II 116TH CONGRESS 1ST SESSION S. 2082 To strengthen the position of the United States as the world’s leading inno- vator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country’s economy. IN THE SENATE OF THE UNITED STATES JULY 10, 2019 Mr. COONS (for himself, Mr. COTTON, Mr. DURBIN, Ms. HIRONO, Mr. KEN- NEDY, and Mr. CRAMER) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To strengthen the position of the United States as the world’s leading innovator by amending title 35, United States Code, to protect the property rights of the inven- tors that grow the country’s economy. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Support Technology and Research for Our Nation’s 5 Growth and Economic Resilience Patents Act of 2019’’ or 6 the ‘‘STRONGER Patents Act of 2019’’. 7 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 2 •S 2082 IS (b) TABLE OF CONTENTS.—The table of contents for 1 this Act is as follows: 2 Sec. 1. Short title; table of contents. TITLE I—STRONGER PATENTS ACT Sec. 101. Findings. Sec. 102. Inter partes review. Sec. 103. Post-grant review. Sec. 104. Composition of post-grant review and inter partes review panels. Sec. 105. Reexamination of patents. Sec. 106. Restoration of patents as property rights. Sec. 107. Elimination of USPTO fee diversion. Sec. 108. Institutions of higher education. Sec. 109. Assisting small businesses in the U.S. patent system. TITLE II—TARGETING ROGUE AND OPAQUE LETTERS Sec. 201. Definitions. Sec. 202. Unfair or deceptive acts or practices in connection with the assertion of a United States patent. Sec. 203. Enforcement by Federal Trade Commission. Sec. 204. Preemption of State laws on patent demand letters and enforcement by State attorneys general. TITLE I—STRONGER PATENTS 3 ACT 4 SEC. 101. FINDINGS. 5 Congress finds that— 6 (1) the patent property rights enshrined in the 7 Constitution of the United States provide the foun- 8 dation for the exceptional innovation environment in 9 the United States; 10 (2) strong patent rights encourage United 11 States inventors to invest their resources in creating 12 new inventions; 13 (3) patent protection has led to patient cures, 14 positive changes to the standard of living for all peo- 15 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 3 •S 2082 IS ple in the United States, and improvements to the 1 agricultural, telecommunications, and electronics in- 2 dustries, among others; 3 (4) the United States patent system is an es- 4 sential part of the country’s economic success; 5 (5) strong patent protection improves the 6 chances of success for small companies and increases 7 their chances of securing financing from investors; 8 (6) intellectual property-intensive industries in 9 the United States generate tens of millions of jobs 10 for individuals in the United States; 11 (7) intellectual property-intensive industries in 12 the United States account for more than one-third 13 of the country’s gross domestic product; 14 (8) in the highly competitive global economy, 15 the United States needs to uphold strong patent 16 protections to maintain its position as the world’s 17 premier innovative country; 18 (9) Congress last enacted comprehensive re- 19 forms of the patent system in 2011; 20 (10) unintended consequences of the com- 21 prehensive 2011 reform of patent laws are con- 22 tinuing to become evident, including the strategic fil- 23 ing of post-grant review proceedings to depress stock 24 prices and extort settlements, the filing of repetitive 25 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 4 •S 2082 IS petitions for inter partes and post-grant reviews that 1 have the effect of harassing patent owners, and the 2 unnecessary duplication of work by the district 3 courts of the United States and the Patent Trial 4 and Appeal Board; 5 (11) the Judicial Conference of the United 6 States has made significant revisions to rules gov- 7 erning pleadings and discovery in the Federal Rules 8 of Civil Procedure, which took effect in December 9 2015; 10 (12) the Supreme Court issued rulings in Oc- 11 tane Fitness, LLC v. Icon Health & Fitness, Inc., 12 134 S.Ct. 1749 (2014) and Highmark Inc. v. Allcare 13 Health Management System, Inc., 134 S.Ct. 1744 14 (2014) that significantly reduced the burden on an 15 alleged infringer to recover attorney fees from the 16 patent owner, and increased the incidence of fees 17 shifted to the losing party; and 18 (13) efforts by Congress to reform the patent 19 system without careful scrutiny create a serious risk 20 of making it more costly and difficult for legitimate 21 innovators to protect their patents from infringe- 22 ment, thereby weakening United States companies 23 and the United States economy. 