Prenda's Massive Trolling Take Revealed: $1.9 Million in 2012 Steele and Hansmeier Are Said to Have Taken in 70 Percent of That Sum

Prenda's massive trolling take revealed: $1.9 million in 2012 Steele and Hansmeier are said to have taken in 70 percent of that sum.

by Joe Mullin - Oct 18, 2013 3:07pm CDT

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Philip Taylor

A startling new document has been filed in court that sheds new light on the saga of copyright troll Prenda Law, one which reveals WHO'S BEHIND PRENDA the huge sums that accused copyright "pirates" paid: at least $1.9 LAW? million in 2012 alone. Judge: Prenda lawyer must sell condo, liquidate assets to pay $2.SM debt The spreadsheet detailing Prenda's finances was filed as evidence by former Prenda associate Brett Gibbs, a California lawyer who is Legal regulators move in on Prenda's Paul desperately trying to distance himself from the two lawyers widely Hansmeier, who may get disbarred pointed to as the masterminds behind Prenda-John Steele and Paul Hansmeier. At long last, Prenda mastermind hit with state bar complaint Since 2010, Prenda has sued thousands of John Doe defendants for illegally downloading pornographic movies. But after a Los Judge finds Prenda Law attorneys in contempt, says they hid assets Angeles federal judge slappedthe company with a tough sanctions order in May, its business has ground to a halt. 9th Circuit judges rip into Prenda Law copyright Yesterday, Gibbs filed a motion asking US District Judge Otis Wright trolling scheme to exempt him from that order. The sanctions have been appealed, and Steele hasinsisted they are illegal and misguided. Gibbs filed View all. .. the new documents yesterday in Wright's court.

As part of his argument showing his relative distance from the scheme, Gibbs has evidence showing Steele and Hansmeier's firm links to Prenda. That includes a spreadsheet showing Prenda's income from the "pirates" as being more than $1.9 million in 2012. Steele and Hansmeier collected about $1.3 million of that, according to Gibbs.

The spreadsheet, which was e-mailed to Gibbs in January of this year, has a section labeled "payment to old owners." Steele and Hansmeier were paid directly and also through a company they jointly owned called "Under the Bridge Consulting," according to Gibbs. He claims he was told in a telephone call that Under the Bridge is owned by Steele and Hansmeier. "The name 'Under the Bridge' presumably refers to a place where trolls congregate," notes Gibbs in a footnote.

The spreadsheet doesn't include payments that may have come from other Prenda accounts, "or settlements that may have bypassed Prenda completely."

Steele and Hansmeier have stated repeatedly they had no ownership stake in the Prenda enterprise. Steele even filed a bar complaint against Gibbs specifically stating "I never had an ownership interest in Prenda Law Inc.," and that he never had an ownership interest in Prenda shells like AF Holdings and Ingenuity 13. Gibbs titled the section of the motion introducing the financial evidence, "New Evidence of Lies and Fraud by Steele and Hansmeier."

A secret interest

And the $1.3 million they were paid directly isn't all, notes Gibbs.

Overall, Hansmeier received $645,821.29-$185,321.28 directly and $460,500.00 through Under the Bridge. Steele received $660,915.94, of which he got $200,415.94 directly and $460,500.00 via Under the Bridge.

Those sums don't include "tens of thousands of dollars in additional payments to or on behalf of Steele and Hansmeier for travel and entertainment, meals, credit card charges, and miscellaneous reimbursements, or payments to Steel's wife, Kerry Eckenrode Steele," notes the motion. It also does not include payments totaling $37,069.56 to Prenda lawyer Paul Duffy or Duffy Law Group.

The spreadsheet doesn't show exactly how the money flowed into the accounts. It simply lists the money flowing in from the copyright settlements as coming from "pirates," not specifying which Prenda shell handled the money. The spreadsheet doesn't list the individual settlement sums collected by Prenda either, most of which were a few thousand dollars or less. The money transfers shown on the spreadsheet as coming from "pirates" are big lumps of money, in several cases $100,000 or more at a time.

"Steele and Hansmeier were the primary beneficiaries of settlement payments to Prenda Law, giving them a compelling, if secret, financial interest in all aspects of Prenda's operations and litigation," concludes Gibbs.

Gibbs: I never thought this was unethical

Steele and Hansmeier, as well as official Prenda head Mark Lutz, have attacked Gibbs as a disgruntled ex• employee, culminating in "unsworn and virtually fact-free" bar complaints, states Gibbs, who fights that characterization here. He writes:

[T]he Principals' attempts to silence or discredit him are, in themselves, strong new evidence that Gibbs was truthful in his testimony. The Principals have not produced and cannot produce any evidence that Gibbs is lying, so their only hope of escaping sanctions in this and other courts is to destroy Gibbs' credibility or otherwise find a way to prevent him from testifying truthfully about their conduct. It is understandable that, as courts move closer to discovering the truth about Prenda Law and the Principals, their attempts to "Blame Everything On Gibbs" grow ever louder, more far-fetched and desperate.

Gibbs' motion goes on to highlight other elements of the Prenda fraud that have been alleged on the record by various defense attorneys, but weren't entirely clear at the time of Wright's May sanction order. For instance, he re-tells the story of how BitTorrent consultant Declan Neville found that Prenda had created a "honeypot," uploading its own files on Pirate Bay in order to induce downloading. As came out in a recent San Francisco hearing, Steele actually impersonated his former housekeeper, Alan Cooper, in phone calls to GoDaddy customer service, according to Gibbs, who identified his voice.

Cooper's name appears on several Prenda-related copyright assignments used by Prenda in litigation. The recorded phone calls make Steele's denial that he forged Cooper's name on those assignments "even less credible," asserts Gibbs.

Gibbs goes on to note that he testified extensively in San Francisco, helping defense lawyers in their attempt to win sanctions against Prenda in a separate case. While Gibbs was helpful, the supposed top guy at Prenda-Mark Lutz-couldn't even be bothered to show up. Gibbs writes: l Lutz... did not appear in court or telephone to explain his absence. Duffy did not attempt, in any meaningful way, to answr any of the specific questlons posed by the court. hen Lutz did not appear, Quffy called no other witnesses and presented almost no new evidence. Gibbs, on the other hand, voluntarily appeared and testified for over an hour answering every question posed to him by Defendant's attorney, the Court, and Duffy. Gibbs again testified that Steele and Hansmeier were the decision-makers at Prenda Law. Gibbs provided phone records of calls with Steele and Hansmeier detailing hundreds of calls, including calls on dates that were specifically relevant to issues arising in the Navasca case.

Gibbs didn't know about the allegedly forged documents, he emphasized. He thought that "clients" like AF Holdings were actual, independent entities, not shells set up for lawsuits. He took direction from Steele and Hansmeier and "never thought he was being directed to do anything illegal or unethical."

Finally, Gibbs notes that while he's asking for the court to toss out the sanctions order against him, he has no problem with being referred, along with Duffy, Steele, and Hansmeier, to the IRS, the state bar, and to criminal investigators. "Gibbs wants these investigations to proceed and will continue to cooperate fully with them," his motion concludes. 9th Circuit judges rip into Prenda Law copyright trolling scheme "They should have taken the 5th... They were engaged in extortion ."

by Joe Mullin - May 4, 2015 4:49pm CDT

US Court of Appeals for the 9th Circuit

It's been more than two years since the "copyright trolling" firm called Prenda Law began to unravel, after a disastrous hearing in BEHIND PRENDA the courtroom of US District Court Judge Otis Wright led to bruising w?s sanctions and a referralto criminal investigators. Judge: Prenda lawyer must sell condo, liquidate assets to pay $2.SM debt The attorneys said to be operating Prenda, Paul Hansmeier and John Steele, have long denied their involvement, and they Legal regulators move in on Prenda's Paul denounced Wright's order as lacking due process. They've seen Hansmeier, who may get disbarred through an appeal of the case after posting a $238,000 bond that will go to defense attorney Morgan Pietz and his anonymous client if At long last, Prenda mastermind hit with state bar Steele and Hansmeier lose. complaint

A roughly hour-long oral argument held this morning at the 9th Judge finds Prenda Law attorneys in contempt, says Circuit's Pasadena courthouse suggests that things aren't looking they hid assets good for Team Prenda. Appeals court: Shell game over, Prenda Law must

pay sanctions in full "Who ran this operation?" View all. .. All the sanctioned Prenda parties-Steele, Hansmeier, Paul Duffy, and several Prenda-linked shell companies-were represented on appeal by Daniel Voelker, the same attorney who argued for them.to no avail, in their 7th Circuit appeal last year.

Voelker argued that the trio of attorneys were denied due process by Wright, who punished them for invoking their 5th Amendment right. Wright made accusations of fraud and forgery, at one point threatening incarceration as a possible sanction, noted Voelker. By doing so, the judge had initiated an "indirect criminal contempt" proceeding that warranted additional protections, he explained.

"The entire proceeding was tainted," Voelker said. "Mark Lutz, the CEO of Ingenuity 13, was not allowed to testify. As soon as they asserted their 5th amendment rights, the judge stopped the proceeding. He can't use that against them."

"Sure he can," responded US Circuit Judge Richard Tallman. "He can draw adverse inferences. The district court was trying to gather facts. Your clients didn't appear for the first hearing."

"Explain to me in simple English how this operation worked-from the beginning," said US Circuit Judge Harry Pregerson. "How did they make their money? Who ran this operation?" Daniel Voelker, representing Prenda-linked lawyers Hansmeier and Steele on appeal.

"I don't know," Voelker said. 9th Circuit video

"You don't know anything, do you?" Pregerson said.

"I know Mr. Lutz was the CEO, and he wasn't allowed to testify."

"They should have taken the 5th, because they were engaged in extortion," Pregerson said. "They sent out thousands of extortionate letters."

"The principals of Prenda set up these companies, who would then pursue ... early discovery, to try to get a settlement," said US Circuit Judge Jacqueline Nguyen. She told Voelker he was "swimming uphill" if he was going to try to argue there were no "bad faith" tactics. "Those are well supported in the record," said Nguyen. "This wasn't exactly a clean operation."

Nguyen and Tallman both seemed concerned about the "multiplier" that the district court had imposed, doubling the fee award as a sheerly punitive measure. At one point Nguyen even suggested that Voelker focus his arguments around that multiplier.

But Voelker persisted in arguing that the proceeding was tainted and that the sanctions should be thrown out entirely.

"Let's say you're right," said Pregerson. "Do you want us to send this back and have this turn into a criminal contempt proceeding?"

"Absolutely, your honor," said Voelker. "My clients want their day in court, with procedural protections."

The judges were taken aback at that remark.

"With a potential penalty of life in prison for criminal contempt?" asked Tallman. "They're prepared to run that gauntlet?"

"I'm amazed that you are asking us to vacate the sanctions and send it back for an independent prosecutor to pursue," said Nguyen. There are other cases across the country that such a prosecution could bring up, as well, she noted.

"I'm giving you their message," said Voelker. "They're citizens of the United States, and that's what they would like."

At one point, Pregerson began reading out loud one of the Prenda threat letters that had been entered into evidence, asking for a $3,400 payment in order to avoid being named in a federal lawsuit over pornographic content.

"This was a very clever scheme they were involved in," said Pregerson. He continued:

"They used our court system for illegal purposes to extort money-they used our discovery system. They bought these pornographic films, and seeded the Internet with them. This is going to be written about, for years and years. You're probably going to be part of the story. Idon't know where this is going to end up. If they really want to have a trial on this, with all protections of a criminal case-burden of proof, and a prosecutor, and all the rest of it-you sure they want that?"

They want their day in court, Voelker repeated.

From paralegal to mastermind?

"What happened here is the reason why many people hate lawyers," said defense lawyer Morgan Pietz, who represents a John Doe client in this case. "The word was used at one point, 'a disgrace to the profession.' That's why I'm here, why I was involved in the case below, and why I'm still here.''

Pietz represented dozens of Prenda defendants over the years the firm was active. In the case argued today, Pietz represented a John Doe client accused of downloading a pornographic movie owned by Ingenuity 13, a Prenda shell company.

The idea that Lutz would have offered game-changing testimony at the April 2013 hearing was a far-fetched one, Pietz argued. Lutz had multiple opportunities to testify in copyright-trolling cases after the Ingenuity 13 case, and he didn't show up to those hearings.

