Patent and Trademark Office Reform Act of 1995

[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1458 Introduced in Senate (IS)]

104th CONGRESS
  1st Session
                                S. 1458

 To amend the provisions of title 35, United States Code, to establish
     the Patent and Trademark Corporation, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            December 7, 1995

Mr. Lautenberg introduced the following bill; which was read twice and
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 To amend the provisions of title 35, United States Code, to establish
     the Patent and Trademark Corporation, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patent and Trademark Office Reform
Act of 1995''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
               TITLE I--PATENT AND TRADEMARK CORPORATION

Sec. 101. Establishment, officers, and functions of the Corporation.
Sec. 102. Management report.
Sec. 103. Use of Corporation name and definitions.
Sec. 104. Suspension or exclusion from practice.
Sec. 105. Fees.
Sec. 106. Trademark Trial and Appeal Board.
Sec. 107. Transfers.
Sec. 108. Transition provisions.
Sec. 109. Nonapplicability of Federal workforce reductions.
Sec. 110. Technical and conforming amendments.
                   TITLE II--MISCELLANEOUS PROVISIONS

Sec. 201. Separability.
Sec. 202. Effective date.

               TITLE I--PATENT AND TRADEMARK CORPORATION

SEC. 101. ESTABLISHMENT, OFFICERS, AND FUNCTIONS OF THE CORPORATION.

