STRONGER Patents Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3666 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 HOUSE OF REPRESENTATIVES JULY 10, 2019 Mr. STIVERS (for himself, Mr. FOSTER, Mr. MCCLINTOCK, Ms. VELA´ZQUEZ, Mr. BABIN, Mr. BURGESS, Mr. HILL of Arkansas, Mr. HUIZENGA, Mr. JOYCE of Ohio, Mr. KING of New York, Mr. NORMAN, Mrs. WATSON COLEMAN, Mr. SUOZZI, Mr. PETERS, Mr. GOSAR, and Mr. DAVIDSON of Ohio) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Energy and Com- merce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned 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 VerDate Sep 11 2014 21:21 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 2 •HR 3666 IH Growth and Economic Resilience Patents Act of 2019’’ or 1 the ‘‘STRONGER Patents Act of 2019’’. 2 (b) TABLE OF CONTENTS.—The table of contents for 3 this Act is as follows: 4 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 5 ACT 6 SEC. 101. FINDINGS. 7 Congress finds that— 8 (1) the patent property rights enshrined in the 9 Constitution of the United States provide the foun- 10 dation for the exceptional innovation environment in 11 the United States; 12 (2) strong patent rights encourage United 13 States inventors to invest their resources in creating 14 new inventions; 15 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 3 •HR 3666 IH (3) patent protection has led to patient cures, 1 positive changes to the standard of living for all peo- 2 ple in the United States, and improvements to the 3 agricultural, telecommunications, and electronics in- 4 dustries, among others; 5 (4) the United States patent system is an es- 6 sential part of the country’s economic success; 7 (5) strong patent protection improves the 8 chances of success for small companies and increases 9 their chances of securing financing from investors; 10 (6) intellectual property-intensive industries in 11 the United States generate tens of millions of jobs 12 for individuals in the United States; 13 (7) intellectual property-intensive industries in 14 the United States account for more than one-third 15 of the country’s gross domestic product; 16 (8) in the highly competitive global economy, 17 the United States needs to uphold strong patent 18 protections to maintain its position as the world’s 19 premier innovative country; 20 (9) Congress last enacted comprehensive re- 21 forms of the patent system in 2011; 22 (10) unintended consequences of the com- 23 prehensive 2011 reform of patent laws are con- 24 tinuing to become evident, including the strategic fil- 25 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 4 •HR 3666 IH ing of post-grant review proceedings to depress stock 1 prices and extort settlements, the filing of repetitive 2 petitions for inter partes and post-grant reviews that 3 have the effect of harassing patent owners, and the 4 unnecessary duplication of work by the district 5 courts of the United States and the Patent Trial 6 and Appeal Board; 7 (11) the Judicial Conference of the United 8 States has made significant revisions to rules gov- 9 erning pleadings and discovery in the Federal Rules 10 of Civil Procedure, which took effect in December 11 2015; 12 (12) the Supreme Court issued rulings in Oc- 13 tane Fitness, LLC v. Icon Health & Fitness, Inc., 14 134 S.Ct. 1749 (2014) and Highmark Inc. v. Allcare 15 Health Management System, Inc., 134 S.Ct. 1744 16 (2014) that significantly reduced the burden on an 17 alleged infringer to recover attorney fees from the 18 patent owner, and increased the incidence of fees 19 shifted to the losing party; and 20 (13) efforts by Congress to reform the patent 21 system without careful scrutiny create a serious risk 22 of making it more costly and difficult for legitimate 23 innovators to protect their patents from infringe- 24 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 5 •HR 3666 IH ment, thereby weakening United States companies 1 and the United States economy. 2 SEC. 102. INTER PARTES REVIEW. 3 (a) CLAIM CONSTRUCTION.