"Lutz was a paralegal for Steele Hansmeier," said Pietz. "This notion that he went from a humble paralegal at Prenda, to the mastermind overseeing shell companies, and overseeing 20 Morgan Pietz defending the attorneys' fees awarded to lawyers across the country-it doesn't hold water.'' him as a sanction.

Pietz argued that legal precedent did allow for an imposition of strong sanctions, including the "multiplier" that the judges indicated they had some reservations about. "The fundamental concern of civil sanctions is supposed to be deterrence," he said.

As to the other side's suggestion that Prenda principals deserve criminal protections, Pietz was fine with them having it-in a separate criminal proceeding.

"The court can do both," said Pietz. "Award the maximum civil sanction in this appeal and grant them their wish of an additional criminal proceeding.''

At one point, one of the judges asked Pietz if he knew anything about any criminal investigation into the Prenda principals. He said he wasn't aware of any. It's possible the authorities are waiting on a decision by the appellate panel before taking action, he noted. The Switch Firm accused of uploading porn, shaking down people who download it

By Andrea Peterson and Timothy B. Lee August 16, 2013

Piratebay user sharkmp4 was just outed as a Prenda honeypot (viaMagnus Brath)

Prenda Law is one of the Internet's most prolific copyright trolls: firms that catch users downloading content from peer-to-peer networks, threaten them with lawsuits and then offer to "settle" for less than the cost of defending a lawsuit. The tactic is

, _ 1 1 . rr _ • • . r • • 1. • 1 because many users are afraid to have their name associated with titles like "In Love with Jynx Maze", "Sexual Obsessions" and "Look What I Found in the Street 5" in public court documents.

But Prenda has repeatedly been accused of cutting legal and ethical corners. In one case last year, a Minnesota man sued Prenda for alleged identicy theft after the man's name was listed as the CEO of a Prenda shell company without his permission. The allegations have led to tens of thousands of dollarsin fines against the company.

This week Prenda faces fresh allegations of unethical conduct. TorrentFreak says it obtained documents that QQear to show that someone associated with Prenda uploaded some of the copyrighted pornographic films that it subsequently threatened users for downloading.

The Switch newsletter Sign up The day's top stories on the world of tech.

Earlier this summer, an expert re ort filed by a Bittorrent monitoring company associated with a suit involving Prenda suggested that one user who allegedly uploaded many of the videos, sharkmp4, may have been associated with Prenda itself. The file-sharing site the Pirate Bay, then jumped in andidentified several IP addresses that it said were used by sharkmp4. 6/10/2016 Brief History rJ the Internet - Internet Timeline IInternet Society ...... ,..._.., ,..=, 'L Internet

TIO

Brief History of the Internet Bany M. Leiner, Vinton G. Cerf, David D. Clark, Robert E. Kahn, Leonard Kleinrock, Daniel C. Lynch, Jon Postel, Lany G. Roberts, Stephen Wolff

Origins of the Internet The Initial Intemetting Concepts Proving the Ideas Transition to Widespread Infrastructure The Role of Documentation Formation of the Broad Community Commercialization of the Technology History of the Future Footnotes Timeline References Authors

Introduction The Internet has revolutionized the computer and communications world like nothing before. The invention of the telegraph , telephone, radio. and computer set the stage for this unprecedented integration of capabilities. The Internet is at once a world-wide broadcasting capability, a mechanism for information dissemination. and a medium for collaboration and interaction between individuals and their computers without regard for geographic location . The Internet represents one of the most successful examples of the benefits of sustained i nvestment and commitment to research and development of information infrastructure. Beginning wi th the early research in packet switching, the government, industry and academia have been partners in evolving and deploying this exciting new technology . Today, terms like "[email protected]" and "http://www.acm.org" tlip lightly off the tongue of the random person on the street. I

This is intended to be a brief, necessarily cursory and incomplete history. Much material currently exists about the Internet , covering history, technology, and usage. A trip to almost any bookstore will find shelves of material written about the Internet. 2

In this paper,3 several of us involved in the development and evolution of the Internet share our views of its origins and history. This history revolves around four distinct aspects. There is the technological evolution that began with early research on packet switching and the ARPANET (and related technologies), and where current research continues to expand the horizons of the infrastructure along several dimensions, such as scale, performance, and higher-level functionality.There is the operations and management aspect of a global and complex operational infrastructure . There is the social aspect, which resulted in a broad community of Intemauts working together to create and evolve the technology. And there is the commercialization aspect , resulting in an extremely effective transition of research results into a broadly deployed and available information infrastructure .

The Internet today is a widespread information infrastructure, the initial prototype of what is often called the National (or Global or Galactic) Information Infrastructure .Its history is complex and involves many aspects - technological, organizational, and community. And its influence reaches not only to the technical fields of computer communications but throughout society as we move toward increasing use of online tools to accomplish electronic commerce. information acquisition, and community operations.

Ori2ins of the Internet http://www.internetsociety. orWinternet/what-internet/history-internet/brief-history-internet 1/13 6/10/2016 Brief History of the Internet - lnternet Timeline I Internet Society

The first recorded description of the social interactions that could be enabled through networking was a series of memos written by J.C.R . Licklider of MIT i n August 1962 discussi ng his "Galactic Network" concept. He envisioned a globally interconnected set of computers through which everyone could quickly access data and programs from any site. In spirit, the concept was very much like the Internet of today. Licklider was the first head of the computer research program at DARPA,4 starting in October 1962. While at DARPA he convinced his successors at DARPA, Ivan Sutherland, Bob Taylor, and MIT researcher Lawrence G. Roberts, of the importance of this networking concept.

Leonard Kleinrock at MIT published the first paper on packet switching theory in July 1961 and the first book on the subject i n 1964. Kleinrock convinced Roberts of the theoretical feasibility of communications using packets rather than circuits, which was a major step along the path towards computer networking . The other key step was to make the computers talk together. To explore this, in 1965 working with Thomas Menill, Roberts connected the TX-2 computer in Mass. to the Q-32 in California with a low speed dial-up telephone l i ne creating the first (however small) wide-area computer network ever built . The resu lt of this experi ment was the realization that the time-shared computers could work well together, running programs and retrieving data as necessary on the remote machine, but that the circuit switched telephone system was totally inadequate for the job . Kleinrock's conviction of the need for packet switching was confirmed .

In late 1966 Roberts went to DARPA to develop the computer network concept and quickly put together his plan for the "ARPANET", publishing it in 1967. At the conference where he presented the paper, there was also a paper on a packet network concept from the UK by Donald Davies and Roger Scantlebury of NPL. Scantlebury told Roberts about the NPL work as well as that of Paul Baran and others at RAND. The RAND group had written a paper on packet switching networks for secure voice in the military in 1964. It happened that the work at MIT (I 961-1 967), at RAND (1962-1965), and at NPL (1964-1967) had all proceeded in parallel without any of the researchers knowing about the other work . The word "packet" was adopted from the work at NPL and the proposed l ine speed to be used i n the ARPANET design was upgraded from 2.4 kbps to 50 kbps. 5

In August 1968, after Roberts and the DARPA funded community had refined the overall structure and specifications for the ARPANET, an RFQ was released by DARPA for the development of one of the key components, the packet switches called Interface Message Processors (IMP's). The RFQ was won in December 1968 by a group headed by Frank Heart at Bolt Beranek and Newman (BBN). As the BBN team worked on the IMP's with Bob Kahn playing a major role in the overall ARPANET architectural design, the network topology and economics were designed and optimized by Roberts working with Howard Frank and his team at Network 6 Analysis Corporation, and the network measurement system was prepared by Kleinrock's team at UCLA.

Due to Kleinrock's early development of packet switching theory and his focus on analysis. design and measurement, his Network Measurement Center at UCLA was selected to be the first node on the ARPANET. All this came together in September 1969 when BBN installed the first IMP at UCLA and the first host computer was connected. Doug Engelbart's project on "Augmentation of Human Intellect" (which included NLS, an early hypertext system) at Stanford Research Institute (SRn provided a second node. SRI supported the Network Information Center, led by Elizabeth (Jake) Feinler and including functions such as maintaining tables of host name to address mapping as well as a directory of the RFC's.

One month later, when SRI was connected to the ARPANET, the first host-to-host message was sent from Kleinrock's laboratory to SRI. Two more nodes were added at UC Santa Barbara and University of Utah. These last two nodes incorporated appl ication visualization projects, with Glen Culler and Burton Fried at UCSB investigating methods for display of mathematical functions using storage displays to deal with the problem of refresh over the net, and Robert Taylor and Ivan Sutherland at Utah investigating methods of3-D representations over the net. Thus, by the end of 1969, four host computers were connected together into the initial ARPANET, and the budding Internet was off the ground. Even at this early stage, it should be noted that the networking research incorporated both work on the underlying network and work on how to utilize the network. This tradition continues to this day.

Computers were added quickly to the ARPANET during the following years, and work proceeded on completing a functionally complete Host-to-Host protocol and other network software. In December I 970 the Network Working Group (NWG) working under S. Crocker finished the initial ARPANET Host-to-Host

protocol, called the Network Control Protocol (NCP). As the ARPANET sites completed implementing NCP during the period 1971-1972, the network users finally could begin to develop applications.

http://www.internetsociety.orglinternet/what-internet/history-internet/brief-history-i nternet 2/13 6110/2016 Brief History of the Internet - Internet Timeline I Internet Society

Computer Communication Conference (!CCC). This was the first public demonstration of this new network technology to the public. It was also in 1972 that the initial "hot" application, electronic mail, was introduced. In March Ray Tomlinson at BBN wrote the basic email message send and read software, motivated by the need of the ARPANET developers for an easy coordination mechanism . In July, Roberts expanded its utility by writing the first email utility program to list, selectively read, file, forward, and respond to messages. From there email took off as the largest network application for over a decade. This was a harbinger of the kind of activity we see on the World Wide Web today, namely, the enormous growth of all kinds of "people-to-people" traffic.

The Initial Internetting Concepts The original ARPANET grew into the Internet. Internet was based on the idea that there would be multiple i ndependent networks of rather arbitrary design, begin ning with the ARPANET as the pioneering packet switching network, but soon to include packet satellite networks, ground-based packet radio networks and other networks. The Internet as we now know it embodies a key underlying technical idea_. namely that of open architecture networking. In this approach, the choice of any individual network technology was not dictated by a particular network architecture but rather could be selected freely by a provider and made to interwork with the other networks through a meta-level "lntemetworking Architecture" . Up until that time there was only one general method for federating networks. This was the traditional circuit switching method where networks would interconnect at the circuit level, passing individual bits on a synchronous basis along a portion of an end- to-end circuit between a pair of end locations. Recall that Kleinrock had shown in 1961 that packet switching was a more efficient switching method. Along with packet switching, special purpose interconnection arrangements between networks were another possibility. While there were other limited ways to interconnect different networks, they required that one be used as a component of the other, rather than acting as a peer of the other in offering end-to-end service.

In an open-architecture network, the individual networks may be separately designed and developed and each may have its own unique interface which it may offer to users and/or other providers. including other Internet providers. Each network can be designed in accordance with the specific environ ment and user requirements of that network . There are generally no constrai_nts on the types of network that can be included or on their geographic scope, although certain pragmatic considerations will dictate what makes sense to offer.

The idea of open-architecture networking was first introduced by Kahn shortly after having arrived at DARPA in 1972. This work was originally part of the packet radio program, but subsequently became a separate program in its own right . At the time, the program was called "Intemetting". Key to making the packet radio system work was a reliable end-end protocol that could maintain effective communication in the face of jamming and other radio interference, or withstand intermittent blackout such as caused by being in a tunnel or blocked by the local terrain. Kahn first contemplated developing a protocol local on ly to the packet radio network, since that would avoid having to deal with the multitude of di tferent operating systems, and continuing to use NCP.

