commission a certification of eligibility based on the qualification requirements of this subsection. Absent a material deficiency, the Commission shall grant certification of eligibility to apply for class A status. ``(C) Application for and award of licenses.--Consistent with the requirements set forth in paragraph (2)(A) of this subsection, a licensee may submit an application for class A designation under this paragraph within 30 days after final regulations are adopted under subparagraph (A) of this paragraph. Except as provided in paragraphs (6) and (7), the Commission shall, within 30 days after receipt of an application of a licensee of a qualifying low-power television station that is acceptable for filing, award such a class A television station license to such licensee. ``(D) Resolution of technical problems.--The Commission shall act to preserve the service areas of low-power television licensees pending the final resolution of a class A application. If, after granting certification of eligibility for a class A license, technical problems arise requiring an engineering solution to a full-power station's allotted parameters or channel assignment in the digital television Table of Allotments, the Commission shall make such modifications as necessary-- ``(i) to ensure replication of the full-power digital television applicant's service area, as provided for in sections 73.622 and 73.623 of the Commission's regulations (47 CFR 73.622, 73.623); and ``(ii) to permit maximization of a full-power digital television applicant's service area consistent with such sections 73.622 and 73.623, if such applicant has filed an application for maximization or a notice of its intent to seek such maximization by December 31, 1999, and filed a bona fide application for maximization by May 1, 2000. Any such applicant shall comply with all applicable Commission rules regarding the construction of digital television facilities. ``(E) Change applications.--If a station that is awarded a construction permit to maximize or significantly enhance its digital television service area, later files a change application to reduce its digital television service area, the protected contour of that station shall be reduced in accordance with such change modification. ``(2) Qualifying low-power television stations.--For purposes of this subsection, a station is a qualifying low- power television station if-- ``(A)(i) during the 90 days preceding the date of the enactment of the Community Broadcasters Protection Act of 1999-- ``(I) such station broadcast a minimum of 18 hours per day; ``(II) such station broadcast an average of at least 3 hours per week of programming that was produced within the market area served by such station, or the market area served by a group of commonly controlled low-power stations that carry common local programming produced within the market area served by such group; and ``(III) such station was in compliance with the Commission's requirements applicable to low-power television stations; and ``(ii) from and after the date of its application for a class A license, the station is in compliance with the Commission's operating rules for full-power television stations; or ``(B) the Commission determines that the public interest, convenience, and necessity would be served by treating the station as a qualifying low-power television station for purposes of this section, or for other reasons determined by the Commission. ``(3) Common ownership.--No low-power television station authorized as of the date of the enactment of the Community Broadcasters Protection Act of 1999 shall be disqualified for a class A license based on common ownership with any other medium of mass communication. ``(4) Issuance of licenses for advanced television services to television translator stations and qualifying low-power television stations.--The Commission is not required to issue any additional license for advanced television services to the licensee of a class A television station under this subsection, or to any licensee of any television translator station, but shall accept a license application for such services proposing facilities that will not cause interference to the service area of any other broadcast facility applied for, protected, permitted, or authorized on the date of filing of the advanced television application. Such new license or the original license of the applicant shall be forfeited after the end of the digital television service transition period, as determined by the Commission. A licensee of a low-power television station or television translator station may, at the option of licensee, elect to convert to the provision of advanced television services on its analog channel, but shall not be required to convert to digital operation until the end of such transition period. ``(5) No preemption of section 337.--Nothing in this subsection preempts or otherwise affects section 337 of this Act. ``(6) Interim qualification.-- ``(A) Stations operating within certain bandwidth.--The Commission may not grant a class A license to a low-power television station for operation between 698 and 806 megahertz, but the Commission shall provide to low-power television stations assigned to and temporarily operating in that bandwidth the opportunity to meet the qualification requirements for a class A license. If such a qualified applicant for a class A license is assigned a channel within the core spectrum (as such term is defined in MM Docket No. 87-286, February 17, 1998), the Commission shall issue a class A license simultaneously with the assignment of such channel. ``(B) Certain channels off-limits.--The Commission may not grant under this subsection a class A license to a low-power television station operating on a channel within the core spectrum that includes any of the 175 additional channels referenced in paragraph 45 of its February 23, 1998, Memorandum Opinion and Order on Reconsideration of the Sixth Report and Order (MM Docket No. 87-268). Within 18 months after the date of the enactment of the Community Broadcasters Protection Act of 1999, the Commission shall identify by channel, location, and applicable technical parameters those 175 channels. ``(7) No interference requirement.