[DOCID: f:hr464.106]
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106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-464

======================================================================


  INTELLECTUAL PROPERTY AND COMMUNICATIONS OMNIBUS REFORM ACT OF 1999

                                _______


                November 9, 1999.--Ordered to be printed

                                _______


 Mr. Tauzin, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 1554]

    The committee of conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
1554), to amend the provisions of title 17, United States Code,
and the Communications Act of 1934, relating to copyright
licensing and carriage of broadcast signals by satellite,
having met, after full and free conference, have agreed to
recommend and do recommend to their respective Houses as
follows:
    That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an amendment
as follows:
    In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:

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. Loan guarantees.
Sec. 2003. Administration of loan guarantees.
Sec. 2004. Retransmission of local television broadcast stations.
Sec. 2005. Local television service in unserved and underserved markets.
Sec. 2006. Definitions.

               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.
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 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 1 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 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
workembodied 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 2 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
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--
                                    ``(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) Exception to Satellite Carrier Definition.--Section
119(d)(6) of title 17, United States Code, is amended by
inserting before the period ``, or provides a digital online
communication service''.
    (f) 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 1 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
stationto 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 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 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 2 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 2 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 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 C.F.R. 76.92) syndicated
                exclusivity protection (47 C.F.R. 76.151), and
                sports blackout protection (47 C.F.R. 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 C.F.R. 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 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 C.F.R. 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 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 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 C.F.R.
                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
            ``(E) during the 6-month period beginning on the
        date of 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 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 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 1
                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 2
        copies of the complaint with the Secretary of the
        Commission and serving a copy of the complaint on the
        satellite carrier by means of 2 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 1 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 5
        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 1 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
        1 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 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 1 person in the local
        market of such station and has failed to meet its
        burden of proving 1 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 2
                        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.
                    ``(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 1 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 1 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--
                    (A) by striking ``cable system'' and
                ``cable systems'' each place it appears (other
                than chapter 12) and inserting ``terrestrial
                system'' and ``terrestrial systems'',
                respectively;
                    (B) by striking ``cable service'' each
                place it appears and inserting ``terrestrial
                service''; and
                    (C) by striking ``programing' each place it
                appears and inserting ``programming''.
            (2) Section 111(d)(1)(C) is amended by striking
        ``cable system's'' and inserting ``terrestrial
        system's''.
            (3) Section 111 is amended in the subsection
        headings for subsections (c), (d), and (e), by striking
        ``Cable'' and inserting ``Terrestrial''.
            (4) Chapter 5 is amended--
                    (A) in the table of contents by amending
                the item relating to section 510 to read as
                follows:

``Sec. 510. Remedies for alteration of programming by terrestrial
          systems.'';

                and
                    (B) by amending the section heading for
                section 510 to read as follows:

``Sec. 510. Remedies for alteration of programming by terrestrial
                    systems''.

            (5) Section 801(b)(2)(A) is amended--
                    (A) by striking ``cable subscribers'' and
                inserting ``terrestrial service subscribers'';
                and
                    (B) by striking ``cable industry'' and
                inserting ``terrestrial service industry''.
            (6) Section 111 is amended by striking
        ``compulsory'' each place it appears and inserting
        ``statutory''.
            (7) 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
                                terrestrial 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) Technical Amendment Relating to Terrestrial Systems.--
Section 111(f) of title 17, United States Code, is amended in
the first sentence of the definition of `terrestrial system',
by inserting ``, other than a digital online communication
service,'' after ``other communications channels''.
    (d) Conforming Amendment.--Section 119(a)(2)(C) of title
17, United States Code, is amended in the first sentence by
striking ``currently''.
    (e) 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 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. LOAN GUARANTEES.

    (a) Purpose.--The purpose of this title is to ensure
improved access to the signals of local television stations by
multichannel video providers to all households which desire
such service in unserved and underserved rural areas by
December 31, 2006.
    (b) Assistance to Borrowers.--Subject to the appropriations
limitation under subsection (c)(2), the Secretary, after
consultation with the Secretary of the Treasury and the Federal
Communications Commission, may provide loan guarantees to
borrowers to finance projects to provide local television
broadcast signals by providers of multichannel video services
including direct broadcast satellite licensees and licensees of
multichannel multipoint distribution systems, to areas that do
not receive local television broadcast signals over commercial
for-profit direct-to-home satellite distribution systems. A
borrower that receives a loan guarantee under this title may
not transfer any part of the proceeds of the monies from the
loans guaranteed under this program to an affiliate of the
borrower.
    (c) Underwriting Criteria; Prerequisites.--
            (1) In general.--The Secretary shall administer the
        underwriting criteria developed under subsection (f)(1)
        to determine which loans are eligible for a guarantee
        under this title.
            (2) Authority to make loan guarantees.--The
        Secretary shall be authorized to guarantee loans under
        this title only to the extent provided for in advance
        by appropriations Acts.
            (3) Prerequisites.--In addition to meeting the
        underwriting criteria under paragraph (1), a loan is
        not eligible for a loan guarantee under this title
        unless--
                    (A) the loan is made to finance the
                acquisition, improvement, enhancement,
                construction, deployment, launch, or
                rehabilitation of the means by which local
                television broadcast signals will be delivered
                to an area not receiving such signals over
                commercial for-profit direct-to-home satellite
                distribution systems;
                    (B) the proceeds of the loan will not be
                used for operating expenses;
                    (C) the total amount of all such loans may
                not exceed in the aggregate $1,250,000,000;
                    (D) the loan does not exceed $100,000,000,
                except that 1 loan under this title may exceed
                $100,000,000, but shall not exceed
                $625,000,000;
                    (E) the loan bears interest and penalties
                which, in the Secretary's judgment, are not
                unreasonable, taking into consideration the
                prevailing interest rates and customary fees
                incurred under similar obligations in the
                private capital market; and
                    (F) the Secretary determines that taking
                into account the practices of the private
                capital markets with respect to the financing
                of similar projects, the security of the loan
                is adequate.
            (4) Additional criteria.--In addition to the
        requirements of paragraphs (1), (2), and (3), a loan
        for which a guarantee is sought under this title shall
        meet any additional criteria promulgated under
        subsection (f)(1).
    (d) Additional Requirements.--The Secretary may not make a
loan guarantee under this title unless--
            (1) repayment of the obligation is required to be
        made within a term of the lesser of--
                    (A) 25 years from the date of its
                execution; or
                    (B) the useful life of the primary assets
                used in the delivery of relevant signals;
            (2) the Secretary has been given the assurances and
        documentation necessary to review and approve the
        guaranteed loans;
            (3) the Secretary makes a determination in writing
        that--
                    (A) the applicant has given reasonable
                assurances that the assets, facilities, or
                equipment will be utilized economically and
                efficiently;
                    (B) necessary and sufficient regulatory
                approvals, spectrum rights, and delivery
                permissions have been received by project
                participants to assure the project's ability to
                repay obligations under this title; and
                    (C) repayment of the obligation can
                reasonably be expected, including the use of an
                appropriate combination of credit risk premiums
                and collateral offered by the applicant to
                protect the Federal Government.
    (e) Approval of NTIA Required.--
            (1) In general.--The Secretary may not issue a loan
        guarantee under this title unless the National
        Telecommunications and Information Administration
        consults with the Secretary and certifies that--
                    (A) the issuance of the loan guarantee is
                consistent with subsection (a) of this section;
                and
                    (B) consistent with subsection (b) of this
                section, the project to be financed by a loan
                guaranteed under this section is not likely to
                have a substantial adverse impact on
                competition between multichannel video
                programming distributors that outweighs the
                benefits of improving access to the signals of
                a local television station by a multichannel
                video provider.
            (2) Certification.--The Secretary shall provide the
        appropriate information on each loan guarantee
        application recommended by the Secretary to the
        National Telecommunications and Information
        Administration for certification. The National
        Telecommunications and Information Administration shall
        make the determination required under this subsection
        within 90 days, without regard to the provision of
        chapter 5 of title 5, United States Code, and sections
        10 and 11 of the Federal Advisory Committee Act (5
        U.S.C. App.).
    (f) Requirements.--
            (1) In general.--Within 180 days after the date of
        enactment of this Act, the Secretary shall consult with
        the Office of Management and Budget and an independent
        public accounting firm to develop underwriting criteria
        relating to the issuance of loan guarantees,
        appropriate collateral and cash flow levels for the
        types of loan guarantees that might be issued under
        this title, and such other matters as the Secretary
        determines appropriate.
            (2) Authority of secretary.--In lieu of or in
        combination with appropriations of budget authority to
        cover the costs of loan guarantees as required under
        section 504(b)(1) of the Federal Credit Reform Act of
        1990, the Secretary may accept on behalf of an
        applicant for assistance under this title a commitment
        from a non-Federal source to fund in whole or in part
        the credit risk premiums with respect to the
        applicant's loan. The aggregate of appropriations of
        budget authority and credit risk premiums described in
        this paragraph with respect to a loan guarantee may not
        be less than the cost of that loan guarantee.
            (3) Credit risk premium amount.--The Secretary
        shall determine the amount required for credit risk
        premiums under this subsection on the basis of--
                    (A) the circumstances of the applicant,
                including the amount of collateral offered;
                    (B) the proposed schedule of loan
                disbursements;
                    (C) the borrower's business plans for
                providing service;
                    (D) financial commitment from the broadcast
                signal provider;
                    (E) approval of the Office of Management
                and Budget; and
                    (F) any other factors the Secretary
                considers relevant.
            (4) Payment of premiums.--Credit risk premiums
        under this subsection shall be paid to an account
        established in the Treasury which shall accrue interest
        and such interest shall be retained by the account,
        subject to paragraph (5).
            (5) Cohorts of loans.--In order to maintain
        sufficient balances of credit risk premiums to
        adequately protect the Federal Government from risk of
        default, while minimizing the length of time the
        Government retains possession of those balances, the
        Secretary in consultation with the Office of Management
        and Budget shall establish cohorts of loans. When all
        obligations attached to a cohort of loans have been
        satisfied, credit risk premiums paid for the cohort,
        and interest accrued thereon, which were not used to
        mitigate losses shall be returned to the original
        source on a pro rata basis.
    (g) Conditions of Assistance.--A borrower shall agree to
such terms and conditions as are sufficient, in the judgment of
the Secretary to ensure that, as long as any principal or
interest is due and payable on such obligation, the borrower--
            (1) will maintain assets, equipment, facilities,
        and operations on a continuing basis;
            (2) will not make any discretionary dividend
        payments that reduce the ability to repay obligations
        incurred under this section; and
            (3) will remain sufficiently capitalized.
    (h) Lien on Interests in Assets.--Upon providing a loan
guarantee to a borrower under this title, the Secretary shall
have liens which shall be superior to all other liens on assets
of the borrower equal to the unpaid balance of the loan subject
to such guarantee.
    (i) Perfected Interest.--The Secretary and the lender shall
have a perfected security interest in those assets of the
borrower fully sufficient to protect the Secretary and the
lender.
    (j) Insurance Policies.--In accordance with practices of
private lenders, as determined by the Secretary, the borrower
shall obtain, at its expense, insurance sufficient to protect
the interests of the Federal Government, as determined by the
Secretary.
    (k) Special Provision for Satellite Carriers.--No satellite
carrier that provided television broadcast signals to
subscribers on October 1, 1999, and no company that is an
affiliate of any such carrier, shall be eligible for a loan
guarantee under this section if either the carrier or its
affiliate holds a license for unused spectrumthat would be
suitable for delivering local television signals into unserved and
underserved markets.
    (l) Authorization of Appropriations.--For the additional
costs of the loans guaranteed under this title, including the
cost of modifying the loans as defined in section 502 of the
Congressional Budget Act of 1974 (2 U.S.C. 661(a)), there are
authorized to be appropriated for fiscal years 2000 through
2006, such amounts as may be necessary. In addition there are
authorized to be appropriated such sums as may be necessary to
administer this title. Any amounts appropriated under this
subsection shall remain available until expended.

SEC. 2003. ADMINISTRATION OF LOAN GUARANTEES.

    (a) Applications.--The Secretary shall prescribe the form
and contents for an application for a loan guarantee under
section 2002.
    (b) Assignment of Loan Guarantees.--The holder of a loan
guaranteed under this title may assign the loan guarantee in
whole or in part, subject to such requirements as the Secretary
may prescribe.
    (c) Modifications.--The Secretary may approve the
modification of any term or condition of a loan guarantee
including the rate of interest, time of payment of interest or
principal, or security requirements, if the Secretary finds in
writing that--
            (1) the modification is equitable and is in the
        overall best interests of the United States;
            (2) consent has been obtained from the borrower and
        the lender;
            (3) the modification is consistent with the
        objective underwriting criteria developed in
        consultation with the Office of Management and Budget
        and an independent public accounting firm under section
        2002(f);
            (4) the modification does not adversely affect the
        Federal Government's interest in the entity's assets or
        loan collateral;
            (5) the modification does not adversely affect the
        entity's ability to repay the loan; and
            (6) the National Telecommunications and Information
        Administration does not object to the modification on
        the ground that it is inconsistent with the
        certification under section 2002(e).
    (d) Priority Markets.--
            (1) In general.--To the maximum extent practicable,
        the Secretary shall give priority to projects which
        serve the most underserved rural markets, as determined
        by the Secretary. In making prioritization
        determinations, the Secretary shall consider prevailing
        market conditions, feasibility of providing service,
        population, terrain, and other factors the Secretary
        determines appropriate.
            (2) Priority relating to consumer costs and
        separate tier of signals.--The Secretary shall give
        priority to projects that--
                    (A) offer a separate tier of local
                broadcast signals; and
                    (B) provide lower projected costs to
                consumers of such separate tier.
            (3) Performance schedules.--Applicants for priority
        projects under this section shall enter into stipulated
        performance schedules with the Secretary.
            (4) Penalty.--The Secretary may assess a borrower a
        penalty not to exceed 3 times the interest due on the
        guaranteed loan, if the borrower fails to meet its
        stipulated performance schedule. The penalty shall be
        paid to the account established by the Treasury under
        section 2002.
            (5) Limitation on consideration of most populated
        areas.--The Secretary shall not provide a loan
        guarantee for a project that is primarily designed to
        serve the 40 most populated designated market areas and
        shall take into consideration the importance of serving
        rural markets that are not likely to be otherwise
        offered service under section 122 of title 17, United
        States Code, except through the loan guarantee program
        under this title.
    (e) Compliance.--The Secretary shall enforce compliance by
an applicant and any other party to the loan guarantee for
whose benefit assistance is intended, with the provisions of
this title, regulations issued hereunder, and the terms and
conditions of the loan guarantee, including through regular
periodic inspections and audits.
    (f) Commercial Validity.--For purposes of claims by any
party other than the Secretary, a loan guarantee or loan
guarantee commitment shall be conclusive evidence that the
underlying obligation is in compliance with the provisions of
the title, and that such obligation has been approved and is
legal as to principal, interest, and other terms. Such a
guarantee or commitment shall be valid and incontestable in the
hands of a holder thereof, including the original lender or any
other holder, as of the date when the Secretary granted the
application therefor, except as to fraud or material
misrepresentation by such holder.
    (g) Defaults.--The Secretary shall prescribe regulations
governing a default on a loan guaranteed under this title.
    (h) Rights of the Secretary.--
            (1) Subrogation.--If the Secretary authorizes
        payment to a holder, or a holder's agent, under
        subsection (g) in connection with a loan guarantee made
        under section 2002, the Secretary shall be subrogated
        to all of the rights of the holder with respect to the
        obligor under the loan.
            (2) Disposition of property.--The Secretary may
        complete, recondition, reconstruct, renovate, repair,
        maintain, operate, rent, sell, or otherwise dispose of
        any property or other interests obtained under this
        section in a manner that maximizes taxpayer return and
        is consistent with the public convenience and
        necessity.
            (3) Warrants.--To ensure that the United States
        Government is compensated for the risk in making
        guarantees under this title, the Secretary shall enter
        into contracts under which the Government, contingent
        on the financial success of the borrower, would
        participate in a percentage of the gains of any for
        profit borrower or its security holders in connection
        with the project funded by loans so guaranteed.
    (i) Action Against Obligor.--The Secretary may bring a
civil action in an appropriate district court of the United
States in the name of the United States or of the holder of the
obligation in the event of a default on a loan guaranteed under
this title. The holder of a guarantee shall make available to
the Secretary all records and evidence necessary to prosecute
the civil action. The Secretary may accept property in full or
partial satisfaction of any sums owed as a result of default.
If the Secretary receives, through the sale or other
disposition of such property, an amount greater than the
aggregate of--
            (1) the amount paid to the holder of a guarantee
        under subsection (g) of this section; and
            (2) any other cost to the United States of
        remedying the default, the Secretary shall pay such
        excess to the obligor.
    (j) Breach of Conditions.--The Attorney General shall
commence a civil action in a court of appropriate jurisdiction
to enjoin any activity which the Secretary finds is in
violation of this title, regulations issued hereunder, or any
conditions which were duly agreed to, and to secure any other
appropriate relief, including relief against any affiliate of
the borrower.
    (k) Attachment.--No attachment or execution may be issued
against the Secretary or any property in the control of the
Secretary prior to the entry of final judgment to such effect
in any State, Federal, or other court.
    (l) Investigation Charge and Fees.--
            (1) Appraisal fee.--The Secretary may charge and
        collect from an applicant a reasonable fee for
        appraisal for the value of the equipment or facilities
        for which the loan guarantee is sought, and for making
        necessary determinations and findings. The fee may not,
        in the aggregate, be more than one-half of one percent
        of the principal amount of the obligation. The fee
        imposed under this paragraph shall be used to offset
        the administrative costs of the program.
            (2) Loan origination fee.--The Secretary may charge
        a loan origination fee.
    (m) Annual Audit.--The General Accounting Office shall
annually audit the administration of this title and report the
results to the Agriculture, Appropriations, and Judiciary
Committees of the Senate and the House of Representatives, the
House of Representatives Committee on Commerce, the Senate
Committee on Commerce, Science, and Transportation, the Senate
Committee on Banking, Housing, and Urban Affairs, and the House
of Representatives Committee on Banking and Financial Services.
    (n) Indemnification.--An affiliate of the borrower shall
indemnify the Government for any losses it incurs as a result
of--
            (1) a judgment against the borrower;
            (2) any breach by the borrower of its obligations
        under the loan guarantee agreement;
            (3) any violation of the provisions of this title
        by the borrower;
            (4) any penalties incurred by the borrower for any
        reason, including the violation of the stipulated
        performance; and
            (5) any other circumstances that the Secretary
        determines to be appropriate.
    (o) Sunset.--The Secretary may not approve a loan guarantee
under this title after December 31, 2006.

SEC. 2004. RETRANSMISSION OF LOCAL TELEVISION BROADCAST STATIONS.

    A borrower shall be subject to applicable rights,
obligations, and limitations of title 17, United States Code.
If a local broadcast station requests carriage of its signal
and is located in a market not served by a satellite carrier
providing service under a statutory license under section 122
of title 17, United States Code, the borrower shall carry the
signal of that station without charge and shall be subject to
the applicable rights, obligations, and limitations of sections
338, 614, and 615 of the Communications Act of 1934.

SEC. 2005. LOCAL TELEVISION SERVICE IN UNSERVED AND UNDERSERVED
                    MARKETS.

    (a) In General.--Not later than 1 year after the date of
enactment of this Act, 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 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.

SEC. 2006. DEFINITIONS.

    In this title:
            (1) Affiliate.--The term ``affiliate'' means any
        person or entity that controls, or is controlled by, or
        is under common control with, another person or entity.
            (2) Borrower.--The term ``borrower'' means any
        person or entity receiving a loan guarantee under this
        program.
            (3) Commission.--The term ``Commission'' means the
        Federal Communications Commission.
            (4) Cost.--
                    (A) In general.--The term ``cost'' means
                the estimated long-term cost to the Government
                of a loan guarantee or modification thereof,
                calculated on a net present value basis,
                excluding administrative costs and any
                incidental effects on governmental receipts or
                outlays.
                    (B) Loan guarantees.--For purposes of this
                paragraph the cost of a loan guarantee--
                            (i) shall be the net present value,
                        at the time when the guaranteed loan is
                        disbursed, of the estimated cash flows
                        of--
                                    (I) payments by the
                                Government to cover defaults
                                and delinquencies, interest
                                subsidies, or other payments;
                                    (II) payments to the
                                Government, including
                                origination and other fees,
                                penalties, and recoveries; and
                            (ii) shall include the effects of
                        changes in loan terms resulting from
                        the exercise by the guaranteed lender
                        of an option included in the loan
                        guarantee contract, or by the borrower
                        of an option included in the guaranteed
                        loan contract.
                    (C) Cost of modification.--The cost of the
                modification shall be the difference between
                the current estimate of the net present value
                of the remaining cash flows under the terms of
                a loan guarantee contract, and the current
                estimate of the net present value of the
                remaining cash flows under the terms of the
                contract, as modified.
                    (D) Discount rate.--In estimating net
                present value, the discount rate shall be the
                average interest rate on marketable Treasury
                securities of similar maturity to the cash
                flows of the guarantee for which the estimate
                is being made.
                    (E) Fiscal year assumptions.--When funds of
                a loan guarantee under this title are
                obligated, the estimated cost shall be based on
                the current assumptions, adjusted to
                incorporate the terms of the loan contract, for
                the fiscal year in which the funds are
                obligated.
            (5) Current.--The term ``current'' has the same
        meaning as in section 250(c)(9) of the Balanced Budget
        and Emergency Deficit Control Act of 1985.
            (6) Designated market area.--The term ``designated
        market area'' has the meaning given that term under
        section 122(j) of title 17, United States Code.
            (7) Loan guarantee.--The term ``loan guarantee''
        means any guarantee, insurance, or other pledge with
        respect to the payment of all or part of the principal
        or interest on any debt obligation of a non-Federal
        borrower to the Federal Financing Bank or a non-Federal
        lender, but does not include the insurance of deposits,
        shares, or other withdrawable accounts in financial
        institutions.
            (8) Modification.--The term ``modification'' means
        any Government action that alters the estimated cost of
        an outstanding loan guarantee (or loan guarantee
        commitment) from the current estimate of cash flows,
        including the sale of loan assets, with or without
        recourse, and the purchase of guaranteed loans.
             (9) Secretary.--The term ``Secretary'' means the
        Secretary of Agriculture.
            (10) Common terms.--Except as provided in
        paragraphs (1) through (9), any term used in this title
        that is defined in the Communications Act of 1934 (47
        U.S.C. 151 et seq.) has the meaning given it in that
        Act.