    Chapter 1 of title 35, United States Code, is amended by striking
out sections 1, 2, 3, 4, 6, and 7 and inserting in lieu thereof the
following:
``Sec. 1. Establishment
    ``(a) The Patent and Trademark Corporation is established as a
wholly owned Government corporation subject to chapter 91 of title 31,
except as otherwise provided in this title. The Corporation shall be
within the Department of Commerce and shall be subject to the Secretary
for patent and trademark policy direction. For purposes of internal
management, the Corporation shall be considered a corporate body apart
from departmental supervision, except as otherwise provided in this
title.
    ``(b) The Patent and Trademark Corporation shall maintain an office
for the service of process in the District of Columbia, or the
metropolitan area thereof, and shall be deemed, for purposes of venue
in civil actions, to be a resident of the district in which its
principal office is located. The Corporation may establish offices in
such other place or places as it may deem necessary or appropriate in
the conduct of its business.
    ``(c) For purposes of this title, the Patent and Trademark
Corporation shall also be referred to as the `Corporation'.
``Sec. 2. Powers and duties
    ``(a) The Corporation shall have the powers and carry out the
functions and duties that are authorized by law with respect to--
            ``(1) the granting and issuing of patents and the
        registration of trademarks;
            ``(2) conducting studies, programs, or exchanges of items
        or services regarding domestic and international patent and
        trademark law or the administration of the Corporation, or any
        other matter included in the laws for which the Corporation is
        responsible including the provision of this title, the Act of
        July 5, 1946 (commonly referred to as the Trademark Act of 1946
        (15 U.S.C. 1051 et seq.)), and the Patent and Trademark Office
        Reform Act of 1995;
            ``(3) authorizing or conducting studies and programs
        cooperatively with foreign patent and trademark offices and
        international organizations, in connection with the granting
        and issuing of patents and the registration of trademarks; and
            ``(4) disseminating to the public information with respect
        to patents and trademarks.
    ``(b) In order to accomplish the purposes of this title, the
Corporation--
            ``(1) shall have perpetual succession;
            ``(2) shall adopt and use a corporate seal, which shall be
        judicially noticed and with which letters patent, certificates
        of trademark registrations, and papers issued by the
        Corporation shall be authenticated;
            ``(3) may sue and be sued in its corporate name and be
        represented by its own attorneys in all judicial and
        administrative proceedings, as provided in section 8 of this
        title;
            ``(4) may indemnify the Commissioner, officers, attorneys,
        agents and employees (including members of the Advisory Board),
        of the Corporation for liabilities and expenses incurred within
        the scope of their employment;
            ``(5) may adopt, amend, and repeal bylaws, rules, and
        regulations, governing the manner in which its business will be
        conducted and the powers granted to it by law will be
        exercised, without regard to chapter 35 of title 44;
            ``(6) 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 of 1959 (40 U.S.C. 601 et
        seq.), and sections 501 and 502 of the Stewart B. McKinney Act
        (42 U.S.C. 11411 and 11412) may--
                    ``(A) acquire, construct, purchase, lease, hold,
                manage, operate, and alter any property (real,
                personal, or mixed) or any interest therein, as it
                determines necessary in the transaction of its
                business, and sell, lease, grant; and
                    ``(B) dispose of such property, as it deems
                necessary to effectuate the purposes of this title for
                periods of time or for terms as the Corporation
                determines necessary;
            ``(7)(A) may make purchases, contracts for the
        construction, alteration, maintenance, or management and
        operation of facilities and contracts for the supplies or
        services, except personal services, after advertising, in such
        manner and at such times sufficiently in advance of opening
        bids, as the Corporation shall determine to be adequate to
        insure notice and an opportunity for competition, except such
        advertising shall not be required when the Corporation
        determines that--
                    ``(i) the making of any such purchase or contract
                without advertising is necessary in the interest of
                furthering the purposes of this title; or
                    ``(ii) advertising is not reasonably practicable;
                and
            ``(B) may enter into and perform such purchases and
        contracts for printing services, to include the process of
        composition, platemaking, presswork, silk screen processes,
        binding, microform, and the products of such processes, as it
        determines necessary to effectuate the functions of the
        Corporation, without regard to sections 501 through 517 and
        1101 through 1123 of title 44;
            ``(8) may use, with their consent, services, equipment,
        personnel, and facilities of other civilian or military
        agencies and instrumentalities of the Federal Government, on a
        reimbursable basis, and, on a similar basis, to cooperate with
        such other agencies and instrumentalities in the establishment
        and use of services, equipment, and facilities of the
        Corporation;
            ``(9) may obtain from the Administrator of the General
        Services Administration such services as the Administrator is
        authorized to provide to agencies of the United States, on the
        same basis as those services are provided to other agencies of
        the United States;
            ``(10) may use, with the consent of the agency, government,
        or organization concerned, the services, records, facilities,
        or personnel of any State or local government agency or
        instrumentality or foreign government or international
        organization to perform necessary functions on the
        Corporation's behalf;
            ``(11) may enter into and perform such contracts, leases,
        cooperative agreements, or other transactions with
        international, foreign and domestic public agencies and private
        organizations and persons as needed in the conduct of its
        business and on such terms as it determines appropriate;
            ``(12) may determine the character of and the necessity for
        its obligations and expenditures and the manner in which they
        shall be incurred, allowed, and paid, subject to the provisions
        of this title, the Act of July 5, 1946 (commonly referred to as
        the Trademark Act of 1946), and to laws specifically applicable
        to wholly owned government corporations that are not
        specifically inconsistent with this title;
            ``(13) may retain and utilize all of its revenues and
        receipts, including revenues from the sale, lease, or disposal
        of any property (real, personal, or mixed) or any interest
        therein, of the Corporation, including research and development
        and capital investment, without apportionment under the
        provisions of subchapter II of chapter 15 of title 31;
            ``(14) shall have the priority of the United States with
        respect to the payment of debts out of bankrupt, insolvent, and
        decedents' estates;
            ``(15) may accept monetary gifts or donations of services,
        or of property, real, personal, mixed, tangible or intangible,
        in aid of any purposes authorized under this section;
            ``(16) may execute, in accordance with its bylaws, rules
        and regulations, all instruments necessary and appropriate in
        the exercise of any of its powers;
            ``(17) may provide for liability insurance and insurance
        against any loss in connection with its property, other assets
        or operations either by contract or by self-insurance; and
            ``(18) shall pay any settlement or judgment entered against
        it from the Corporation's own funds and not from the judgment
        fund established under section 1304 of title 31.
``Sec. 3. Officers and employees
    ``(a)(1) The management of the Corporation shall be vested in the
Commissioner of Patents and Trademarks, 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 Commissioner shall be a
person who, by reason of professional background and experience in
patent and trademark law and of management experience, is especially
qualified to manage the Corporation.
    ``(2) The Commissioner shall--
            ``(A) be responsible for the management and direction of
        the Corporation, including the granting and issuance of patents
        and the registration of trademarks, and may delegate these
        responsibilities to the officers and employees of the
        Corporation whose performance of these duties shall be subject
        to the Commissioner's review;
            ``(B) report directly to the Secretary on patent and
        trademark policy matters;
            ``(C) consult with the Advisory Board established in
        section 5 on a regular basis on matters relating to the
        operation of the Corporation, and shall consult with the Board
        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;
            ``(D) inform the Secretary of studies and programs
        conducted under section 2(a)(3);
            ``(E) advise the Secretary on all aspects of intellectual
        property policy, legislation, and issues;
            ``(F) advise the Secretary on international trade issues
        concerning intellectual property;
            ``(G) promote in international trade the United States
        industries that rely on intellectual property;
            ``(H) advise the Secretary of State, the United States
        Trade Representative, and other appropriate department and
        agency heads, subject to the authority of the Secretary, on
        international intellectual property issues;
            ``(I) advise Federal agencies on ways to improve
        intellectual property protection in other countries through
        economic assistance and international trade;
            ``(J) review and coordinate all proposals by agencies to