However, NCP did not have the abil ity to address networks (and machines) further downstream than a destination IMP on the ARPANET and thus some change to NCP would also be required. (The assumption was that the ARPANET was not changeable in this regard). NCP relied on ARPANET to provide end-to-end reliability. If any packets were lost, the protocol (and presumably any applications it supported) would come to a grinding halt. In this model NCP had no end-end host error control, since the ARPANET was to be the only network in existence and it would be so reliable that no error control would be required on the part of the hosts. Thus, Kahn decided to develop a new version of the protocol which could meet the needs of an open• architecture network environment. This protocol would eventually be called the Transmission Control Protoco l/Internet Protocol (TCP/IP). While NCP tended to act like a device driver, the new protocol would be more like a communications protocol.

Four ground rules were critical to Kahn's early thinking :

Each distinct network would have to stand on its own and no internal changes could be required to any

such network to connect it to the Internet. Communications would be on a best effort basis. If a packet didn't make it to the final destination, it would shortly be retransmitted from the source. Black boxes would be used to connect the networks; these would later be called gateways and routers. There would be no information retained by the gateways about the individual flows ofoackets passing http://www.i nternetsociety.orglinternet/what-internet/history-internet/brief-history-internet 3/13 6110/2016 Brief History of the Internet - Internet Timeline I Internet Society

through them. thereby keeping them simple and avoiding complicated adaptation and recovery from various failure modes. There would be no global control at the operations level.

Other key issues that needed to be addressed were:

Algorithms to prevent lost packets from permanently disabling communications and enabling them to be successfully retransmitted from the source. Providing for host-to-host "pipelining" so that multiple packets could be enroute from source to destination at the discretion of the participating hosts, if the intermediate networks allowed it. Gateway functions to allow it to forward packets appropriately. This included interpreting IP headers for routing, handling interfaces, breaking packets into smaller pieces ifnecessary, etc. The need for end-end checksums, reassembly of packets from fragments and detection of duplicates, if any. The need for global addressing Tech niques for host-to-host flow control. Interfacing with the various operating systems There were also other concerns, such as implementation efficiency, internetwork performance, but these were secondary considerations at first.

Kahn began work on a communications-oriented set of operating system principles while at BBN and documented some of his early thoughts in an internal BBN memorandum entitled "Communications Principles for Operating Systems". At this point he realized it would be necessary to learn the implementation details of each operating system to have a chance to embed any new protocols in an efficient way. Thus, in the spring of 1973, after starting the internetting effort, he asked Vint Cerf (then at Stanford) to work with him on the detailed design of the protocol. Cerf had been intimately involved in the original NCP design and development and already had the knowledge about interfacing to existing operating systems. So armed with Kahn's architectural approach to the communications side and with Cerfs NCP experience, they teamed up to spell out the details of what became TCP/IP.

The give and take was highly productive and the first written version 7 of the resulting approach was distributed at a special meeting of the International Network Working Group (INWG) which had been set up at a conference at Sussex University in September 1973. Cerf had been invited to chair this group and used the occasion to hold a meeting of INWG members who were heavily represented at the Sussex Conference.

Some basic approaches emerged from this collaboration between Kahn and Cerf:

Communication between two processes would logically consist of a very long stream of bytes (they called them octets). The position ofany octet in the stream would be used to identify it. Flow control would be done by using sliding windows and acknowledgments (acks). The destination could select when to acknowledge and each ack returned would be cumulative for all packets received to that point . It was left open as to exactly how the source and destination would agree on the parameters of the windowi ng to be used. Defaults were used initially. Although Ethernet was under development at Xerox PARC at that time, the proliferation of LANs were not envisioned at the time, much less PCs and workstations. The original model was national level networks like ARPANET of which only a relatively small number were expected to exist. Thus a 32 bit IP address was used of which the first 8 bits signified the network and the remaining 24 bits designated the host on that network. This assumption, that 256 networks would be sufficient for the foreseeable future, was clearly in need of reconsideration when LANs began to appear in the late 1970s.

The original Cerf/Kahn paper on the Internet described one protocol, called TCP, which provided all the transport and forwarding services in the Internet. Kahn had intended that the TCP protocol support a range of

which provided only for addressing and forwarding of individual packets, and the separate TCP, which was concerned with service features such as flow control and recovery from lost packets. For those applications that did not want the services of TCP, an alternative called the User Datagram Protocol (UDP) was added in order to provide direct access to the basic service ofIP.

A major initial motivation for both the ARPANET and the hitemet was resource sharing - for example allowing users on the packet radio networks to access the time sharing systems attached to the ARPANET. Connecting the two together was far more economical that duplicating these very expensive computers. However, while file transfer and remote login (Telnet) were very important applications, electronic mail has probably had the most significant impact of the innovations from that era. Emai I provided a new model of how people could communicate with each other, and changed the nature of collaboration, first in the building of the Internet itself (as is discussed below) and later for much of society.

There were other applications proposed in the early days of the Internet. including packet based voice communication (the precursoroflnternet telephony), various models of file and disk sharing, and early "worm" programs that showed the concept of agents (and, of course, viruses). A key concept of the Internet is that it was not designed forjust one application, but as a general infrastmcture on which new applications could be conceived, as illustrated later by the emergence of the World Wide Web. It is the general purpose nature of the service provided by TCP and IP that makes this possible.

Proving the Ideas DARPA let three contracts to Stanford (Cert), BBN (Ray Tomlinson) and UCL (Peter Kirstein) to implement TCP/IP (it was simply called TCP in the Cert7Kahn paper but contained both components). The Stanford team, led by Cerf, produced the detailed specification and within about a year there were three independent implementations of TCP that could interoperate.

This was the beginning oflong term experimentation and development to evolve and mature the Internet concepts and technology. Beginning with the first three networks (ARPANET, Packet Radio, and Packet Satellite) and thei r initial research communities, the experimental environment has grown to incorporate essentially every form of network and a very broad-based research and development community. [REK78] With each expansion has come new challenges.

The early implementations of TCP were done for large time sharing systems such as Tenex and TOPS 20. When desktop computers first appeared, it was thought by some that TCP was too big and complex to run on a personal computer. David Clark and his research group at MIT set out to show that a compact and simple implementation of TCP was possible. They produced an implementation, first for the Xerox Alto (the early personal workstation developed at Xerox PARC) and then for the IBM PC. That implementation was fully i nteroperable with other TCPs, but was tailored to the appl ication suite and performance objectives of the personal computer, and showed that workstations, as well as large time-sharing systems, could be a part of the Internet. In I 976, Kleinrock published the first book on the ARPANET. It included an emphasis on the complexity of protocols and the pitfalls they often introduce. This book was influential in spreading the lore of packet switching networks to a very wide community.

Widespread development of LANS, PCs and workstations in the I 980s allowed the nascent Internet to flourish. Ethernet technology, developed by Bob Metcalfe at Xerox PARC in 1973, is now probably the dominant network technology in the Internet and PCs and workstations the dominant computers. This change from having a few networks with a modest number of time-shared hosts (the original ARPANET model) to having many networks has resulted in a number of new concepts and changes to the underlying technology. First, it resulted in the definition of three network classes (A, B, and C) to accommodate the range ofnetworks. Class A represented large national scale networks (small number of networks with large numbers of hosts); Class B represented regional scale networks; and Class C represented local area networks (large number of networks

with relatively few hosts).

A major shift occurred as a result of the increase in scale of the Internet and its associated management issues. To make it easy for people to use the network, hosts were assigned names, so that it was not necessary to remember the numeric addresses. Originally, there were a fairly limited number of hosts, so it was feasible to maintain a single table ofall the hosts and their associated names and addresses. The shift to having a large number of independently managed networks (e.g., LANs) meant that having a single table of hosts was no longer feasible, and the Domain Name System (DNS) was invented by Paul Mockapetris of USC/ ISL The DNS http://www.internetsociety.org/interneVwhat-in ternet/history-internet/brief-history-internet 5113 6/10/2016 Brief History of the Internet - lnternet Timeline IInternet Society

Internet address.

The increase in the size of the Internet also challenged the capabilities of the routers. Originally. there was a single distributed algorithm for routing that was implemented uniformly by all the routers in the Internet . As the number ofnetworks in the Internet exploded, this initial design could not expand as necessary, so it was replaced by a hierarchical model of routing, with an Interior Gateway Protocol (IGP) used inside each region of the Internet, and an Exterior Gateway Protocol (EGP) used to tie the regions together. This design permitted different regions to use a different !GP, so that different requirements for cost, rapid reconfiguration, robustness and scale could be accommodated. Not only the routing algorithm, but the size of the addressing tables. stressed the capacity of the routers. New approaches for address aggregation , in particular classless inter• domain routing (CIDR), have recently been introduced to control the size of router tables.

As the Internet evolved.one of the major challenges was how to propagate the changes to the software, particularly the host software. DARPA supported UC Berkeley to investigate modifications to the Un ix operating system, including incorporating TCP/ IP developed at BBN. Although Berkeley later rewrote the BBN code to more efficiently fit into the Unix system and kernel, the incorporation of TCP/IP into the Unix BSD system releases proved to be a critical element in dispersion of the protocols to the research community. Much of the CS research community began to use Unix BSD for their day-to-day computing environment. Looking back, the strategy of incorporating Internet protocols into a supported operating system for the research community was one of the key elements in the successful widespread adoption of the Internet.

One of the more interesting challenges was the transition of the ARPANET host protocol from NCP to TCP/ IP as of January 1, 1983. This was a "flag-day" style transition, requiring all hosts to convert simultaneously or be left having to communicate via rather ad-hoc mechanisms . This transition was carefully planned with in the community over several years before it actually took place and went surprisingly smoothly (but resulted in a distribution of buttons saying "I survived the TCP/IP transition").

TCP/IP was adopted as a defense standard three years earlier in 1980. This enabled defense to begin sharing in the DARPA Internet technology base and led directly to the eventual partitioning of the military and non• mil itary communities. By 1983, ARPANET was being used by a significant number of defense R&D and operational organiz_ations . The transition of ARPANE from NCP to TCP/IP permitted it to be split into a MILNET supporting operational requirements and an ARPANET supporting research needs.

Thus, by 1985, Internet was already well established as a technology supporting a broad community of researchers and developers, and was beginning to be used by other communities for daily computer communications. Electronic mail was being used broadly across several communities, often with different systems. but interconnection between different mail systems was demonstrating the utility of broad based electronic communications between people.

Transition to Widespread Infrastructure At the same time that the Internet technology was being experimentally validated and widely used amongst a subset of computer science researchers, other networks and networking technologies were being pursued . The usefulness of computer networking -especially electronic mail - demonstrated by DARPA and Department of Defense contractors on the ARPANET was not lost on other communities and disciplines, so that by the mid• l 970s computer networks had begun to spring up wherever funding could be found for the purpose. The U.S. Department of Energy (DoE) established MFENet for its researchers in Magnetic Fusion Energy, whereupon DoE's High Energy Physicists responded by building HEPNet. NASA Space Physicists followed with SPAN. and Rick Adrion, David Farber, and Larry Landweber established CSNET for the (academic and industrial) Computer Science community with an initial grant from the U.S. National Science Foundation (NSF). AT&T's

free-wheeling dissemination of the UNIX computer operating system spawned USENET, based on UNIX' built• in UUCP communication protocols , and in 1981 Ira Fuchs and Greydon Freeman devised BITNET, which linked academic mainframe computers in an "email as card images" paradigm .

With the exception of BITNET and USENET, these early networks (including ARPANET) were purpose-built - i.e., they were intended for, and largely restricted to, closed communities of scholars; there was hence little pressure for the individual networks to be compatible and, indeed, they largely were not. In addition, alternate technologies were being pursued in the commercial sector, including XNS from Xerox, DECNet, and IBM's SNA.8 It remained for the British JANET (1984) and U.S. NSFNET (1985) programs to explicitly announce their intent to serve the entire higher education community, regardless of discipline. Indeed, a condition for a http://www.i nternetsociety.orgi nternet/what-i nternet/history-internet/brief-hi story-internet 6/13 6/10/2016 Brief History of the Internet - Internet Timeline IInternet Society U.S. university to receive NSF funding for an Internet connection was that "... the connection must be made available to ALL qualified users on campus."

In 1985, Den nis Jennings came from Ireland to spend a year at NSF leading the NSFNET program. He worked with the community to help NSF make a critical decision - that TCP/IP would be mandatory for the NSFNET program. When Steve Wolff took over the NSFNET program in 1986, he recognized the need for a wide area networking infrastructure to support the general academic and research community, along with the need to develop a strategy for establishing such infrastructure on a basis ultimately independent of direct federal funding. Policies and strategies were adopted (see below) to achieve that end.