--The Commission may not grant a class A license, nor approve a modification of a class A license, unless the applicant or licensee shows that the class A station for which the license or modification is sought will not cause-- ``(A) interference within-- ``(i) the predicted Grade B contour (as of the date of the enactment of the Community Broadcasters Protection Act of 1999, or November 1, 1999, whichever is later, or as proposed in a change application filed on or before such date) of any television station transmitting in analog format; or ``(ii)(I) the digital television service areas provided in the DTV Table of Allotments; (II) the areas protected in the Commission's digital television regulations (47 CFR 73.622(e) and (f )); (III) the digital television service areas of stations subsequently granted by the Commission prior to the filing of a class A application; and (IV) stations seeking to maximize power under the Commission's rules, if such station has complied with the notification requirements in paragraph (1)(D); ``(B) interference within the protected contour of any low- power television station or low-power television translator station that-- ``(i) was licensed prior to the date on which the application for a class A license, or for the modification of such a license, was filed; ``(ii) was authorized by construction permit prior to such date; or ``(iii) had a pending application that was submitted prior to such date; or ``(C) interference within the protected contour of 80 miles from the geographic center of the areas listed in section 22.625(b)(1) or 90.303 of the Commission's regulations (47 CFR 22.625(b)(1) and 90.303) for frequencies in-- ``(i) the 470-512 megahertz band identified in section 22.621 or 90.303 of such regulations; or ``(ii) the 482-488 megahertz band in New York. ``(8) Priority for displaced low-power stations.--Low-power stations that are displaced by an application filed under this section shall have priority over other low-power stations in the assignment of available channels.''. TITLE VI--SUPERFUND RECYCLING EQUITY SEC. 6001. SUPERFUND RECYCLING EQUITY. (a) Purposes.--The purposes of this section are-- (1) to promote the reuse and recycling of scrap material in furtherance of the goals of waste minimization and natural resource conservation while protecting human health and the environment; (2) to create greater equity in the statutory treatment of recycled versus virgin materials; and (3) to remove the disincentives and impediments to recycling created as an unintended consequence of the 1980 Superfund liability provisions. [[Page H12608]] (b) Clarification of Liability Under CERCLA for Recycling Transactions.-- (1) Clarification.--Title I of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) is amended by adding at the end the following new section: ``SEC. 127. RECYCLING TRANSACTIONS. ``(a) Liability Clarification.-- ``(1) As provided in subsections (b), (c), (d), and (e), a person who arranged for recycling of recyclable material shall not be liable under sections 107(a)(3) and 107(a)(4) with respect to such material. ``(2) A determination whether or not any person shall be liable under section 107(a)(3) or section 107(a)(4) for any material that is not a recyclable material as that term is used in subsections (b) and (c), (d), or (e) of this section shall be made, without regard to subsections (b), (c), (d), or (e) of this section. ``(b) Recyclable Material Defined.--For purposes of this section, the term `recyclable material' means scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires), scrap metal, or spent lead-acid, spent nickel-cadmium, and other spent batteries, as well as minor amounts of material incident to or adhering to the scrap material as a result of its normal and customary use prior to becoming scrap; except that such term shall not include-- ``(1) shipping containers of a capacity from 30 liters to 3,000 liters, whether intact or not, having any hazardous substance (but not metal bits and pieces or hazardous substance that form an integral part of the container) contained in or adhering thereto; or ``(2) any item of material that contained polychlorinated biphenyls at a concentration in excess of 50 parts per million or any new standard promulgated pursuant to applicable Federal laws. ``(c) Transactions Involving Scrap Paper, Plastic, Glass, Textiles, or Rubber.--Transactions involving scrap paper, scrap plastic, scrap glass, scrap textiles, or scrap rubber (other than whole tires) shall be deemed to be arranging for recycling if the person who arranged for the transaction (by selling recyclable material or otherwise arranging for the recycling of recyclable material) can demonstrate by a preponderance of the evidence that all of the following criteria were met at the time of the transaction: ``(1) The recyclable material met a commercial specification grade. ``(2) A market existed for the recyclable material. ``(3) A substantial portion of the recyclable material was made available for use as feedstock for the manufacture of a new saleable product. ``(4) The recyclable material could have been a replacement or substitute for a virgin raw material, or the product to be made from the recyclable material could have been a replacement or substitute for a product made, in whole or in part, from a virgin raw material. ``(5) For transactions occurring 90 days or more after the date of enactment of this section, the person exercised reasonable care to determine that the facility where the recyclable material was handled, processed, reclaimed, or otherwise managed by another person (hereinafter in this section referred to as a `consuming facility') was in compliance with substantive (not procedural or administrative) provisions of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with recyclable material. ``(6) For purposes of this subsection, `reasonable care' shall be determined using criteria that include (but are not limited to)-- ``(A) the price paid in the recycling transaction; ``(B) the ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with recyclable material; and ``(C) the result of inquiries made to the appropriate Federal, State, or local environmental agency (or agencies) regarding the consuming facility's past and current compliance with substantive (not procedural or administrative) provisions of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with the recyclable material. For the purposes of this paragraph, a requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activity associated with the recyclable materials shall be deemed to be a substantive provision. ``(d) Transactions Involving Scrap Metal.