        assist foreign governments and international intergovernmental
        agencies in improving intellectual property protection;
            ``(K) carry on studies related to the effectiveness of
        intellectual property protection throughout the world; and
            ``(L) in coordination with the Department of State, carry
        on studies cooperatively with foreign intellectual property
        offices and international intergovernmental organizations.
    ``(3) The Commissioner shall serve a term of 6 years, and such
period thereafter until a successor is appointed and assumes office.
The Commissioner may be reappointed to subsequent terms.
    ``(4) The Commissioner shall receive as basic compensation for a
calendar year an amount not to exceed the equivalent of the annual rate
of basic pay for level II of the Executive Schedule under section 5313
of title 5 and, in addition, may receive as a bonus awarded by the
Secretary, an amount up to the equivalent of the annual rate of basic
pay for such level II, based upon the Secretary's evaluation of the
Commissioner's performance--
            ``(A) as defined in an annual performance agreement between
        the Commissioner and the Secretary incorporating measurable
        goals in such specific areas as productivity, cycle times,
        efficiency, cost-reduction, innovative ways of delivering
        patent and trademark services, and customer satisfaction, as
        delineated in an annual performance plan; and
            ``(B) as reflected in the annual report required under
        section 14.
    ``(5) The Commissioner shall, before taking office, take an oath to
discharge faithfully the duties of the Corporation.
    ``(6) The Commissioner shall designate an officer of the
Corporation who shall be vested with the authority to act in the
capacity of the Commissioner in the event of absence or incapacity of
the Commissioner.
    ``(b)(1) Officers and employees of the Corporation shall be
officers and employees of the United States as defined by sections 2104
and 2105 of title 5, United States Code.
    ``(2)(A) The Commissioner shall appoint a Deputy Commissioner for
Patents and a Deputy Commissioner for Trademarks for terms that shall
expire on the date on which the Commissioner's term expires. The Deputy
Commissioner for Patents shall be a person with demonstrated experience
in patent law and the Deputy Commissioner for Trademarks shall be a
person with demonstrated experience in trademark law.
    ``(B) The Deputy Commissioner for Patents and the Deputy
Commissioner for Trademarks shall be--
            ``(i) the principal advisors to the Commissioner on all
        aspects of the activities of the Corporation that affect the
        administration of patent and trademark operations,
        respectively; and
            ``(ii) principally responsible for managing their
        respective patent and trademark units.
    ``(3) The Commissioner shall appoint an Inspector General and such
other officers, employees (including attorneys), and agents of the
Corporation as the Commissioner considers necessary to carry out its
functions.
    ``(c)(1) Except as regards the Inspector General, the Commissioner
shall fix the compensation of officers and employees in accordance with
the policy set forth in section 5301 of title 5 including compensation
based on performance.
    ``(2) Except as otherwise provided in this title or any other
provision of law, the basic pay of an officer or employee of the
Corporation for any calendar year may not exceed the annual rate of
basic pay in effect for level III of the Executive Schedule under
section 5314 of title 5 or level ES-6 for the Senior Executive Service
under section 5332 of title 5, whichever is higher. Total compensation,
including compensation based on performance (but not including benefits
or contributions to retirement systems), may not exceed the equivalent
of the basic rate of pay for level I of the Executive Schedule under
section 5312 of title 5.
    ``(3) The Commissioner shall define the authority and duties of
such officers and employees and delegate to them such of the powers
vested in the Corporation as the Commissioner shall determine.
    ``(d) The Corporation shall not be subject to any administratively
or statutorily imposed limitation on positions or personnel, and no
positions or personnel of the Corporation shall be taken into account
for purposes of applying any such limitation, except to the extent
otherwise specifically provided by statute with respect to the
Corporation.
    ``(e) Notwithstanding the provisions of title 5 (but subject to the
Inspector General Act of 1978 (5 U.S.C. App.)), the Commissioner shall
have sole and exclusive discretion--
            ``(1) over the establishment, amendment, or repeal of any
        position classification system to determine the qualifications
        and procedures for appointment; any compensation and award
        system except gainsharing, including wages and compensation
        based on performance, and contributions of the Corporation to
        the retirement and benefits programs, except that the
        Corporation's contribution shall not be less than that paid for
        Federal employees under title 5;
            ``(2) to fix and adjust rates of pay without regard to the
        provisions of chapter 53 of title 5 and abolish positions and
        lay off without regard to the provisions of chapter 35 of title
        5 except that preference eligibility laws shall apply in any
        layoff system; and
            ``(3) to determine any supplement to benefits beyond those
        provided by statute.
    ``(f) The following provisions of title 5 shall not apply to the
Corporation or its officers and employees:
            ``(1) Chapter 31 (employment authorities), except that the
        provisions of sections 3102 and 3110 shall apply to the
        Corporation and its employees.
            ``(2) Chapter 33 (examination, selection, and placement),
        except that the system of veterans' preference established by
        chapter 33 shall apply to the Corporation and its employees.
            ``(3) Chapter 35 (retention, restoration, and
        reemployment).
            ``(4) Chapter 43 (performance appraisal).
            ``(5) Chapter 51 (classification).
            ``(6) Chapter 53, subchapter 3 (general pay rates).
    ``(g)(1) Officers and employees shall remain subject to chapters 83
(Civil Service Retirement System), 84 (Federal Employees Retirement
System), 87 (life insurance), and 89 (health insurance) of title 5. The
Corporation may supplement the benefits provided under chapters 83 and
84 of such title from time to time. The Corporation also may change the
application of chapters 87 and 89 of such title to its officers and
employees, except that such changes, in their aggregate, shall not
result in life and health benefits which are less favorable to officers
and employees than those offered under chapters 87 and 89.
    ``(2) The Corporation shall withhold pay and make such payments as
are required under the Federal disability and retirement system for the
Government's share of the cost of the Civil Service Retirement System
or the Federal Employees Retirement System applicable to the
Corporation's employees and their beneficiaries. The Corporation shall
also contribute to the employees' compensation fund, on the basis of
annual billings as determined by the Secretary of Labor, for the
benefit payments made from such fund on account of the Corporation's
employees. The annual billings shall also include a statement of the
fair portion of the cost of administration of the respective funds,
which shall be paid into the Treasury as miscellaneous receipts.
    ``(h)(1) Chapter 71 of title 5 shall apply with respect to the
Corporation and its employees.
    ``(2) The Corporation and employees may bargain with respect to the
establishment, amendment, or repeal of--
            ``(A) any position classification system;
            ``(B) any compensation system, including wages and
        compensation based on performance, and contribution of the
        Corporation to the retirement and benefits program; and
            ``(C) any system to determine qualifications and procedures
        for employment;
in the same manner and to the same extent as under a Federal Labor
Relations Authority holding, in effect on the day before the effective
date of the Patent and Trademark Office Reform Act of 1995, with regard
to the negotiability of such matters, unless such holding is overturned
or modified by a Federal court.
    ``(i)(1) On the effective date of the Patent and Trademark Office
Reform Act of 1995, all officers and employees of the Patent and
Trademark Office on the day before such effective date shall become
officers and employees of the Corporation without a break in service.
    ``(2) No officer or employee of the Office who becomes an officer
or employee of the Corporation shall, for a period of 1 year after the
effective date of the Patent and Trademark Office Reform Act of 1995,
be subject to separation or to any reduction in compensation as a
consequence of the establishment of the Corporation.
    ``(3) The amount of sick and annual leave and compensatory time
accumulated under title 5 prior to the effective date of the Patent and
Trademark Office Reform Act of 1995, by officers and employees of the
Office who become officers and employees of the Corporation under this
section shall be obligations of the Corporation.
    ``(4)(A) The individual serving as the Commissioner of Patents and
Trademarks on the day before the effective date of the Patent and
Trademark Office Reform Act of 1995 may serve as the Commissioner until
a Commissioner has been appointed under subsection (a).
    ``(B) The individual serving as the Assistant Commissioner for
Patents on the day before the effective date of the Patent and
Trademark Office Reform Act of 1995 may serve as the Deputy
Commissioner for Patents until a Deputy Commissioner for Patents has
been appointed under subsection (b).
    ``(C) The individual serving as the Assistant Commissioner for
Trademarks on the day before the effective date of the Patent and
Trademark Office Reform Act of 1995 may serve as Deputy Commissioner
for Trademarks until a Commissioner has been appointed under subsection
(b).
    ``(j) For purposes of appointment to a position in the competitive
service for which an officer or employee of the Corporation is
qualified, such officer or employee shall--
            ``(1) not forfeit any competitive status, acquired by such
        officer or employee before the effective date of the Patent and
        Trademark Office Reform Act of 1995, by reason of becoming an
        officer or employee of the Corporation under subsection (i)(1);
        or