NSF also elected to support DARPA's existing Internet organizational infrastructure, hierarchically arranged under the (then) Internet Activities Board (IAB). The public declaration of this choice was the joint authorship by the IAB's Internet Engineering and Architecture Task Forces and by NSF's Network Technical Advisory Group of RFC 985 (Requirements for Internet Gateways ), which formally ensured interoperability of DARPA's and NSF's pieces of the Internet.

In addition to the selection of TCP/IP for the NSFNET program, Federal agencies made and implemented several other policy decisions which shaped the Internet of today.

Federal agencies shared the cost of common infrastructure, such as trans-oceanic circuits. They also jointly supported "managed interconnection points" for interagency traffic; the Federal Internet Exchanges (FIX-E and FIX-W) built for this purpose served as models for the Network Access Points and "*IX" facilities that are prominent features of today's Internet architecture. To coordinate this sharing, the Federal Networking Counci l9 was formed. The FNC also cooperated with other international organizations, such as RARE in Europe, through the Coordinating Committee on Interconti nental Research Networking, CCIRN, to coordinate Internet support of the research commu nity worldwide. This sharing and cooperation between agencies on Internet-related issues had a long history. An unprecedented 1981 agreement between Farber, acting for CSNET and the NSF, and DARPA's Kahn, permitted CSNET traffic to share ARPANET infrastructure on a statistical and no-metered-settlements basis. Subsequently, in a similar mode, the NSF encouraged its regional (initially academic) networks of the NSFNET to seek conunercial, non-academic customers, expand their facilities to serve them, and exploit the resulting economies of scale to lower subscription costs for all. On the NSFNET Backbone - the national-scale segment of the NSFNET - NSF enforced an "Acceptable Use Pol icy" (AUP) which prohibi ted Backbone usage for purposes "not in support of Research and Education." The predictable (and intended) result of encouraging commercial network traffic at the local and regional level, while denying its access to national-scale transport, was to stimulate the emergence and/or growth of "private", competitive, long-haul networks such as PSI, UUNET, ANS Co+RE, and (later) others. This process of privately-financed augmentation for commercial uses was thrashed out starting in 1988 in a series of NSF-initiated conferences at Harvard's Kennedy School of Government on "The Commercialization and Privatization of the Internet" - and on the "com-priv" list on the net itself In 1988, a National Research Council committee, chaired by Kleinrock and with Kahn and Clark as members, produced a report commissioned by NSF titled "Towards a National Research Network". This report was influential on then Senator Al Gore, and ushered in high speed networks that laid the networking foundation for the future information superhighway. In 1994, a National Research Council report, again chaired by Kleinrock (and with Kahn and Clark as members again), Entitled "Realizing The Information Future: The Internet and Beyond" was released. This report, commissioned by NSF, was the document in which a blueprint for the evolution of the information superhighway was articulated and which has had a lasting affect on the way to think about its evolution. It anticipated the critical issues of intellectual property rights, ethics, pricing, education, architecture and regulation for the Internet. NSF's privatization policy culminated in April, 1995, with the defunding of the NSFNET Backbone. The funds thereby recovered were (competitively) redistributed to regional networks to buy national-scale Internet connectivity from the now numerous, private, long-haul networks.

The backbone had made the transition from a network built from routers out of the research community (the "Fuzzball" routers from David Mills) to commercial equipment. In its 8 1/2 year lifetime, the Backbone had grown from six nodes with 56 kbps links to 21 nodes with multiple 45 Mbps links. It had seen the Internet grow to over 50,000 networks on all seven continents and outer space, with approximately 29,000 networks in the United States. http://www.internetsociety.ar9'internet/what-internet/history-internet/brief-hi story-internet 7/13 6/10/2016 Brief History of the Internet - Internet Timeline IInternet Society

Such was the weight of the NSFNET program's ecumenism and funding ($200 million from 1986 to 1995) - and the quality of the protocols themselves - that by 1990 when the ARPANET itself was finally decommissioned 10, TCP/IP had supplanted or marginalized most other wide-area computer network protocols worldwide, and IP was well on its way to becoming THE bearer service for the Global Information Infrastructure.

The Role of Documentation A key to the rapid growth of the Internet has been the free and open access to the basic documents, especially the specifications of the protocols.

The beginnings of the ARPANET and the Internet in the university research community promoted the academic tradition of open publication of ideas and results. However, the normal cycle of traditional academic publication was too formal and too slow for the dynamic exchange of ideas essential to creating networks.

In 1969 a key step was taken by S. Crocker (then at UCLA) in establishing the Request for Comments (or RFC) series ofnotes. These memos were intended to be an informal fast distribution way to share ideas with other network researchers. At first the RFCs were printed on paper and distributed via snail mail. As the File Transfer Protocol (FTP) came into use, the RFCs were prepared as online files and accessed via FTP. Now, of course, the RFCs are easily accessed via the World Wide Web at dozens of sites around the world. SRI, in its role as Network Information Center, maintained the online directories. Jon Postel acted as RFC Editor as well as managing the centralized administration of required protocol number assignments, roles that he continued to play until his death, October 16, 1998.

The effect of the RFCs was to create a positive feedback loop, with ideas or proposals presented in one RFC triggering another RFC with additional ideas, and so on. When some consensus (or a least a consistent set of ideas) had come together a specification document would be prepared. Such a specification would then be used as the base for implementations by the various research teams.

Over time, the RFCs have become more focused on protocol standards (the "official" specifications), though there are still informational RFCs that describe alternate approaches, or provide background information on protocols and engineering issues. The RFCs are now viewed as the "documents ofrecord" in the Internet engineering and standards community.

The open access to the RFCs (for free, if you have any kind of a connection to the Internet) promotes the growth of the Internet because it allows the actual specifications to be used for examples in college classes and by entrepreneurs developing new systems.

Email has been a significant factor in all areas of the Internet, and that is certainly true in the development of protocol specifications, technical standards, and Internet engineering. The very early RFCs often presented a set of ideas developed by the researchers at one location to the rest of the community. After email came into use, the authorship pattern changed - RFCs were presented by joint authors with common view independent of their locations.

The use of specialized email mailing lists has been long used in the development of protocol specifications, and continues to be an important tool. The IETF now has in excess of 75 working groups, each working on a different aspect oflnternet engineering. Each of these working groups has a mailing list to discuss one or more

draft documents under development. When consensus is reached on a draft document it may be distributed as an RFC.

As the current rapid expansion of the Internet is fueled by the realization of its capability to promote information sharing, we should understand that the network's first role in information sharing was sharing the information about its own design and operation through the RFC documents. This unique method for evolving new capabilities in the network will continue to be critical to future evolution of the Internet.

Formation of the Broad Community The Internet is as much a collection of communities as a collection of technologies, and its success is largely attributable to both satisfying basic community needs as well as utilizing the community in an effective way to push the infrastructure forward . This community spirit has a long history beginning with the early http://www.internetsociety. org/internet/what-internet/history-internet/brief-history-internet 8/13 6110/2016 Brief History of the Internet - Internet Timeline IInternet Society AKt'ANJ:\ 1. 1ne eariy AKt'ANJ:\ 1 researcners worKea as a c1ose-Kn1t commumry to accomp11sn me 111ma1 demonstrations of packet switching technology described earlier. Likewise, the Packet Satellite, Packet Radio and several other DARPA computer science research programs were multi-contractor collaborative activities that heavily used whatever available mechanisms there were to coordinate their efforts, starting with electronic mail and adding file sharing, remote access. and eventually World Wide Web capabilities. Each of these programs formed a working group, starting with the ARPANET Network Working Group. Because of the unique role that ARPANET played as an infrastructure supporting the various research programs, as the Internet started to evolve, the Network Working Group evolved into Internet Working Group.

In the late 1970s, recognizing that the growth of the Internet was accompanied by a growth in the size of the interested research community and therefore an increased need for coordination mechanisms, Vint Cerf, then manager of the Internet Program at DARPA, formed several coordination bodies - an International Cooperation Board (ICB), chaired by Peter Kirstein of UCL, to coordinate activities with some cooperating European countries centered on Packet Satellite research, an Internet Research Group which was an inclusive group providing an environment for general exchange of information, and an Internet Configuration Control Board (ICCB), chaired by Clark. The ICCB was an invitational body to assist Cerf in managing the burgeoning Internet activity.

In 1983.when Barry Leiner took over management of the Internet research program at DARPA, he and Clark recognized that the continuing growth of the Internet community demanded a restructuring of the coordination mechanisms. The ICCB was disbanded and in its place a structure of Task Forces was formed, each focused on a particular area of the technology (e.g. routers, end-to-end protocols, etc.). The Internet Activities Board (IAB) was formed from the chairs of the Task Forces.

It of course was only a coincidence that the chairs of the Task Forces were the same people as the members of the old ICCB, and Dave Clark contin ued to act as chair. After some changing membership on the IAB, Phill Gross became chair of a revitalized Internet Engineering Task Force (IETF), at the time merely one of the JAB Task Forces. As we saw above, by 1985 there was a tremendous growth in the more practical/engineering side of the Internet. This growth resulted in an explosion in the attendance at the IETF meetings, and Gross was compelled to create substructure to the IETF in the form of working groups.

This growth was complemented by a major expansion in the community. No longer was DARPA the only major player in the funding of the Internet. In addition to NSFNet and the various US and international government• funded activities, interest in the commercial sector was beginning to grow. Also in 1985, both Kahn and Leiner left DARPA and there was a significant decrease in Internet activity at DARPA. As a result, the JAB was left without a primary sponsor and increasingly assumed the mantle ofleadershi p.

The growth contin ued, resulting in even further substmcture within both the !AB and IETF.The IETF combined Working Groups into Areas, and designated Area Directors. An Internet Engineering Steering Group (IESG) was formed of the Area Directors. The IAB recognized the increasing importance of the IETF, and restructured the standards process to explicitly recognize the IESG as the major review body for standards. The JAB also restructured so that the rest of the Task Forces (other than the IETF) were combined into an Internet Research Task Force (!RTF) chaired by Postel, with the old task forces renamed as research groups.

The growth in the commercial sector brought with it increased concern regarding the standards process itself. Starting in the early l 980's and continuing to this day, the Internet grew beyond its primarily research roots to include both a broad user community and increased commercial activity. Increased attention was paid to making the process open and fair. This coupled with a recognized need for community support of the Internet eventually led to the formation of the Internet Society in 1991, under the auspices of Kahn's Corporation for National Research Initiatives (CNRD and the leadership of Cerf, then with CNRI.

In 1992, yet another reorganization took place. In 1992, the Internet Activities Board was re-organized and re• named the Internet Architecture Board operating under the auspices of the Internet Society. A more "peer" relationship was defined between the new IAB and IESG, with the IETF and IESG taking a larger responsibility for the approval of standards. Ultimately, a cooperative and mutually supportive relationship was formed between the JAB. IETF, and Internet Society. with the Internet Society taking on as a goal the provision of service and other measures which would facilitate the work of the IETF.

The recent development and widespread deployment of the World Wide Web has brought with it a new community, as many of the people working on the WWW have not thought of themselves as primarily network researchers and developers. A new coordination organization was formed, the World Wide Web Consortium (W3C). Initially led from MIT's Laboratory for Computer Science by Tim Berners-Lee (the inventor of the htt.p://www.internetsociety. or!)internet/what-internet/history-internet/bri ef-history-internet 9/13 6/10/2016 Brief History of the Internet - Internet Timeline IInternet Society w w w J ana At vezza, w jL nas taKen on me respons10111ty ror evotvmg me vanous protocols ana stanaaras associated with the Web .

Thus, through the over two decades oflnternet activity, we have seen a steady evolution of organizational structures designed to support and facilitate an ever-increasing community working collaboratively on Internet issues.

Commercialization of the Technology Commercialization of the Internet involved not only the development of competitive, private network services, but also the development of commercial products implementing the Internet technology. In the early 1980s, dozens of vendors were incorporating TCP/IP into their products because they saw buyers for that approach to networking . Unfortunately they lacked both real information about how the technology was supposed to work and how the customers planned on using this approach to networki ng. Many saw it as a nuisance add-on that had to be glued on to their own proprietary networking solutions: SNA, DECNet, Netware, NetBios. The DoD had mandated the use of TCP/IP in many of its purchases but gave little help to the vendors regarding how to build useful TCP/IP products.