-- ``(1) Transactions involving scrap metal shall be deemed to be arranging for recycling if the person who arranged for the transaction (by selling recyclable material or otherwise arranging for the recycling of recyclable material) can demonstrate by a preponderance of the evidence that at the time of the transaction-- ``(A) the person met the criteria set forth in subsection (c) with respect to the scrap metal; ``(B) the person was in compliance with any applicable regulations or standards regarding the storage, transport, management, or other activities associated with the recycling of scrap metal that the Administrator promulgates under the Solid Waste Disposal Act subsequent to the enactment of this section and with regard to transactions occurring after the effective date of such regulations or standards; and ``(C) the person did not melt the scrap metal prior to the transaction. ``(2) For purposes of paragraph (1)(C), melting of scrap metal does not include the thermal separation of 2 or more materials due to differences in their melting points (referred to as `sweating'). ``(3) For purposes of this subsection, the term `scrap metal' means bits and pieces of metal parts (e.g., bars, turnings, rods, sheets, wire) or metal pieces that may be combined together with bolts or soldering (e.g., radiators, scrap automobiles, railroad box cars), which when worn or superfluous can be recycled, except for scrap metals that the Administrator excludes from this definition by regulation. ``(e) Transactions Involving Batteries.--Transactions involving spent lead-acid batteries, spent nickel-cadmium batteries, or other spent batteries shall be deemed to be arranging for recycling if the person who arranged for the transaction (by selling recyclable material or otherwise arranging for the recycling of recyclable material) can demonstrate by a preponderance of the evidence that at the time of the transaction-- ``(1) the person met the criteria set forth in subsection (c) with respect to the spent lead-acid batteries, spent nickel-cadmium batteries, or other spent batteries, but the person did not recover the valuable components of such batteries; and ``(2)(A) with respect to transactions involving lead-acid batteries, the person was in compliance with applicable Federal environmental regulations or standards, and any amendments thereto, regarding the storage, transport, management, or other activities associated with the recycling of spent lead-acid batteries; ``(B) with respect to transactions involving nickel-cadmium batteries, Federal environmental regulations or standards are in effect regarding the storage, transport, management, or other activities associated with the recycling of spent nickel-cadmium batteries, and the person was in compliance with applicable regulations or standards or any amendments thereto; or ``(C) with respect to transactions involving other spent batteries, Federal environmental regulations or standards are in effect regarding the storage, transport, management, or other activities associated with the recycling of such batteries, and the person was in compliance with applicable regulations or standards or any amendments thereto. ``(f) Exclusions.-- ``(1) The exemptions set forth in subsections (c), (d), and (e) shall not apply if-- ``(A) the person had an objectively reasonable basis to believe at the time of the recycling transaction-- ``(i) that the recyclable material would not be recycled; ``(ii) that the recyclable material would be burned as fuel, or for energy recovery or incineration; or ``(iii) for transactions occurring before 90 days after the date of the enactment of this section, that the consuming facility was not in compliance with a substantive (not procedural or administrative) provision of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, or other management activities associated with the recyclable material; ``(B) the person had reason to believe that hazardous substances had been added to the recyclable material for purposes other than processing for recycling; or ``(C) the person failed to exercise reasonable care with respect to the management and handling of the recyclable material (including adhering to customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances). ``(2) For purposes of this subsection, an objectively reasonable basis for belief shall be determined using criteria that include (but are not limited to) the size of the person's business, customary industry practices (including customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances), the price paid in the recycling transaction, and the ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with the recyclable material. ``(3) For purposes of this subsection, a requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activities associated with recyclable material shall be deemed to be a substantive provision. ``(g) Effect on Other Liability.--Nothing in this section shall be deemed to affect the liability of a person under paragraph (1) or (2) of section 107(a). ``(h) Regulations.--The Administrator has the authority, under section 115, to promulgate additional regulations concerning this section. ``(i) Effect on Pending or Concluded Actions.--The exemptions provided in this section shall not affect any concluded judicial or administrative action or any pending judicial action initiated by the United States prior to enactment of this section. ``(j) Liability for Attorney's Fees for Certain Actions.-- Any person who commences an action in contribution against a person who is not liable by operation of this section shall be liable to that person for all reasonable costs of defending that action, including all reasonable attorney's and expert witness fees. ``(k) Relationship to Liability Under Other Laws.--Nothing in this section shall affect-- ``(1) liability under any other Federal, State, or local statute or regulation promulgated pursuant to any such statute, including any requirements promulgated by the Administrator under the Solid Waste Disposal Act; or [[Page H12609]] ``(2) the ability of the Administrator to promulgate regulations under any other statute, including the Solid Waste Disposal Act. ``(l) Limitation on Statutory Construction.--Nothing in this section shall be construed to-- ``(1) affect any defenses or liabilities of any person to whom subsection (a)(1) does not apply; or ``(2) create any presumption of liability against any person to whom subsection (a)(1) does not apply.'' (2) Technical Amendment.--The table of contents for title I of such Act is amended by adding at the end the following item: ``Sec. 127. Recycling transactions.''. Bill Young. Jerry Lewis. Managers on the Part of the House. Ted Stevens. Pete Domenici. Kay Bailey Hutchison. Managers on the Part of the Senate.