—Section 316(a) of title 4 35, United States Code, is amended— 5 (1) in paragraph (9), by inserting after ‘‘sub- 6 stitute claims,’’ the following: ‘‘including the stand- 7 ard for how substitute claims should be construed,’’; 8 (2) in paragraph (12), by striking ‘‘; and’’ and 9 inserting a semicolon; 10 (3) in paragraph (13), by striking the period at 11 the end and inserting ‘‘; and’’; and 12 (4) by adding at the end the following new 13 paragraph: 14 ‘‘(14) providing that for all purposes under this 15 chapter— 16 ‘‘(A) each challenged claim of a patent, or 17 claim proposed in a motion to amend, shall be 18 construed as the claim would be construed 19 under section 282(b) in an action to invalidate 20 a patent, including by construing each such 21 claim in accordance with— 22 ‘‘(i) the ordinary and customary 23 meaning of the claim as understood by a 24 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 6 •HR 3666 IH person having ordinary skill in the art to 1 which the claimed invention pertains; and 2 ‘‘(ii) the prosecution history per- 3 taining to the patent; and 4 ‘‘(B) if a court has previously construed a 5 challenged claim of a patent or a challenged 6 claim term in a civil action to which the patent 7 owner was a party, the Office shall consider 8 that claim construction.’’. 9 (b) BURDEN OF PROOF.—Section 316(e) of title 35, 10 United States Code, is amended to read as follows: 11 ‘‘(e) EVIDENTIARY STANDARDS.— 12 ‘‘(1) PRESUMPTION OF VALIDITY.—The pre- 13 sumption of validity under section 282(a) shall apply 14 to a previously issued claim that is challenged dur- 15 ing an inter partes review under this chapter. 16 ‘‘(2) BURDEN OF PROOF.—In an inter partes 17 review instituted under this chapter, the petitioner 18 shall have the burden of proving a proposition of 19 unpatentability of a previously issued claim by clear 20 and convincing evidence.’’. 21 (c) STANDING.—Section 311 of title 35, United 22 States Code, is amended by adding at the end the fol- 23 lowing new subsection: 24 ‘‘(d) PERSONS THAT MAY PETITION.— 25 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 7 •HR 3666 IH ‘‘(1) DEFINITION.—In this subsection, the term 1 ‘charged with infringement’ means a real and sub- 2 stantial controversy regarding infringement of a pat- 3 ent exists such that the petitioner would have stand- 4 ing to bring a declaratory judgment action in Fed- 5 eral court. 6 ‘‘(2) NECESSARY CONDITIONS.—A person may 7 not file with the Office a petition to institute an 8 inter partes review of a patent unless the person, or 9 a real party in interest or privy of the person, has 10 been— 11 ‘‘(A) sued for infringement of the patent; 12 or 13 ‘‘(B) charged with infringement under the 14 patent.’’. 15 (d) LIMITATION ON REVIEWS.—Section 314(a) of 16 title 35, United States Code, is amended to read as fol- 17 lows: 18 ‘‘(a) THRESHOLD.— 19 ‘‘(1) LIKELIHOOD OF PREVAILING.—Subject to 20 paragraph (2), the Director may not authorize an 21 inter partes review to be instituted unless the Direc- 22 tor determines that the information presented in the 23 petition filed under section 311 and any response 24 filed under section 313 show that there is a reason- 25 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 8 •HR 3666 IH able likelihood that the petitioner would prevail with 1 respect to at least one of the claims challenged in 2 the petition. 3 ‘‘(2) PREVIOUS INSTITUTION.—The Director 4 may not authorize an inter partes review to be insti- 5 tuted on a claim challenged in a petition if the Di- 6 rector has previously instituted an inter partes re- 7 view or post-grant review with respect to that 8 claim.’’. 9 (e) REVIEWABILITY OF INSTITUTION DECISIONS.— 10 Section 314 of title 35, United States Code, is amended 11 by striking subsection (d) and inserting the following: 12 ‘‘(d) NO APPEAL.— 13 ‘‘(1) NONAPPEALABLE DETERMINATIONS.— 14 ‘‘(A) THRESHOLD DETERMINATION.—A 15 determination by the Director on the reasonable 16 likelihood that the petitioner will prevail under 17 subsection (a)(1) shall be final and nonappeal- 18 able. 19 ‘‘(B) DENIALS OF INSTITUTION.—A deter- 20 mination by the Director not to institute an 21 inter partes review under this section shall be 22 final and nonappealable. 