In 1985, recognizing this lack of information availability and appropriate training, Dan Lynch in cooperation with the IAB arranged to hold a three day workshop for ALL vendors to come learn about how TCP/IP worked and what it still could not do well. The speakers came mostly from the DARPA research community who had both developed these protocols and used them in day-to-day work. About 250 vendor personnel came to listen to 50 inventors and experimenters. The results were surprises on both sides: the vendors were amazed to find that the inventors were so open about the way things worked (and what still did not work) and the inventors were pleased to listen to new problems they had not considered, but were being discovered by the vendors in the field. Thus a two-way discussion was formed that has lasted for over a decade.

After two years of conferences, tutorials, design meetings and workshops, a special event was organized that invited those vendors whose products ran TCP/ IP well enough to come together in one room for three days to show off how well they all worked together and also ran over the Internet. In September of 1988 the first Interop trade show was born . 50 companies made the cut. 5,000 engineers from potential customer organizations came to see if it all did work as was promised . It did. Why? Because the vendors worked extremely hard to ensure that everyone's products interoperated with all of the other products - even with those of their competitors. The Interop trade show has grown immensely since then and today it is held in 7 locations around the world each year to an audience of over 250,000 people who come to learn which products work with each other in a seamless manner, learn about the latest products, and discuss the latest technology .

In parallel with the commercialization efforts that were highlighted by the Interop activities, the vendors began to attend the IETF meetings that were held 3 or 4 times a year to discuss new ideas for extensions of the TCP/IP protocol suite. Starting with a few hundred attendees mostly from academia and paid for by the government, these meetings now often exceed a thousand attendees, mostly from the vendor community and paid for by the attendees themselves . This self-selected group evolves the TCP/IP suite in a mutually cooperative manner. The reason it is so useful is that it is composed of all stakeholders: researchers, end users and vendors.

Network management provides an example of the interplay between the research and commercial communities. In the beginning of the Internet, the emphasis was on defining and implementing protocols that achieved interoperation.

As the network grew larger, it became clear that the sometime ad hoc procedures used to manage the network would not scale. Manual configuration of tables was replaced by distributed automated algorithms, and better tools were devised to isolate faults. In 1987 it became clear that a protocol was needed that would permit the elements of the network, such as the routers, to be remotely managed in a unifom1way. Several protocols for this purpose were proposed, including Simple Network Management Protocol or SNMP (designed, as its name would suggest, for simplicity, and derived from an earlier proposal called SGMP) , HEMS (a more complex design from the research community) and CMIP (from the OSI community). A series of meeting led to the decisions that HEMS would be withdrawn as a candidate for standardization, in order to help resolve the contention, but that work on both SNMP and CMIP would go forward, with the idea that the SNMP could be a more near-term solution and CMIP a longer-term approach. The market could choose the one it found more suitable. SNMP is now used almost universally for network-based management.

In the last few years, we have seen a new phase of commercialization. Originally, commercial efforts mainly trtt+,://www .internetsociety.orginternet/what-internet/history-internet/brief-history -internet 10/13 6110/2016 Brief History of the Internet - lnternet Timeline IInternet Society comprised vendors providing the basic networking products, and service providers offering the connectivity and basic Internet services. The Internet has now become almost a "commodity" service, and much of the latest attention has been on the use of this global information infrastructure for support of other commercial services. This has been tremendously accelerated by the widespread and rapid adoption of browsers and the World Wide Web technology, allowing users easy access to information linked throughout the globe. Products are available to facilitate the provisioning of that information and many of the latest developments in technology have been aimed at providing increasingly sophisticated information services on top of the basic Intemet data communications.

History of the Future On October 24, 1995, the FNC unanimously passed a resolution defining the term Internet. This definition was developed in consultation with members of the intemet and intellectual property rights communities. RESOLUTION: The Federal Networking Council (FNC) agrees that the following language reflects our definition of the term "Intemet". "Internet" refers to the global information system that -- (i) is logically linked together by a globally unique address space based on the Internet Protocol (IP) or its subsequent extensions/follow-ons; (ii) is able to support communications using the Transmission Control Protoco l/Internet Protocol (fCP/ lP) suite or its subsequent extensions/follow-ons, and/or other IP-compatible protocols; and (iii) provides, uses or makes accessible, either publicly or privately, high level services layered on the communications and related infrastructure described herein.

The Internet has changed much in the two decades since it came into existence. It was conceived in the era of time-sharing, but has survived into the era of personal computers, client-server and peer-to-peer computing, and the network computer. It was designed before LANs existed, but has accommodated that new network technology, as well as the more recent ATM and frame switched services. It was envisioned as supporting a range of functions from file sharing and remote login to resource sharing and collaboration, and has spawned electronic mail and more recently the World Wide Web. But most important, it started as the creation ofa small band of dedicated researchers, and has grown to be a commercial success with billions of dollars ofannual investment.

One should not conclude that the Internet has now finished changing. The Internet , although a network in name and geography, is a creature of the computer, not the traditional network of the telephone or television industry. It will, indeed it must, continue to change and evolve at the speed of the computer industry if it is to remain relevant. It is now changing to provide new services such as real time transport, in order to support, for example, audio and video streams.

The availability of pervasive networking (i.e., the Internet) along with powerful affordable computing and communications in portable form (i.e., laptop computers, two-way pagers, PDAs, cellular phones), is making possible a new paradigm of nomadic computing and communications. This evolution will bring us new applications - Internet telephone and, slightly further out, Internet television. It is evolving to permit more sophisticated forms of pricing and cost recovery, a perhaps painful requirement in this commercial world. It is changing to accommodate yet another generation ofunderlying network technologies with different

characteristics and requ irements, e.g. broadband residential access and satellites. New modes of access and new forms of service will spawn new applications, which in tum will drive further evolution of the net itself.

The most pressing question for the future of the Internet is not how the technology will change, but how the process of change and evolution itself will be managed. As this paper describes, the architecture of the Internet has always been driven by a core group of designers, but the form of that group has changed as the number of interested parties has grown. With the success of the Internet has come a proliferation of stakeholders - stakeholders now with an economic as well as an intellectual investment in the network.

We now see, in the debates over control of the domain name space and the form of the next generation IP addresses, a struggle to find the next social structure that will guide the Internet in the future. The form of that structure will be harder to find, given the large number of concerned stakeholders. At the same time, the industry struggles to find the economic rationale for the large investment needed for the future growth, for example to upgrade residential access to a more suitable technology. If the Internet stumbles, it will not be because we lack for technology, vision,or motivation. It will be because we cannot set a direction and march collectively into the future.

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Footnotes I Perhaps this is an exaggeration based on the lead author's residence in Silicon Val ley. 2 On a recent trip to a Tokyo bookstore, one of the authors counted 14 English language magazines devoted to the Internet. 3 An abbreviated version of this article appears in the 50th anniversary issue of the CACM, Feb. 97. The authors would like to express their appreciation to Andy Rosenbloom, CACM Senior Editor, for both instigating the writing of this article and his invaluable assistance in editing both this and the abbreviated version. 4 The Advanced Research Projects Agency (ARPA) changed its name to Defense Advanced Research Projects Agency (DARPA) in 1971, then back to ARPA in 1993, and back to DARPA in 1996. We refer throughout to DARPA, the current name. 5 It was from the RAND study that the false rumor started claiming that the ARPANET was somehow related to building a network resistant to nuclear war. This was never true of the ARPANET, only the unrelated RAND study on secure voice considered nuclear war. However, the later work on Intemetting did emphasize robustness and survivability, including the capability to withstand losses oflarge portions of the underlying networks. 6 Including amongst others Vint Cerf, Steve Crocker, and Jon Postel. Joining them later were David Crocker who was to play an important role in documentation of electronic mail protocols, and Robert Braden, who developed the first NCP and then TCP for IBM mainframes and also was to play a long term role in the ICCB and JAB. 7 This was subsequently published as V. G. Cerf and R. E. Kahn, "A protocol for packet network interconnection" IEEE Trans. Comm. Tech., vol. COM-22, V 5, pp. 627-641, May 1974. 8 The desirability of email interchange, however, led to one of the first "Internet books": !%@::A Directory of Electronic Mail Addressing and Networks, by Frey and Adams, on email address translation and fotwarding . 9 Originally named Federal Research Internet Coordinating Committee, FRICC. The FRICC was originally formed to coordinate U.S. research network activities in support of the international coordination provided by

the CCIRN. 10 The decommissioning of the ARPANET was commemorated on its 20th anniversary by a UCLA symposium in 1989.

References P. Baran, "On Distributed Communications Networks", IEEE Trans. Comm. Systems, March 1964. V. G. Cerf and R. E. Kahn, "A protocol for packet network interconnection", IEEE Trans. Comm. Tech., vol. COM-22, V 5, pp. 627-641, May 1974. S. Crocker, RFCOO I Host software, Apr-07-1969. R. Kahn, Communications Principles for Operating Systems. Internal BBN memorandum, Jan. 1972. Proceedings of the IEEE, Special Issue on Packet Communication Networks, Volume 66, No. 11, November 1978. (Guest editor: Robert Kahn, associate guest editors: Keith Uncapher and Harry van Trees) L. Kleinrock, "Information Flow in Large Communication Nets", RLE Quarterly Progress Report, July 1961. L. Kleinrock, Communication Nets: Stochastic Message Flow and Delay, Mcgraw-Hill (New York), 1964. L. Kleinrock, Queueing Systems: Vol II, Computer Applications, John Wiley and Sons (New York), 1976 J.C.R. Licklider & W. Clark, "On-Line Man Computer Communication", August 1962. L. Roberts & T. Merrill, "Toward a Cooperative Network of Time-Shared Computers", Fall AFIPS Conf., Oct. 1966. L. Roberts, "Multiple Computer Networks and Intercomputer Communication", ACM Gatlinburg Conf., httf):/lwww.internetsociety.org/internet/what-internet/history-internet/brief-history-internet 12/13 6110/2016 Brief History of the Internet - Internet Timeline I Internet Society October 1967.

Authors Barry M . Leiner was Director of the Research Institute for Advanced Computer Science. He passed away in April 2003.

Vinton G. Cerf is Vice President and Chief Internet Evangelist at Google.

David D. Clark is Senior Research Scientist at the MIT Laboratory for Computer Science.

Robert E. Kahn is President of the Corporation for National Research Initiatives.

Leonard Kleinrock is Leonard Kleinrock is Distinguished Professor of Computer Science at the University of California, Los Angeles, and is a Founder of Linkabit Corp., TTI/Vanguard, Nomadix Inc., and Platformation Inc University of California, Los Angeles, and is Chairman and Founderof Nomadix .

Daniel C. Lynch is a founder and of the Interop networking trade show and conferences.

Jon Postel served as Director of the Computer Networks Division of the Information Sciences Institute of the University of Southern California until his untimely death October 16, 1998.

Dr. Lawrence G. Roberts is CEO, President, and Chairman of Anagran, Inc.

Stephen Wolff is CTO of lntemet2.

Send any comments to Vint Cerf or any of the authors

1775 Wiehle Avenue, Suite 201, Reston, VA 20190-5108 U.S.A. +1-703-439-2120 Galerie Jean-Malbuisson 15, CH-1204 Geneva. Switzerland +41 22 807 1444

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The Intersect The Internet's most famous dog rater keeps disappearing from Twitter

y Abby Ohlhelser February 11

WeRateDogs I W Follow } R'._ i @dog_ rates

This is Klevin. He doesn't want his family brainwashed by mainstream media. 10/10 (vid by @AshtonHose) 11:17 AM - 8 Feb 2016 t.'l 1,135 •2,365

fatt Nelson is a college student who is very good at rating other people's dogs on Twitter. Somehow, that fact earned him a etermined nemesis, whose name he doesn't even know.

'hanks to multiple, likely bogus, copyright claims against @dog_rates, Nelson's popular account disappeared from Twitter on 'uesday night, prompting brief and intense outrage among the citizens of Dog Twitter. Nelson himself said he was devastated. l was distraught," Nelson told the Intersect by phone Wednesday morning. "Iwasjust sitting in my bed, not moving."