24 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 5 •S 2082 IS SEC. 102. INTER PARTES REVIEW. 1 (a) CLAIM CONSTRUCTION.—Section 316(a) of title 2 35, United States Code, is amended— 3 (1) in paragraph (9), by inserting after ‘‘sub- 4 stitute claims,’’ the following: ‘‘including the stand- 5 ard for how substitute claims should be construed,’’; 6 (2) in paragraph (12), by striking ‘‘; and’’ and 7 inserting a semicolon; 8 (3) in paragraph (13), by striking the period at 9 the end and inserting ‘‘; and’’; and 10 (4) by adding at the end the following new 11 paragraph: 12 ‘‘(14) providing that for all purposes under this 13 chapter— 14 ‘‘(A) each challenged claim of a patent, or 15 claim proposed in a motion to amend, shall be 16 construed as the claim would be construed 17 under section 282(b) in an action to invalidate 18 a patent, including by construing each such 19 claim in accordance with— 20 ‘‘(i) the ordinary and customary 21 meaning of the claim as understood by a 22 person having ordinary skill in the art to 23 which the claimed invention pertains; and 24 ‘‘(ii) the prosecution history per- 25 taining to the patent; and 26 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 6 •S 2082 IS ‘‘(B) if a court has previously construed a 1 challenged claim of a patent or a challenged 2 claim term in a civil action to which the patent 3 owner was a party, the Office shall consider 4 that claim construction.’’. 5 (b) BURDEN OF PROOF.—Section 316(e) of title 35, 6 United States Code, is amended to read as follows: 7 ‘‘(e) EVIDENTIARY STANDARDS.— 8 ‘‘(1) PRESUMPTION OF VALIDITY.—The pre- 9 sumption of validity under section 282(a) shall apply 10 to a previously issued claim that is challenged dur- 11 ing an inter partes review under this chapter. 12 ‘‘(2) BURDEN OF PROOF.—In an inter partes 13 review instituted under this chapter, the petitioner 14 shall have the burden of proving a proposition of 15 unpatentability of a previously issued claim by clear 16 and convincing evidence.’’. 17 (c) STANDING.—Section 311 of title 35, United 18 States Code, is amended by adding at the end the fol- 19 lowing new subsection: 20 ‘‘(d) PERSONS THAT MAY PETITION.— 21 ‘‘(1) DEFINITION.—In this subsection, the term 22 ‘charged with infringement’ means a real and sub- 23 stantial controversy regarding infringement of a pat- 24 ent exists such that the petitioner would have stand- 25 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 7 •S 2082 IS ing to bring a declaratory judgment action in Fed- 1 eral court. 2 ‘‘(2) NECESSARY CONDITIONS.—A person may 3 not file with the Office a petition to institute an 4 inter partes review of a patent unless the person, or 5 a real party in interest or privy of the person, has 6 been— 7 ‘‘(A) sued for infringement of the patent; 8 or 9 ‘‘(B) charged with infringement under the 10 patent.’’. 11 (d) LIMITATION ON REVIEWS.—Section 314(a) of 12 title 35, United States Code, is amended to read as fol- 13 lows: 14 ‘‘(a) THRESHOLD.— 15 ‘‘(1) LIKELIHOOD OF PREVAILING.—Subject to 16 paragraph (2), the Director may not authorize an 17 inter partes review to be instituted unless the Direc- 18 tor determines that the information presented in the 19 petition filed under section 311 and any response 20 filed under section 313 show that there is a reason- 21 able likelihood that the petitioner would prevail with 22 respect to at least one of the claims challenged in 23 the petition. 24 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 8 •S 2082 IS ‘‘(2) PREVIOUS INSTITUTION.—The Director 1 may not authorize an inter partes review to be insti- 2 tuted on a claim challenged in a petition if the Di- 3 rector has previously instituted an inter partes re- 4 view or post-grant review with respect to that 5 claim.’’. 6 (e) REVIEWABILITY OF INSTITUTION DECISIONS.— 7 Section 314 of title 35, United States Code, is amended 8 by striking subsection (d) and inserting the following: 9 ‘‘(d) NO APPEAL.— 10 ‘‘(1) NONAPPEALABLE DETERMINATIONS.— 11 ‘‘(A) THRESHOLD DETERMINATION.—A 12 determination by the Director on the reasonable 13 likelihood that the petitioner will prevail under 14 subsection (a)(1) shall be final and nonappeal- 15 able. 16 ‘‘(B) DENIALS OF INSTITUTION.—A deter- 17 mination by the Director not to institute an 18 inter partes review under this section shall be 19 final and nonappealable. 