            ``(2) if not covered by paragraph (1), acquire competitive
        status after completing at least 1 year of continuous service
        under a nontemporary appointment to a position within the
        Corporation (taking into account such service, performed before
        the effective date described in paragraph (1), as may be
        appropriate).
    ``(k) All orders, determinations, rules, and regulations regarding
compensation and benefits and other terms and conditions of employment
in effect for the Office and its officers and employees on the day
before the effective date of the Patent and Trademark Office Reform Act
of 1995 shall continue in effect with respect to the Corporation and
its officers and employees until modified, superseded, or set aside by
the Corporation or a court of competent jurisdiction or by operation of
law. The collective bargaining agreements between the Patent and
Trademark Office and the National Treasury Employees Union 243, dated
March 13, 1993, the Patent and Trademark Office and the National
Treasury Employees Union 245, dated July 20, 1993, and the Patent and
Trademark Office and the Patent Office Professional Association, dated
October 6, 1986, as well as the recognition of the three units, shall
remain in effect until modified, superseded, or set aside by the
parties.
``Sec. 4. Restrictions on officers and employees as to interest in
              patents
    ``Officers and employees of the Patent and Trademark Corporation
shall be incapable, during the period of their appointments and for 1
year thereafter, of applying for a patent and of acquiring, directly or
indirectly, except by inheritance or bequest, any patent or any right
or interest in any patent, issued or to be issued by the Corporation.
In patents applied for thereafter they shall not be entitled to any
priority date earlier than 1 year after the termination of their
appointment.
``Sec. 5. Advisory Board
    ``(a)(1) There is established an Advisory Board of the Corporation,
which shall consist of thirteen members, as follows:
            ``(A) The Commissioner of Patents and Trademarks, ex
        officio.
            ``(B) Twelve members appointed by the Secretary who shall
        be United States citizens of high integrity and demonstrated
        accomplishment in a variety of fields, including, finance,
        labor relations, consumer affairs, academia, large and small
        business or as an independent inventor. At least 6 shall have
        strong backgrounds in patents or trademarks.
    ``(2) No other person may substitute for a member of the Advisory
Board.
    ``(3) The Secretary shall designate the chair of the Board, whose
term as chair shall be for 3 years.
    ``(4) Initial appointments to the Board shall be made within 3
months after the effective date of the Patent and Trademark Office
Reform Act of 1995, and vacancies shall be filled within 3 months after
they occur.
    ``(b) Of those members of the Board specified in subsection
(a)(1)(A) who are original appointees, the Secretary shall designate 4
who shall serve for a term of 1 year, 4 who shall serve for a term of 2
years, and 4 who shall serve for a term of 3 years. The term of
members of the Board appointed after the expiration of the terms of the
first appointed members of the Board shall be 3 years. The Secretary
shall appoint an individual to serve the unexpired term of a member who
withdraws or otherwise is unable to serve for the full term.
    ``(c) Members of the Board specified in subsection (a)(1)(B) shall
be special Government employees within the meaning of section 202 of
title 18. Members of the Board specified in subsection (a)(1)(B) shall
serve on a part-time basis and shall be compensated at a per diem rate
equivalent to level III of the Executive Schedule under section 5314 of
title 5, in addition to reimbursement of reasonable incurred expenses
when engaged in performance of duties vested in the Board.
    ``(d) The Board shall--
            ``(1) review the Corporation's policies, goals,
        performance, budget, and user fees and advise the Commissioner
        on these matters and any other matter that the Commissioner
        refers to the Board;
            ``(2) within 60 days after the end of each fiscal year,
        prepare an annual report on the matters referred to in
        paragraph (1), transmit the report to the President, the
        Commissioner, and the Committees on the Judiciary of the Senate
        and the House of Representatives, and publish the report in the
        Patent and Trademark Office Official Gazette; and
            ``(3) meet at least quarterly, as provided by the bylaws of
        the Corporation, and at any time at the request of the
        Commissioner.
    ``(e)(1) The Corporation shall provide at the request of the Board
such assistance as is necessary for the Board to perform its functions.
    ``(2) Members of the Board shall be provided access to records and
information of the Corporation, except for personnel or other
privileged information and information concerning patent applications
required to be kept in confidence by section 122 of this title.
    ``(f) The provisions of the Federal Advisory Committee Act (5
U.S.C. App.) shall not apply to any activities of the Board, except
that members shall be considered to be serving on an advisory committee
within the meaning of the Federal Advisory Committee Act for purposes
of section 208(b)(3) of title 18.
``Sec. 6. Suits by and against the Corporation
    ``(a)(1) Any civil action, suit, or proceeding to which the
Corporation is a party is deemed to arise under the laws of the United
States. Exclusive jurisdiction over all civil actions by or against the
Corporation is in the Federal courts as provided by law. For purposes
of filing suits, the Commissioner shall be the head of the Corporation.
    ``(2) Any action, suit, or proceeding against the Corporation
founded upon contract shall be subject to the limitations and exclusive
remedy provided in sections 1346(a)(2) and 1491 through 1509 of title
28, whether or not such contract claims are cognizable under sections
507, 1346, 1402, 1491, 1496, 1497, 1501, 1503, 2071, 2072, 2411, 2501,
and 2512 of title 28. For purposes of the Contract Disputes Act of
1978, the Commissioner shall be deemed to be the agency head with
respect to contract claims arising with respect to the Corporation.
    ``(3) Any action, suit, or proceeding against the Corporation
founded upon tort shall be subject to the limitations and exclusive
remedies provided in sections 1346(a) and 2671 through 2680 of title
28, whether or not such tort claims are cognizable under section
1346(b) of title 28.
    ``(4) Any action, suit, or proceeding against the Corporation based
upon an alleged violation of section 717 of the Civil Rights Act of
1964 (42 U.S.C. 2000e-16), section 15 of the Age Discrimination in
Employment Act of 1967 (29 U.S.C. 633a), title V of the Rehabilitation
Act of 1973 (29 U.S.C. 791 et seq.) or section 6(d) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 206(d)) shall be subject to the
limitations and exclusive remedies provided for other Federal
Government executive agencies for a violation of such section or title.
    ``(5) No attachment, garnishment, lien, or similar process,
intermediate or final, in law or equity, may be issued against property
of the Corporation.
    ``(6) The Corporation shall be substituted as defendant in any
civil action, suit, or proceeding against an employee of the
Corporation, if the Corporation determines that the employee was acting
within the scope of the employee's employment with the Corporation. If
the Corporation refuses to certify scope of employment, the employee
may at any time before trial, petition the court to find and certify
that the employee was acting within the scope of the employee's
employment. Upon certification by the court, the Corporation shall be
substituted as the party defendant. A copy of the petition shall be
served upon the Corporation.
    ``(b)(1) Except as further provided in this section, in relation to
all judicial proceedings in which the Corporation or an employee is a
party or in which the Corporation is interested and which arise from or
relate to employees acting within the scope of their employment, torts,
contracts, property, registration of patent and trademark
practitioners, patents or trademarks, or fees, the Corporation may
exercise, without prior authorization from the Attorney General, the
authorities and duties that otherwise would be exercised by the
Attorney General on behalf of the Corporation under title 28 and other
laws. In all other judicial proceedings in which the Corporation or an
employee of the Corporation is a party or is interested, the
Corporation may exercise these authorities and duties only after
obtaining authorization from the Attorney General.
    ``(2) The Attorney General may file an appearance on behalf of the
Corporation or an employee of the Corporation, without the consent of
the Corporation, in any suit in which the Corporation is a party and
represent the Corporation with exclusive authority in the conduct,
settlement, or compromise of that suit.
    ``(3) The Corporation may consult with the Attorney General
concerning any legal matter, and the Attorney General shall provide
advice and assistance to the Corporation, including representing the
Corporation in litigation, if requested by the Corporation.
    ``(4) The Attorney General shall represent the Corporation in all
cases before the United States Supreme Court.
    ``(5) An attorney admitted to practice to the bar of the highest
court of at least one State in the United States or the District of
Columbia and appointed by the Corporation may represent the Corporation
in any legal proceeding in which the Corporation or an employee of the
Corporation is a party or interested, regardless of whether the
attorney is a resident of the jurisdiction in which the proceeding is
held and notwithstanding any other prerequisites of qualification or
appearance required by the court or administrative body.
``Sec. 7. Board of Patent Appeals and Interferences
    ``(a) There shall be in the Patent and Trademark Corporation a
Board of Patent Appeals and Interferences. The Commissioner, the
officer principally responsible for the examination of patents, the
officer principally responsible for the examination of trademarks, and
the examiners-in-chief shall constitute the Board. The examiners-in-
chief shall be persons of competent legal knowledge and scientific
ability.
    ``(b) 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) of this title (35 U.S.C. 135(a)). Each appeal and interference
shall be heard by at least 3 members of the Board, who shall be
designated by the Commissioner. Only the Board of Patent Appeals and
Interferences may grant rehearings.''.