23 ‘‘(2) APPEALABLE DETERMINATIONS.—Any as- 24 pect of a determination by the Director to institute 25 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 9 •HR 3666 IH an inter partes review under this section, other than 1 a determination described in paragraph (1)(A), may 2 be reviewed during an appeal of a final written deci- 3 sion issued under section 318(a).’’. 4 (f) ELIMINATING REPETITIVE PROCEEDINGS.—Sec- 5 tion 315(e) of title 35, United States Code, is amended 6 to read as follows: 7 ‘‘(e) ESTOPPEL.— 8 ‘‘(1) PROCEEDINGS BEFORE THE OFFICE.—A 9 person petitioning for an inter partes review of a 10 claim in a patent under this chapter, or the real 11 party in interest or privy of the petitioner, may not 12 petition for a subsequent inter partes review before 13 the Office with respect to that patent on any ground 14 that the petitioner raised or reasonably could have 15 raised in the initial petition, unless, after the filing 16 of the initial petition, the petitioner, or the real 17 party in interest or privy of the petitioner, is 18 charged with infringement of additional claims of 19 the patent. 20 ‘‘(2) CIVIL ACTIONS AND OTHER PRO- 21 CEEDINGS.—A person petitioning for an inter partes 22 review of a claim in a patent under this chapter that 23 results in an institution decision under section 314, 24 or the real party in interest or privy of the peti- 25 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 10 •HR 3666 IH tioner, may not assert either in a civil action arising 1 in whole or in part under section 1338 of title 28 2 or in a proceeding before the International Trade 3 Commission under section 337 of the Tariff Act of 4 1930 (19 U.S.C. 1337) that the claim is invalid 5 based on section 102 or 103 of this title, unless the 6 invalidity argument is based on allegations that the 7 claimed invention was in public use, on sale, or oth- 8 erwise available to the public before the effective fil- 9 ing date of the claimed invention.’’. 10 (g) REAL PARTY IN INTEREST.— 11 (1) CLARIFICATION OF DEFINITION.—Section 12 315 of title 35, United States Code, is amended by 13 adding at the end the following new subsection: 14 ‘‘(f) PETITIONER.—For purposes of this chapter, a 15 person that directly or through an affiliate, subsidiary, or 16 proxy makes a financial contribution to the preparation 17 for, or conduct during, an inter partes review on behalf 18 of the petitioner shall be considered a real party in interest 19 of the petitioner.’’. 20 (2) DISCOVERY OF REAL PARTY IN INTER- 21 EST.—Section 316(a)(5) of title 35, United States 22 Code, is amended to read as follows: 23 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 11 •HR 3666 IH ‘‘(5) setting forth standards and procedures for 1 discovery of relevant evidence, including that such 2 discovery shall be limited to— 3 ‘‘(A) the deposition of witnesses submitting 4 affidavits or declarations; 5 ‘‘(B) evidence identifying the petitioner’s 6 real parties in interest; and 7 ‘‘(C) what is otherwise necessary in the in- 8 terest of justice;’’. 9 (h) PRIORITY OF FEDERAL COURT VALIDITY DE- 10 TERMINATIONS.— 11 (1) IN GENERAL.—Section 315 of title 35, 12 United States Code, as amended by subsections (f) 13 and (g), is further amended— 14 (A) by redesignating subsections (c) 15 through (f) as subsections (d) through (g), re- 16 spectively; and 17 (B) by inserting after subsection (b) the 18 following new subsection: 19 ‘‘(c) FEDERAL COURT VALIDITY DETERMINA- 20 TIONS.— 21 ‘‘(1) INSTITUTION BARRED.—An inter partes 22 review of a patent claim may not be instituted if, in 23 a civil action arising in whole or in part under sec- 24 tion 1338 of title 28 or in a proceeding before the 25 VerDate Sep 11 2014 05:31 Jul 16, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3666.IH H3666 jbell on DSK3GLQ082PROD with BILLS 12 •HR 3666 IH International Trade Commission under section 337 1 of the Tariff Act of 1930 (19 U.S.C. 1337), a court 2 has entered a final judgment— 3 ‘‘(A) that decid [Text truncated for display. 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