20 ‘‘(2) APPEALABLE DETERMINATIONS.—Any as- 21 pect of a determination by the Director to institute 22 an inter partes review under this section, other than 23 a determination described in paragraph (1)(A), may 24 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 9 •S 2082 IS be reviewed during an appeal of a final written deci- 1 sion issued under section 318(a).’’. 2 (f) ELIMINATING REPETITIVE PROCEEDINGS.—Sec- 3 tion 315(e) of title 35, United States Code, is amended 4 to read as follows: 5 ‘‘(e) ESTOPPEL.— 6 ‘‘(1) PROCEEDINGS BEFORE THE OFFICE.—A 7 person petitioning for an inter partes review of a 8 claim in a patent under this chapter, or the real 9 party in interest or privy of the petitioner, may not 10 petition for a subsequent inter partes review before 11 the Office with respect to that patent on any ground 12 that the petitioner raised or reasonably could have 13 raised in the initial petition, unless, after the filing 14 of the initial petition, the petitioner, or the real 15 party in interest or privy of the petitioner, is 16 charged with infringement of additional claims of 17 the patent. 18 ‘‘(2) CIVIL ACTIONS AND OTHER PRO- 19 CEEDINGS.—A person petitioning for an inter partes 20 review of a claim in a patent under this chapter that 21 results in an institution decision under section 314, 22 or the real party in interest or privy of the peti- 23 tioner, may not assert either in a civil action arising 24 in whole or in part under section 1338 of title 28 25 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 10 •S 2082 IS or in a proceeding before the International Trade 1 Commission under section 337 of the Tariff Act of 2 1930 (19 U.S.C. 1337) that the claim is invalid 3 based on section 102 or 103 of this title, unless the 4 invalidity argument is based on allegations that the 5 claimed invention was in public use, on sale, or oth- 6 erwise available to the public before the effective fil- 7 ing date of the claimed invention.’’. 8 (g) REAL PARTY IN INTEREST.— 9 (1) CLARIFICATION OF DEFINITION.—Section 10 315 of title 35, United States Code, is amended by 11 adding at the end the following new subsection: 12 ‘‘(f) PETITIONER.—For purposes of this chapter, a 13 person that directly or through an affiliate, subsidiary, or 14 proxy makes a financial contribution to the preparation 15 for, or conduct during, an inter partes review on behalf 16 of the petitioner shall be considered a real party in interest 17 of the petitioner.’’. 18 (2) DISCOVERY OF REAL PARTY IN INTER- 19 EST.—Section 316(a)(5) of title 35, United States 20 Code, is amended to read as follows: 21 ‘‘(5) setting forth standards and procedures for 22 discovery of relevant evidence, including that such 23 discovery shall be limited to— 24 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 11 •S 2082 IS ‘‘(A) the deposition of witnesses submitting 1 affidavits or declarations; 2 ‘‘(B) evidence identifying the petitioner’s 3 real parties in interest; and 4 ‘‘(C) what is otherwise necessary in the in- 5 terest of justice;’’. 6 (h) PRIORITY OF FEDERAL COURT VALIDITY DE- 7 TERMINATIONS.— 8 (1) IN GENERAL.—Section 315 of title 35, 9 United States Code, as amended by subsections (f) 10 and (g), is further amended— 11 (A) by redesignating subsections (c) 12 through (f) as subsections (d) through (g), re- 13 spectively; and 14 (B) by inserting after subsection (b) the 15 following new subsection: 16 ‘‘(c) FEDERAL COURT VALIDITY DETERMINA- 17 TIONS.— 18 ‘‘(1) INSTITUTION BARRED.—An inter partes 19 review of a patent claim may not be instituted if, in 20 a civil action arising in whole or in part under sec- 21 tion 1338 of title 28 or in a proceeding before the 22 International Trade Commission under section 337 23 of the Tariff Act of 1930 (19 U.S.C. 1337), a court 24 has entered a final judgment— 25 VerDate Sep 11 2014 05:30 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082 kjohnson on DSK79L0C42 with BILLS 12 •S 2082 IS ‘‘(A) that decides the validity of the patent 1 claim with respect to section 102 or 103; and 2 ‘‘(B) from which an appeal under section 3 1295 of title 28 may be taken, or from which 4 an appeal under section 1295 of title 28 was 5 previously available but is no longer available. 6 ‘‘(2) STAY OF PROCEEDINGS.— 7 ‘‘(A) IN GENERAL.—If, in a civil action 8 arising in whole or in part under section 1338 9 of title 28 or [Text truncated for display. 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