              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
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
        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 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
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 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 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 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 3 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:

``Sec. 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 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 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 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
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 one 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 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 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 1 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 one
                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 one
                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
                3 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 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 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 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 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:

``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 asurcharge, 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 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 basedon 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 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 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 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
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, 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 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 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 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 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, DC, 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;
                    ``(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;
            ``(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, 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.--
                    ``(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. 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,
                including any applicable locality-based
                comparability payment that may be authorized
                under section 5304(h)(2)(C) of title 5. The
                compensation of the Commissioners shall be
                considered, for purposes of section
                207(c)(2)(A) of title 18, to be the equivalent
                of that described under clause (ii) of section
                207(c)(2)(A) of title 18. 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 amountof the salary of the
Vice President under section 104 of title 3.
                    ``(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. 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.--Officers and
employees of the Office shall be subject to the provisions of
title 5 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 afterthe 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 for level
III of the Executive Schedule under section 5314 of title 5.
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.
    ``(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 3 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 enactment of this
Act.

SEC. 4732. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to Title 35.--
            (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 and
        following), 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''.
            (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 beissued 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 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 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
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 StatesPatent 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 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: ``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 enactment of this Act.

SEC. 5003. COMPLETION OF BIENNIAL REGULATORY REVIEW.

    Within 180 days after the date of 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 residentagent 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 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 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
                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 C.F.R.
                        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 shallcomply
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 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 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 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 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 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 C.F.R. 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;
                    ``(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
                C.F.R. 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.''.

      And the Senate agree to the same.

                From the Committee on Commerce, for
                consideration of the House bill and the Senate
                amendment, and modifications committed to
                conference:
                                   Tom Bliley,
                                   Billy Tauzin,
                                   Michael G. Oxley,
                                   John D. Dingell,
                                   Edward J. Markey,
                Provided that Mr. Boucher is appointed in lieu
                of Mr. Markey for consideration of secs.
                712(b)(1), 712(b)(2), and 712(c)(1) of the
                Communications Act of 1934 as added by sec. 104
                of the House bill.
                                   Rick Boucher,
                From the Committee on the Judiciary, for
                consideration of the House bill and the Senate
                amendment, and modifications committed to
                conference:
                                   Henry Hyde,
                                   Howard Coble,
                                   Bob Goodlatte,
                                   John Conyers,
                                   Howard L. Berman,
                                 Managers on the Part of the House.

                From the Committee on the Judiciary:
                                   Orrin Hatch,
                                   Strom Thurmond,
                                   Mike DeWine,
                                   Patrick Leahy,
                                   Herb Kohl,
                From the Committee on Commerce, Science, and
                Transportation:
                                   Ted Stevens,
                                   Fritz Hollings,
                                Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendment of the Senate to the bill (H.R. 1554), to amend
the provisions of title 17, United States Code, and the
Communications Act of 1934, relating to copyright licensing and
carriage of broadcast signals by satellite, submit the
following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference report:
      The Senate amendment struck out all of the House bill
after the enacting clause and inserted a substitute text.
      The House recedes from its disagreement to the amendment
of the Senate with an amendment which is a substitute for the
House bill and the Senate amendment. The differences between
the House bill, the Senate amendment, and the substitute agreed
to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clarifying
changes.
Section 1. Short title.
      This Act may be cited as the ``Intellectual Property and
Communications Omnibus Reform Act of 1999.''

         TITLE I--SATELLITE HOME VIEWER IMPROVEMENT ACT OF 1999

      When Congress passed the Satellite Home Viewer Act in
1988, few Americans were familiar with satellite television.
They typically resided in rural areas of the country where the
only means of receiving television programming was through use
of a large, backyard C-band satellite dish. Congress recognized
the importance of providing these people with access to
broadcast programming, and created a compulsory copyright
license in the Satellite Home Viewer Act that enabled satellite
carriers to easily license the copyrights to the broadcast
programming that they retransmitted to their subscribers.
      The 1988 Act fostered a boom in the satellite television
industry. Coupled with the development of high-powered
satellite service, or DSS, which delivers programming to a
satellite dish as small as 18 inches in diameter, the satellite
industry now serves homes nationwide with a wide range of high
quality programming. Satellite is no longer primarily a rural
service, for it offers an attractive alternative to other
providers of multichannel video programming; in particular,
cable television. Because satellite can provide direct
competition with the cable industry, it is in the public
interest to ensure that satellite operates under a copyright
framework that permits it to be an effective competitor.
      The compulsory copyright license created by the 1988 Act
was limited to a five year period to enable Congress to
consider its effectiveness and renew it where necessary. The
license was renewed in 1994 for an additional five years, and
amendments made that were intended to increase the enforcement
of the network territorial restrictions of the compulsory
license. Two-year transitional provisions were created to
enable local network broadcasters to challenge satellite
subscribers' receipt of satellite network service where the
local network broadcaster had reason to believe that these
subscribers received an adequate off-the-air signal from the
broadcaster. The transitional provisions were minimally
effective and caused much consumer confusion and anger
regarding receipt of television network stations.
      The satellite license is slated to expire at the end of
this year, requiring Congress to again consider the copyright
licensing regime for satellite retransmissions of over-the-air
television broadcast stations. In passing this legislation, the
Conference Committee was guided by several principles. First,
the Conference Committee believes that promotion of competition
in the marketplace for delivery of multichannel video
programming is an effective policy to reduce costs to
consumers. To that end, it is important that the satellite
industry be afforded a statutory scheme for licensing
television broadcast programming similar to that of the cable
industry. At the same time, the practical differences between
the two industries must be recognized and accounted for.
      Second, the Conference Committee reasserts the importance
of protecting and fostering the system of television networks
as they relate to the concept of localism. It is well
recognized that television broadcast stations provide valuable
programming tailored to local needs, such as news, weather,
special announcements and information related to local
activities. To that end, the Committee has structured the
copyright licensing regime for satellite to encourage and
promote retransmissions by satellite of local television
broadcast stations to subscribers who reside in the local
markets of those stations.
      Third, perhaps most importantly, the Conference Committee
is aware that in creating compulsory licenses, it is acting in
derogation of the exclusive property rights granted by the
Copyright Act to copyright holders, and that it therefore needs
to act as narrowly as possible to minimize the effects of the
government's intrusion on the broader market in which the
affected property rights and industries operate. In this
context, the broadcast television market has developed in such
a way that copyright licensing practices in this area take into
account the national network structure, which grants exclusive
territorial rights to programming in a local market to local
stations either directly or through affiliation agreements. The
licenses granted in this legislation attempt to hew as closely
to those arrangements as possible. For example, these
arrangements are mirrored in the section 122 ``local-to-local''
license, which grants satellite carriers the right to
retransmit local stations within the station's local market,
and does not require a separate copyright payment because the
works have already been licensed and paid for with respect to
viewers in those local markets. By contrast, allowing the
importation of distant or out-of-market network stations in
derogation of the local stations' exclusive right--bought and
paid for in market-negotiated arrangements--to show the works
in question undermines those market arrangements. Therefore,
the specific goal of the 119 license, which is to allow for a
life-line network television service to those homes beyond the
reach of their local television stations, must be met by only
allowing distant network service to those homes which cannot
receive the local network television stations. Hence, the
``unserved household'' limitation that has been in the license
since its inception. The Committee is mindful and respectful of
the interrelationship between the communications policy of
``localism'' outlined above and property rights considerations
in copyright law, and seeks a proper balance between the two.
      Finally, although the legislation promotes satellite
retransmissions of local stations, the Conference Committee
recognizes the continued need to monitor the effects of distant
signal importation by satellite. To that end, the compulsory
license for retransmission of distant signals is extended for
aperiod of five years, to afford Congress the opportunity to evaluate
the effectiveness and continuing need for that license at the end of
the five-year period.
Sec. 1001. Short title
      This title may be cited as the ``Satellite Home Viewer
Improvement Act.''
Sec. 1002. Limitations on exclusive rights; secondary transmissions by
        satellite carriers within local markets
      The House and the Senate provisions were in most respects
highly similar. The conference substitute generally follows the
House approach, with the differences described here.
      Section 1002 of this Act creates a new statutory license,
with no sunset provision, as a new section 122 of the Copyright
Act of 1976. The new license authorizes the retransmission of
television broadcast stations by satellite carriers to
subscribers located within the local markets of those stations.
      Creation of a new statutory license for retransmission of
local signals is necessary because the current section 119
license is limited to the retransmission of distance signals by
satellite. The section 122 license allows satellite carriers
for the first time to provide their subscribers with the
television signals they want most: their local stations. A
carrier may retransmit the signal of a network station (or
superstation) to all subscribers who reside within the local
market of that station, without regard to whether the
subscriber resides in an ``unserved household.'' The term
``local market'' is defined in Section 119(j)(2), and generally
refers to a station's Designated Market Area as defined by
Nielsen.
      Because the section 122 license is permanent, subscribers
may obtain their local television stations without fear that
their local broadcast service may be turned off at a future
date. In addition, satellite carriers may deliver local
stations to commercial establishments as well as homes, as the
cable industry does under its license. These amendments create
parity and enhanced competition between the satellite and cable
industries in the provision of local television broadcast
stations.
      For a satellite carrier to be eligible for this license,
this Act, following the House approach, provides both in new
section 122(a) and in new section 122(d) that a carrier may use
the new local-to-local license only if it is in full compliance
with all applicable rules and regulations of the Federal
Communications Commission, including any requirements that the
Commission may adopt by regulation concerning carriage of
stations or programming exclusivity. These provisions are
modeled on similar provisions in section 111, the terrestrial
compulsory license. Failure to fully comply with Commission
rules with respect to retransmission of one or more stations in
the local market precludes the carrier from making use of the
section 122 license. Put another way, the statutory license
overrides the normal copyright scheme only to the extent that
carriers strictly comply with the limits Congress has put on
that license.
      Because terrestrial systems, such as cable, as a general
rule do not pay any copyright royalty for local retransmissions
of broadcast stations, the section 122 license does not require
payment of any copyright royalty by satellite carriers for
transmissions made in compliance with the requirements of
section 122. By contrast, the section 119 statutory license for
distant signals does require payment of royalties. In addition,
the section 122 statutory license contains no ``unserved
household'' limitation, while the section 119 license does
contain that limitation.
      Satellite carriers are liable for copyright infringement,
and subject to the full remedies of the Copyright Act, if they
violate one or more of the following requirements of the
section 122 license. First, satellite carriers may not in any
way willfully alter the programming contained on a local
broadcast station.
      Second, satellite carriers may not use the section 122
license to retransmit a television broadcast station to a
subscriber located outside the local market of the station.
Retransmission of a station to a subscriber located outside the
station's local market is covered by section 119, and is
permitted only when all conditions of that license are
satisfied. Accordingly, satellite carriers are required to
provide local broadcasters with accurate lists of the street
addresses of their local-to-local subscribers so that
broadcasters may verify that satellite carriers are making
proper use of the license. The subscriber information supplied
to broadcasters is for verification purposes only, and may not
be used by broadcasters for any other reason. Any knowing
provision of false information by a satellite carrier would,
under section 122(d), bar use of the Section 122 license by the
carrier engaging in such practices. The section 122 license
contains remedial provisions parallel to those of Section 119,
including a ``pattern or practice'' provision that requires
termination of the Section 122 statutory license as to a
particular satellite carrier if it engages in certain abuses of
the license.
      Under this provision, just as in the statutory licenses
codified in sections 111 and 119, a violation may be proven by
showing willful activity, or simple delivery of the secondary
transmission over a certain period of time. In addition to
termination of service on a nationwide or local or regional
basis, statutory damages are available up to $250,000 for each
6-month period during which the pattern or practice of
violations was carried out. Satellite carriers have the burden
of proving that they are not improperly making use of the
section 122 license to serve subscribers outside the local
markets of the television broadcast stations they are
providing. The penalties created under this section parallel
those under Section 119, and are to deter satellite carriers
from providing signals to subscribers in violation of the
licenses.
      The section 122 license is limited in geographic scope to
service to locations in the United States, including any
commonwealth, territory or possession of the United States. In
addition, section 122(j) makes clear that local retransmission
of television broadcast stations to subscribers is governed
solely by the section 122 license, and that no provision of the
section 111 cable compulsory license should be interpreted to
allow satellite carriers to make local retransmissions of
television broadcast stations under that license. Likewise, no
provision of the section 119 license (or any other law) should
be interpreted as authorizing local-to-local retransmissions.
As with all statutory licenses, these explicit limitations are
consistent with the general rule that, because statutory
licenses are in derogation of the exclusive rights granted
under the Copyright Act, they should be interpreted narrowly.
      Section 1002(a) of this Act contains new standing
provisions. Adopting the approach of the House bill, section
122(f)(1) of the Copyright Act is parallel to section 119(e),
and ensures that local stations, in addition to any other
parties that qualify under other standing provisions of the
Act, will have the ability to sue for violations of section
122. New section 122(f)(2) of the Copyright Act enables a local
television station that is not being carried by a satellite
carrier in violation of the license to file a copyright
infringement lawsuit in federal court to enforce its rights.
Sec. 1003. Extension of effect of amendments to section 119 of title
        17, United States Code
      As in both the House bill and the Senate amendment, this
Act extends the section 119 satellite statutory license for a
period of five years by changing the expiration date of the
legislation from December 31, 1999, to December 31, 2004. The
procedural and remedial provisions of section 119, which have
already been interpreted by the courts, are being extended
without change. Should the section 119 license be allowed to
expire in 2004, it shall do so at midnight on December 31,
2004, so that the license will cover the entire second
accounting period of 2004.
      The advent of digital terrestrial broadcasting will
necessitate additional review and reform of the distant signal
statutory license. And responsibility to oversee the
development of the nascent local station satellite service may
also require for review of the distant signal statutory license
in the future. For each of these reasons, this Act establishes
a period for review in 5 years.
      Although the section 119 regime is largely being extended
in its current form, certain sections of the Act may have a
near-term effect on pending copyright infringement lawsuits
brought by broadcasters against satellite carriers. These
changes are prospective only; Congress does not intend to
change the legality of any conduct that occurred prior to the
date of enactment. Congress does intend, however, to benefit
consumers where possible and consistent with existing copyright
law and principles.
      This Act attempts to strike a balance among a variety of
public policy goals. While increasing the number of potential
subscribers to distant network signals, this Act clarifies that
satellite carriers may carry up to, but no more than, two
stations affiliated with the same network. The original purpose
of the Satellite Home Viewer Act was to ensure that all
Americans could receive network programming and other
television services provided they could not receive those
services over-the-air or in any other way. This bill reflects
the desire of the Conference to meet this requirement and
consumers' expectations to receive the traditional level of
satellite service that has built up over the years, while
avoiding an erosion of the programming market affected by the
statutory licenses.
Sec. 1004. Computation of royalty fees for satellite carriers
      Like both the House bill and the Senate amendment, this
Act reduces the royalty fees currently paid by satellite
carriers for the retransmission of network and superstations by
45 percent and 30 percent, respectively. These are reductions
of the 27-cent royalty fees made effective by the Librarian of
Congress on January 1, 1998. The reductions take effect on July
1, 1999, which is the beginning of the second accounting period
for 1999, and apply to all accounting periods for the five-year
extension of the section 119 license. The Committee has drafted
this provision such that, if the section 119 license is renewed
after 2004, the 45 percent and 30 percent reductions of the 27-
cent fee will remain in effect, unless altered by legislative
amendment.
      In addition, section 119(c) of title 17, United States
Code, is amended to clarify that in royalty distribution
proceedings conducted under section 802 of the Copyright Act,
the Public Broadcasting Service may act as agent for all public
television copyright claimants and all Public Broadcasting
Service member stations.
Sec. 1005. Distant signal eligibility for consumers
      The Senate bill contained provisions retaining the
existing Grade B intensity standard in the definition of
``unserved household.'' The House agreed to the Senate
provisions with amendments, which extend the ``unserved
household'' definition of section 119 of title 17 intact in
certain respects and amend it in other respects. Consistent
with the approach of the Senate amendment, the central feature
of the existing definition of ``unserved household''--inability
to receive, through use of a conventional outdoor rooftop
receiving antenna, a signal of Grade B intensity from a primary
network station--remains intact. The legislation directs the
FCC, however, to examine the definition of ``Grade B
intensity'', reflecting the dBu levels long set by the Federal
Communications Commission in 47 C.F.R. Sec. 73.683(a), and
issue a rulemaking within 6 months after enactment to evaluate
the standard and, if appropriate, make recommendations to
Congress about how to modify the analog standard, and make a
further recommendation about what an appropriate standard would
be for digital signals. In this fashion, the Congress will have
the best input and recommendations from the Commission,
allowing the Commission wide latitude in its inquiry and
recommendations, but reserve for itself the final decision-
making authority over the scope of the copyright licenses in
question, in light of all relevant factors.
      The amended definition of ``unserved household'' makes
other consumer-friendly changes. It will eliminate the
requirement that a cable subscriber wait 90 days to be eligible
for satellite delivery of distant network signals. After
enactment, cable subscribers will be eligible to receive
distant network signals by satellite, upon choosing to do so,
if they satisfy the other requirements of section 119.
      In addition, this Act adds three new categories to the
definition of ``unserved household'' in section 119(d)(10): (a)
certain subscribers to network programming who are not
predicted to receive a signal of Grade A intensity from any
station of the relevant network, (b) operators of recreational
vehicles and commercial trucks who have complied with certain
documentation requirements, and (c) certain C-band subscribers
to network programming. This Act also confirms in new section
119(d)(10)(B) what has long been understood by the parties and
accepted by the courts, namely that a subscriber may receive
distant network service if all network stations affiliated with
the relevant network that are predicted to serve that
subscriber give their written consent.
      Section 105(a)(2) of the bill creates a new section
119(a)(2)(B)(i) of the Copyright Act to prohibit a satellite
carrier from delivering more than two distant TV stations
affiliated with a single network in a single day to a
particular customer. This clarifies that a satellite carrier
provides a signal of a television station throughout the
broadcast day, rather than switching between stations
throughout a day to pick the best programming among different
signals.
      Section 1005(a)(2) of this Act creates a new section
119(a)(2)(B)(ii)(I) of the Copyright Act to confirm that courts
should rely on the FCC's ILLR model to presumptively determine
whether a household is capable of receiving a signal of Grade B
intensity. The conferees understand that the parties to
copyright infringement litigation under the Satellite Home
Viewer Act have agreed on detailed procedures for implementing
the current version of ILLR, and nothing in this Act requires
any change in those procedures. In the future, when the FCC
amends the ILLR model to make it more accurate pursuant to
section 339(c)(3) of the Communications Act of 1934, the
amended model should be used in place of the current version of
ILLR. The new language also confirms in new section
119(a)(2)(B)(ii)(II) that the ultimate determination of
eligibility to receive network signals shall be a signal
intensity test pursuant to 47 C.F.R. Sec. 73.686(d), as
reflected in new section 339(c)(5) of the Communications Act of
1934. Again, the conferees understand that existing Satellite
Home Viewer Act court orders already incorporate this FCC-
approved measurement method, and nothing in this Act requires
any change insuch orders. Such a signal intensity test may be
conducted by any party to resolve a customer's eligibility in
litigation under section 119.
      Section 1005(a)(2) of this Act creates a new section
119(a)(2)(B)(iii) of the Copyright Act to permit continued
delivery by means of C-band transmissions of network stations
to C-band dish owners who received signals of the pertinent
network on October 31, 1999, or were recently required to have
such service terminated pursuant to court orders or settlements
under section 119. This provision does not authorize satellite
delivery of network stations to such persons by any technology
other than C-band.
      Section 1005(b) also adds a new provision (E) to section
119(a)(5). The purpose of this provision is to allow certain
longstanding superstations to continue to be delivered to
satellite customers without regard to the ``unserved
household'' limitation, even if the station now technically
qualifies as a ``network station'' under the 15-hour-per-week
definition of the Act. This exception will cease to apply if
such a station in the future becomes affiliated with one of the
four networks (ABC, CBS, Fox, and NBC) that qualified as
networks as of January 1, 1995.
      Section 1005(c) of this Act adds a new section 119(e) of
the Copyright Act. This provision contains a moratorium on
terminations of network stations to certain otherwise
ineligible recent subscribers to network programming whose
service has been (or soon would have been) terminated and
allows them to continue to be eligible for distant signal
services. The subscribers affected are those predicted by the
current version of the ILLR model to receive a signal of less
than Grade A intensity from any network station of the relevant
network defined in section 73.683(a) of Commission regulations
(47 C.F.R. 73.683(a)) as in effect January 1, 1999. As the
statutory language reflects, recent court orders and
settlements between the satellite and broadcasting industries
have required (or will in the near future require) significant
numbers of terminations of network stations to ineligible
subscribers in this category. Although the conferees strongly
condemn lawbreaking by satellite carriers, and intend for
satellite carriers to be subject to all other available legal
remedies for any infringements in which the carriers have
engaged, the conferees have concluded that the public interest
will be served by the grandfathering of this limited category
of subscribers whose service would otherwise be terminated.
      The decision by the conferees to direct this limited
grandfathering should not be understood as condoning unlawful
conduct by satellite carriers, but rather reflects the concern
of the conference for those subscribers who would otherwise be
punished for the actions of the satellite carriers. Note that
in the previous 18 months, court decisions have required the
termination of some distant network signals to some
subscribers. However, the Conferees are aware that in some
cases satellite carriers terminated distant network service
that was not subject to the original lawsuit. The Conferees
intend that affected subscribers remain eligible for such
service.
      The words ``shall remain eligible'' in section 119(e)
refer to eligibility to receive stations affiliated with the
same network from the same satellite carrier through use of the
same transmission technology at the same location; in other
words, grandfathered status is not transferable to a different
carrier or a different type of dish or at a new address. The
provisions of new section 119(e) are incorporated by reference
in the definition of ``unserved household'' as new section
119(d)(10)(C).
      Section 1005(d) of this Act creates a new section
119(a)(11), which contains provisions governing delivery of
network stations to recreational vehicles and commercial
trucks. This provision is, in turn, incorporated in the
definition of ``unserved household'' in new section
119(d)(10)(D). The purpose of these amendments is to allow the
operators of recreational vehicles and commercial trucks to use
satellite dishes permanently attached to those vehicles to
receive, on television sets located inside those vehicles,
distant network signals pursuant to section 119. To prevent
abuse of this provision, the exception for recreational
vehicles and commercial trucks is limited to persons who have
strictly complied with the documentation requirements set forth
in section 119(a)(11). Among other things, the exception will
only become available as to a particular recreational vehicle
or commercial truck after the satellite carrier has provided
all affected networks with all documentation set forth in
section 119(a). The exception will apply only for reception in
that particular recreational vehicle or truck, and does not
authorize any delivery of network stations to any fixed
dwelling.
      Section 1005(e) of this Act adds a new proviso to the
definition of ``satellite carrier'' to exclude from that
definition the provision of any ``digital online communications
service.'' As the Copyright Office concluded in its 1997 Review
of the Copyright Licensing Regimes Covering Retransmission of
Broadcast Signals, no existing statutory license (whether in
section 111, section 119, or otherwise) authorizes
retransmission of television broadcast signals via the Internet
or any other online service. The extension of any statutory
license for television programming to online transmissions
would raise profound policy considerations, including, most
notably, the apparent impossibility of limiting such
transmissions to ``unserved households.'' In any event, the
committee's intent is that, neither section 111, section 119,
nor section 122 creates any authorization for third parties to
disseminate television programming via online delivery of any
kind, and the amendment to the definition of ``satellite
carrier'' simply confirms existing law on that point.
Sec. 1006. Public Broadcasting Service satellite feed
      The conference agreement follows the Senate bill with an
amendment that applies the network copyright royalty rate to
the Public Broadcasting Service the satellite feed. The
conference agreement grants satellite carriers a section 119
compulsory license to retransmit a national satellite feed
distributed and designated by PBS. The license would apply to
educational and informational programming to which PBS
currently holds broadcast rights. The license, which would
extend to all households in the United States, would sunset on
January 1, 2002, the date when local-to-local must-carry
obligations become effective. Under the conference agreement,
PBS will designate the national satellite feed for purposes of
this section.
Sec. 1007. Application of Federal Communications Commission regulations
      The section 119 license is amended to clarify that
satellite carriers must comply with all rules, regulations, and
authorizations of the Federal Communications Commission in
order to obtain the benefits of the section 119 license. As
provided in the House bill, this would include any programming
exclusivity provisions or carriage requirements that the
Commission may adopt. Violations of such rules, regulations or
authorizations would render a carrier ineligible for the
copyright statutory license with respect to that
retransmission.
Sec. 1008. Rules for satellite carriers retransmitting television
        broadcast signals
      The Senate agrees to the House bill provisions regarding
carriage of television broadcast signals, with certain
amendments, as discussed below. Section 108 creates new
sections 338 and 339 of theCommunications Act of 1934. Section
338 addresses carriage of local television signals, while section 339
addresses distant television signals.
      New section 338 requires satellite carriers, by January
1, 2002, to carry upon request all local broadcast stations'
signals in local markets in which the satellite carriers carry
at least one signal pursuant to section 122 of title 17, United
States Code. The conference report added the cross-reference to
section 122 to the House provision to indicate the relationship
between the benefits of the statutory license and the carriage
requirements imposed by this Act. Thus, the conference report
provides that, as of January 1, 2002, royalty-free copyright
licenses for satellite carriers to retransmit broadcast signals
to viewers in the broadcasters' service areas will be available
only on a market-by-market basis.
      The procedural provisions applicable to section 338
(concerning costs, avoidance of duplication, channel
positioning, compensation for carriage, and complaints by
broadcast stations) are generally parallel to those applicable
to cable systems. Within one year after enactment, the Federal
Communications Commission is to issue implementing regulations
which are to impose obligations comparable to those imposed on
cable systems under paragraphs (3) and (4) of section 614(b)
and paragraphs (1) and (2) of section 615(g), such as the
requirement to carry a station's entire signal without
additions or deletions. The obligation to carry local stations
on contiguous channels is illustrative of the general
requirement to ensure that satellite carriers position local
stations in a way that is convenient and practically accessible
for consumers. By directing the FCC to promulgate these must-
carry rules, the conferees do not take any position regarding
the application of must-carry rules to carriage of digital
television signals by either cable or satellite systems.
      To make use of the local license, satellite carriers must
provide the local broadcast station signal as part of their
satellite service, in a manner consistent with paragraphs (b),
(c), (d), and (e), FCC regulations, and retransmission consent
requirements. Until January 1, 2002, satellite carriers are
granted a royalty-free copyright license to retransmit
broadcast signals on a station-by-station basis, consistent
with retransmission consent requirements. The transition period
is intended to provide the satellite industry with a
transitional period to begin providing local-into-local
satellite service to communities throughout the country.
      The conferees believe that the must-carry provisions of
this Act neither implicate nor violate the First Amendment.
Rather than requiring carriage of stations in the manner of
cable's mandated duty, this Act allows a satellite carrier to
choose whether to incur the must-carry obligation in a
particular market in exchange for the benefits of the local
statutory license. It does not deprive any programmers of
potential access to carriage by satellite carriers. Satellite
carriers remain free to carry any programming for which they
are able to acquire the property rights. The provisions of this
Act allow carriers an easier and more inexpensive way to obtain
the right to use the property of copyright holders when they
retransmit signals from all of a market's broadcast stations to
subscribers in that market. The choice whether to retransmit
those signals is made by carriers, not by the Congress. The
proposed licenses are a matter of legislative grace, in the
nature of subsidies to satellite carriers, and reviewable under
the rational basis standard.\1\
---------------------------------------------------------------------------
    \1\ See Rust v. Sullivan, 500 U.S. 173 (1991) (grants); Indopco,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992) (tax benefits). The First
Amendment requires only that Congress not aim at ``the suppression of
dangerous ideas.'' NEA v. Finley, 118 S. Ct. 2168, 2178-79 (1998).
---------------------------------------------------------------------------
      In addition, the conferees are confident that the
proposed license provisions would pass constitutional muster
even if subjected to the O'Brien standard applied to the cable
must-carry requirement.\2\ The proposed provisions are intended
to preserve free television for those not served by satellite
or cable systems and to promote widespread dissemination of
information from a multiplicity of sources. The Supreme Court
has found both to be substantial interests, unrelated to the
suppression of free expression.\3\ Providing the proposed
license on a market-by-market basis furthers both goals by
preventing satellite carriers from choosing to carry only
certain stations and effectively preventing many other local
broadcasters from reaching potential viewers in their service
areas. The Conference Committee is concerned that, absent must-
carry obligations, satellite carriers would carry the major
network affiliates and few other signals. Non-carried stations
would face the same loss of viewership Congress previously
found with respect to cable noncarriage.\4\
---------------------------------------------------------------------------
    \2\ See United States v. O'Brien, 391 U.S. 367 (1968).
    \3\ See Turner Broadcasting Sys., Inc. v. FCC, 512 U.S. 622, 663
(1994).
    \4\ See, e.g., H.R. Rep. No. 102-628, p. 51 (1992); S. Rep. No.
102-92, p. 62 (1991); see also Feb. 24 Hearing (Al DeVaney).
---------------------------------------------------------------------------
      The proposed licenses place satellite carrier in a
comparable position to cable systems, competing for the same
customers. Applying a must-carry rule in markets which
satellite carriers choose to serve benefits consumers and
enhances competition with cable by allowing consumers the same
range of choice in local programming they receive through cable
service. The conferees expect that, by January 1, 2002,
satellite carriers' market share will have increased and that
the Congress' interest in maintaining free over-the-air
television will be undermined if local broadcasters are
prevented from reaching viewers by either cable or satellite
distribution systems. The Congress' preference for must-carry
obligations has already been proven effective, as attested by
the appearance of several emerging networks, which often serve
underserved market segments. There are no narrower alternatives
that would achieve the Congress' goals. Although the conferees
expect that subscribers who receive no broadcast signals at all
from their satellite service may install antennas or subscribe
to cable service in addition to satellite service, the
Conference Committee is less sanguine that subscribers who
receive network signals and hundreds of other programming
choices from their satellite carrier will undertake such
trouble and expense to obtain over-the-air signals from
independent broadcast stations. National feeds would also be
counterproductive because they siphon potential viewers from
local over-the-air affiliates. In sum, the Conference Committee
finds that trading the benefits of the copyright license for
the must carry requirement is a fair and reasonable way of
helping viewers have access to all local programming while
benefitting satellite carriers and their customers.
      Section 338(c) contains a limited exception to the
general must-carry requirements, stating that a satellite
carrier need not carry two local affiliates of the same network
that substantially duplicate each others' programming, unless
the duplicating stations are licensed to communities in
different states. The latter provisions address unique and
limited cases, including WMUR (Manchester, New Hampshire)/WCVB
(Boston, Massachusetts) and WPTZ (Plattsburg, New York)/WNNE
(White River Junction,Vermont), in which mandatory carriage of
both duplicating local stations upon request assures that satellite
subscribers will not be precluded from receiving the network affiliate
that is licensed to the state in which they reside.
      Because of unique technical challenges on satellite
technology and constraints on the use of satellite spectrum,
satellite carriers may initially be limited in their ability to
deliver must carry signals into multiple markets. New
compression technologies, such as video streaming, may help
overcome these barriers however, and, if deployed, could enable
satellite carriers to deliver must-carry signals into many more
markets than they could otherwise. Accordingly, the conferees
urge the FCC, pursuant to its obligations under section 338, or
in any other related proceedings, to not prohibit satellite
carriers from using reasonable compression, reformatting, or
similar technologies to meet their carriage obligations,
consistent with existing authority.
      New section 339 of the Communications Act contains
provisions concerning carriage of distant television stations
by satellite carriers. Section 339(a)(1) limits satellite
carriers to providing a subscriber with no more than two
stations affiliated with a given television network from
outside the local market. In addition, a satellite carrier that
provides two distant signals to eligible households may also
provide the local television signals pursuant to section 122 of
title 17 if the subscriber offers local-to-local service in the
subscriber's market. This provision furthers the congressional
policy of localism and diversity of broadcast programming,
which provides locally-relevant news, weather, and information,
but also allows consumers in unserved households to enjoy
network programming obtained via distant signals. Under new
section 339(a)(2), which is based on the Senate amendment, the
knowing and willful provision of distant television signals in
violation of these restrictions is subject to a forfeiture
penalty under section 503 of the Communications Act of $50,000
per violation or for each day of a continuing violation.
      New section 339(b)(1)(A) requires the Commission to
commence within 45 days of enactment, and complete within one
year after the date of enactment, a rulemaking to develop
regulations to apply network nonduplication, syndicated
exclusivity and sports blackout rules to the transmission of
nationally distributed superstations by satellite carriers. New
section 339(b)(1)(B) requires the Commission to promulgate
regulations on the same schedule with regard to the application
of sports blackout rules to network stations. These regulations
under subparagraph (B) are to be imposed ``to the extent
technically feasible and not economically prohibitive'' with
respect to the affected parties. The burden of showing that
conforming to rules similar to cable would be ``economically
prohibitive'' is a heavy one. It would entail a very serious
economic threat to the health of the carrier. Without that
showing, the rules should be as similar as possible to that
applicable to cable services.
      Section 339(c) of the Communications Act of 1934
addresses the three distinct areas discussed by the Commission
in its Report & Order in Docket No. 98-201: (i) the definition
of ``Grade B intensity,'' which is the substantive standard for
determining eligibility to receive distant network stations by
satellite, (ii) prediction of whether a signal of Grade B
intensity from a particular station is present at a particular
household, and (iii) measurement of whether a signal of Grade B
intensity from a particular station is present at a particular
household. Section 339(c) addresses each of these topics.
      New section 339(c) addresses evaluation and possible
recommendations for modification by the Commission of the
definition of Grade B intensity, which is incorporated into the
definition of ``unserved household'' in section 119 of the
Copyright Act. Under section 339(c), the Commission is to
complete a rulemaking within 1 year after enactment to
evaluate, and if appropriate to recommend modifications to the
Grade B intensity standard for analog signals set forth in 47
C.F.R. Sec. 73.683(a), for purposes of determining eligibility
for distant signal satellite service. In addition, the
Commission is to recommend a signal standard for digital
signals to prepare Congress to update the statutory license for
digital television broadcasting. The Committee intends that
this report would reflect the FCC's best recommendations in
light of all relevant considerations, and be based on whatever
factors and information the Commission deems relevant to
determining whether the signal intensity standard should be
modified and in what way. As discussed above, the two-part
process allows the Commission to recommend modifications
leaving to Congress the decision-making power on modifications
of the copyright licenses at issue.
      Section 339(c)(3) addresses requests to local television
stations by consumers for waivers of the eligibility
requirements under section 119 of title 17, United States Code.
If a satellite carrier is barred from delivering distant
network signals to a particular customer because the ILLR model
predicts the customer to be served by one or more television
stations affiliated with the relevant network, the consumer may
submit to those stations, through his or her satellite carrier,
a written request for a waiver. The statutory phrase ``station
asserting that the retransmission is prohibited'' refers to a
station that is predicted by the ILLR model to serve the
household. Each such station must accept or reject the waiver
request within 30 days after receiving the request from the
satellite carrier. If a relevant network station grants the
requested waiver, or fails to act on the waiver within 30 days,
the viewer shall be deemed unserved with respect to the local
network station in question.
      Section 339(c)(4) addresses the ILLR predictive model
developed by the Commission in Docket No. 98-201. The provision
requires the Commission to attempt to increase its accuracy
further by taking into account not only terrain, as the ILLR
model does now, but also land cover variations such as
buildings and vegetation. If the Commission discovers other
practical ways to improve the accuracy of the ILLR model still
further, it shall implement those methods as well. The linchpin
of whether particular proposed refinements to the ILLR model
result in greater accuracy is whether the revised model's
predictions are closer to the results of actual field testing
in terms of predicting whether households are served by a local
affiliate of the relevant network.
      The ILLR model of predicting subscribers' eligibility
will be of particular use in rural areas. To make the ILLR more
accurate and more useful to this group of Americans, the
Conference Committee believes the Commission should be
particularly careful to ensure that the ILLR is accurate in
areas that use star routes, postal routes, or other addressing
systems that may not indicate clearly the location of the
actual dwelling of a potential subscriber. The Commission
should to ensure the model accurately predicts the signal
strength at the viewers' actual location.
      New section 339(c)(5) addresses the third area discussed
in the Commission's Report & Order in Docket No. 98-201, namely
signal intensity testing. This provision permits satellite
carriers and broadcasters to carry out signal intensity
measurements, using the procedures set forth by the Commission
in 47 C.F.R. Sec. 73.686(d), to determine whether particular
households are unserved. Unless the parties otherwise agree,
any such tests shall be conducted on a ``loser pays'' basis,
with the network station bearing the costs of tests showing the
household to be unserved, and the satellite carrier bearing the
costs of tests showing the household to be served. If the
satellite carrier and station is unable to agreeon a qualified
individual to perform the test, the Commission is to designate an
independent and neutral entity by rule. The Commission is to promulgate
rules that avoid any undue burdens being imposed on any party.
Sec. 1009. Retransmission consent
      Section 1009 amends the provisions of section 325 of the
Communications Act governing retransmission consent. As
revised, section 325(b)(1) bars multichannel video programming
distributors from retransmitting the signals of television
broadcast stations, or any part thereof, without the express
authority of the originating station. Section 325(b)(2)
contains several exceptions to this general prohibition,
including noncommercial stations, certain superstations, and,
until the end of 2004, retransmission of not more than two
distant signals by satellite carriers to unserved households
outside of the local market of the retransmitted stations, and
(E) for six months to the retransmission of local stations
pursuant to the statutory license in section 122 of the title
17.
      Section 1009 also amends section 325(b) of the
Communications Act to require the Commission to issue
regulations concerning the exercise by television broadcast
stations of the right to grant retransmission consent. The
regulations would, until January 1, 2006, prohibit a television
broadcast station from entering into an exclusive
retransmission consent agreement with a multichannel video
programming distributor or refusing to negotiate in good faith
regarding retransmission consent agreements. A television
station may generally offer different retransmission consent
terms or conditions, including price terms, to different
distributors. The FCC may determine that such different terms
represent a failure to negotiate in good faith only if they are
not based on competitive marketplace considerations.
      Section 1009 of the bill adds a new subsection (e) to
section 325 of the Communications Act. New subsection 325(e)
creates a set of expedited enforcement procedures for the
alleged retransmission of a television broadcast station in its
own local market without the station's consent. The purpose of
these expedited procedures is to ensure that delays in
obtaining relief from violations do not make the right to
retransmission consent an empty one. The new provision requires
45-day processing of local-to-local retransmission consent
complaints at the Commission, followed by expedited enforcement
of any Commission orders in the United States District Court
for the Eastern District of Virginia. In addition, a television
broadcast station that has been retransmitted in its local
market without its consent will be entitled to statutory
damages of $25,000 per violation in an action in federal
district court. Such damages will be awarded only if the
television broadcast station agrees to contribute any statutory
damage award above $1,000 to the United States Treasury for
public purposes. The expedited enforcement provision contains a
sunset which prevents the filing of any complaint with the
Commission or any action in federal district court to enforce
any Commission order under this section after December 31,
2001. The conferees believe that these procedural provisions,
which provide ample due process protections while ensuring
speedy enforcement, will ensure that retransmission consent
will be respected by all parties and promote a smoothly
functioning marketplace.
Sec. 1010. Severability
      Section 1010 of the Act provides that if any provision of
section 325(b) of the Communications Act as amended by this Act
is declared unconstitutional, the remaining provisions of that
section will stand.
Sec. 1011. Technical amendments
      Section 1011 of this Act makes technical and conforming
amendments to sections 101, 111, 119, 501, and 510 of the
Copyright Act. Section 1011(e) makes a technical and clarifying
change to the definition of a ``work made for hire'' in section
101 of the Copyright Act. Sound recordings have been registered
in the Copyright Office as works made for hire since being
protected in their own right. This clarifying amendment shall
not be deemed to imply that any sound recording or any other
work would not otherwise qualify as a work made for hire in the
absence of the amendment made by this subsection.
Sec. 1012. Effective dates
      Under section 1012 of this Act, sections 1001, 1003,
1005, and 1007 through 1011 shall be effective on the date of
enactment. The amendments made by sections 1002, 1004, and 1006
shall be effective as of July 1, 1999.