SEC. 102. MANAGEMENT REPORT.

    Section 14 of title 35, United States Code, is amended to read as
follows:
``Sec. 14. Annual report to Congress
    ``The Corporation shall prepare and submit to the Congress an
annual management report as required under section 9106 of title 31.''.

SEC. 103. USE OF CORPORATION NAME AND DEFINITIONS.

    Chapter 1 of title 35, United States Code, is amended by inserting
after section 14 the following new sections:
``Sec. 15. Use of Corporation name
    ``No individual, association, partnership, or corporation, except
the Corporation, shall hereafter use the words `United States Patent
and Trademark Corporation', `Patent and Trademark Office', or any
combination of such words, as the name or part thereof under which such
individual or entity shall do business. Violations of the foregoing may
be enjoined by any Federal court at the suit of the Corporation. In any
such suit, the Corporation shall be entitled to statutory damages of
$1,000 for each day during which such violation continues or is
repeated and, in addition, may recover actual damages flowing from such
violation.
``Sec. 16. Definitions
    ``For purposes of this title:
            ``(1) The term `Advisory Board' means the Advisory Board of
        the United States Patent and Trademark Corporation.
            ``(2) The term `Commissioner' means the Commissioner of the
        United States Parent and Trademark Corporation.
            ``(3) The term `Corporation' means the United States Patent
        and Trademark Corporation.
            ``(4) The term `intellectual property' shall include rights
        in inventions; in trademarks, service marks, and commercial
        names and designations; in literary, artistic and scientific
        works; in performances of performing artists, phonograms and
        broadcasts; in industrial designs; in trade secrets and
        scientific discoveries; in semiconductor chip layout designs;
        in geographical indications; and all other rights resulting
        from intellectual activity in the industrial, scientific,
        literary, or artistic fields.
            ``(5) The terms `Patent and Trademark Office' and `Office'
        mean the Patent and Trademark Office of the Department of
        Commerce.
            ``(6) The term `Secretary' means the Secretary of
        Commerce.''.

SEC. 104. SUSPENSION OR EXCLUSION FROM PRACTICE.

    Section 32 of title 35, United States Code, is amended by inserting
before the last sentence the following: ``The Commissioner shall have
the discretion to designate any attorney who is an officer or employee
of the Patent and Trademark Corporation to conduct the hearing required
by this section.''.

SEC. 105. FEES.