11 several tweets from his personal account on Tuesday night, Nelson outlined, to the best of his knowledge, rhy @dog_rates had been taken offline and why, he believed, he'd done absolutely nothing to deserve it. Although his account ras reinstated hours after it disappeared, he has heard little from Twitter on the matter officially. A Twitter spokesperson oted to the Intersect that the company does not comment on individual account suspensions for privacy and security reasons.

WeRateDogs ._ Follow @dog_rates

These two pirates crashed their ship and don't know what to do now. Very irresponsible of them. Both 9/10 9:14 PM - 8 Feb 2016 t.'l 807 •2,688

WeRateDogs W Follow @dog_rates

Guys Ifound the dog from Up. 12/10 8:40 PM - 8 Feb 2016 t.'l 2,131 W 5,518

ubmitting a copyright complaint under the Digital Millennium Copyright Act on Twitter is as easy as filling out a form. But 'witter's resources on copyright issues make it pretty clear that doing so is not a decision to make lightly: A copyright omplaint opens up the person filing it to potential legal liability .That's in part what makes the above email exchange, and ome of the complaints filed against Nelson's account, feel a bit jarring.

'he six DMCA takedown notices against @dog_rates tweets that come up in a Lumen search are credited to senders calling 1emselves "Darsx's Does," "Ed:gar' breakfast cafe" or "Dai!)'.!!!an."

'.raig Hickman is a New 2'£aland dairy farmer. Charlie is his dog. Both are on Twitter, and both are fans of Nelson's work Two reeks ago, a photo of Charlie, snapped and submitted by Hickman and later reposted and rated on @dog_rates, was removed mm Twitter due to a DMCA notice.

;ut the request didn't come from Hickman. It came from one "Keith Chennocks," of Bozeman, Mont., who listed his company s "Dairyman" and his occupation as "Dairy farmer," according to a copy of the full complaint Twitter sent to Nelson . The emai ssociated with that DMCA notice is the very same one used by Nelson's apparent copyright troll. relson contacted Hickman on Twitter to see if he knew anything about the takedown request. Hickman told the Intersect that rhile he had been disappointed by an "abysmal" 8/10 rating for Charlie, he had nothing to do with the copyright claim and ffered to help Nelson fight it in any way he could. The dairy farmer even contacted Twitter himself to clarify that he, and not rhoever submitted the complaint, held the copyright to the photo and that he was fine with it appearing on Nelson's account. Telson's best guess at why someone wanted to ruin @dog_rates comes from a bizarre email exchange with the anonymous erson whose email was listed on the multiple copyright claims against Nelson. The person at the other end of the email, who idn't identify themselves to Nelson and who did not respond to a request for comment from the Intersect, gave Nelson the Jllowing reason for making multiple copyright complaints against @dog_rates' Tweets:

"I am doing this because I am dogrates and you are the fake. I copied you on instagram but i'm guessing u already seen this. when i steal enough tweets from you. ur account isgonna be shutdown on twitter. i want all your followers lol" o. a brief email exchange with the Daily Dot, the anonymous individual first said that Nelson stole the @dog_rates account and II of its images from them, but then claimed that only one image was stolen, and that they only sent in one copyright report - story that Nelson disputes, and that doesn't really match up to the email exchanges Nelson provided to us.

Please you have my attention what do you want," Nelson replied in the email chain, "I'll do anything to keep my account unning. It makes so many people happy." The reply from his anonymous tormenter? "give me your password on twitter."

Ct's like a classic supervillain hacker deal!" Nelson said of the exchange. "It'sjust wild."

'or Nelson and many of his fans, the whole ordeal has raised some serious questions about whether it's simply too easy for ranksters to successfully remove content from the Internet by abusing the copyright claim process, particularly on Twitter.

l own the dogs. I own the cows. I took the picture," Hickman told Twitter in a copy of the email given to the Intersect. "The >MCA notice you have received is mischievous." Hickman told us that he never heard back from Twitter about it.

ri the meantime, Nelson has reposted Charlie's photo, along with a new and improved 10/10 rating.

WeRateDogs @dog_rates .. w_F_ol_lo_w j I Meet Charlie. He likes to kiss all the big milk dogs with the rad earrings. Passionate af. 10/10 just a great guy 9:05 PM - 9 Feb 2016

4"' t. 1,366 ¥ 3,389

>f all the people to find themselves fighting a weird trollish copyright situation on Twitter, Nelson might be one of the better repared. As Fusion documented, Nelson has devoted a lot of time to fending off copycat accounts that also promised to rate ogs -even though many of their tweets were directly lifted from Nelson'soriginal photo captions. Nelson eventually ucceeded in getting one particularly prolific copycat suspended from Twitter, and that account remains offline.

I know that it'sjust social media, but it's a platform for content creators, and we need to protect it," Nelson said

;ased on his previous experience navigating copyright complaints on Twitter, Nelson has now filed counter notifications for

NO of the DMCA takedowns against his account -itself a complicated, legal process that won't be resolved quickly. But Nelson ;trying to find other ways to ensure his account stays online, with mixed success.

'hat's in part because @dog_rates won't stay a hobby for Nelson forever. He sees his future inextricably tied up in the success f the account. Since its founding in November, @dog_rates' Twitter popularity has translated into good press, which rompted Nelson to start imagining what more he could do with @dog_rates -and to acquire a publishing agent. He now pends pretty much full-time hours rating dogs for his 180,000 followers, he said, in addition to his responsibilities as a collegt eshman.

'o ensure that this mysterious individual wouldn't continue to try to remove his work from the Internet, Nelson decided to try

J negotiate with them. Their email exchange is ... strange. At one point, the troll claims that they will next target another .2Rular animal Twitter account dedicated to goats. After several emails, the two finally settled on a resolution. The copyright omplainer wouldn't target @dog_rates further if Nelson promised to delete two of the tweets targeted by the DMCA claims. Telson was given a dramatic 20-minute time limit to comply. fter he deleted the tweets, Nelson asked, "Mind telling me what that was about?"

Iis troll replied: "Enjoy your account. Sorry about that. I'mjust a one of your old followers. I'm going through a tough time I'rr eally sorry."

11seemed to be well on Wednesday morning, when Nelson and I spoke. But later on Wednesday Nelson said that @dog_rates ras suspended again and that he was notified of another DMCA takedown request against his account, one bearing the same mail as before, according to a copy of that request forwarded to the Intersect.

'he person filing the latest complaint listed their name as Bushido Brown, which is the name of a character from the animated how "The Boondocks," and wrote "n/a" in the field where Twitter asks for a link to the original, copyrighted work that has een allegedly copied.

11tersect newsletter Sign up he corner of the Internet and interesting.

o now @dog_rates is back on Twitter, again. Although the reported tweet has occasionally displayed as normal, the Intersect as observed the tweet being displayed without the image and bearing a copyright notice instead:

WeRateDogs "JI Follow Iii_ , @dog_rates

Here's a pupper with a piece of pizza. Two of everybody's favorite things in one photo. 11/10 7:42 PM - 10 Feb 2016 4" t.'l 1,487 W 3,416 J .t this point, the story gets even murkier: Is this latest claim even from the same person? Since Nelson tweeted the email ssociated with some of the initial copyright claims, this one could be from a copycat troll.

J1yway, we will try to keep you updated on this very important dog story. And if you are the person or persons behind all these >MCA takedown requests, please reach out to tell us whyyy?

,iked that? Try these:

• The sad spectacle of a radical misogynist'sbasement press conference

• The heroic way one cartoonist responded when the Huffington Post swiped his art

• The fascinating, feel-good psychology of Internet cat videos

Abby Ohlheiser is a general assignment reporter for The Washington Post. W Follow @abbyohlheiser

Porn trolls slammed again: Minnesota judge calls in the feds on Prenda Prenda Law is referred to investigators-and it must repay its victims.

by Joe Mullin - Nov 6, 2013 8:10pm CST

•

Minneapolis, Under the Third Ave. Bridge Joe D / flickr

The copyright-lawsuit factory known as Prenda Law is in the midst of a long shutdown, which is certainly no fun for the lawyers that run BEHIND PRENDA the organization. Today their headaches multiplied, as a second w;s federal judge has followed the example of US District Judge Otis Judge: Prenda lawyer must sell condo, liquidate Wright, referring the Prenda firm to the US Attorney's office in assets to pay $2.SM debt Minnesota. Legal regulators move in on Prenda 's Paul Today's order [PDF] by US District Judge Franklin Noel also requires Hansmeier, who may get disbarred Prenda to pay back the four defendants who settled cases in his court, making payments which range between $3,500 and $6,000. At long last, Prenda mastermind hit with state bar Prenda also has to pay legal fees for those defendants. complaint

While Prenda has now been ordered to pay attorney's fees in five Judge finds Prenda Law attorneys in contempt, says cases, today's order by Noel stands out. Like Wright, he also refers they hid assets Prenda to state and federal investigators, as well as the state bar 9th Circuit judges rip into Prenda Law copyright authorities. trolling scheme

Noel's order follows a 2.5-hour hearing conducted on September View an... 30, in which he tried to dig down for the truth as to who really signed the copyright documents attached to AF Holdings. Prenda has sued thousands of Internet users for illegally downloading pornography, according to lawsuits filed through shell companies like AF Holdings and Ingenuity 13.

Those companies were using copyright assignments now alleged to be bogus. Key documents were signed by Alan Cooper, the one-time housekeeper for John Steele (Steele is believed by Prenda critics to be one of the masterminds behind the Prenda operation). But Cooper has denied signing those documents or giving his authorization to anyone else to do so. He made those denials again in Noel's courtroom on Sept. 30, and the judge found them convincing.

The court "expressly disbelieves" Steele

a, Today's order minces no words in condemning Prenda or Steele, whom FURTHER READING the judge practically accuses of lying under oath. In the Sept. 30 hearing, Steele said that Cooper gave permission to Mark Lutz-the only I : \,.. acknowledged owner of AF Holdings-to sign his name. This supposedly 'I sound right to US District Judge Franklin Noel. '

I , PR. ENDA happened after Steele introduced the two by telephone. But that didn't ( ' \ ·

At the hearing last month, Noel asked Steele directly: "Did you hear Mr. HAMMERED: JUDGE Cooper give Mr. Lutz authority or permission to sign his name to SENDS PORN• documents?" Steele said yes, but today it's clear that the judge wasn't TRO.LLING convinced. "The Court expressly disbelieves Steele's testimony in this LAWYERS TO regard," Noel wrote today. "AF Holdings failed to meet its burden of CRIMINAL proving the authenticity of the copyright-assignment agreements INVESTIGATORS for Popular Demand and Sexual Obsession." Lawyers who obfuscated for years face disbarment and an $81,000 fine. And it didn't escape Noel's notice that Mark Lutz failed to show up, just like he failed to show up in San Francisco a month earlier. Noel wrote:

At the end of the hearing, the Court inquired about who was going to testify on behalf of AF Holdings. Mr. Hansmeier informed the Court that Mark Lutz-the "sole officer" of AF Holdings-was informed of the hearing and planned to attend, but for unknown reasons did not get on his scheduled flight from Miami, Florida to Minneapolis, Minnesota... Hansmeier represented to the Court that Steele entered Lutz's apartment and, after finding him absent, searched for him at the "usual places [he] recreate[s]." Cooper's attorney, Mr. Godfread, noted the recent pattern of Lutz failing to appear when he is scheduled to testify under oath.

Noel goes on to find that Prenda has defrauded his court, just like they did Wright's: ------The Court has been the victim of a fraud perpetrated by AF Holdings, LLC. The Court concludes that the appropriate remedy for this fraud is to require AF Holdings to return all of the settlement money it received from all of the Defendants in these cases, and to pay all costs and fees (including attorneys' fees) incurred by the Defendants. After all settlement payments are returned and other fees are paid, all five cases should be dismissed on the merits, with prejudice.

The Court further concludes that. once all of the ill-gotten gains are fully disgorged from AF Holdings, it would not be a wise use of the Court's limited resources to sua sponte attempt to fully untangle the relationship between Hansmeier, Steele, Duffy, Dugas, Lutz, and Prenda Law, on the one hand-and the Plaintiff, AF Holdings, LLC., on the other. Such investigation can more effectively be conducted by federal and state law enforcement at the direction of the United States Attorney, the Minnesota Attorney General, and the Boards of Professional Responsibility in the jurisdictions where the attorneys involved in this apparent scheme are licensed to practice law.