                TITLE II--RURAL LOCAL TELEVISION SIGNALS

      The Conference Committee agrees that it is very important
that rural Americans receive the benefits of this Act along
with urban residents. There are concerns that without this
title, many rural Americans would not receive local broadcast
signals.
      Conferees were advised that major satellite carriers
intended to provide local broadcast TV stations via satellite
only in the largest markets rather than in more rural areas.
These satellite providers have stated that is it not
economically feasible to provide such service in rural areas at
the present time. Many rural areas of the United States are not
served by broadcast television or cable service.
      Title II of this Act authorizes the Department of
Agriculture, in consultation with OMB, the Secretary of
Treasury, and the FCC, and with the certification of the
National Telecommunications and Information Administration, to
guarantee loans not exceeding $1.25 billion for providing local
broadcast TV signals in rural areas. In addition, providers can
offer other services, such as data service, should excess
capacity permit. No single loan can exceed $625 million to any
one provider and the rest of the loans may not exceed $100
million face value.
      No loan shall be guaranteed unless: 1) approved in
advance by an appropriations Act; 2) USDA consults with OMB,
NTIA, and with a public accounting firm; 3) USDA has security
that is ``adequate'' to protect the government's interests; 4)
USDA can reasonably expect repayment ``using an appropriate
combination of credit risk premiums and collateral offered by
the applicant to protect the Federal Government;'' and, 5) the
borrower has ``insurance sufficient to protect the interests of
the Federal Government.''
      The provisions are technology neutral in that the
borrower can use any delivery mechanism to provide local TV
that otherwise meets the requirements of this title.
      The language of Title II is similar to the Railroad
Rehabilitation and Improvement Financing Act which provided up
to $3.5 billion in federal loan guarantees to help shortline
railroads serve rural America. The underwriting criteria for
the USDA loan guarantee--such as cash flow levels and
appropriate collateral--will be developed in consultation with
OMB and a public accounting firm and are modeled after the
Railroad Act language.
Sec. 2001. Short title
      This title may be referred to as the ``Rural Local
Broadcast Signal Act.''
Sec. 2002. Loan guarantees
      Subject to appropriations Acts, the Secretary of
Agriculture is authorized to establish a program of loan
guarantees to fund projects which finance the acquisition,
improvement, enhancement, deployment, launch, or rehabilitation
of the means by which local television broadcast signals will
be delivered to areas not receiving such signals over
commercial for-profit direct-to-home satellite distribution
systems.
      No single guaranteed loan can exceed $625 million to any
one provider of local TV stations and none of the remaining
loans may exceed $100 million in face value. Strict
requirements for insurance, collateral, assurances of
repayments to the Secretary, perfected interests of the
Secretary, liens on assets, and strong security provisions are
set forth in the law. All of these provisions are designed to
protect the interests of the taxpayers.
      In developing underwriting standards relating to the
issuance of loan guarantees, appropriate collateral and cash
flow levels, the Secretary is required to consult with OMB and
with a public accounting firm. In addition, the Secretary may
accept on behalf of an applicant a commitment from a non-
Federal source to fund in whole or in part the credit risk
premiums with respect to the loan.
Sec. 2003. Administration of loan guarantees
      In deciding which loan guarantees to approve, the
Secretary, to the maximum extent practicable shall give
priority to projects which serve the most unserved and
underserved rural markets, taking into account such factors as
feasibility, population, terrain, prevailing market conditions,
and projected costs to consumers. These applicants for priority
projects shall agree to performance schedules which if missed
make the borrower potentially subject to stiff penalties.
Detailed subrogation, disposition of property, default, breach
of agreement, attachment, and audit provisions are designed to
protect the interests of the taxpayers.
      The Secretary may require an affiliate of the borrower to
indemnify the Government for any losses it incurs as a result
of a judgment against the borrower, and breach of the
borrower's obligations, or any violation of the provisions of
the Act.
      The sunset clause provides that the Secretary may not
approve a loan guarantee under this title after December 31,
2006.
Sec. 2004. Retransmission of local television broadcast stations
      Borrowers shall have the same copyright authority and
other rights to transmit the signals of local television
broadcast stations as provided in this title and shall carry
the signals of local stations without charge.
Sec. 2005. Local television service in unserved and underserved markets
      To encourage the FCC to approve needed licenses (or other
authorizations to use spectrum) to provide local TV service in
rural areas, the Commission is required to make determinations
regarding needed licenses within one year of enactment.
      However, the FCC shall ensure that no license or
authorization provided under this section will cause ``harmful
interference'' to the primary users of the spectrum or to
public safety use. Subparagraph (2), states that the Commission
shall not license under subsection (a) any facility that causes
harmful interference to existing primary users of spectrum or
to public safety use. The Commission typically categorizes a
licensed service as primary or secondary. Under Commission
rules, a secondary service cannot be authorized to operate in
the same band as a primary user of that band unless the
proposed secondary user conclusively demonstrates that the
proposed secondary use will not cause harmful interference to
the primary service. The Commission is to define ``harmful
interference'' pursuant to the definition at 47 C.F.R. section
2.1 and in accordance with Commission rules and policies.
      For purposes of section 2005(b)(3) the FCC may consider a
compression, reformatting or other technology to be
unreasonable if the technology is incompatible with other
applicable FCC regulation or policy under the Communications
Act of 1934, as amended.
      The Commission also may not restrict any entity granted a
license or other authorization under this section, except as
otherwise specified, from using any reasonable compression,
reformatting, or other technology.
Sec. 2006. Definitions
      Section 2006 defines terms used in the title such as
``loan guarantees,'' ``discount rate,'' ``loan guarantee,''
``modification,'' and ``borrower.''