    (a) In General.--Chapter 4 of title 35, United States Code, is
amended by striking out section 42 and inserting in lieu thereof the
following:
``Sec. 42. Patent and Trademark Corporation funding
    ``(a) All fees for services performed by or materials furnished by
the Patent and Trademark Corporation will be payable to the
Corporation.
    ``(b)(1) Moneys of the Corporation not otherwise used to carry out
the functions of the Corporation shall be kept in cash on hand or on
deposit, or invested in obligations of the United States or guaranteed
thereby, or in obligations or other instruments which are lawful
investments for fiduciary, trust, or public funds.
    ``(2) Fees available to the Commissioner under this title shall be
used exclusively for the processing of patent applications and for
other services and materials relating to patents. Fees available to the
Commissioner under section 31 of the Act of July 5, 1946 (commonly
referred to as the `Trademark Act of 1946') (15 U.S.C. 1113) shall be
used exclusively for the processing of trademark registrations and for
other services and materials relating to trademarks.
    ``(c) The Corporation is authorized to issue from time to time for
purchase by the Secretary of the Treasury its debentures, bonds, notes,
and other evidences of indebtedness (collectively referred to as
`obligations') in an amount not exceeding $2,000,000,000 outstanding at
any one time, to assist in financing its activities. Such obligations
shall be redeemable at the option of the Corporation before maturity in
the manner stipulated in such obligations and shall have such maturity
as is determined by the Corporation with the approval of the Secretary
of the Treasury. Each such obligation issued to the Treasury shall bear
interest at a rate not less than the current yield on outstanding
marketable obligations of the United States of comparable maturity
during the month preceding the issuance of the obligation as determined
by the Secretary of the Treasury. The Secretary of the Treasury shall
purchase any obligations of the Corporation issued hereunder and for
such purpose the Secretary of the Treasury is authorized to use as a
public debt transaction the proceeds of any securities issued under
chapter 31 of title 31, and the purposes for which securities may be
issued under that chapter are extended to include such purpose. Payment
under this section of the purchase price of such obligations of the
Corporation shall be treated as public debt transactions of the United
States.
``Sec. 43. Audits
    ``(a) Financial statements of the Corporation shall be prepared on
an annual basis in accordance with generally accepted accounting
principles and shall be made publicly available in a timely manner.
Such statements shall be audited by an independent certified public
accountant chosen by the Secretary. The audit shall be conducted in
accordance with standards that are consistent with generally accepted
government auditing standards and other standards established by the
Comptroller General, and with the private sector's generally accepted
auditing standards, to the extent feasible. Upon the completion of the
audit required by this subsection, the person who audits the statement
shall submit a report on the audit to the Congress and the Corporation.
    ``(b) The Comptroller General may review any audit of the
Corporation's financial statements conducted under subsection (a). The
Comptroller General shall report to the Congress and the Corporation
the results of any such review and shall include in such report
appropriate recommendations.
    ``(c) The Comptroller General may audit the financial statements of
the Corporation and such audit shall be in lieu of the audit required
by subsection (a). The Corporation shall reimburse the Comptroller
General for the cost of any audit conducted under this subsection.
    ``(d) All books, financial records, report files, memoranda, and
other property that the Comptroller General deems necessary for the
performance of any audit shall be made available to the Comptroller
General.
    ``(e) This section shall apply to the Corporation in lieu of the
provisions of section 9105 of title 31.''.
    (b) Surcharge Fund.--(1) On the effective date of this Act, there
are transferred to the Patent and Trademark Office those residual and
unappropriated balances remaining as of the effective date within the
Patent and Trademark Office Surcharge Fund established by section
10101(b) of the Omnibus Budget Reconciliation Act of 1990 (35 U.S.C. 41
note).
    (2) Notwithstanding any other provision of law, effective on and
after October 1, 1998, section 10101 of the Omnibus Reconciliation Act
of 1990 (35 U.S.C. 41 note) shall cease to apply to the revenues of the
Corporation.
    (c) Technical and Conforming Amendments.--(1) The table of sections
for chapter 4 of title 35, United States Code, is amended by striking
out the item relating to section 42 and inserting in lieu thereof the
following:

``42. Patent and Trademark Corporation funding.
``43. Audits.''.
    (2) Section 10101 of the Omnibus Reconciliation Act of 1990 (35
U.S.C. 41 note) is amended--
            (A) in subsection (a), by striking out ``subsections (a)
        and (b) of'';
            (B) in paragraphs (1)(A) and (2)(A) of subsection (b), by
        striking out ``Patent and Trademark activities in the
        Department of Commerce'' and inserting in lieu thereof ``United
        States Patent and Trademark Corporation'';
            (C) in subsection (b), by striking out ``Patent and
        Trademark Office'' each place it appears and inserting in each
        such place ``United States Patent and Trademark Corporation'';
        and
            (D) in subsection (c), by striking out ``Commissioner of
        Patents and Trademarks'' and inserting in lieu thereof
        ``Commissioner of the United States Patent and Trademark
        Corporation''.

SEC. 106. 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 Commissioner
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
Commissioner, the officer principally responsible for the examination
of trademarks, the officer principally responsible for the examination
of patents, and members competent in trademark law, who are appointed
by the Commissioner of the United States Patent and Trademark
Corporation.''.

SEC. 107. TRANSFERS.

    (a) Functions.--Except as otherwise provided in this Act, there are
transferred to, and vested in, the United States Patent and Trademark
Corporation all functions, powers, and duties vested by law in the
Secretary of Commerce or the Department of Commerce or in officers or
components in the Department with respect to the authority to grant
patents and register trademarks, and the Patent and Trademark Office,
and in the officers and components of such Office.
    (b) Assets.--The Secretary of Commerce is authorized and directed,
without need of further appropriation, to transfer to the United States
Patent and Trademark Corporation, on the effective date of this title,
those assets, liabilities, contracts, property, records, and unexpended
and unobligated balances of appropriations, authorizations,
allocations, and other funds employed, held, used, arising from,
available or to be made available to the Department of Commerce
(inclusive of funds set aside for accounts receivable which are related
to functions, powers, and duties which are vested in the Corporation by
this title).