FURTHER READING Noel noted that since Prenda's dissolution in July, "it is unclear where Prenda's assets-including the settlement agreement monies from these cases-were transferred ." He took note of the spreadsheets recently turned in by former Prenda lawyer Brett Gibbs, showing that Paul Hansmeier and John Steele received $1.3 million from Prenda over the course of 2012.

PRENDA'S MASSIVE Wherever the money may be, Prenda and AF Holdings have until TROLLING TAKE November 20 to pay back the four Minnesota defendants . REVEALED: $1.9 MILLION IN 2012 Steele and Hansmeier are said to have taken in 70 percent of that sum.

Utility Utility Utility Utility Patent Patent Patent Year Utility Patent Utility Patent Utility Patent Utility Patent Design Patent Grants Grants Grants Design Plant Reissue Total Total Patent Applic'n/ Applic (U.S. Applic. (For Applic. (Foreign Applications Patent Plant Patent Total Patent Grants (Foreign (Foreign (Total Patent Patent Patent Patent Grants, Grant Origin) Orig.) Orig. %) (All Origin) Applicat'n Applicat'n Applicat'n • (U.S. Org) Org) %) Org) Grants Grants Grants Grants (For Orig. %) 1963 66,715 19,154 23.3 85,869 4,968 145 90,982 37,174 8,505 18.6 45,679 2,965 129 198 48,971 18 • 1964 67,013 20,579 23.5 87,592 5,259 120 92,971 38,410 8,965 18.9 47,375 2,686 128 200 50,389 18 • 1965 72,317 22,312 23.6 94,629 5,413 108 100,150 50,331 12,526 19.9 62,857 3,424 120 246 66,647 19 • 1966 66,855 21,670 24.5 88,525 4,853 104 93,482 54,634 13,771 20.1 68,405 3,188 114 179 71,886 20 • 1967 61,651 24,046 28 85,697 4,744 103 90,544 51,273 14,379 21.9 65,652 3,165 85 196 69,098 21 • 1968 67,180 26,291 28.1 93,471 5,171 95 98,737 45,781 13,323 22.5 59,104 3,352 72 186 62,714 22 • 1969 68,243 30,507 30.9 98,750 5,496 111 104,357 50,394 17,165 25.4 67,559 3,335 103 233 71,230 25 • 1970 72,343 30,832 29.9 103,175 5,996 188 109,359 47,072 17,357 26.9 64,429 3,214 52 269 67,964 26 1971 71,089 33,640 32.1 104,729 6,211 155 111,095 55,976 22,341 28.5 78,317 3,156 71 246 81,790 28 1972 65,943 33,355 33.6 99,298 5,867 135 105,300 51,518 23,292 31.1 74,810 2,901 199 275 78,185 30 1973 66,935 37,144 35.7 104,079 5,425 118 109,622 51,500 22,643 30.5 74,143 4,033 132 314 78,622 30 1974 64,093 38,445 37.5 102,538 5,318 155 108,011 50,645 25,633 33.6 76,278 4,304 261 435 81,278 33 1975 64,445 36,569 36.2 101,014 6,292 150 107,456 46,715 25,285 35.1 72,000 4,282 150 378 76,810 1976 65,050 37,294 36.4 102,344 7,061 175 109,580 44,280 25,946 36.9 70,226 4,564 176 422 75,388 1977 62,863 38,068 37.7 100,931 7,258 188 108,377 41,484 23,785 36.4 65,269 3,929 173 410 69,781 36 1978 61,441 39,475 39.1 100,916 7,538 194 108,648 41,255 24,847 37.6 66,102 3,862 186 364 70,514 37 1979 60,535 39,959 39.8 100,494 7,519 196 108,209 30,078 18,776 38.4 48,854 3,119 131 309 52,413 37 1980 62,098 42,231 40.5 104,329 7,830 220 112,379 37,355 24,464 39.6 61,819 3,949 117 285 66,170 38 1981 62,404 44,009 41.4 106,413 7,375 178 113,966 39,223 26,548 40.4 65,771 4,745 183 365 71,064 39 1982 63,316 46,309 42.2 109,625 8,174 188 117,987 33,896 23,992 41.4 57,888 4,944 173 271 63,276 40 1983 59,390 44,313 42.7 103,703 8,082 255 112,040 32,871 23,989 42.2 56,860 4,563 197 362 61,982 41 1984 61,841 49,443 44.4 111,284 8,739 253 120,276 38,367 28,833 42.9 67,200 4,938 212 300 72,650 42 1985 63,874 53,132 45.4 117,006 9,551 231 126,788 39,555 32,106 44.8 71,661 5,066 242 276 77,245 44 1986 65,487 56,946 46.5 122,433 9,912 320 132,665 38,126 32,734 46.2 70,860 5,518 224 260 76,862 45 1987 68,315 59,602 46.6 127,917 11,153 385 139,455 43,520 39,432 47.5 82,952 5,959 229 245 89,385 47 1988 75,192 64,633 46.2 139,825 11,289 377 151,491 40,497 37,427 48 77,924 5,679 425 244 84,272 47 1989 82,370 70,380 46.1 152,750 12,615 383 165,748 50,185 45,352 47.5 95,537 6,092 587 317 102,533 47 1990 90,643 73,915 44.9 164,558 11,288 418 176,264 47,391 42,974 47.6 90,365 8,024 318 370 99,077 47 1991 87,955 76,351 46.5 164,306 13,061 463 177,830 51,177 45,334 47 96,511 9,569 353 263 106,696 46 1992 92,425 80,650 46.6 173,075 13,078 354 186,507 52,253 45,191 46.4 97,444 9,269 321 360 107,394 45 1993 99,955 74,788 42.8 174,743 13,635 361 188,739 53,231 45,111 45.9 98,342 10,630 442 332 109,746 44 1994 107,233 82,624 43.5 189,857 15,774 459 206,090 56,066 45,610 44.9 101,676 11,095 499 317 113,587 43 1995 123,958 88,419 41.6 212,377 15,409 452 228,238 55,739 45,680 45 101,419 11,712 387 316 113,834 43 1996 106,892 88,295 45.2 195,187 15,161 665 211,013 61,104 48,541 44.3 109,645 11,410 362 279 121,696 43 1997 120,445 94,812 44 215,257 16,546 621 232,424 61,708 50,276 44.9 111,984 11,414 394 277 124,069 44 1998 135,483 107,579 44.3 243,062 17,107 720 260,889 80,289 67,228 45.6 147,517 14,766 561 298 163,142 44 1999 149,825 120,362 44.5 270,187 17,761 863 288,811 83,906 69,579 45.3 153,485 14,732 420 448 169,085 44 2000 164,795 131,131 44.3 295,926 18,292 797 315,015 85,068 72,426 46 157,494 17,413 548 524 175,979 45 2001 177,511 148,997 45.6 326,508 18,280 944 345,732 87,600 78,435 47.2 166,035 16,871 584 480 183,970 46 2002 184,245 150,200 44.9 334,445 20,904 1,144 356,493 86,971 80,360 48 167,331 15,451 1,133 460 184,375 47 2003 188,941 153,500 44.8 342,441 22,602 1,000 366,043 87,893 81,130 48 169,023 16,574 994 421 187,012 47 2004 189,536 167,407 46.9 356,943 23,975 1,221 382,139 84,270 80,020 48.7 164,290 15,695 1,016 298 181,299 48 2005 207,867 182,866 46.8 390,733 25,553 1,222 417,508 74,637 69,169 48.1 143,806 12,951 716 245 157,718 48 2006 221,784 204,183 47.9 425,967 25,515 1,151 452,633 89,823 83,949 48.3 173,772 20,965 1,149 519 196,405 48 2007 241,347 214,807 47.1 456,154 27,752 1,049 484,955 79,526 77,756 49.4 157,282 24,062 1,047 508 182,899 49 2008 231,588 224,733 49.2 456,321 27,782 1,209 485,312 77,502 80,270 50.9 157,772 25,565 1,240 647 185,224 50 2009 224,912 231,194 50.7 456,106 25,806 959 482,871 82,382 84,967 50.8 167,349 23,116 1,009 453 191,927 50 2010 241,977 248,249 50.6 490,226 29,059 992 520,277 107,791 111,823 50.9 219,614 22,799 981 947 244,341 50 2011 247,750 255,832 50.8 503,582 30,467 1,139 535,188 108,622 115,883 51.6 224,505 21,356 823 1,029 247,713 51 2012 268,782 274,033 50.5 542,815 32,799 1,149 576,763 121,026 132,129 52.2 253,155 21,951 860 822 276,788 52 2013 287,831 283.781 49.6 571,612 36,034 1,406 609,052 133,593 144,242 51.9 277,835 23,468 847 798 302,948 51 2014 285,096 293,706 50.7 578,802 35,378 1,063 615,243 144,621 156,056 51.9 300,677 23,657 1,072 626 326,032 51 2015 n/a •• n/a •• n/a •• 589,410 39,097 1,140 629,647 140,969 157,438 52.8 298,407 25,986 1,074 512 325,979 52 •·INFORMATION ';;J CPO

PUBLIC LAW 112-29-SEPT. 16, 2011

LEAHY-SMITH AMERICA INVENTS ACT

125 STAT. 284 PUBLIC LAW 112-29-SEPT. 16, 2011

Public Law 112-29 112th Congress An Act Sept. 16, 2011 To amend title 35, United States Code, to provide for patent reform. [H.R. 1249] Be it enacted by the Senate and House of Representatives of Leahy-Smith the United States of America in Congress assembled, America Invents Act. SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 35 USC 1note. (a) SHORT TITLE.-This Act may be cited as the "Leahy-Smith America Invents Act". (b) TABLE OF CONTENTS.-The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. First inventor to file. Sec. 4. Inventor's oath or declaration. Sec. 5. Defense to infringement based on prior commercial use. Sec. 6. Post-grant review proceedings . Sec. 7. Patent Trial and Appeal Board. Sec. 8. Preissuance submissions by third parties. Sec. 9. Venue. Sec. 10. Fee setting authority. Sec. 11. Fees for patent services. Sec. 12. SupJ>lemental examination. Sec. 13. Funding agreements. Sec. 14. Tax strategies deemed within the prior art. Sec. 15. Best mode requirement. Sec. 16. Marking. Sec. 17. Advice of counsel. Sec. 18. Transitional program for covered business method patents. Sec. 19. Jurisdiction and procedural matters. Sec. 20. Technical amendments. Sec. 21. Travel expenses and payment of administrative judges. Sec. 22. Patent and Trademark Office funding. Sec. 23. Satellite offices. Sec. 24. Designation of Detroit satellite office. Sec. 25. Priority examination for important technologies. Sec. 26. Study on implementation. Sec. 27. Study on genetic testing. Sec. 28. Patent Ombudsman Program for small business concerns. Sec. 29. Establishment of methods for studying the diversity of applicants. Sec. 30. Sense of Congress. Sec. 31. USPTO study on international patent protectionB for small businesses . Sec. 32. Pro bono program . Sec. 33. Limitation on issuance of patents. Sec. 34. Study of patent litigation. Sec. 35. Effective date. Sec. 36. Budgetary effects. Sec. 37. Calculation of 60-day period for application of patent term extension. 35 USC 1note. SEC. 2. DEFINITIONS. In this Act: (1) DIRECTOR.-The term "Director" means the Under Sec• retary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 285