              TITLE III--TRADEMARK CYBERPIRACY PREVENTION

Sec. 3001. Short title; references
      This section provides that the Act may be cited as the
``Anticybersquatting Consumer Protection Act'' and that any
references within the bill to the Trademark Act of 1946 shall
be a reference to 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 (15 U.S.C. 1051
et seq.), also commonly referred to as the Lanham Act.
Sec. 3002. Cyberpiracy prevention
            Subsection (a). In general
      This subsection amends the Trademark Act to provide an
explicit trademark remedy for cybersquatting under a new
section 43(d). Under paragraph (1)(A) of the new section 43(d),
actionable conduct would include the registration, trafficking
in, or use of a domain name that is identical or confusingly
similar to, or dilutive of, the mark of another, including a
personal name that is protected as a mark under section 43 of
the Lanham Act, provided that the mark was distinctive (i.e.,
enjoyed trademark status) at the time the domain name was
registered, or in the case of trademark dilution, was famous at
the time the domain name was registered. The bill is carefully
and narrowly tailored, however, to extend only to cases where
the plaintiff can demonstrate that the defendant registered,
trafficked in, or used the offending domain name with bad-faith
intent to profit from the goodwill of a mark belonging to
someone else. Thus, the bill does not extend to innocent domain
name registrations by those who are unaware of another's use of
the name, or even to someone who is aware of the trademark
status of the name but registers a domain name containing the
mark for any reason other than with bad faith intent to profit
from the goodwill associated with that mark.
      The phrase ``including a personal name which is protected
as a mark under this section'' addresses situations in which a
person's name is protected under section 43 of the Lanham Act
and is used as a domain name. The Lanham Act prohibits the use
of false designations of origin and false or misleading
representations. Protection under section 43 of the Lanham Act
has been applied by the courts to personal names which function
as marks, such as service marks, when such marks are infringed.
Infringement may occur when the endorsement of products or
services in interstate commerce is falsely implied through the
use of a personal name, or otherwise, without regard to the
goods or services of the parties. This protection also applies
to domain names on the Internet, where falsely implied
endorsements and other types of infringement can cause greater
harm to the owner and confusion to a consumer in a shorter
amount of time than is the case with traditional media. The
protection offered by section 43 to a personal name which
functions as a mark, as applied to domain names, is subject to
the same fair use and first amendment protections as have been
applied traditionally under trademark law, and is not intended
to expand or limit any rights to publicity recognized by States
under State law.
      Paragraph (1)(B)(i) of the new section 43(d) sets forth a
number of nonexclusive, nonexhaustive factors to assist a court
in determining whether the required bad-faith element exists in
any given case. These factors are designed to balance the
property interests of trademark owners with the legitimate
interests of Internet users and others who seek to make lawful
uses of others' marks, including for purposes such as
comparative advertising, comment, criticism, parody, news
reporting, fair use, etc. The bill suggests a total of nine
factors a court may wish to consider. The first four suggest
circumstances that may tend to indicate an absence of bad-faith
intent to profit from the goodwill of a mark, and the next four
suggest circumstances that may tend to indicate that such bad-
faith intent exists. The last factor may suggest either bad-
faith or an absence thereof depending on the circumstances.
      First, under paragraph (1)(B)(i)(I), a court may consider
whether the domain name registrant has trademark or any other
intellectual property rights in the name. This factor
recognizes, as does trademark law in general, that there may be
concurring uses of the same name that are noninfringing, such
as the use of the ``Delta'' mark for both air travel and sink
faucets. Similarly, the registration of the domain name
``deltaforce.com'' by a movie studio would not tend to indicate
a bad faith intent on the part of the registrant to trade on
Delta Airlines' or Delta Faucets' trademarks.
      Second, under paragraph (1)(B)(i)(II), a court may
consider the extent to which the domain name is the same as the
registrant's own legal name or a nickname by which that person
is commonly identified. This factor recognizes, again as does
the concept of fair use in trademark law, that a person should
be able to be identified by their own name, whether in their
business or on a web site. Similarly, a person may bear a
legitimate nickname that is identical or similar to a well-
known trademark, such as in the well-publicized case of the
parents who registered the domain name ``pokey.org'' for their
young son who goes by that name, and these individuals should
not be deterred by this bill from using their name online. This
factor is not intended to suggest that domain name registrants
may evade the application of this act by merely adopting Exxon,
Ford, or other well-known marks as their nicknames. It merely
provides a court with the appropriate discretion to determine
whether or not the fact that a person bears a nickname similar
to a mark at issue is an indication of an absence of bad-faith
on the part of the registrant.
      Third, under paragraph (1)(B)(i)(III), a court may
consider the domain name registrant's prior use, if any, of the
domain name in connection with the bona fide offering of goods
or services. Again, this factor recognizes that the legitimate
use of the domain name in online commerce may be a good
indicator of the intent of the person registering that name.
Where the person has used the domain name in commerce without
creating a likelihood of confusion as to the source or origin
of the goods or services and has not otherwise attempted to use
the name in order to profit from the goodwill of the trademark
owner's name, a court may look to this as an indication of the
absence of bad faith on the part of the registrant.
      Fourth, under paragraph (1)(B)(i)(IV), a court may
consider the person's bona fide noncommercial or fair use of
the mark in a web site that is accessible under the domain name
at issue. This factor is intended to balance the interests of
trademark owners with the interests of those who would make
lawful noncommercial or fair uses of others' marks online, such
as in comparative advertising, comment, criticism, parody, news
reporting, etc. Under the bill, the mere fact that the domain
name is used for purposes of comparative advertising, comment,
criticism, parody, news reporting, etc., would not alone
establish a lack of bad-faith intent. The fact that a person
uses a mark in a site in such a lawful manner may be an
appropriate indication that the person's registration or use of
the domain name lacked the required element of bad-faith. This
factor is not intended to create a loophole that otherwise
might swallow the bill, however, by allowing a domain name
registrant to evade application of the Act by merely putting up
a noninfringing site under an infringing domain name. For
example, in the well known case of Panavision Int'l v. Toeppen,
141 F.3d 1316 (9th Cir. 1998), a well known cybersquatter
hadregistered a host of domain names mirroring famous trademarks,
including names for Panavision, Delta Airlines, Neiman Marcus, Eddie
Bauer, Lufthansa, and more than 100 other marks, and had attempted to
sell them to the mark owners for amounts in the range of $10,000 to
$15,000 each. His use of the ``panavision.com'' and ``panaflex.com''
domain names was seemingly more innocuous, however, as they served as
addresses for sites that merely displayed pictures of Pana Illinois and
the word ``Hello'' respectively. This bill would not allow a person to
evade the holding of that case--which found that Mr. Toeppen had made a
commercial use of the Panavision marks and that such uses were, in
fact, diluting under the Federal Trademark Dilution Act--merely by
posting noninfringing uses of the trademark on a site accessible under
the offending domain name, as Mr. Toeppen did. Similarly, the bill does
not affect existing trademark law to the extent it has addressed the
interplay between First Amendment protections and the rights of
trademark owners. Rather, the bill gives courts the flexibility to
weigh appropriate factors in determining whether the name was
registered or used in bad faith, and it recognizes that one such factor
may be the use the domain name registrant makes of the mark.
      Fifth, under paragraph (1)(B)(i)(V), a court may consider
whether, in registering or using the domain name, the
registrant intended to divert consumers away from the trademark
owner's website to a website that could harm the goodwill of
the mark, either for purposes of 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. This factor recognizes
that one of the main reasons cybersquatters use other people's
trademarks is to divert Internet users to their own sites by
creating confusion as to the source, sponsorship, affiliation,
or endorsement of the site. This is done for a number of
reasons, including to pass off inferior goods under the name of
a well-known mark holder, to defraud consumers into providing
personally identifiable information, such as credit card
numbers, to attract ``eyeballs'' to sites that price online
advertising according to the number of ``hits'' the site
receives, or even just to harm the value of the mark. Under
this provision, a court may give appropriate weight to evidence
that a domain name registrant intended to confuse or deceive
the public in this manner when making a determination of bad-
faith intent.
      Sixth, under paragraph (1)(B)(i)(VI), a court may
consider a domain name registrant's offer to transfer, sell, or
otherwise assign the domain name to the mark owner or any third
party for financial gain, where the registrant has not used,
and did not have any intent to use, the domain name in the bona
fide offering of any goods or services. A court may also
consider a person's prior conduct indicating a pattern of such
conduct. This factor is consistent with the court cases, like
the Panavision case mentioned above, where courts have found a
defendant's offer to sell the domain name to the legitimate
mark owner as being indicative of the defendant's intent to
trade on the value of a trademark owner's marks by engaging in
the business of registering those marks and selling them to the
rightful trademark owners. It does not suggest that a court
should consider the mere offer to sell a domain name to a mark
owner or the failure to use a name in the bona fide offering of
goods or services as sufficient to indicate bad faith. Indeed,
there are cases in which a person registers a name in
anticipation of a business venture that simply never pans out.
And someone who has a legitimate registration of a domain name
that mirrors someone else's domain name, such as a trademark
owner that is a lawful concurrent user of that name with
another trademark owner, may, in fact, wish to sell that name
to the other trademark owner. This bill does not imply that
these facts are an indication of bad-faith. It merely provides
a court with the necessary discretion to recognize the evidence
of bad-faith when it is present. In practice, the offer to sell
domain names for exorbitant amounts to the rightful mark owner
has been one of the most common threads in abusive domain name
registrations. Finally, by using the financial gain standard,
this paragraph allows a court to examine the motives of the
seller.
      Seventh, under paragraph (1)(B)(i)(VII), a court may
consider the registrant's intentional provision of material and
misleading false contact information in an application for the
domain name registration, the person's intentional failure to
maintain accurate contact information, and the person's prior
conduct indicating a pattern of such conduct. Falsification of
contact information with the intent to evade identification and
service of process by trademark owners is also a common thread
in cases of cybersquatting. This factor recognizes that fact,
while still recognizing that there may be circumstances in
which the provision of false information may be due to other
factors, such as mistake or, as some have suggested in the case
of political dissidents, for purposes of anonymity. This bill
balances those factors by limiting consideration to the
person's contact information, and even then requiring that the
provision of false information be material and misleading. As
with the other factors, this factor is nonexclusive and a court
is called upon to make a determination based on the facts
presented whether or not the provision of false information
does, in fact, indicate bad-faith.
      Eight, under paragraph (1)(B)(i)(VIII), a court may
consider the domain name registrant's acquisition of multiple
domain names which the person knows are identical or
confusingly similar to, or dilutive of, others' marks. This
factor recognizes the increasingly common cybersquatting
practice known as ``warehousing'', in which a cybersquatter
registers multiple domain names--sometimes hundreds, even
thousands--that mirror the trademarks of others. By sitting on
these marks and not making the first move to offer to sell them
to the mark owner, these cybersquatters have been largely
successful in evading the case law developed under the Federal
Trademark Dilution Act. This bill does not suggest that the
mere registration of multiple domain names is an indication of
bad faith, but it allows a court to weigh the fact that a
person has registered multiple domain names that infringe or
dilute the trademarks of others as part of its consideration of
whether the requisite bad-faith intent exists.
      Lastly, under paragraph (1)(B)(i)(IX), a court may
consider 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 of
the Trademark Act of 1946. The more distinctive or famous a
mark has become, the more likely the owner of that mark is
deserving of the relief available under this act. At the same
time, the fact that a mark is not well-known may also suggest a
lack of bad-faith.
      Paragraph (1)(B)(ii) underscores the bad-faith
requirement by making clear that bad-faith 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.
      Paragraph (1)(C) makes clear that in any civil action
brought under the new section 43(d), a court may order the
forfeiture, cancellation, or transfer of a domain name to the
owner of the mark.
      Paragraph (1)(D) clarifies that a prohibited ``use'' of a
domain name under the bill applies only to a use by the domain
name registrant or that registrant's authorized licensee.
      Paragraph (1)(E) defines what means to ``traffic in'' a
domain name. Under this Act, ``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.
      Paragraph (2)(A) provides for in rem jurisdiction, which
allows a mark owner to seek the forfeiture, cancellation, or
transfer of an infringing domain name by filing an in rem
action against the name itself, where the mark owner has
satisfied the court that it has exercised due diligence in
trying to locate the owner of the domain name but is unable to
do so, or where the mark owner is otherwise unable to obtain in
personam jurisdiction over such person. As indicated above, a
significant problem faced by trademark owners in the fight
against cybersquatting is the fact that many cybersquatters
register domain names under aliases or otherwise provide false
information in their registration applications in order to
avoid identification and service of process by the mark owner.
This bill will alleviate this difficulty, while protecting the
notions of fair play and substantial justice, by enabling a
mark owner to seek an injunction against the infringing
property in those cases where, after due diligence, a mark
owner is unable to proceed against the domain name registrant
because the registrant has provided false contact information
and is otherwise not to be found, or where a court is unable to
assert personal jurisdiction over such person, provided the
mark owner can show that the domain name itself violates
substantive federal trademark law (i.e., that the domain name
violates the rights of the registrant of a mark registered in
the Patent and Trademark Office, or section 43 (a) or (c) of
the Trademark Act). Under the bill, a mark owner will be deemed
to have exercised due diligence in trying to find a defendant
if the mark owner sends notice of the alleged violation and
intent to proceed to the domain name registrant at the postal
and e-mail address provided by the registrant to the registrar
and publishes notice of the action as the court may direct
promptly after filing the action. Such acts are deemed to
constitute service of process by paragraph (2)(B).
      The concept of in rem jurisdiction has been with us since
well before the Supreme Court's landmark decision in Pennoyer
v. Neff, 95 U.S. 714 (1877). Although more recent decisions
have called into question the viability of quasi in rem
``attachment'' jurisdiction, see Shaffer v. Heitner, 433 U.S.
186 (1977), the Court has expressly acknowledged the propriety
of true in rem proceedings (or even type I quasi in rem
proceedings \5\) where ``claims to the property itself are the
source of the underlying controversy between the plaintiff and
the defendant.'' Id. at 207-08. The Act clarifies the
availability of in rem jurisdiction in appropriate cases
involving claims by trademark holders against cyberpirates. In
so doing, the Act reinforces the view that in rem jurisdiction
has continuing constitutional vitality, see R.M.S. Titanic,
Inc. v. Haver, 171 F.3d 943, 957-58 (4th Cir. 1999) (``In rem
actions only require that a party seeking an interest in a res
bring the res into the custody of the court and provide
reasonable, public notice of its intention to enable others to
appear in the action to claim an interest in the res.'');
Chapman v. Vande Bunte, 604 F. Supp. 714, 716-17 (E.D. N.C.
1985) (``In a true in rem proceeding, in order to subject
property to a judgment in rem, due process requires only that
the property itself have certain minimum contacts with the
territory of the forum.'').
---------------------------------------------------------------------------
    \5\ The Supreme Court has described the ``two types'' of quasi in
rem proceedings: a type I proceeding, in which ``the plaintiff is
seeking to secure a pre-existing claim in the subject property and to
extinguish or establish the nonexistence of similar interests of
particular persons,'' and a type II action, in which ``the plaintiff
seeks to apply what he concedes to be the property of the defendant to
the satisfaction of a claim against him.'' Hanson v. Denckla, 357 U.S.
235, 246 n.12 (1958).
---------------------------------------------------------------------------
      By authorizing in rem jurisdiction, the Act also attempts
to respond to the problems faced by trademark holders in
attempting to effect personal service of process on
cyberpirates. In an effort to avoid being held accountable for
their infringement or dilution of famous trademarks,
cyberpirates often have registered domain names under
fictitious names and addresses or have used offshore addresses
or companies to register domain names. Even when they actually
do receive notice of a trademark holder's claim, cyberpirates
often either refuse to acknowledge demands from a trademark
holder altogether, or simply respond to an initial demand and
then ignore all further efforts by the trademark holder to
secure the cyberpirate's compliance. The in rem provisions of
the Act accordingly contemplate that a trademark holder may
initiate in rem proceedings in cases where domain name
registrants are not subject to personal jurisdiction or cannot
reasonably be found by the trademark holder.
      Paragraph (2)(C) provides that in an in rem proceeding, a
domain name shall be deemed to have its situs in the judicial
district in which (1) the domain name registrar, registry, or
other domain name authority that registered or assigned the
domain name is located, or (2) documents sufficient to
establish control and authority regarding the disposition of
the registration and use of the domain name are deposited with
the court.
      Paragraph (2)(D) limits the relief available in such an
in rem action to an injunction ordering the forfeiture,
cancellation, or transfer of the domain name. Upon receipt of a
written notification of the complaint, the domain name
registrar, registry, or other authority is required to 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 may
not transfer, suspend, or otherwise modify the domain name
during the pendency of the action, except upon order of the
court. Such domain name registrar, registry, or other authority
is immune from injunctive or monetary relief in such an action,
except in the case of bad faith or reckless disregard, which
would include a willful failure to comply with any such court
order.
      Paragraph (3) makes clear that the new civil action
created by this Act and the in rem action established therein,
and any remedies available under such actions, shall be in
addition to any other civil action or remedy otherwise
applicable. This paragraph thus makes clear that the creation
of a new section 43(d) in the Trademark Act does not in any way
limit the application of current provisions of trademark,
unfair competition and false advertising, or dilution law, or
other remedies under counterfeiting or other statutes, to
cybersquatting cases.
      Paragraph (4) makes clear that the in rem jurisdiction
established by the bill is in addition to any other
jurisdiction that otherwise exists, whether in rem or in
personam.
            Subsection (b). Cyberpiracy protection for individuals
      Subsection (b) prohibits the registration of a domain
name that is the name of another living person, or a name that
is substantially and confusingly similar thereto, without such
person's permission, if the registrant's specific intent is to
profit from the domain name by selling it for financial gain to
such person or a third party. While the provision is broad
enough to apply to the registration of full names (e.g.,
johndoe.com), appellations (e.g., doe.com), and variations
thereon (e.g. john-doe.com or jondoe.com), the provision is
still very narrow in that it requires a showing that the
registrant of the domain name registered that name with a
specific intent to profit from the name by selling it to that
person or to a third party for financial gain. This section
authorizes the court to grant injunctive relief, including
ordering the forfeiture or cancellation of the domain name or
the transfer of the domain name to the plaintiff. Although the
subsection does not authorize a court to grant monetary
damages, the court may award costs and attorneys' fees to the
prevailing party in appropriate cases.
      This subsection does not prohibit the registration of a
domain name in good faith by an owner or licensee of a
copyrighted work, such as an audiovisual work, a sound
recording, a book, or other work of authorship, where the
personal name is used in, affiliated with, or related to that
work, where the person's intent in registering the domain is
not to sell the domain name other than in conjunction with the
lawful exploitation of the work, and where such registration is
not prohibited by a contract between the domain name registered
and the named person. This limited exemption recognizes the
First Amendment issues that may arise in such cases and defers
to existing bodies of law that have developed under State and
Federal law to address such uses of personal names in
conjunction with works of expression. Such an exemption is not
intended to provide a loophole for those whose specific intent
is to profit from another's name by selling the domain name to
that person or a third party other than in conjunction with the
bona fide exploitation of a legitimate work of authorship. For
example, the registration of a domain name containing a
personal name by the author of a screenplay that bears the same
name, with the intent to sell the domain name in conjunction
with the sale or license of the screenplay to a production
studio would not be barred by this subsection, although other
provisions of State or Federal law may apply. On the other
hand, the exemption for good faith registrations of domain
names tied to legitimate works of authorship would not exempt a
person who registers a personal name as a domain name with the
intent to sell the domain name by itself, or in conjunction
with a work of authorship (e.g., a copyrighted web page) where
the real object of the sale is the domain name, rather than the
copyrighted work.
      In sum, this subsection is a narrow provision intended to
curtail one form of ``cybersquatting''--the act of registering
someone else's name as a domain name for the purpose of
demanding remuneration from the person in exchange for the
domain name. Neither this section nor any other section in this
bill is intended to create a right of publicity of any kind
with respect to domain names. Nor is it intended to create any
new property rights, intellectual or otherwise, in a domain
name that is the name of a person. This subsection applies
prospectively only, affecting only those domain names
registered on or after the date of enactment of this Act.
Sec. 3003. Damages and remedies
      This section applies traditional trademark remedies,
including injunctive relief, recovery of defendant's profits,
actual damages, and costs, to cybersquatting cases under the
new section 43(d) of the Trademark Act. The bill also amends
section 35 of the Trademark Act to provide for statutory
damages in cybersquatting cases, in an 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
      This section amends section 32(2) of the Trademark Act to
extend the Trademark Act's existing limitations on liability to
the cybersquatting context. This section also creates a new
subparagraph (D) in section 32(2) to encourage domain name
registrars and registries to work with trademark owners to
prevent cybersquatting through a limited exemption from
liability for domain name registrars and registries that
suspend, cancel, or transfer domain names pursuant to a court
order or in the implementation of a reasonable policy
prohibiting cybersquatting. Under this exemption, a registrar,
registry, or other domain name registration authority that
suspends, cancels, or transfers a domain name pursuant to a
court order or a reasonable policy prohibiting cybersquatting
will not be held liable for monetary damages, and will not be
subject to injunctive relief provided that the registrar,
registry, or other registration authority has deposited control
of the domain name with a court in which an action has been
filed regarding the disposition of the domain name, it has not
transferred, suspended, or otherwise modified the domain name
during the pendency of the action, other than in response to a
court order, and it has not willfully failed to comply with any
such court order. Thus, the exemption will allow a domain name
registrar, registry, or other registration authority to avoid
being joined in a civil action regarding the disposition of a
domain name that has been taken down pursuant to a dispute
resolution policy, provided the court has obtained control over
the name from the registrar, registry, or other registration
authority, but such registrar, registry, or other registration
authority would not be immune from suit for injunctive relief
where no such action has been filed or where the registrar,
registry, or other registration authority has transferred,
suspended, or otherwise modified the domain name during the
pendency of the action or wilfully failed to comply with a
court order.
      This section also protects the rights of domain name
registrants against overreaching trademark owners. Under a new
subparagraph (D)(iv) in section 32(2), a trademark owner who
knowingly and materially misrepresents to the domain name
registrar or registry that a domain name is infringing shall be
liable to the domain name registrant for damages resulting from
the suspension, cancellation, or transfer of the domain name.
In addition, the court may grant injunctive relief to the
domain name registrant by ordering the reactivation of the
domain name or the transfer of the domain name back to the
domain name registrant. In creating a new subparagraph (D)(iii)
of section 32(2), this section codifies current case law
limiting the secondary liability of domain name registrars and
registries for the act of registration of a domain name, absent
bad-faith on the part of the registrar and registry.
      Finally, subparagraph (D)(v) provides additional
protections for domain name holders by allowing a domain name
registrant whose name has been suspended, disabled, or
transferred to file a civil action to establish that the
registration or use of the domain name by such registrant is
not a violation of the Lanham Act. In such cases, a court may
grant injunctive relief to the domain nameregistrant, including
the reactivation of the domain name or transfer of the domain name to
the domain name registrant.
Sec. 3005. Definitions
      This section amends the Trademark Act's definitions
section (section 45) to add definitions for key terms used in
this Act. First, the term ``Internet'' is defined consistent
with the meaning given that term in the Communications Act (47
U.S.C. 230(f)(1)). Second, this section creates a narrow
definition of ``domain name'' to target the specific bad faith
conduct sought to be addressed while excluding such things as
screen names, file names, and other identifiers not assigned by
a domain name registrar or registry.
Sec. 3006. Study on abusive domain name registrations involving
        personal names
      This section directs the Secretary of Commerce, in
consultation with the Patent and Trademark Office and the
Federal Election Commission, to conduct a study and report to
Congress with recommendations on guidelines and procedures for
resolving disputes involving the registration or use of domain
names that include personal names of others or names that are
confusingly similar thereto. This section further directs the
Secretary of Commerce to collaborate with the Internet
Corporation for Assigned Names and Numbers (ICANN) to develop
guidelines and procedures for resolving disputes involving the
registration or use of domain names that include personal names
of others or names that are confusingly similar thereto.
Sec. 3007. Historic preservation
      This section provides a limited immunity from suit under
trademark law for historic buildings that are on or eligible
for inclusion on the National Register of Historic Places, or
that are designated as an individual landmark or as a
contributing building in a historic district.
Sec. 3008. Savings clause
      This section provides an explicit savings clause making
clear that the bill does not affect traditional trademark
defenses, such as fair use, or a person's first amendment
rights.
Sec. 3009. Effective date
      This section provides that damages provided for under
this bill shall not apply to the registration, trafficking, or
use of a domain name that took place prior to the enactment of
this Act.