SEC. 108. TRANSITION PROVISIONS.

    (a) Contracts and Agreements.--Except as otherwise provided in this
Act, all contracts, agreements, leases and other business instruments,
licenses, permits, and privileges that have been afforded to the Patent
and Trademark Office before the effective date of this Act, shall
continue in effect as if the United States Patent and Trademark
Corporation had executed such contracts, agreements, leases, or other
business instruments which have been made in the exercise of functions
which are transferred to the Corporation by this Act.
    (b) Rules.--Until changed by the United States Patent and Trademark
Corporation, any procedural and administrative rules applicable to
particular functions over which the Corporation acquires jurisdiction
on the effective date of this Act shall continue in effect with respect
to such particular functions.
    (c) Application of Department Rules to Corporation.--Unless
otherwise provided by this Act, as related to the functions vested in
the United States Patent and Trademark Corporation by this Act, all
orders, determinations, rules, regulations, and privileges of the
Department shall cease to apply to the Corporation on the effective
date of this Act, except for those which the Corporation determines
shall continue to be applicable.
    (d) Pending Proceedings.--Except as otherwise provided in this Act,
the transfer of functions related to and vested in the United States
Patent and Trademark Corporation by this Act shall not affect judicial,
administrative, or other proceedings which are pending at the time this
Act takes effect, and such proceedings shall be continued by the
Corporation.
    (e) References.--Reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any document of
or relating to--
            (1) the Commissioner of Patents and Trademarks shall be
        deemed to refer to the Commissioner of the United States Patent
        and Trademark Corporation; and
            (2) the Patent and Trademark Office shall be deemed to
        refer to the United States Patent and Trademark Corporation.

SEC. 109. NONAPPLICABILITY OF FEDERAL WORKFORCE REDUCTIONS.

    No full-time equivalent position in the Patent and Trademark
Corporation shall be eliminated to meet the requirements of section 5
of the Federal Workforce Restructuring Act of 1994 (5 U.S.C. 3101
note).

SEC. 110. TECHNICAL AND CONFORMING AMENDMENTS.

    Make the following amendments:
            (1) Section 500(e) of title 5, United States Code, is
        amended by striking out ``the Patent Office'' and inserting in
        lieu thereof ``the United States Patent and Trademark
        Corporation''.
            (2) Section 5102(c)(23) of title 5, United States Code, is
        amended by striking out ``Patent and Trademark Office'' and
        inserting in lieu thereof ``United States Patent and Trademark
        Corporation''.
            (3) Section 5313 of title 5, United States Code, is amended
        by adding at the end thereof the following:
            ``Commissioner of Patents and Trademarks, United States
        Patent and Trademark Office, Department of Commerce.''.
            (4) Section 5315 of title 5, United States Code, is amended
        by adding at the end thereof the following:
            ``Inspector General, United States Patent and Trademark
        Corporation.''.
            (5) Section 5316 of title 5, United States Code (5 U.S.C.
        5316), is amended by striking out the items relating to
        Commissioner of Patents, Department of Commerce, Deputy
        Commissioner for Patents, Assistant Commissioner for Patents,
        and Assistant Commissioner for Trademarks.
            (6) Section 8G(a)(2) of the Inspector General Act of 1978
        (5 U.S.C. App.) is amended by inserting ``the United States
        Patent and Trademark Corporation,'' before ``and the United
        States Postal Service''.
            (7) Section 13 of title 35, United States Code, is amended
        by striking out ``at the rate for each year's issue established
        for this purpose in section 41(d) of this title''.
            (8) The provisions of the Act of July 5, 1946 (commonly
        referred to as the Trademark Act of 1946) (15 U.S.C. 1051 et
        seq.), other than section 29, are amended by striking out
        ``Patent and Trademark Office'' and ``United States Patent and
        Trademark Office'' each place such terms appear and inserting
        in each such place ``United States Patent and Trademark
        Corporation''.
            (9) The Act of July 5, 1946 (commonly referred to as the
        Trademark Act of 1946) is amended in section 12(a) (15 U.S.C.
        1062(a)) by striking out ``shall refer the application to the
        examiner in charge of the registration of marks''.
            (10) Section 4 of the Act of February 14, 1903 (15 U.S.C.
        1511) is amended by striking out ``Patent and Trademark
        Office''.
            (11) Section 19 of the Tennessee Valley Authority Act of
        1933 (16 U.S.C. 831r) is amended by striking out ``Patent and
        Trademark Office of the United States'' and inserting in lieu
        thereof ``United States Patent and Trademark Corporation''.
            (12) Section 2320(d)(1)(A)(ii) of title 18, United States
        Code, is amended by striking out ``United States Patent and
        Trademark Office'' and inserting in lieu thereof ``United
        States Patent and Trademark Corporation''.
            (13) Section 526 of the Tariff Act of 1930 (19 U.S.C.
        1526(a)) is amended by striking out ``Patent and Trademark
        Office'' and inserting in lieu thereof ``United States Patent
        and Trademark Corporation''.
            (14) The Joint Resolution approved April 12, 1892 (20
        U.S.C. 91) is amended by striking out ``Patent Office'' and
        inserting in lieu thereof ``United States Patent and Trademark
Corporation''.
            (15) Section 505(m) of the Federal Food, Drug, and Cosmetic
        Act (21 U.S.C. 355(m)) is amended by striking out ``Patent and
        Trademark Office of the Department of Commerce'' and inserting
        in lieu thereof ``United States Patent and Trademark
        Corporation''.
            (16) Section 512(o) of the Federal Food, Drug, and Cosmetic
        Act (21 U.S.C. 360b(o)) is amended by striking out ``Patent and
        Trademark Office of the Department of Commerce'' and inserting
        in lieu thereof ``United States Patent and Trademark
        Corporation''.
            (17) Section 702(d) of the Federal Food, Drug, and Cosmetic
        Act (21 U.S.C. 372(d)) is amended by striking out
        ``Commissioner of Patents'' and inserting in lieu thereof
        ``Commissioner of Patents and Trademarks''.
            (18) Section 501(b)(1) of the Jobs Through Trade Expansion
        Act of 1994 (22 U.S.C. 2151t-1(b)(1)) is amended by striking
        out ``Patent and Trademark Office'' and inserting in lieu
        thereof ``United States Patent and Trademark Corporation''.
            (19) Section 2 of the Act of August 27, 1935 (25 U.S.C.
        305a) is amended by striking out ``Patent and Trademark
        Office'' and inserting in lieu thereof ``United States Patent
        and Trademark Corporation''.
            (20) Section 105(e) of the Federal Alcohol Administration
        Act (27 U.S.C. 205(e)) is amended by striking out ``Patent
        Office'' and inserting in lieu thereof ``United States Patent
        and Trademark Corporation''.
            (21) Section 1295(a)(4) of title 28, United States Code, is
        amended by striking out ``Patent and Trademark Office'' and
        inserting in lieu thereof ``United States Patent and Trademark
        Corporation''.
            (22) Section 1744 of title 28, United States Code, is
        amended--
                    (A) in the section heading by striking out ``Patent
                Office'' and inserting in lieu thereof ``United States
                Patent and Trademark Office'';
                    (B) by striking out ``Patent Office'' each place
                such term appears and inserting in lieu thereof
                ``United States Patent and Trademark Corporation''; and
                    (C) by striking out ``Commissioner of Patents'' and
                inserting in lieu thereof ``Commissioner of Patents and
                Trademarks''.
            (23) Section 1745 of title 28, United States Code, is
        amended by striking out ``United States Patent Office'' and
        inserting in lieu thereof ``United States Patent and Trademark
        Corporation''.
            (24) Section 1928 of title 28, United States Code, is
        amended by striking out ``Patent Office'' and inserting in lieu
        thereof ``United States Patent and Trademark Corporation''.
            (25) Section 9101(3) of title 31, United States Code, is
        amended by adding at the end thereof:
                    ``(O) the United States Patent and Trademark
                Corporation.''.
            (26) The provisions of title 35, United States Code, are
        amended by striking out ``Patent and Trademark Office'' and
        ``United States Patent and Trademark Office'' each place such
        terms appear and inserting in each such place ``United States
        Patent and Trademark Corporation''.
            (27) The table of sections for chapter 1 of part I of title
        35, United States Code, is amended to read as follows:

            ``CHAPTER 1--ESTABLISHMENT, OFFICERS, FUNCTIONS

``Sec.
``1. Establishment.
``2. Powers and duties.
``3. Officers and employees.
``4. Restrictions on officers and employees as to interest in patents.
``5. Advisory Board.
``6. Suits by and against the Corporation.
``7. Board of Patent Appeals and Interferences.
``8. Library.
``9. Classification of patents.
``10. Certified copies of records.
``11. Publications.
``12. Exchange of copies of patents with foreign countries.
``13. Copies of patents for public libraries.
``14. Annual report to Congress.
``15. Use of Corporation name.
``16. Definitions.''.
            (28) Section 302 of title 35, United States Code, is
        amended in the second sentence by inserting ``established''
        before ``pursuant''.
            (29) Sections 371(c)(1) and 376(a) of title 35, United
        States Code, are amended by striking out ``provided'' and
        inserting in lieu thereof ``established under''.
            (30) Section 602 of the Federal Property and Administrative
        Services Act of 1949 (40 U.S.C. 474) is amended by inserting
        after paragraph (21) the following new paragraph:
            ``(22) the United States Patent and Trademark
        Corporation,''.
            (31) Section 151 (c) and (d) of the Atomic Energy Act of
        1954 (42 U.S.C. 2181 (c) and (d)) are each amended by striking
        out ``Commissioner of Patents'' and inserting in lieu thereof
        ``Commissioner of Patents and Trademarks''.
            (32) Section 160 of the Atomic Energy Act of 1954 (42
        U.S.C. 2190) is amended by striking out ``Patent Office'' and
        inserting in lieu thereof ``United States Patent and Trademark
        Corporation''.
            (33) Section 305(c) of the National Aeronautics and Space
        Act of 1958 (42 U.S.C. 2457(c)) is amended by striking out
        ``Commissioner of Patents'' and inserting in lieu thereof
        ``Commissioner of Patents and Trademarks''.
            (34) Section 12(a) of the Solar Energy Research,
        Development, and Demonstration Act of 1974 (42 U.S.C. 5510(a))
        is amended by striking out ``Commissioner of Patent Office''
        and inserting in lieu thereof ``Commissioner of Patents and
        Trademarks''.
            (35) Section 1111 of title 44, United States Code, is
        amended by striking out ``Commissioner of Patents'' and
        inserting in lieu thereof ``Commissioner of Patents and
        Trademarks''.
            (36) Section 1123 of title 44, United States Code, is
        amended by striking out ``the Patent Office,''.
            (37) Section 1114 of title 44, United States Code, is
        amended by striking out ``Commissioner of Patents,''.
            (38)(A) Sections 1337 and 1338 of title 44, United States
        Code, are repealed.
            (B) The table of sections for chapter 13 of title 44,
        United States Code, is amended by striking out the items
        relating to sections 1337 and 1338.
            (39) Section 10(i) of the Trading with the Enemy Act (50
        U.S.C. App. 10) is amended by striking out ``Commissioner of
        Patents'' and inserting in lieu thereof ``Commissioner of
        Patents and Trademarks''.

                   TITLE II--MISCELLANEOUS PROVISIONS

SEC. 201. SEPARABILITY.

    If any provision of this Act or the application thereof to any
person or circumstance is held invalid, the remainder of this Act, and
the application of such provision to other persons or circumstances
shall not be affected thereby.

SEC. 202. EFFECTIVE DATE.

    This Act shall take effect 180 days after the date of the enactment
of this Act.
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