                     TITLE VI--INVENTOR PROTECTION

Sec. 4001. Short title
      This title may be cited as the ``American Inventors
Protection Act of 1999.''
Sec. 4002. Table of contents
      Section 4002 enumerates the table of contents of this
title.

                     Subtitle A--Inventors' Rights

      Subtitle A creates a new section 297 in chapter 29 of
title 35 of the United States Code, designed to curb the
deceptive practices of certain invention promotion companies.
Many of these companies advertise on television and in
magazines that inventors may call a toll-free number for
assistance in marketing their inventions. They are sent an
invention evaluation form, which they are asked to complete to
allow the promoter to provide expert analysis of the market
potential of their inventions. The inventors return the form
with descriptions of the inventions, which become the basis for
contacts by salespeople at the promotion companies. The next
step is usually a ``professional''-appearing product research
report which contains nothing more than boilerplate information
stating that the invention has outstanding market potential and
fills an important need in the field. The promotion companies
attempt to convince the inventor to buy their marketing
services, normally on a sliding scale in which the promoter
will ask for a front-end payment of up to $10,000 and a
percentage of resulting profits, or a reduced front-end payment
of $6,000 or $8,000 with commensurately larger royalties on
profits. Once paid under such a scenario, a promoter will
typically and only forward information to a list of companies
that never respond.
      This subtitle addresses these problems by (1) requiring
an invention promoter to disclose certain materially relevant
information to a customer in writing prior to entering into a
contract for invention promotion services; (2) establishing a
federal cause of action for inventors who are injured by
material false or fraudulent statements or representations, or
any omission of material fact, by an invention promoter, or by
the invention promoter's failure to make the required written
disclosures; and (3) requiring the Director of the United
States Patent and Trademark Office to make publicly available
complaints received involving invention promoters, along with
the response to such complaints, if any, from the invention
promoters.
Sec. 4101. Short title
      This subtitle may be cited as the ``Inventors' Rights Act
of 1999.''
Sec. 4102. Integrity in invention promotion services
      This section adds a new section 297 to chapter 29 of
title 35, United States Code, intended to promote integrity in
invention promotion services. Legitimate invention assistance
and development organizations can be of great assistance to
novice inventors by providing information on how to protect an
invention, how to develop it, how to obtain financing to
manufacture it, or how to license or sell the invention. While
many invention developers are legitimate, the unscrupulous ones
take advantage of untutored inventors, asking for large sums of
money up front for which they provide no real service in
return. This new section provides a much needed safeguard to
assist independent inventors in avoiding becoming victims of
the predatory practices of unscrupulous invention promoters.
      New section 297(a) of title 35 requires an invention
promoter to disclose certain materially relevant information to
a customer in writing prior to entering into a contract for
invention promotion services. Such information includes: (1)
The number of inventions evaluated by the invention promoter
and stating the number of those evaluated positively and the
number negatively; (2) The number of customers who have
contracted for services with the invention promoter in the
prior five years; (3) The number of customers known by the
invention promoter to have received a net financial profit as a
direct result of the invention promoter's services; (4) The
number of customers known by the invention promoter to have
received license agreements for their inventions as a direct
result of the invention promoter's services; 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 to enable the customer to evaluate the reputations of
these companies.
      New section 297(b) of title 35 establishes a civil cause
of action against any invention promoter who injures a customer
through any material false or fraudulent statement,
representation, or omission of material fact by the invention
promoter, or any person acting on behalf of the invention
promoter, or through failure of the invention promoter to make
all the disclosures required under subsection (a). In such a
civil action, the customer may recover, in addition to
reasonable costs and attorneys' fees, the amount of actual
damages incurred by the customer or, at the customer's
election, statutory damages up to $5,000, as the court
considers just. Subsection (b)(2) authorizes the court to
increase damages to an amount not to exceed three times the
amount awarded as statutory or actual damages in a case where
the customer demonstrates, and the court finds, that the
invention promoter intentionally misrepresented or omitted a
material fact to such customer, or failed to make the required
disclosures under subsection (a), for the purpose of deceiving
the customer. In determining the amount of increased damages,
courts may take into account whether regulatory sanctions or
other corrective action has been taken as a result of previous
complaints against the invention promoter.
      New section 297(c) defines the terms used in the section.
These definitions are carefully crafted to cover true invention
promoters without casting the net too broadly. Paragraph (3)
excepts from the definition of ``invention promoter''
departments and agencies of the Federal, state, and local
governments; any nonprofit, charitable, scientific, or
educational organizations qualified under applicable State laws
or described under Sec. 170(b)(1)(A) of the Internal Revenue
Code of 1986; persons or entities involved in evaluating the
commercial potential of, or offering to license or sell, a
utility patent or a previously filed nonprovisional utility
patent application; any party participating in a transaction
involving the sale of the stock or assets of a business; or any
party who directly engages in the business of retail sales or
distribution of products. Paragraph (4) defines the term
``invention promotion services'' to mean 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 customer's invention.
      New section 297(d) requires the Director of the USPTO to
make publicly available all complaints submitted to the USPTO
regarding invention promoters, together with any responses by
invention promoters to those complaints. The Director is
required to notify the invention promoter of a complaint and
provide a reasonable opportunity to reply prior to making such
complaint public. Section 297(d)(2) authorizes the Director to
request from Federal and State agencies copies of any
complaints relating to invention promotion services they have
received and to include those complaints in the records
maintained by the USPTO regarding invention promotion services.
It is anticipated that the Director will use appropriate
discretion in making such complaints available to the public
for a reasonably sufficient, yet limited, length of time, such
as a period of three years from the date of receipt, and that
the Director will consult with the Federal Trade Commission to
determine whether the disclosure requirements of the FTC and
section 297(a) can be coordinated.
Sec. 4103. Effective date
      This section provides that the effective date of section
297 will be 60 days after the date of enactment of this Act.

             Subtitle B--Patent and Trademark Fee Fairness

      Subtitle B provides patent and trademark fee reform, by
lowering patent fees, by directing the Director of the USPTO to
study alternative fee structures to encourage full
participation in our patent system by all inventors, large and
small, and by strengthening the prohibition against the use of
trademark fees for non-trademark uses.
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
      This section reduces patent filing and reissue fees by
$50, and reduces patent maintenance fees by $110. This would
mark only the second time in history that patent fees have been
reduced. Because trademark fees have not been increased since
1993 and because of the application of accounting based cost
principles and systems, patent fee income has been partially
offsetting the cost of trademarkoperations. This section will
restore fairness to patent and trademark fees by reducing patent fees
to better reflect the cost of services.
Sec. 4203. Adjustment of trademark fees
      This section will allow the Director of the USPTO to
adjust trademark fees in fiscal year 2000 without regard to
fluctuations in the Consumer Price Index in order to better
align those fees with the costs of services.
Sec. 4204. Study on alternative fee structures
      This section directs the Director of the USPTO to conduct
a study and report to the Judiciary Committees of the House and
Senate within one year on alternative fee structures that could
be adopted by the USPTO to encourage maximum participation in
the patent system by the American inventor community.
Sec. 4205. Patent and Trademark Office funding
      Pursuant to section 42(c) of the Patent Act, fees
available to the Commissioner under section 31 of the Trademark
Act of 1946 \6\ may be used only for the processing of
trademark registrations and for other trademark-related
activities, and to cover a proportionate share of the
administrative costs of the USPTO. In an effort to more tightly
``fence'' trademark funds for trademark purposes, section 4205
amends this language such that all (trademark) fees available
to the Commissioner shall be used for trademark registration
and other trademark-related purposes. In other words, the
Commissioner may exercise no discretion when spending funds;
they must be earmarked for trademark purposes.
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    \6\ 15 U.S.C. Sec. 1051, et seq.
---------------------------------------------------------------------------

                   Subtitle C--First Inventor Defense

      Subtitle C strikes an equitable balance between the
interests of U.S. inventors who have invented and
commercialized business methods and processes, many of which
until recently were thought not to be patentable, and U.S. or
foreign inventors who later patent the methods and processes.
The subtitle creates a defense for inventors who have reduced
an invention to practice in the U.S. at least one year before
the patent filing date of another, typically later, inventor
and commercially used the invention in the U.S. before the
filing date. A party entitled to the defense must not have
derived the invention from the patent owner. The bill protects
the patent owner by providing that the establishment of the
defense by such an inventor or entrepreneur does not invalidate
the patent.
      The subtitle clarifies the interface between two key
branches of intellectual property law--patents and trade
secrets. Patent law serves the public interest by encouraging
innovation and investment in new technology, and may be thought
of as providing a right to exclude other parties from an
invention in return for the inventor making a public disclosure
of the invention. Trade secret law, however, also serves the
public interest by protecting investments in new technology.
Trade secrets have taken on a new importance with an increase
in the ability to patent all business methods and processes. It
would be administratively and economically impossible to expect
any inventor to apply for a patent on all methods and processes
now deemed patentable. In order to protect inventors and to
encourage proper disclosure, this subtitle focuses on methods
for doing and conducting business, including methods used in
connection with internal commercial operations as well as those
used in connection with the sale or transfer of useful end
results--whether in the form of physical products, or in the
form of services, or in the form of some other useful results;
for example, results produced through the manipulation of data
or other inputs to produce a useful result.
      The earlier-inventor defense is important to many small
and large businesses, including financial services, software
companies, and manufacturing firms--any business that relies on
innovative business processes and methods. The 1998 opinion by
the U.S. Court of Appeals for the Federal Circuit in State
Street Bank and Trust Co. v. Signature Financial Group,\7\
which held that methods of doing business are patentable, has
added to the urgency of the issue. As the Court noted, the
reference to the business method exception had been improperly
applied to a wide variety of processes, blurring the essential
question of whether the invention produced a ``useful,
concrete, and tangible result.'' In the wake of State Street,
thousands of methods and processes used internally are now
being patented. In the past, many businesses that developed and
used such methods and processes thought secrecy was the only
protection available. Under established law, any of these
inventions which have been in commercial use--public or
secret--for more than one year cannot now be the subject of a
valid U.S. patent.
---------------------------------------------------------------------------
    \7\ 149 F.3d 1368 (Fed. Cir. 1998) [hereinafter State Street].
---------------------------------------------------------------------------
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
      In establishing the defense, subsection (a) of section
4302 creates a new section 273 of the Patent Act, which in
subsection (a) sets forth the following definitions:
            (1) ``Commercially used and commercial use'' mean
        use of any method in the United States so long as the
        use is in connection with an internal commercial use or
        an actual sale or transfer of a useful end result;
            (2) ``Commercial use as applied to a nonprofit
        research laboratory and nonprofit entities such as a
        university, research center, or hospital intended to
        benefit the public'' means that such entities may
        assert the defense only based on continued use by and
        in the entities themselves, but that the defense is
        inapplicable to subsequent commercialization or use
        outside the entities;
            (3) ``Method'' means any method for doing or
        conducting an entity's business; and
            (4) ``Effective filing date'' means the earlier of
        the actual filing date of the application for the
        patent or the filing date of any earlier U.S., foreign,
        or international application to which the subject
        matter at issue is entitled under the Patent Act.
      To be ``commercially used'' or in ``commercial use'' for
purposes of subsection (a), the use must be in connection with
either an internal commercial use or an actual arm's-length
sale or other arm's-length commercial transfer of a useful end
result. The method that is the subject matter of the defense
may be an internal method for doing business, such as an
internal human resources management process, or a method for
conducting business such as a preliminary or intermediate
manufacturing procedure, which contributes to the effectiveness
of the business by producing a useful end result for the
internal operation of the business or for external sale.
Commercial use does not require the subject matter at issue to
be accessible to or otherwise known to the public.
      Subject matter that must undergo a premarketing
regulatory review period during which safety or efficacy is
established before commercial marketing or use is considered to
be commercially used and in commercial use during the
regulatory review period.
      The issue of whether an invention is a method is to be
determined based on its underlying nature and not on the
technicality of the form of the claims in the patent. For
example, a method for doing or conducting business that has
been claimed in a patent as a programmed machine, as in the
State Street case, is a method for purposes of section 273 if
the invention could have as easily been claimed as a method.
Form should not rule substance.
      Subsection (b)(1) of section 273 establishes a general
defense against infringement under section 271 of the Patent
Act. Specifically, a person will not be held liable with
respect to any subject matter that would otherwise infringe one
or more claims to a method in another party's patent if the
person:
            (1) Acting in good faith, actually reduced the
        subject matter to practice at least one year before the
        effective filing date of the patent; and
            (2) Commercially used the subject matter before the
        effective filing date of the patent.
      The first inventor defense is not limited to methods in
any particular industry such as the financial services
industry, but applies to any industry which relies on trade
secrecy for protecting methods for doing or conducting the
operations of their business.
      Subsection (b)(2) states that the sale or other lawful
disposition of a useful end result produced by a patented
method, by a person entitled to assert a section 273 defense,
exhausts the patent owner's rights with respect to that end
result to the same extent such rights would have been exhausted
had the sale or other disposition been made by the patent
owner. For example, if a purchaser would have had the right to
resell a product or other end result if bought from the patent
owner, the purchaser will have the same right if the product is
purchased from a person entitled to a section 273 defense.
      Subsection (b)(3) creates limitations and qualifications
on the use of the defense. First, a person may not assert the
defense unless the invention for which the defense is asserted
is for a commercial use of a method as defined in section
273(a)(1) and (3). Second, a person may not assert the defense
if the subject matter was derived from the patent owner or
persons in privity with the patent owner. Third, subsection
(b)(3) makes clear that the application of the defense does not
create a general license under all claims of the patent in
question--it extends only to the specific subject matter
claimed in the patent with respect to which the person can
assert the defense. At the same time, however, the defense does
extend to variations in the quantity or volume of use of the
claimed subject matter, and to improvements that do not
infringe additional, specifically-claimed subject matter.
      Subsection (b)(4) requires that the person asserting the
defense has the burden of proof in establishing it by clear and
convincing evidence. Subsection (b)(5) establishes that the
person who abandons the commercial use of subject matter may
not rely on activities performed before the date of such
abandonment in establishing the defense with respect to actions
taken after the date of abandonment. Such a person can rely
only on the date when commercial use of the subject matter was
resumed.
      Subsection (b)(6) notes that the defense may only be
asserted by the person who performed the acts necessary to
establish the defense, and, except for transfer to the patent
owner, the right to assert the defense cannot be licensed,
assigned, or transferred to a third party 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.
      When the defense has been transferred along with the
enterprise or line of business to which it relates as permitted
by subsection (b)(6), subsection (b)(7) limits the sites for
which the defense may be asserted. Specifically, when the
enterprise or line of business to which the defense relates has
been transferred, the defense may be asserted only for uses at
those sites where the subject matter was used before the later
of the patent filing date or the date of transfer of the
enterprise or line of business.
      Subsection (b)(8) states that a person who fails to
demonstrate a reasonable basis for asserting the defense may be
held liable for attorneys' fees under section 285 of the Patent
Act.
      Subsection (b)(9) specifies that the successful assertion
of the defense does not mean that the affected patent is
invalid. Paragraph (9) eliminates a point of uncertainty under
current law, and strikes a balance between the rights of an
inventor who obtains a patent after another inventor has taken
the steps to qualify for a prior use defense. The bill provides
that the commercial use of a method in operating a business
before the patentee's filing date, by an individual or entity
that can establish a section 273 defense, does not invalidate
the patent. For example, under current law, although the matter
has seldom been litigated, a party who commercially used an
invention in secrecy before the patent filing date and who also
invented the subject matter before the patent owner's invention
may argue that the patent is invalid under section 102(g) of
the Patent Act. Arguably, commercial use of an invention in
secrecy is not suppression or concealment of the invention
within the meaning of section 102(g), and therefore the party's
earlier invention could invalidate the patent.\8\
---------------------------------------------------------------------------
    \8\ See Dunlop Holdings v. Ram Golf Corp., 524 F.2d 33 (7th Cir.
1975), cert. denied, 424 US 985 (1976).
---------------------------------------------------------------------------
Sec. 4303. Effective date and applicability
      The effective date for subtitle C is the date of
enactment, except that the title does not apply to any
infringement action pending on the date of enactment or to any
subject matter for which an adjudication of infringement,
including a consent judgment, has been made before the date of
enactment.

                   Subtitle D--Patent Term Guarantee

      Subtitle D amends the provisions in the Patent Act that
compensate patent applicants for certain reductions in patent
term that are not the fault of the applicant. The provisions
that were initially included in the term adjustment provisions
of patent bills in the 105th Congress only provided adjustments
for up to 10 years for secrecy orders, interferences, and
successful appeals. Not only are these adjustments too short in
some cases, but no adjustments were provided for administrative
delays caused by the USPTO that were beyond the control of the
applicant. Accordingly, subtitle D removes the 10-year caps
from the existing provisions, adds a new provision to
compensate applicants fully for USPTO-caused administrative
delays, and, for good measure, includes a new provision
guaranteeing diligent applicants at least a 17-year term by
extending the term of any patent not granted within three years
of filing. Thus, no patent applicant diligently seeking to
obtain a patent will receive a term of less than the 17 years
as provided under the pre-GATT \9\ standard; in fact, most will
receive considerably more. Only those who purposely manipulate
the system to delay the issuance of their patents will be
penalized under subtitle D, a result that the Conferees believe
entirely appropriate.
---------------------------------------------------------------------------
    \9\ General Agreement on Tariffs and Trade, Pub. L. No. 103-465.
The framework for international trade since its inception in 1948, GATT
is now administered under the auspices of the World Trade Organization
(WTO) (see note 19, infra).
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Sec. 4401. Short title
      This subtitle may be cited as the ``Patent Term Guarantee
Act of 1999.''
Sec. 4402. Patent term guarantee authority
      Section 4402 amends section 154(b) of the Patent Act
covering term. First, new subsection (b)(1)(A)(i)-(iv)
guarantees day-for-day restoration of term lost as a result of
delay created by the USPTO when the agency fails to:
            (1) Make a notification of the rejection of any
        claim for a patent or any objection or argument under
        Sec. 132, or give or mail a written notice of allowance
        under Sec. 151, within 14 months after the date on
        which a non-provisional application was actually filed
        in the USPTO;
            (2) Respond to a reply under Sec. 132, or to an
        appeal taken under Sec. 134, within four months after
        the date on which the reply was filed or the appeal was
        taken;
            (3) Act on an application within four months after
        the date of a decision by the Board of Patent Appeals
        and Interferences under Sec. 134 or Sec. 135 or a
        decision by a Federal court under Sec. Sec. 141, 145,
        or 146 in a case in which allowable claims remain in
        the application; or
            (4) Issue a patent within four months after the
        date on which the issue fee was paid under Sec. 151 and
        all outstanding requirements were satisfied.
      Further, subject to certain limitations, infra, section
154(b)(1)(B) guarantees a total application pendency of no more
than three years. Specifically, day-for-day restoration of term
is granted if the USPTO has not issued a patent within three
years after ``the actual date of the application in the United
States.'' This language was intentionally selected to exclude
the filing date of an application under the Patent Cooperation
Treaty (PCT).\10\ Otherwise, an applicant could obtain up to a
30-month extension of a U.S. patent merely by filing under PCT,
rather than directly in the USPTO, gaining an unfair advantage
in contrast to strictly domestic applicants. Any periods of
time--
---------------------------------------------------------------------------
    \10\ See Herbert F. Schwartz, Patent Law & Practice (2d ed.,
Federal Judicial Center, 1995), note 72 at 22. The PCT is a
multilateral treaty among more than 50 nations that is designed to
simplify the patenting process when an applicant seeks a patent on the
same invention in more than one nation. See also 35 U.S.C.A. chs. 35-37
and PCT Applicant's Guide (1992, rev. 1994).
---------------------------------------------------------------------------
            (1) consumed in the continued examination of the
        application under Sec. 132(b) of the Patent Act as
        added by section 4403 of this Act;
            (2) lost due to an interference under
        section135(a), a secrecy order under section 181, or
        appellate review by the Board of Patent Appeals and
        Interferences or by a Federal court (irrespective of
        the outcome); and
            (3) incurred at the request of an applicant in
        excess of the three months to respond to a notice from
        the Office permitted by section 154(b)(2)(C)(ii) unless
        excused by a showing by the applicant under section
        154(b)(3)(C) that in spite of all due care the
        applicant could not respond within three months
shall not be considered a delay by the USPTO and shall not be
counted for purposes of determining whether the patent issued
within three years from the actual filing date.
      Day-for-day restoration is also granted under new section
154(b)(1)(C) for delays resulting from interferences,\11\
secrecy orders,\12\ and appeals by the Board of Patent Appeals
and Interferences or a Federal court in which a patent was
issued as a result of a decision reversing an adverse
determination of patentability.
---------------------------------------------------------------------------
    \11\ 35 U.S.C. Sec. 135(a).
    \12\ 35 U.S.C. Sec. 181.
---------------------------------------------------------------------------
      Section 4402 imposes limitations on restoration of term.
In general, pursuant to new Sec. 154(b)(2)(A)-(C) of the bill,
total adjustments granted for restorations under (b)(1) are
reduced as follows:
            (1) To the extent that there are multiple grounds
        for extending the term of a patent that may exist
        simultaneously (e.g., delay due to a secrecy order
        under section 181 and administrative delay under
        section 154(b)(1)(A)), the term should not be extended
        for each ground of delay but only for the actual number
        of days that the issuance of a patent was delayed;
            (2) The term of any patent which has been
        disclaimed beyond a date certain may not receive an
        adjustment beyond the expiration date specified in the
        disclaimer; and
            (3) Adjustments shall be reduced by a period equal
        to the time in which the applicant failed to engage in
        reasonable efforts to conclude prosecution of the
        application, based on regulations developed by the
        Director, and an applicant shall be deemed to have
        failed to engage in such reasonable efforts for any
        periods of time in excess of three months that are
        taken to respond to a notice from the Office making any
        rejection or other request;
      New section 154(b)(3) sets forth the procedures for the
adjustment of patent terms. Paragraph (3)(A) empowers the
Director to establish regulations by which term extensions are
determined and contested. Paragraph (3)(B) requires the
Director to send a notice of any determination with the notice
of allowance and to give the applicant one opportunity to
request reconsideration of the determination. Paragraph (3)(C)
requires the Director to reinstate any time the applicant takes
to respond to a notice from the Office in excess of three
months that was deducted from any patent term extension that
would otherwise have been granted if the applicant can show
that he or she was, in spite of all due care, unable to respond
within three months. In no case shall more than an additional
three months be reinstated for each response. Paragraph (3)(D)
requires the Director to grant the patent after completion of
determining any patent term extension irrespective of whether
the applicant appeals.
      New section 154(b)(4) regulates appeals of term
adjustment determinations made by the Director. Paragraph
(4)(A) requires a dissatisfied applicant to seek remedy in the
District Court for the District of Columbia under the
Administrative Procedures Act \13\ within 180 days after the
grant of the patent. The Director shall alter the term of the
patent to reflect any final judgment. Paragraph (4)(B)
precludes a third party from challenging the determination of a
patent term prior to patent grant.
---------------------------------------------------------------------------
    \13\ 5 U.S.C. Sec. Sec. 551-559, 701-706, 1305, 3105, 3344, 5372,
7521.
---------------------------------------------------------------------------
      Section 4402(b) makes certain conforming amendments to
section 282 of the Patent Act and the appellate jurisdiction of
the U.S. Court of Appeals for the Federal Circuit.\14\
---------------------------------------------------------------------------
    \14\ 28 U.S.C. Sec. 1295.
---------------------------------------------------------------------------
Sec. 4403. Continued examination of patent applications
      Section 4403 amends section 132 of the Patent Act to
permit an applicant to request that an examiner continue the
examination of an application following a notice of ``final''
rejection by the examiner. New section 132(b) authorizes the
Director to prescribe regulations for the continued examination
of an application notwithstanding a final rejection, at the
request of the applicant. The Director may also establish
appropriate fees for continued examination proceedings, and
shall provide a 50% fee reduction for small entities which
qualify for such treatment under section 41(h)(1) of the Patent
Act.
Sec. 4404. Technical clarification
      Section 4404 of the bill coordinates technical term
adjustment provisions set forth in section 154(b) with those in
section 156(a) of the Patent Act.
Sec. 4405. Effective date
      The effective date for the amendments in section 4402 and
4404 is six months after the date of enactment and, with the
exception of design applications (the terms of which are not
measured from filing), applies to any application filed on or
after such date. The amendments made by section 4403 take
effect six months after date of enactment to allow the USPTO to
prepare implementing regulations that apply to all national and
international (PCT) applications filed on or after June 8,
1995.

   Subtitle E--Domestic Publication of Patent Applications Published
                                 Abroad

      Subtitle E provides for the publication of pending patent
applications which have a corresponding foreign counterpart.
Any pending U.S. application filed only in the United States
(e.g., one that does not have a foreign counterpart) will not
be published if the applicant so requests. Thus, an applicant
wishing to maintain her application in confidence may do so
merely by filing only in the United States and requesting that
the USPTO not publish the application. For those applicants who
do file abroad or who voluntarily publish their applications,
provisional rights will be available for assertion against any
third party who uses the claimed invention between publication
and grant provided that substantially similar claims are
contained in both the published application and granted patent.
This change will ensure that American inventors will be able to
see the technology that our foreign competition is seeking to
patent much earlier than is possible today.
Sec. 4501. Short title
      This subtitle may be cited as the ``Domestic Publication
of Foreign Filed Patent Applications Act of 1999.''
Sec. 4502. Publication
      As provided in subsection (a) of section 4502, amended
section 122(a) of the Patent Act continues the general rule
that patent applications will be maintained in confidence.
Paragraph (1)(A) of new subsection (b) of section 122 creates a
new exception to this general rule by requiring publication of
certain applications promptly after the expiration of an 18-
month period following the earliest claimed U.S. or foreign
filing date. The Director is authorized by subparagraph (B) to
determine what information concerning published applications
shall be made available to the public, and, under subparagraph
(C) any decision made in this regard is final and not subject
to review.
      Subsection (b)(2) enumerates exceptions to the general
rule requiring publication. Subparagraph (A) precludes
publication of any application that is: (1) no longer pending
at the 18th month from filing; (2) the subject of a secrecy
order until the secrecy order is rescinded; (3) a provisional
application; \15\ or (4) a design patent application.\16\
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    \15\ 35 U.S.C. Sec. 111(b). Pursuant to 35 U.S.C. Sec. 111(b)(5),
all provisional applications are abandoned 12 months after the date of
their filing; accordingly, they are not subject to the 18-month
publication requirement.
    \16\ 35 U.S.C. Sec. 171. Since design applications do not disclose
technology, inventors do not have a particular interest in having them
published. The bill as written therefore simplifies the proposed system
of publication to confine the requirement to those applications for
which there is a need for publication.
---------------------------------------------------------------------------
      Pursuant to subparagraph (B)(i), any applicant who is not
filing overseas and does not wish her application to be
published can simply make a request and state that her
invention has not and will not be the subject of an application
filed in a foreign country that requires publication after 18
months. Subparagraph (B)(ii) clarifies that an applicant may
rescind this request at any time. Moreover, if an applicant has
requested that her application not be published in a foreign
country with a publication requirement, subparagraph (B)(iii)
imposes a duty on the applicant to notify the Director of this
fact. An unexcused failure to notify the Director will result
in the abandonment of the application. If an applicant either
rescinds a request that her application not be published or
notifies the Director that an application has been filed in an
early publication country or through the PCT, the U.S.
application will be published at 18 months pursuant to
subsection (b)(1).
      Finally, under subparagraph (B)(v), where an applicant
has filed an application in a foreign country, either directly
or through the PCT, so that the application will be published
18 months from its earliest effective filing date, the
applicant may limit the scope of the publication by the USPTO
to the total of the cumulative scope of the applications filed
in all foreign countries. Where the foreign application is
identical to the application filed in the United States or
where an application filed under the PCT is identical to the
application filed in the United States, the applicant may not
limit the extent to which the application filed in the United
States is published. However, where an applicant has limited
the description of an application filed in a foreign country,
either directly or through the PCT in comparison with the
application filed in the USPTO, the applicant may restrict the
publication by the USPTO to no more than the cumulative details
of what will be published in all of the foreign applications
and through the PCT. The applicant may restrict the extent of
publication of her U.S. application by submitting a redacted
copy of the application to the USPTO eliminating only those
details that will not be published in any of the foreign
applications. Any description contained in at least one of the
foreign national or PCT filings may not be excluded from
publication in the corresponding U.S. patent application. To
ensure that any redacted copy of the U.S. application is
published in place of the original U.S. application, the
redacted copy must be received within 16 months from the
earliest effective filing date. Finally, if the published U.S.
application as redacted by the applicant does not enable a
person skilled in the art to make and use the claimed
invention, provisional rights under section 154(d) shall not be
available.
      Subsection (c) requires the Director to establish
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 without the express written
consent of the applicant.
      Subsection (d) protects our national security by
providing that no application may be published under subsection
(b)(1) where the publication or disclosure of such invention
would be detrimental to the national security. In addition, the
Director of the USPTO is required to 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 the Patent Act, which governs
secrecy of inventions in the interest of national security.
      Subsection (b) of section 4502 of subtitle E requires the
Government Accounting Office (GAO) to conduct a study of
applicants who file only in the United States during a three-
year period beginning on the effective date of subtitle E. The
study will focus on the percentage of U.S. applicants who file
only in the United States versus those who file outside the
United States; how many domestic-only filers request not to be
published; how many who request not to be published later
rescind that request; and whether there is any correlation
between the type of applicant (e.g., small vs. large entity)
and publication. The Comptroller General must submit the
findings of the study, once completed, to the Committees on the
Judiciary of the House and Senate.
Sec. 4503. Time for claiming benefit of earlier filing date
      Section 119 of the Patent Act prescribes procedures to
implement the right to claim priority under Article 4 of the
Paris Convention for the Protection of Industrial Property.\17\
Under that Article, an applicant seeking protection in the
United States may claim the filing date of an application for
the same invention filed in another Convention country--
provided the subsequent application is filed in the United
States within 12 months of the earlier filing in the foreign
country.
---------------------------------------------------------------------------
    \17\ Mar. 20, 1883, as revised at Brussels, Dec. 14, 1900, 25 Stat.
1645, T.S. No. 579, and subsequently through 1967. The Convention has
156 member nations, including the United States.
---------------------------------------------------------------------------
      Section 4503 of subtitle V amends section 119(b) of the
Patent Act to authorize the Director to establish a cut-off
date by which the applicant must claim priority. This is to
ensure that the claim will be made early enough--generally not
later than the 16th month from the earliest effective filing
date--so as to permit an orderly publication schedule for
pending applications. As the USPTO moves to electronic filing,
it is envisioned that this date could be moved closer to the
18th month.
      The amendment to Sec. 119(b) also gives the Director the
discretion to consider the failure of the applicant to file a
timely claim for priority to be a waiver of any such priority
claim. The Director is also authorized to establish procedures
(including the payment of a surcharge) to accept an
unintentionally delayed priority claim.
      Section 4503(b) of subtitle E amends section 120 of the
Patent Act in a similar way. This provision empowers the
Director to: (1) establish a time by which the priority of an
earlier filed United States application must be claimed; (2)
consider the failure to meet that time limit to be a waiver of
the right to claim such priority; and (3) accept an
unintentionally late claim of priority subject to the payment
of a surcharge.
Sec. 4504. Provisional rights
      Section 4504 amends section 154 of the Patent Act by
adding a new subsection (d) to accord provisional rights to
obtain a reasonable royalty for applicants whose applications
are published under amended section 122(b) of the Patent Act,
supra, or applications designating the United States filed
under the PCT. Generally, this provision establishes the right
of an applicant to obtain a reasonable royalty from any person
who, during the period beginning on the date that his or her
application is published and ending on the date a patent is
issued--
            (1) makes, uses, offers for sale, or sells the
        invention in the United States, or imports such an
        invention into the United States; or
            (2) if the invention claimed is a process, makes,
        uses, offers for sale, sells, or imports a product made
        by that process in the United States; and
            (3) had actual notice of the published application
        and, in the case of an application filed under the PCT
        designating the United States that is published in a
        language other than English, a translation of the
        application into English.
      The requirement of actual notice is critical. The mere
fact that the published application is included in a commercial
database where it might be found is insufficient. The published
applicant must give actual notice of the published application
to the accused infringer and explain what acts are regarded as
giving rise to provisional rights.
      Another important limitation on the availability of
provisional royalties is that the claims in the published
application that are alleged to give rise to provisional rights
must also appear in the patent in substantially identical form.
To allow anything less than substantial identity would impose
an unacceptable burden on the public. If provisional rights
were available in the situation where the only valid claim
infringed first appeared in substantially that form in the
granted patent, the public would have no guidance as to the
specific behavior to avoid between publication and grant. Every
person or company that might be operating within the scope of
the disclosure of the published application would have to
conduct her own private examination to determine whether a
published application contained patentable subject matter that
she should avoid. The burden should be on the applicant to
initially draft a schedule of claims that gives adequate notice
to the public of what she is seeking to patent.
      Amended section 154(d)(3) imposes a six-year statute of
limitations from grant in which an action for reasonable
royalties must be brought.
      Amended section 154(d)(4) sets forth some additional
rules qualifying when an international application under the
PCT will give rise to provisional rights. The date that will
give rise to provisional rights for international applications
will be the date on which the USPTO receives a copy of the
application published under the PCT in the English language; if
the application is published under the PCT in a language other
than English, then the date on which provisional rights will
arise will be the date on which the USPTO receives a
translation of the international application in the English
language. The Director is empowered to require an applicant to
provide a copy of the international application and a
translation of it.
Sec. 4505. Prior art effect of published applications
      Section 4505 amends section 102(e) of the Patent Act to
treat an application published by the USPTO in the same fashion
as a patent published by the USPTO. Accordingly, a published
application is given prior art effect as of its earliest
effective U.S. filing date against any subsequently filed U.S.
applications. As with patents, any foreign filing date to which
the published application is entitled will not be the effective
filing date of the U.S. published application for prior art
purposes. An exception tothis general rule is made for
international applications designating the United States that are
published under Article 21(2)(a) of the PCT in the English language.
Such applications are given a prior art effect as of their
international filing date. The prior art effect accorded to patents
under section 4505 remains unchanged from present section 102(e) of the
Patent Act.
Sec. 4506. Cost recovery for publications
      Section 4506 authorizes the Director to recover the costs
of early publication required by the amendment made by section
4502 of this Act by charging a separate publication fee after a
notice of allowance is given pursuant to section 151 of the
Patent Act.
Sec. 4507. Conforming amendments
      Section 4507 consists of various technical and conforming
amendments to the Patent Act. These include amending section
181 of the Patent Act to clarify that publication of pending
applications does not apply to applications under secrecy
orders, and amending section 284 of the Patent Act to ensure
that increased damages authorized under section 284 shall not
apply to the reasonable royalties possible under amended
section 154(d). In addition, section 374 of the Patent Act is
amended to provide that the effect of the publication of an
international application designating the United States shall
be the same as the publication of an application published
under amended section 122(b), except as its effect as prior art
is modified by amended section 102(e) and its giving rise to
provisional rights is qualified by new section 154(d).
Sec. 4508. Effective date
      Subtitle E shall take effect on the date that is one year
after the date of enactment and shall apply to all applications
filed under section 111 of the Patent Act on or after that
date; and to all applications complying with section 371 of the
Patent Act that resulted from international applications filed
on or after that date. The provisional rights provided in
amended section 154(d) and the prior art effect provided in
amended section 102(e) shall apply to all applications pending
on the date that is one year after the date of enactment that
are voluntarily published by their applicants. Finally, section
404 (provisional rights) shall apply to international
applications designating the United States that are filed on or
after the date that is one year after the date of enactment.

       Subtitle F--Optional Inter Partes Reexamination Procedure

      Subtitle F is intended to reduce expensive patent
litigation in U.S. district courts by giving third-party
requesters, in addition to the existing ex parte reexamination
in Chapter 30 of title 35, the option of inter partes
reexamination proceedings in the USPTO. Congress enacted
legislation to authorize ex parte reexamination of patents in
the USPTO in 1980, but such reexamination has been used
infrequently since a third party who requests reexamination
cannot participate at all after initiating the proceedings.
Numerous witnesses have suggested that the volume of lawsuits
in district courts will be reduced if third parties can be
encouraged to use reexamination by giving them an opportunity
to argue their case for patent invalidity in the USPTO.
Subtitle F provides that opportunity as an option to the
existing ex parte reexamination proceedings.
      Subtitle F leaves existing ex parte reexamination
procedures in Chapter 30 of title 35 intact, but establishes an
inter partes reexamination procedure which third-party
requesters can use at their option. Subtitle VI allows third
parties who request inter partes reexamination to submit one
written comment each time the patent owner files a response to
the USPTO. In addition, such third-party requesters can appeal
to the USPTO Board of Patent Appeals and Interferences from an
examiner's determination that the reexamined patent is valid,
but may not appeal to the Court of Appeals for the Federal
Circuit. To prevent harassment, anyone who requests inter
partes reexamination must identify the real party in interest
and third-party requesters who participate in an inter partes
reexamination proceeding are estopped from raising in a
subsequent court action or inter partes reexamination any issue
of patent validity that they raised or could have raised during
such inter partes reexamination.
      Subtitle F contains the important threshold safeguard
(also applied in ex parte reexamination) that an inter partes
reexamination cannot be commenced unless the USPTO makes a
determination that a ``substantial new question'' of
patentability is raised. Also, as under Chapter 30, this
determination cannot be appealed, and grounds for inter partes
reexamination are limited to earlier patents and printed
publications--grounds that USPTO examiners are well-suited to
consider.
Sec. 4601. Short title
      This subtitle may be cited as the ``Optional Inter Partes
Reexamination Procedure Act.''
Sec. 4602. Clarification of Chapter 30
      This section distinguishes Chapter 31 from existing
Chapter 30 by changing the title of Chapter 30 to ``Ex Parte
Reexamination of Patents.''
Sec. 4603. Definitions
      This section amends section 100 of the Patent Act by
defining ``third-party requester'' as a person who is not the
patent owner requesting ex parte reexamination under section
302 or inter partes reexamination under section 311.
Sec. 4604. Optional inter partes reexamination procedure
      Section 4604 amends Part III of title 35 by inserting a
new Chapter 31 setting forth optional inter partes
reexamination procedures.
      New section 311, as amended by this section, differs from
section 302 of existing law in Chapter 30 of the Patent Act by
requiring any person filing a written request for inter partes
reexamination to identify the real party in interest.
      Similar to section 303 of existing law, new section 312
of the Patent Act confers upon the Director the authority and
responsibility to determine, within three months after the
filing of a request for inter partes reexamination, whether a
substantial new question affecting patentability of any claim
of the patent is raised by the request. Also, the decision in
this regard is final and not subject to judicial review.
      Proposed sections 313-14 under this subtitle are
similarly modeled after sections 304-305 of Chapter 30. Under
proposed section 313, if the Director determines that a
substantial new question of patentability affecting a claim is
raised, the determination shall include an order for inter
partes reexamination for resolution of the question. The order
may be accompanied by the initial USPTO action on the merits of
the inter partes reexamination conducted in accordance with
section 314. Generally, under proposed section 314, inter
partes reexamination shall be conducted according to the
procedures set forth in sections 132-133 of the Patent Act. The
patent owner will be permitted to propose any amendment to the
patent and a new claim or claims, with the same exception
contained in section 305: no proposed amended or new claim
enlarging the scope of the claims will be allowed.
      Proposed section 314 elaborates on procedure with regard
to third-party requesters who, for the first time, are given
the option to participate in inter partes reexamination
proceedings. 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 addition, the third party-requester in an inter
partes reexamination shall receive a copy of any communication
sent by the USPTO to the patent owner. After each response by
the patent owner to an action on the merits by the USPTO, the
third-party requester shall have one opportunity to file
written comments addressing issues raised by the USPTO or
raised in the patent owner's response. Unless ordered by the
Director for good cause, the agency must act in an inter partes
reexamination matter with special dispatch.
      Proposed section 315 prescribes the procedures for appeal
of an adverse USPTO decision by the patent owner and the third-
party requester in an inter partes reexamination. Both the
patent owner and the third-party requester are entitled to
appeal to the Board of Patent Appeals and Interferences
(section 134 of the Patent Act), but only the patentee can
appeal to the U.S. Court of Appeals for the Federal Circuit
(Sec. Sec. 141-144); either may also be a party to any appeal
by the other to the Board of Patent Appeals and Interferences.
The patentee is not entitled to the alternative of an appeal of
an inter partes reexamination to the U.S. District Court for
the District of Columbia. Such appeals are rarely taken from ex
parte reexamination proceedings under existing law and its
removal should speed up the process.
      To deter unnecessary litigation, proposed section 315
imposes constraints on the third-party requester. In general, a
third-party requester who is granted an inter partes
reexamination by the USPTO may not assert at a later time in
any civil action in U.S. district court \18\ the invalidity of
any claim finally determined to be patentable on any ground
that the third-party requester raised or could have raised
during the inter partes reexamination. However, the third-party
requester may assert invalidity based on newly discovered prior
art unavailable at the time of the reexamination. Prior art was
unavailable at the time of the inter partes reexamination if it
was not known to the individuals who were involved in the
reexamination proceeding on behalf of the third-party requester
and the USPTO.
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    \18\ See 28 U.S.C. Sec. 1338.
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      Section 316 provides for the Director to issue and
publish certificates canceling unpatentable claims, confirming
patentable claims, and incorporating any amended or new claim
determined to be patentable in an inter partes procedure.
      Subtitle F creates a new section 317 which sets forth
certain conditions by which inter partes reexamination is
prohibited to guard against harassment of a patent holder. In
general, once an order for inter partes reexamination has been
issued, neither a third-party requester nor the patent owner
may file a subsequent request for inter partes reexamination
until an inter partes reexamination certificate is issued and
published, unless authorized by the Director. Further, if a
third-party requester asserts patent invalidity in a civil
action and a final decision is entered that the party failed to
prove the assertion of invalidity, or if a final decision in an
inter partes reexamination instituted by the requester is
favorable to patentability, after any appeals, that third-party
requester cannot thereafter request inter partes reexamination
on the basis of issues which were or which could have been
raised. However, the third-party requester may assert
invalidity based on newly discovered prior art unavailable at
the time of the civil action or inter partes reexamination.
Prior art was unavailable at the time if it was not known to
the individuals who were involved in the civil action or inter
partes reexamination proceeding on behalf of the third-party
requester and the USPTO.
      Proposed section 318 gives a patent owner the right, once
an inter partes reexamination has been ordered, to obtain a
stay of any pending litigation involving an issue of
patentability of any claims of the patent that are the subject
of the inter partes reexamination, unless the court determines
that the stay would not serve the interests of justice.
Sec. 4605. Conforming amendments
      Section 4605 makes the following conforming amendments to
the Patent Act:
      A patent owner must pay a fee of $1,210 for each petition
in connection with an unintentionally abandoned application,
delayed payment, or delayed response by the patent owner during
any reexamination.
      A patent applicant, any of whose claims has been twice
rejected; a patent owner in a reexamination proceeding; and a
third-party requester in an inter partes reexamination
proceeding may all appeal final adverse decisions from a
primary examiner to the Board of Patent Appeals and
Interferences.
      Proposed section 141 states that a patent owner in a
reexamination proceeding may appeal an adverse decision by the
Board of Patent Appeals and Interferences only to the U.S.
Court of Appeals for the Federal Circuit as earlier noted. A
third-party requester in an inter partes reexamination
proceeding may not appeal beyond the Board of Patent Appeals
and Interferences.
      The Director is required pursuant to section 143
(proceedings on appeal to the Federal Circuit) to submit to the
court the grounds for the USPTO decision in any reexamination
addressing all the issues involved in the appeal.
Sec. 4606. Report to Congress
      Not later than five years after the effective date of
subtitle F, the Director must submit to Congress a report
evaluating whether the inter partes reexamination proceedings
set forth in the title are inequitable to any of the parties in
interest and, if so, the report shall contain recommendations
for change to eliminate the inequity.
Sec. 4607. Estoppel effect of reexamination
      Section 4607 estops any party who requests inter partes
reexamination from challenging at a later time, in any civil
action, any fact determined during the process of the inter
partes 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. The
estoppel arises after a final decision in the inter partes
reexamination or a final decision in any appeal of such
reexamination. If section 4607 is held to be unenforceable, the
enforceability of the rest of subtitle F or the Act is not
affected.
Sec. 4608. Effective date
      Subtitle F shall take effect on the date of the enactment
and shall apply to any patent that issues from an original
application filed in the United States on or after that date,
except that the amendments made by section 4605(a) shall take
effect one year from the date of enactment.

         Subtitle G--United States Patent and Trademark Office

      Subtitle G establishes the United States Patent and
Trademark Office (USPTO) as an agency of the United States
within the Department of Commerce. The Secretary of Commerce
gives policy direction to the agency, but the agency is
autonomous and responsible for the management and
administration of its operations and has independent control of
budget allocations and expenditures, personnel decisions and
processes, and procurement. The Committee intends that the
Office will conduct its patent and trademark operations without
micro-management by Department of Commerce officials, with the
exception of policy guidance of the Secretary. The agency is
headed by an Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent and Trademark
Office, a Deputy, and a Commissioner of Patents and a
Commissioner of Trademarks. The agency is exempt from
government-wide personnel ceilings. A patent public advisory
committee and a trademark public advisory committee are
established to advise the Director on agency policies, goals,
performance, budget and user fees.
Sec. 4701. Short title
      This subtitle may be cited as the ``Patent and Trademark
Office Efficiency Act.''

        Subchapter A--United States Patent and Trademark Office

Sec. 4711. Establishment of Patent and Trademark Office
      Section 4711 establishes the USPTO as an agency of the
United States within the Department of Commerce and under the
policy direction of the Secretary of Commerce. The USPTO, as an
autonomous agency, is explicitly responsible for decisions
regarding the management and administration of its operations
and has independent control of budget allocations and
expenditures, personnel decisions and processes, procurements,
and other administrative and management functions. Patent
operations and trademark operations are to be treated as
separate operating units within the Office, each under the
direction of its respective Commissioner, as supervised by the
Director.
      The USPTO shall maintain its principal office in the
metropolitan Washington, D.C., area, for the service of process
and papers and for the purpose of discharging its functions.
For purposes of venue in civil actions, the agency is deemed to
be a resident of the district in which its principal office is
located, except where otherwise provided by law. The USPTO is
also permitted to establish satellite offices in such other
places in the United States as it considers necessary and
appropriate to conduct business. This is intended to allow the
USPTO, if appropriate, to serve American applicants better.
Sec. 4712. Powers and duties
      Subject to the policy direction of the Secretary of the
Commerce, in general the USPTO will be responsible for the
granting and issuing of patents, the registration of
trademarks, and the dissemination of patent and trademark
information to the public.
      The USPTO will also possess specific powers, which
include:
            (1) a requirement to adopt and use an Office seal
        for judicial notice purposes and for authenticating
        patents, trademark certificates and papers issued by
        the Office;
            (2) the authority to establish regulations, not
        inconsistent with law, that
                    (A) govern the conduct of USPTO proceedings
                within the Office,
                    (B) are in accordance with Sec. 553 of
                title 5,
                    (C) facilitate and expedite the processing
                of patent applications, particularly those
                which can be processed electronically,
                    (D) govern the recognition, conduct, and
                qualifications of agents, attorneys, or other
                persons representing applicants or others
                before the USPTO,
                    (E) recognize the public interest in
                ensuring that the patent system retain a
                reduced fee structure for small entities, and
                    (F) provide for the development of a
                performance-based process for managing that
                includes quantitative and qualitative measures,
                standards for evaluating cost-effectiveness,
                and consistency with principles of impartiality
                and competitiveness;
            (3) the authority to acquire, construct, purchase,
        lease, hold, manage, operate, improve, alter and
        renovate any real, personal, or mixed property as it
        considers necessary to discharge its functions;
            (4) the authority to make purchases of property,
        contracts for construction, maintenance, or management
        and operation of facilities, as well as to contract for
        and purchase printing services without regard to those
        federal laws which govern such proceedings;
            (5) the authority to use services, equipment,
        personnel, facilities and equipment of other federal
        entities, with their consent and on a reimbursable
        basis;
            (6) the authority to use, with the consent of the
        United States and the agency, government, or
        international organization concerned, the services,
        records, facilities or personnel of any State or local
        government agency or foreign patent or trademark office
        or international organization to perform functions on
        its behalf;
            (7) the authority to retain and use all of its
        revenues and receipts;
            (8) a requirement to advise the President, through
        the Secretary of Commerce, on national and certain
        international intellectual property policy issues;
            (9) a requirement to advise Federal departments and
        agencies of intellectual property policy in the United
        States and intellectual property protection abroad;
            (10) a requirement to provide guidance regarding
        proposals offered by agencies to assist foreign
        governments and international intergovernmental
        organizations on matters of intellectual property
        protection;
            (11) the authority to conduct programs, studies or
        exchanges regarding domestic or international
        intellectual property law and the effectiveness of
        intellectual property protection domestically and
        abroad;
            (12) a requirement to advise the Secretary of
        Commerce on any programs and studies relating to
        intellectual property policy that the USPTO may conduct
        or is authorized to conduct, cooperatively with foreign
        intellectual property offices and international
        intergovernmental organizations; and
            (13) the authority to (A) coordinate with the
        Department of State in conducting programs and studies
        cooperatively with foreign intellectual property
        offices and international intergovernmental
        organizations, and (B) transfer, with the concurrence
        of the Secretary of State, up to $100,000 in any year
        to the Department of State to pay an international
        intergovernmental organization for studies and programs
        advancing international cooperation concerning patents,
        trademarks, and other matters.
      The specific powers set forth in new subsection (b) are
clarified in new subsection (c). The special payments of
paragraph (14)(B) are additional to other payments or
contributions and are not subject to any limitation imposed by
law. Nothing in subsection (b) derogates from the duties of the
Secretary of State or the United States Trade Representative as
set forth in section 141 of the Trade Act of 1974,\19\ nor
derogates from the duties and functions of the Register of
Copyrights. The Director is required to consult with the
Administrator of General Services when exercising authority
under paragraphs (3) and (4)(A). Nothing in section 4712 may 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 USPTO. Finally, in exercising the
powers and duties under this section, the Director shall
consult with the Register of Copyright on all Copyright and
related matters.
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    \19\ 19 U.S.C. Sec. 2171.
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Sec. 4713. Organization and management
      Section 4713 details the organization and management of
the agency. The powers and duties of the USPTO shall be vested
in the Under Secretary and Director, who shall be appointed by
the President, by and with the consent of the Senate. The Under
Secretary and Director performs two main functions. As Under
Secretary of Commerce for Intellectual Property, she serves as
the policy advisor to the Secretary of Commerce and the
President on intellectual property issues. As Director, she is
responsible for supervising the management and direction of the
USPTO. She shall consult with the Public Advisory Committees,
infra, on a regular basis regarding operations of the agency
and before submitting budgetary proposals and fee or regulation
changes. The Director shall take an oath of office. The
President may remove the Director from office, but must provide
notification to both houses of Congress.
      The Secretary of Commerce, upon nomination of the
Director, shall appoint a Deputy Director to act in the
capacity of the Director if the Director is absent or
incapacitated. The Secretary of Commerce shall also appoint two
Commissioners, one for Patents, the other for Trademarks,
without regard to chapters 33, 51, or 53 of title 5 of the U.S.
Code. The Commissioners will have five-year terms and may be
reappointed to new terms by the Secretary. Each Commissioner
shall possess a demonstrated experience in patent and trademark
law, respectively; and they shall be responsible for the
management and direction of the patent and trademark
operations, respectively. In addition to receiving a basic rate
of compensation under the Senior Executive Service \20\ and a
locality payment,\21\ the Commissioners may receive bonuses of
up to 50 percent of their annual basic rate of compensation,
not to exceed the salary of the Vice President, based on a
performance evaluation by the Secretary, acting through the
Director. The Secretary may remove Commissioners for misconduct
or unsatisfactory performance. It is intended that the
Commissioners will be non-political expert appointees,
independently responsible for operations, subject to
supervision by the Director.
---------------------------------------------------------------------------
    \20\ 28 U.S.C. Sec. 5382.
    \21\ 5 U.S.C. Sec. 5304(h)(2)(C).
---------------------------------------------------------------------------
      The Director may appoint all other officers, agents, and
employees as she sees fit, and define their responsibilities
with equal discretion. The USPTO is specifically not subject to
any administratively or statutorily imposed limits (full-time
equivalents, or ``FTEs'') on positions or personnel.
      The USPTO is charged with developing and submitting to
Congress a proposal for an incentive program to retain senior
(of the primary examiner grade or higher) patent and trademark
examiners eligible for retirement for the sole purpose of
training patent and trademark examiners.
      The Director of the USPTO, in consultation with the
Director of the Office of Personnel Management, is required to
maintain a program for identifying national security positions
at the USPTO and for providing for appropriate security
clearances for USPTO employees in order to maintain the secrecy
of inventions as described in section 181 of the Patent Act and
to prevent disclosure of sensitive and strategic information in
the interest of national security.
      The USPTO will be subject to all provisions of title 5 of
the U.S. Code governing federal employees. All relevant labor
agreements which are in effect the day before enactment of
subtitle G shall be adopted by the agency. All USPTO employees
as of the day before the effective date of subtitle G shall
remain officers and employees of the agency without a break in
service. Other personnel of the Department of Commerce shall be
transferred to the USPTO only if necessary to carry out
purposes of subtitle G of the bill and if a major function of
their work is reimbursed by the USPTO, they spend at least half
of their work time in support of the USPTO, or a transfer to
the USPTO would be in the interest of the agency, as determined
by the Secretary of Commerce in consultation with the Director.
      On or after the effective date of the Act, the President
shall appoint an individual to serve as Director until a
Director qualifies under subsection (a). The persons serving as
the Assistant Commissioner for Patents and the Assistant
Commissioner for Trademarks on the day before the effective
date of the Act may serve as the Commissioner for Patents and
the Commissioner for Trademarks, respectively, until a
respective Commissioner is appointed under subsection (b)(2).
Sec. 4714. Public Advisory Committees
      Section 4714 provides a new section 5 of the Patent Act
which establishes a Patent Public Advisory Committee and a
Trademark Public Advisory Committee. Each Committee has nine
voting members with three-year terms appointed by and serving
at the pleasure of the Secretary of Commerce. Initial
appointments will be made within three months of the effective
date of the Act; and three of the initial appointees will
receive one-year terms, three will receive two-year terms, and
three will receive full terms. Vacancies will be filled within
three months. The Secretary will also designate chairpersons
for three-year terms.
      The members of the Committees will be U.S. citizens and
will be chosen to represent the interests of USPTO users. The
Patent Public Advisory Committee shall have members who
represent small and large entity applicants in the United
States in proportion to the number of applications filed by the
small and large entity applicants. In no case shall the small
entity applicants be represented by less than 25 percent of the
members of the Patent Public Advisory Committee, at least one
of whom shall be an independent inventor. The members of both
Committees shall include individuals with substantial
background and achievement in finance, management, labor
relations, science, technology, and office automation. The
patent and trademark examiners' unions are entitled to have one
representative on their respective Advisory Committee in a non-
voting capacity.
      The Committees meet at the call of the chair to consider
an agenda established by the chair. Each Committee reviews the
policies, goals, performance, budget, and user fees that bear
on its area of concern and advises the Director on these
matters. Within 60 days of the end of a fiscal year, the
Committees prepare annual reports, transmit the reports to the
Secretary of Commerce, the President, and the Committees on the
Judiciary of the Congress, and publish the reports in the
Official Gazette of the USPTO.
      Members of the Committees are compensated at a defined
daily rate for meeting and travel days. Members are provided
access to USPTO records and information other than personnel or
other privileged information including that concerning patent
applications. Members are special Government employees within
the meaning of section 202 of title 18. The Federal Advisory
Committee Act shall not apply to the Committees. Finally,
section 4714 provides that Committee meetings shall be open to
the public unless by a majority vote the Committee meets in
executive session to consider personnel or other confidential
information.
Sec. 4715. Conforming amendments
      Technical conforming amendments to the Patent Act are set
forth in section 4715.
Sec. 4716. Trademark Trial and Appeal Board
      Section 4716 amends section 17 of the Trademark Act of
1946 by specifying that the Director shall give notice to all
affected parties and shall direct a Trademark Trial and Appeal
Board to determine the respective rights of those parties
before it in a relevant proceeding. The section also invests
the Director with the power of appointing administrative
trademark judges to the Board. The Director, the Commissioner
for Trademarks, the Commissioner for Patents, and the
administrative trademark judges shall serve on the Board.
Sec. 4717. Board of Patent Appeals and Interferences
      Under existing section 7 of the Patent Act, the
Commissioner, Deputy Commissioner, Assistant Commissioners, and
the examiners-in-chief constitute the Board of Patent Appeals
and Interferences. Pursuant to section 4717 of subtitle G, the
Board shall be comprised of the Director, the Commissioner for
Patents, the Commissioner for Trademarks, and the
administrative patent judges. In addition, the existing statute
allows each appellant a hearing before three members of the
Board who are designated by the Director. Section 4717 empowers
the Director with this authority.
Sec. 4718. Annual report of Director
      No later than 180 days after the end of each fiscal year,
the Director must provide a report to Congress detailing funds
received and expended by the USPTO, the purposes for which the
funds were spent, the quality and quantity of USPTO work, the
nature of training provided to examiners, the evaluations of
the Commissioners by the Secretary of Commerce, the
Commissioners' compensation, and other information relating to
the agency.
Sec. 4719. Suspension or exclusion from practice
      Under existing section 32 of the Patent Act, the
Commissioner (the Director pursuant to this Act) has the
authority, after notice and a hearing, to suspend or exclude
from further practice before the USPTO any person who is
incompetent, disreputable, indulges in gross misconduct or
fraud, or is noncompliant with USPTO regulations. Section 4719
permits the Director to designate an attorney who is an officer
or employee of the USPTO to conduct a hearing under section 32.
Sec. 4720. Pay of Director and Deputy Director
      Section 4720 replaces the Assistant Secretary of Commerce
and Commissioner of Patents and Trademarks with the Under
Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office to receive pay at
Level III of the Executive Schedule.\22\ Section 4720 also
establishes the pay of the Deputy Director at Level IV of the
Executive Schedule.\23\
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    \22\ 5 U.S.C. Sec. 5314.
    \23\ 5 U.S.C. Sec. 5315.
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           Subchapter B--Effective Date; Technical Amendments

Sec. 4731. Effective date
      The effective date of subtitle G is four months after the
date of enactment.
Sec. 4732. Technical and conforming amendments
      Section 4732 sets forth numerous technical and conforming
amendments related to subtitle G.

                 Subchapter C--Miscellaneous Provisions

Sec. 4741. References
      Section 4741 clarifies that any reference to the transfer
of a function from a department or office to the head of such
department or office means the head of such department or
office to which the function is transferred. In addition,
references in other federal materials to the current
Commissioner of Patents and Trademarks refer, upon enactment,
to the Under Secretary of Commerce for Intellectual Property
and Director of the United States Patent and Trademark Office.
Similarly, references to the Assistant Commissioner for Patents
are deemed to refer to the Commissioner for Patents and
references to the Assistant Commissioner for Trademarks are
deemed to refer to the Commissioner for Trademarks.
Sec. 4742. Exercise of authorities
      Under section 4742, except as otherwise provided by law,
a federal official to whom a function is transferred pursuant
to subtitle G may exercise all authorities under any other
provision of law that were available regarding the performance
of that function to the official empowered to perform that
function immediately before the date of the transfer of the
function.
Sec. 4743. Savings provisions
      Relevant legal documents that relate to a function which
is transferred by subtitle G, and which are in effect on the
date of such transfer, shall continue in effect according to
their terms unless later modified or repealed in an appropriate
manner. Applications or proceedings concerning any benefit,
service, or license pending on the effective date of subtitle G
before an office transferred shall not be affected, and shall
continue thereafter, but may later be modified or repealed in
the appropriate manner.
      Subtitle G will not affect suits commenced before the
effective date of passage. Suits or actions by or against the
Department of Commerce, its employees, or the Secretary shall
not abate by reason of enactment of subtitle G. Suits against a
relevant government officer in her official capacity shall
continue post enactment, and if a function has transferred to
another officer by virtue of enactment, that other officer
shall substitute as the defendant. Finally, administrative and
judicial review procedures that apply to a function transferred
shall apply to the head of the relevant federal agency and
other officers to which the function is transferred.
Sec. 4744. Transfer of assets
      Section 4744 states that all available personnel,
property, records, and funds related to a function transferred
pursuant to subtitle G shall be made available to the relevant
official or head of the agency to which the function transfers
at such time or times as the Director of the Office of
Management and Budget (OMB) directs.
Sec. 4745. Delegation and assignment
      Section 4745 allows an official to whom a function is
transferred under subtitle G to delegate that function to
another officer or employee. The official to whom the function
was originally transferred nonetheless remains responsible for
the administration of the function.
Sec. 4746. Authority of Director of the Office of Management and Budget
        with respect to functions transferred
      Pursuant to section 4746, if necessary the Director of
OMB shall make any determination of the functions transferred
pursuant to subtitle G.
Sec. 4747. Certain vesting of functions considered transfers
      Section 4747 states that the vesting of a function in a
department or office pursuant to reestablishment of an office
shall be considered to be the transfer of that function.
Sec. 4748. Availability of existing funds
      Under section 4748, existing appropriations and funds
available for the performance of functions and other activities
terminated pursuant to subtitle G shall remain available (for
the duration of their period of availability) for necessary
expenses in connection with the termination and resolution of
such functions and activities, subject to the submission of a
plan to House and Senate appropriators in accordance with
Public Law 105-277 (Departments of Commerce, Justice, and
State, the Judiciary and Related Agencies Appropriations Act,
Fiscal Year 1999).
Sec. 4749. Definitions
      ``Function'' includes any duty, obligation, power,
authority, responsibility, right, privilege, activity, or
program.
      ``Office'' includes any office, administration, agency,
bureau, institute, council, unit, organizational entity, or
component thereof.

              Subtitle H--Miscellaneous Patent Provisions

      Subtitle H consists of seven largely-unrelated provisions
that make needed clarifying and technical changes to the Patent
Act. Subtitle H also authorizes a study. The provisions in
Subtitle H take effect on the date of enactment except where
stated otherwise in certain sections.
Sec. 4801. Provisional applications
      Section 4801 amends section 111(b)(5) of the Patent Act
by permitting a provisional application to be converted into a
non-provisional application. The applicant must make a request
within 12 months after the filing date of the provisional
application for it to be converted into a non-provisional
application.
      Section 4801 also amends section 119(e) of the Patent Act
by clarifying the treatment of a provisional application when
its last day of pendency falls on a weekend or a Federal
holiday, and by eliminating the requirement that a provisional
application must be co-pending with a non-provisional
application if the provisional application is to be relied on
in any USPTO proceeding.
Sec. 4802. International applications
      Section 4802 amends section 119(a) of the Patent Act to
permit persons who filed an application for patent first in a
WTO \24\ member country to claim the right of priority in a
subsequent patent application filed in the United States, even
if such country does not yet afford similar privileges on the
basis of applications filed in the United States. This
amendment was made in conformity with the requirements of
Articles 1 and 2 of the TRIPS Agreement.\25\ These Articles
require that WTO member countries apply the substantive
provisions of the Paris Convention for the Protection of
Industrial Property to other WTO member countries. As some WTO
member countries are not yet members of the Paris Convention,
and as developing countries are generally permitted periods of
up to 5 years before complying with all provisions of the TRIPS
Agreement, they are not required to extend the right of
priority to other WTO member countries until such time.
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    \24\ World Trade Organization. The agreement establishing the WTO
is a multilateral instrument which creates a permanent organization to
oversee the implementation of the Uruguay Round Agreements, including
the GATT 1994, to provide a forum for multilateral trade negotiations
and to administer dispute settlements (see note 3, supra). Staff of the
House Comm. on Ways and Means, 104th Cong., 1st Sess., Overview and
Compilation of U.S. Trade Statutes 1040 (Comm. Print 1995)
[hereinafter, Overview and Compilation of U.S. Trade Statutes].
    \25\ Trade-Related Aspects of Intellectual Property Rights
Agreement; i.e., that component of GATT which addresses intellectual
property rights among the signatory members.
---------------------------------------------------------------------------
      Section 4802 also adds subsection (f) to section 119 of
the Patent Act to provide for the right of priority in the
United States on the basis of an application for a plant
breeder's right first filed in a WTO member country or in a
UPOV \26\ Contracting Party. Many foreign countries provide
only a sui generis system of protection for plant varieties.
Because section 119 presently addresses only patents and
inventors' certificates, applicants from those countries are
technically unable to base a priority claim on a foreign
application for a plant breeder's right when seeking plant
patent or utility patent protection for a plant variety in this
country.
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    \26\ International Convention for the Protection of New Varieties
of Plants. UPOV is administered by the World Intellectual Property
Organization (WIPO), which is charged with the administration of, and
activities concerning revisions to, the international intellectual
property treaties. UPOV has 40 members, and guarantees plant breeders
national treatment and right of priority in other countries that are
members of the treaty, along with certain other benefits. See M.A.
Leaffer, International Treaties on Intellectual Property at 47 (BNA, 2d
ed. 1997).
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      Subsection (g) is added to section 119 to define the
terms ``WTO member country'' and ``UPOV Contracting Party.''
Sec. 4803. Certain limitations on remedies for patent infringement not
        applicable
      Section 4803 amends section 287(c)(4) of the Patent Act,
which pertains to certain limitations on remedies for patent
infringement, to make it applicable only to applications filed
on or after September 30, 1996.
Sec. 4804. Electronic filing and publications
      Section 4804 amends section 22 of the Patent Act to
clarify that the USPTO may receive, disseminate, and maintain
information in electronic form. Subsection (d)(2), however,
prohibits the Director from ceasing to maintain paper or
microform collections of U.S. patents, foreign patent
documents, and U.S. trademark registrations, except pursuant to
notice and opportunity for public comment and except the
Director shall first submit a report to Congress detailing any
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.
      In addition, in the operation of its information
dissemination programs and as the sole source of patent data,
the USPTO should implement procedures that assure that bulk
patent data are provided in such a manner that subscribers have
the data in a manner that grants a sufficient amount of time
for such subscribers to make the data available through their
own systems at the same time the USPTO makes the data publicly
available through its own Internet system.
Sec. 4805. Study and report on biologic deposits in support of
        biotechnology patents
      Section 4805 charges the Comptroller General, in
consultation with the Director of the USPTO, with conducting a
study and submitting a report to Congress no later than six
months after the date of enactment on the potential risks to
the U.S. biotechnological industry regarding biological
deposits in support of biotechnology patents. The study shall
include: an examination of the risk of export and of transfers
to third parties of biological deposits, and the risks posed by
the 18-month publication requirement of subtitle E; an analysis
of comparative legal and regulatory regimes; and any related
recommendations. The USPTO is then charged with considering
these recommendations when drafting regulations affecting
biological deposits.
Sec. 4806. Prior invention
      Section 4806 amends section 102(g) of the Patent Act to
make clear that an inventor who is involved in a USPTO
interference proceeding and establishes a date of invention
under section 104 is subject to the requirements of section
102(g), including the requirement that the invention was not
abandoned, suppressed, or concealed.
Sec. 4807. Prior art exclusion for certain commonly assigned patents
      Section 4807 amends section 103 of the Patent Act, which
sets forth patentability conditions related to the
nonobviousness of subject matter. Section 103(c) of the current
statute states that subject matter developed by another person
which qualifies as prior art only under section 102(f) or (g)
shall not preclude granting a patent on an invention with only
obvious differences where the subject matter andclaimed
invention were, at the time the invention was made, owned by the same
person or subject to an obligation of assignment to the same person.
The bill amends section 103(c) by adding a reference to section 102(e),
which currently bars the granting of a patent if the invention was
described in another patent granted on an application filed before the
applicant's date of invention. The effect of the amendment is to allow
an applicant to receive a patent when an invention with only obvious
differences from the applicant's invention was described in a patent
granted on an application filed before the applicant's invention,
provided the inventions are commonly owned or subject to an obligation
of assignment to the same person.
Sec. 4808. Exchange of copies of patents with foreign countries
      Sec. 4808 amends section 12 of the Patent Act to prohibit
the Director of the USPTO from entering into an agreement to
exchange patent data with a foreign country that is not one of
our NAFTA \27\ or WTO trading partners, unless the Secretary of
Commerce explicitly authorizes such an exchange.
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    \27\ North American Free Trade Agreement, Pub. L. No. 103-182. The
cornerstone of NAFTA is the phased-out elimination of all tariffs on
trade between the U.S., Canada, and Mexico. Overview and Compilation of
U.S. Trade Statutes 1999.
---------------------------------------------------------------------------

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 5001. Commission on Online Child Protection
      Section 5001(a) provides that references contained in the
amendments made by this title are to section 1405 of the Child
Online Protection Act (47 U.S.C. 231 note).
      Section 5001(b) amends the membership of the Commission
on Online Child Protection to remove a requirement that a
specific number of representatives come from designated sectors
of private industry, as outlined in the Act. Section 5001(b)
also provides that the members appointed to the Commission as
of October 31, 1999, shall remain as members. Section 5001(b)
also prevents the members of the Commission from being paid for
their work on the Commission. This provision, however, does not
preclude members from being reimbursed for legitimate costs
associated with participating in the Commission (such as travel
expenses).
      Section 5001(c) extends the due date for the report of
the Commission by one year.
      Section 5001(d) establishes that the Commission's
statutory authority will expire either (1) 30 days after the
submission of the report required by the Act, or (2) November
30, 2000, whichever is earlier.
      Section 5001(e) requires the Commission to commence its
first meeting no later than March 31, 2000. Section 5001(e)
also requires that the Commission elect, by a majority vote, a
chairperson of the Commission not later than 30 days after
holding its first meeting.
      Section 5001(f) establishes minimum rules for the
operations of the Commission, and also allows the Commission to
adopt other rules as it deems necessary.
Sec. 5002. Privacy protection for donors to public broadcasting
        entities
      This provision, which was added in Conference, protects
the privacy of donors to public broadcasting entities.
Sec. 5003. Completion of biennial regulatory review
      Section 5003 provides that, within 180 days after the
date of enactment, the FCC will complete the biennial review
required by section 202(h) of the Telecommunications Act of
1996. The Conferees expect that if the Commission concludes
that it should retain any of the rules under the review
unchanged, the Commission shall issue a report that includes a
full justification of the basis for so finding.
Sec. 5004. Broadcasting entities
      This provision, added in Conference, allows for a
remittance of copyright damages for public broadcasting
entities where they are not aware and have no reason to believe
that their activities constituted violations of copyright law.
This is currently the standard for nonprofit libraries,
archives and educational institutions.
Sec. 5005. Technical amendments relating to vessel hull design
        protection
      This section makes several amendments to chapter 13 of
title 17 relating to design protection for vessel hulls. The
sunset provision for chapter 13, enacted as part of the Digital
Millennium Copyright Act, is removed so that chapter 13 is now
a permanent chapter of title 17. The timing and number of joint
studies to be done by the Copyright Office and the Patent and
Trademark Offices of the effectiveness of chapter 13 are also
amended by reducing the number of studies from two to one, and
requiring that the one study not be submitted until November 1,
2003. Current law requires delivery of two studies within the
first two years of chapter 13, which is unnecessary and an
insufficient amount of time for the Copyright Office and the
Patent and Trademark Office to accurately measure and assess
the effectiveness of design protection within the marine
industry.
      The definition of a ``vessel'' in chapter 13 is amended
to provide that in addition to being able to navigate on or
through water, a vessel must be self-propelled and able to
steer, and must be designed tocarry at least one passenger.
This clarifies Congress's intent not to allow design protection for
such craft as barges, toy and remote controlled boas, inner tubes and
surf boards.
Sec. 5006. Informal rulemaking of copyright determination
      The Copyright Office has requested that Congress make a
technical correction to section 1201(a)(1)(C) of title 17 by
deleting the phrase ``on the record.'' The Copyright Office
believes that this correction is necessary to avoid any
misunderstanding regarding the intent of Congress that the
rulemaking proceeding which is to be conducted by the Copyright
Office under this provision shall be an informal, rather than a
formal, rulemaking proceeding. Accordingly, the phrase ``on the
record'' is deleted as a technical correction to clarify the
intent of Congress that the Copyright Office shall conduct the
rulemaking under section 1201(a)(1)(C) as an informal
rulemaking proceeding pursuant to section 553 of Title 5. The
intent is to permit interested persons an opportunity to
participate through the submission of written statements, oral
presentations at one or more of the public hearings, and the
submission of written responses to the submissions or
presentations of others.
Sec. 5007. Service of process for surety corporations
      This section allows surety corporations, like other
corporations, to utilize approved state officials to receive
service of process in any legal proceeding as an alternative to
having a separate agent for service of process in each of the
94 federal judicial districts.
Sec. 5008. Low-power television
      Section 5009, which can be cited as the Community
Broadcasters Protection Act of 1999, will ensure that many
communities across the nation will continue to have access to
free, over-the-air low-power television (LPTV) stations, even
as full-service television stations proceed with their
conversion to digital format. In particular, Section 5009
requires the Federal Communications Commission (FCC) to provide
certain qualifying LPTV stations with ``primary'' regulatory
status, which in turn will enable these LPTV stations to
attract the financing that is necessary to provide consumers
with critical information and programming. At the same time,
recognizing the importance of, and the engineering complexity
in, the FCC's plan to convert full-service television stations
to digital format, Section 5009 protects the ability of these
stations to provide both digital and analog service throughout
their existing service areas.
      The FCC began awarding licenses for low-power television
service in 1982. Low-power television service is a relatively
inexpensive and flexible means of delivering programming
tailored to the interests of viewers in small localized areas.
It also ensures that spectrum allocated for broadcast
television service is more efficiently used and promotes
opportunities for entering the television broadcast business.
      The FCC estimates that there are more than 2,000 licensed
and operational LPTV stations, about 1,500 of which are
operated in the continental United States by 700 different
licensees in nearly 750 towns and cities.\28\ LPTV stations
serve rural and urban communities alike, although about two-
thirds of all LPTV stations serve rural communities. LPTV
stations in urban markets typically provide niche programming
(e.g., bilingual or non-English programming) to under-served
communities in large cities. In many rural markets, LPTV
stations are consumers' only source of local, over-the-air
programming. Owners of LPTV stations are diverse, including
high school and college student populations, churches and
religious groups, local governments, large and small
businesses, and even individual citizens.
---------------------------------------------------------------------------
    \28\ LPTV stations are distinct from so called ``translators.''
Whereas LPTV stations typically offer orginal programming, translators
merely amplify or ``boost'' a full-service television station's signal
into rural and mountainous regions adjacent to the station's market.
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      From an engineering standpoint, the term ``low-power
television service'' means precisely what it implies, i.e.,
broadcast television service that operates at a lower level of
power than full-service stations. Specifically, LPTV stations
radiate 3 kilowatts of power for stations operating on the VHF
band (i.e., channels 2 through 13), and 150 kilowatts of power
for stations operating on the UHF band (i.e., channels 14
through 69). By comparison, full-service stations on VHF
channels radiate up to 316 kilowatts of power, and stations on
UHF channels radiate up to 5,000 kilowatts of power. The
reduced power levels that govern LPTV stations mean these
stations serve a much smaller geographic region than do full-
service stations. LPTV signals typically extend to a range of
approximately 12 to 15 miles, whereas the originating signal of
full-service stations often reach households 60 or 80 miles
away.
      Compared to its rules for full-service television station
licensees, the FCC's rules for obtaining and operating an LPTV
license are minimal. But in return for ease of licensing, LPTV
stations must operate not only at reduced power levels but also
as ``secondary'' licensees. This means LPTV stations are
strictly prohibited from interfering with, and must accept
signal interference from, ``primary'' licensees, such as full-
service television stations. Moreover, LPTV stations must yield
at any point in time to full-service stations that increase
their power levels, as well as to new full-service stations.
      The video programming marketplace is intensely
competitive. The three largest broadcast networks that once
dominated the market now face competition from several emerging
broadcast and cable networks, cable systems, satellite
television operators, wireless cable, and even the Internet.
Low-power television plays a valuable, albeit modest, role in
this market because it is capable of providing locally-
originated programming to rural and urban communities that have
either no access to local programming, or an over-abundance of
national programming.
      Low-power television's future, however, is uncertain. To
begin with, LPTV's secondary regulatory status means a licensee
can be summarily displaced by a full-service station that seeks
to expand its own service area, or by a new full-service
station seeking to enter the same market. This cloud of
regulatory uncertainty necessarily affects the ability of LPTV
stations to raise capital over the long-term, irrespective of
an LPTV station's popularity among consumers.
      The FCC's plan to convert full-service stations to
digital substantially complicates LPTV stations' already
uncertain future. In its digital television (DTV) proceeding,
the FCC adopted a table of allotments for DTV service that
provided a second channel for each existing full-service
station to use for DTV service in making the transition from
the existing analog technology to the new DTV technology. These
second channels were provided to broadcasters on a temporary
basis. At the end of the DTV transition, which is currently
scheduled for December 31, 2006, they must relinquish one of
their two channels.
      In assigning DTV channels, the FCC maintained the
secondary status of LPTV stations (as well as translators). In
order to provide all full-service television stations with a
second channel, the FCC was compelled to establish DTV
allotments that will displace a number of LPTV stations,
particularly in the larger urban market areas where the
available spectrum is most congested.
      The FCC's plan also provides for the recovery of a
portion of the existing broadcast television spectrum so that
it can be reallocated to new uses. Specifically, the FCC
provided for immediate recovery of broadcast channels 60
through 69, and for recovery of broadcast channels 52 through
59 at the end of the DTV transition. As further required by
Congress under the Balanced Budget Act of 1997, \29\ the FCC
has completed the reallocation of broadcast channels 60 through
69. Existing analog stations, including LPTV stations and a few
DTV stations, are permitted to operate on these channels during
the DTV transition. But at the end of the transition, all
analog broadcast TV stations will have to cease operation, and
the DTV stations on broadcast channels 52 through 69 will be
relocated to new channels in the DTV core spectrum. As a
result, the FCC estimates that the DTV transition will require
about 35 to 45 percent of all LPTV stations to either change
their operation or cease operation. Indeed, some full-service
stations have already ``bumped'' several LPTV stations a number
of times, at substantial cost to the LPTV station, with no
guarantee that the LPTV station will be permitted to remain on
its new channel in the long term.
---------------------------------------------------------------------------
    \29\ See 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
      The conferees, therefore, seek to provide some regulatory
certainty for low-power television service. The conferees
recognize that, because of emerging DTV service, not all LPTV
stations can be guaranteed a certain future. Moreover, it is
not clear that all LPTV stations should be given such a
guarantee in light of the fact that many existing LPTV stations
provide little or no original programming service.
      Instead, the conferees seek to buttress the commercial
viability of those LPTV stations which can demonstrate that
they provide valuable programming to their communities. The
House Committee on Commerce's record in considering this
legislation reflects that there are a significant number of
LPTV stations which broadcast programming--including locally
originated programming--for a substantial portion of each day.
From the consumers' perspective, these stations provide video
programming that is functionally equivalent to the programming
they view on full-service stations, as well as national and
local cable networks. Consequently, these stations should be
afforded roughly similar regulatory status. Section 5009, the
Community Broadcasters Protection Act of 1999, will achieve
that objective, and at the same time, protect the transition to
digital.
      Section 5009(a) provides that the short title of this
section is the ``Community Broadcasters Protection Act of
1999.''
      Section 5009(b) describes the Congress' findings on the
importance of low-power television service. The Congress finds
that LPTV stations have operated in a manner beneficial to the
public, and in many instances, provide worthwhile and diverse
services to communities that lack access to over-the-air
programming. The Congress also finds, however, that LPTV
stations' secondary regulatory status effectively blocks access
to capital.
      Section 5009(c) amends section 336 of the Communications
Act of 1934 \30\ to require the FCC to create a new ``Class A''
license for certain qualifying LPTV stations. New paragraph
(1)(A) in particular directs the FCC to prescribe rules within
120 days of enactment for the establishment of a new Class A
television license that will be available to qualifying LPTV
stations. The FCC's rules must ensure that a Class A licensee
receives the same license terms and renewal standards as any
full-service licensee, and that each Class A licensee is
accorded primary regulatory status. Subparagraph (B) further
requires the FCC, within 30 days of enactment, to send to each
existing LPTV licensee a notice that describes the requirements
for Class A designation. Within 60 days of enactment (or within
30 days of the FCC's notice), LPTV stations intending to seek
Class A designation must submit a certification of eligibility
to the FCC. Absent a material deficiency in an LPTV station's
certification materials, the FCC is required under subparagraph
(B) to grant a certification of eligibility.
---------------------------------------------------------------------------
    \30\ 47 U.S.C. Sec. 336.
---------------------------------------------------------------------------
      Subparagraph (C) permits an LPTV station, within 30 days
of the issuance of the rules required under subparagraph (A),
to submit an application for Class A designation. The FCC must
award a Class A license to a qualifying LPTV station within 30
days of receiving such application. Subparagraph (D) mandates
that the FCC must act to preserve the signal contours of an
LPTV station pending the final resolution of its application
for a Class A license. In the event technical problems arise
that require an engineering solution to a full-service
station's allotted parameters or channel assignment in the DTV
table of allotments, subparagraph (D) requires the FCC to make
the necessary modifications to ensure that such full-service
station can replicate or maximize its service area, as provided
for in the FCC's rules.
      With regard to maximization, a full-service digital
television station must file an application for maximization or
a notice of intent to seek such maximization by December 31,
1999, file a bona fide application for maximization by May 1,
2000, and also comply with all applicable FCC rules regarding
the construction of digital television facilities. The term
``maximization'' is defined in paragraph 31 of the FCC's Sixth
Report and Order as the process by which stations increase
their service areas by operating with additional power or
higher antennae than specified in the FCC's digital television
table of allotments. Subparagraph (E) requires that a station
must reduce the protected contour of its digitaltelevision
service area in accordance with any modifications requested in future
change applications. This provision is intended to ensure that stations
indeed utilize the full amount of maximized spectrum for which they
originally apply by the aforementioned deadlines.
      Paragraph (2) lists the criteria an LPTV station must
meet to qualify for a Class A license. Specifically, the LPTV
station must: during the 90 days preceding the date of
enactment, broadcast a minimum of 18 hours per day--including
at least 3 hours per week of locally-originated programming--
and also be in compliance with the FCC's rules on low-power
television service; and from and after the date of its
application for a Class A license, be in compliance with the
FCC's rules for full-service television stations. In the
alternative, the FCC may qualify an LPTV station as a Class A
licensee if it determines that such qualification would serve
the public interest, convenience, and necessity or for other
reasons determined by the FCC.
      Paragraph (3) provides that no LPTV station authorized as
of the date of enactment may be disqualified for a Class A
license based on common ownership with any other medium of mass
communication.
      Paragraph (4) makes clear that the FCC is not required to
issue Class A LPTV stations (or translators) an additional
license for advanced television services. The FCC, however,
must accept applications for such services, provided the
station will not cause interference to any other broadcast
facility applied for, protected, permitted or authorized on the
date of the filing of the application for advanced television
services. Either the new license for advanced services or the
original license must be forfeited at the end of the DTV
transition. The licensee may elect to convert to advanced
television services on its analog channel, but is not required
to convert to digital format until the end of the DTV
transition.
      Paragraph (5) clarifies that nothing in new subsection
336(f) preempts, or otherwise affects, section 337 of the
Communications Act of 1934.\31\
---------------------------------------------------------------------------
    \31\ 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
      Paragraph (6) precludes the FCC from granting Class A
licenses to LPTV stations operating between 698 megahertz (MHz)
and 806 MHz (i.e., television broadcast channels 52 through
69). However, the FCC shall provide to LPTV stations assigned
to, and temporarily operating on, those channels the
opportunity to qualify for a Class A license. If a qualifying
LPTV station is ultimately assigned a channel within the band
of frequencies that will eventually comprise the ``core
spectrum'' (i.e., television broadcast channels 2 through 51),
then the FCC is required to issue a Class A license
simultaneously. However, the FCC may not grant a Class A
license to an LPTV station operating on a channel within the
core spectrum that the FCC will identify within 180 days of
enactment.
      Finally, paragraph (7) provides that the FCC may not
grant a Class A license (or a modification thereto) unless the
requesting LPTV station demonstrates that it will not interfere
with one of three types of radio-based services. First, under
subparagraph (A), the LPTV station must show that it will not
interfere with: (i) the predicted Grade B contour of any
station transmitting in analog format; or (ii) the digital
television service areas provided in the DTV table of
allotments; or the digital television areas explicitly
protected (as opposed to those areas that may be permitted) in
the Commission's digital television regulations; or the digital
television service areas of stations subsequently granted by
the FCC prior to the filing of a Class A application; or
lastly, stations seeking to maximize power under the FCC's
rules (provided such stations are in compliance with the
notification requirements under paragraph (1)).
      Second, under subparagraph (B), the LPTV station must
show that it will not interfere with any licensed, authorized
or pending LPTV station or translator. And third, under
subparagraph (C), the LPTV station must show that it will not
interfere with other services (e.g., land mobile services) that
also operate on television broadcast channels 14 through 20.
      Finally, paragraph (8) establishes priority for those
LPTVs that are displaced by an application filed under this
section, in that these LPTVs have priority over other LPTVs in
the assignment of available channels.

                From the Committee on Commerce, for
                consideration of the House bill and the Senate
                amendment, and modifications committee to
                conference:
                                   Tom Bliley,
                                   Billy Tauzin,
                                   Michael G. Oxley,
                                   John D. Dingell,
                                   Edward J. Markey,
                Provided that Mr. Boucher is appointed in lieu
                of Mr. Markey for consideration of secs.
                712(b)(1), 712(b)(2), and 712(c)(1) of the
                Communications Act of 1934 as added by sec. 104
                of the House bill.
                                   Rick Boucher,
                From the Committee on the Judiciary, for
                consideration of the House bill and the Senate
                amendment, and modifications committee to
                conference:
                                   Henry Hyde,
                                   Howard Coble,
                                   Bob Goodlatte,
                                   John Conyers,
                                   Howard L. Berman,
                                 Managers on the Part of the House.

                From the Committee on the Judiciary:
                                   Orrin Hatch,
                                   Strom Thurmond,
                                   Mike DeWine,
                                   Patrick Leahy,
                                   Herb Kohl,
                From the Committee on Commerce, Science, and
                Transportation:
                                   Ted Stevens,
                                   Fritz Hollings,
                                Managers on the Part of the Senate.

                                  <all>