(2) OFFICE.-The term "Office" means the United States Patent and Trademark Office. (3) PATENT PUBLIC ADVISORY COMMITTEE.-The term "Patent Public Advisory Committee" means the Patent Public Advisory Committee established under section 5(a) of title 35, United States Code. (4) TRADEMARK ACT OF 1946.-The term ''Trademark Act of 1946" means 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.) (commonly referred to as the "Trademark Act of 1946" or the "Lanham Act"). (5) TRADEMARK PUBLIC ADVISORY COMMITTEE.-The term "Trademark Public Advisory Committee" means the Trademark Public Advisory Committee established under section 5(a) of title 35, United States Code. SEC. 3. FIRST INVENTOR TO FILE. (a) DEFINITIONS.-Section 100 of title 35, United States Code, is amended- (1) in subsection (e), by striking "or inter partes reexamina• tion under section 311"; and (2) by adding at the end the following: "(f) The term 'inventor' means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention. "(g) The terms 'joint inventor' and 'coinventor' mean any 1 of the individuals who invented or discovered the subject matter of a joint invention. "(h) The term 1oint research agreement' means a written con• tract, grant, or cooperative agreement entered into by 2 or more persons or entities for the performance of experimental, develop• mental, or research work in the field of the claimed invention. "(i)(l) The term 'effective filing date' for a claimed invention in a patent or application for patent means- "(A) if subparagraph (B) does not apply, the actual filing date of the patent or the application for the patent containing a claim to the invention; or "(B) the filing date of the earliest application for which the patent or application is entitled, as to such invention, to a right of priority under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date under section 120, 121, or 365(c). "(2) The effective filing date for a claimed invention in an application for reissue or reissued patent shall be determined by deeming the claim to the invention to have been contained in the patent for which reissue was sought. "(j) The term 'claimed invention' means the subject matter defined by a claim in a patent or an application for a patent.". (b) CONDITIONS FOR PATENTABILITY.- (1) IN GENERAL.-Section 102 of title 35, United States Code, is amended to read as follows: "§ 102. Conditions for patentability; novelty "(a) NOVELTY; PRIOR ART.-A person shall be entitled to a patent unless-

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"(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or "(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention. "(b) EXCEPTIONS.- "(l) DISCLOSURES MADE 1YEAR OR LESS BEFORE THE EFFEC• TIVE FILING DATE OF THE CLAIMED INVENTION.-A disclosure made 1year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(l) if- "(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or "(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. "(2) DISCLOSURES APPEARING IN APPLICATIONS AND PAT• ENTS.-A disclosure shall not be prior art to a claimed invention under subsection (aX2) if- "(A) the subject matter disclosed was obtained directly or indirectly from the inventor or ajoint inventor; "(B) the subject matter disclosed had, before such sub• ject matter was effectively filed under subsection {a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or "(C) the subject matter disclosed and the claimed inven• tion, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person. "(c) COMMON OWNERSHIP UNDER JOINT RESEARCH AGREE• MENTS.-Subject matter disclosed and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of subsection (bX2XC) if- "(1) the subject matter disclosed was developed and the claimed invention was made by, or on behalf of, 1 or more parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention; "(2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and "(3) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement. "(d) PATENTS AND PuBLISHED APPLICATIONS EFFECTIVE AS PRIOR ART.-For purposes of determining whether a patent or

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application for patent is prior art to a claimed invention under subsection (a)(2), such patent or application shall be considered to have been effectively filed, with respect to any subject matter described in the patent or application- "(!) if paragraph (2) does not apply, as of the actual filing date of the patent or the application for patent; or "(2) if the patent or application for patent is entitled to claim a right of priority under section 119, 365(a), or 365(b), or to claim the benefit of an earlier filing date under section 120, 121, or 365(c), based upon 1or more prior filed applications for patent, as of the filing date of the earliest such application that describes the subject matter.". (2) CONTINUITY OF INTENT UNDER THE CREATE ACT.-The 35 USC 102 note. enactment of section 102(c) of title 35, United States Code, under paragraph (1) of this subsection is done with the same intent to promote joint research activities that was expressed, including in the legislative history, through the enactment of the Cooperative Research and Technology Enhancement Act of 2004 (Public Law 108-453; the "CREATE Act"), the amendments of which are stricken by subsection (c) of this section. The United States Patent and Trademark Office shall admin- ister section 102(c) of title 35, United States Code, in a manner consistent with the legislative history of the CREATE Act that was relevant to its administration by the United States Patent and Trademark Office. (3) CONFORMING AMENDMENT. -The item relating to section 102 in the table of sections for chapter 10 of title 35, United States Code, is amended to read as follows: "102. Conditions for patentability; novelty.". (c) CONDITIONS FOR PATENTABILITY; NONOBVIOUS SUBJECT MA'fTER.-Section 103 of title 35, United States Code, is amended to read as follows: "§ 103. Conditions for patentability; non-obvious subject matter "A patent for a claimed invention may not be obtained, notwith• standing that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.". (d) REPEAL OF REQUIREMENTS FOR INvENTIONS MADE ABROAD.-Section 104 of title 35, United States Code, and the item relating to that section in the table of sections for chapter 10 of title 35, United States Code, are repealed. (e) REPEAL OF STATUTORY INVENTION REGISTRATION. - (1) IN GENERAL.-Section 157 of title 35, United States Code, and the item relating to that section in the table of sections for chapter 14 of title 35, United States Code, are repealed. (2) REMOVAL OF CROSS REFERENCES.-Section lll(b)(8) of title 35, United States Code, is amended by striking "sections 115, 131, 135, and 157" and inserting "sections 131 and 135".

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Applicability. (3) EFFECTIVE DATE.-The amendments made by this sub- 35 USC 111note. section shall take effect upon the expiration of the 18-month period beginning on the date of the enactment of this Act, and shall apply to any request for a statutory invention reg• istration filed on or after that effective date. (f) EARLIER FILING DATE FOR INvENTOR AND JOINT INVENTOR.• Section 120 of title 35, United States Code, is amended by striking "which is filed by an inventor or inventors named" and inserting "which names an inventor or joint inventor''. (g) CONFORMING AMENDMENTS. - (1) RIGHT OF PRIORITY.-Section 172 of title 35, United States Code, is amended by striking "and the time specified in section 102(d)". (2) LIMITATION ON REMEDIES.-Section 287(c)(4) of title 35, United States Code, is amended by striking "the earliest effec• tive filing date of which is prior to" and inserting "which has an effective filing date before". (3) INTERNATIONAL APPLICATION DESIGNATING THE UNITED STATES: EFFECT.-Section 363 of title 35, United States Code, is amended by striking "except as otherwise provided in section 102(e) of this title". (4) PuBLICATION OF INTERNATIONAL APPLICATION: EFFECT.• Section 374 of title 35, United States Code, is amended by striking "sections 102(e) and 154(d)" and inserting "section 154(d)". (5) PATENT ISSUED ON INTERNATIONAL APPLICATION: EFFECT.-The second sentence of section 375(a) of title 35, United States Gode, is amended by striki:Qg "Subject to section 102(e) of this title, such" and inserting "Such". (6) LIMIT ON RIGHT OF PRIORITY.-Section 119(a) of title 35, United States Code, is amended by striking "; but no patent shall be granted" and all that follows through "one year prior to such filing''. (7) INVENTIONS MADE WITH FEDERAL ASSISTANCE.-Section 202(c) of title 35, United States Code, is amended- (A) in paragraph (2)- (i) by striking "publication, on sale, or public use," and all that follows through "obtained in the United States" and inserting "the 1-year period referred to in section 102(b) would end before the end of that 2- year period"; and (ii) by striking "prior to the end of the statutory'' and inserting ''before the end of that 1-year"; and (B) in paragraph (3), by striking "any statutory bar date that may occur under this title due to publication, on sale, or public use" and inserting "the expiration of the 1-year period referred to in section 102(b)". (h) DERIVED PATENTS.- (1) IN GENERAL .-Section 291 of title 35, United States Code, is amended to read as follows: "§291. Derived Patents "(a) IN GENERAL.-The owner of a patent may have relief by civil action against the owner of another patent that claims the same invention and has an earlier effective filing date, if the inven• tion claimed in such other patent was derived from the inventor

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 289 of the invention claimed in the patent owned by the person seeking relief under this section. "(b) FILING LIMITATION.-An action under this section may Time period. be filed only before the end of the 1-year period beginning on the date of the issuance of the first patent containing a claim to the allegedly derived invention and naming an individual alleged to have derived such invention as the inventor or joint inventor.". (2) CONFORMING AMENDMENT.- The item relating to section 291 in the table of sections for chapter 29 of title 35, United States Code, is amended to read as follows: "291. Derived patents.". (i) DERIVATION PROCEEDINGS.-S ection 135 of title 35, United States Code, is amended to read as follows: "§ 135. Derivation proceedings "(a) INSTITUTION OF PROCEEDING.-An applicant for patent may file a petition to institute a derivation proceeding in the Office. The petition shall set forth with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner's application and, without authorization, the earlier application claiming such invention was filed. Any such petition may be filed only within Time period. the 1-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application's claim to the invention, shall be made under oath, and shall be supported by substantial evidence. Whenever the Director determines that a petition filed under this subsection demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding. The determination by the Director whether to institute a derivation proceeding shall be final and nonappealable. "(b) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.• In a derivation proceeding instituted under subsection (a), the Patent Trial and Appeal Board shall determine whether an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner's application and, without authorization, the earlier application claiming such invention was filed. In appropriate circumstances, the Patent Trial and Appeal Board may correct the naming of the inventor in any application or patent at issue. The Director shall prescribe regulations setting Regulations. forth standards for the conduct of derivation proceedings, including requiring parties to provide sufficient evidence to prove and rebut a claim of derivation. "(c) DEFERRAL OF DECISION.-The Patent Trial and Appeal Time period . Board may defer action on a petition for a derivation proceeding until the expiration of the 3-month period beginning on the date on which the Director issues a patent that includes the claimed invention that is the subject of the petition. The Patent Trial and Appeal Board also may defer action on a petition for a deriva• tion proceeding, or stay the proceeding after it has been instituted, until the termination of a proceeding under chapter 30, 31, or 32 involving the patent of the earlier applicant. "(d) EFFECT OF FINAL DECISION.-The final decision of the Patent Trial and Appeal Board, if adverse to claims in an applica• tion for patent, shall constitute the final refusal by the Office on those claims. The final decision of the Patent Trial and Appeal

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Board, if adverse to claims in a patent, shall, if no appeal or other review of the decision has been or can be taken or had, constitute cancellation of those claims, and notice of such cancella• tion shall be endorsed on copies of the patent distributed after such cancellation. "(e) SETTLEMENT.-Parties to a proceeding instituted under sub• section (a) may terminate the proceeding by filing a written state• ment reflecting the agreement of the parties as to the correct inventors of the claimed invention in dispute. Unless the Patent Trial and Appeal Board finds the agreement to be inconsistent with the evidence of record, if any, it shall take action consistent with the agreement. Any written settlement or understanding of Confidentiality. the parties shall be filed with the Director. At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept sepa• rate from the file of the involved patents or applications, and shall be made available only to Government agencies on written request, or to any person on a showing of good cause. Regulations. "(f) ARBITRATION.- Parties to a proceeding instituted under subsection (a) may, within such time as may be specified by the Director by regulation, determine such contest or any aspect thereof by arbitration. Such arbitration shall be governed by the provisions of title 9, to the extent such title is not inconsistent with this Notice. section. The parties shall give notice of any arbitration award to the Director, and such award shall, as between the parties to the arbitration, be dispositive of the issues to which it relates. The arbitration award shall be unenforceable until such notice is given. Nothing in this subsection shall preclude the Director from determining the patentability of the claimed inventions involved in the proceeding.". (j) ELIMINATION OF REFERENCES TO INTERFERENCES. -{ ) Sec• tions 134, 145, 146, 154, and 305 of title 35, United States Code, are each amended by striking "Board of Patent Appeals and Inter• ferences" each place it appears and inserting "Patent Trial and Appeal Board". (2)(A) Section 146 of title 35, United States Code, is amended• (i) by striking "an interference" and inserting "a deriva• tion proceeding"; and (ii) by striking "the interference" and inserting "the derivation proceeding''. (B) The subparagraph heading for section 154(b)(l)(C) of title 35, United States Code, is amended to read as follows: "(C) GUARANTEE OF ADJUSTMENTS FOR DELAYS DUE TO DERIVATION PROCEEDINGS, SECRECY ORDERS, AND APPEALS.-". (3) The section heading for section 134 of title 35, United States Code, is amended to read as follows:

"§ 134. Appeal to the Patent Trial and Appeal Board". (4) The section heading for section 146 of title 35, United States Code, is amended to read as follows:

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"§ 146. Civil action in case of derivation proceeding''. (5) The items relating to sections 134 and 135 in the table of sections for chapter 12 of title 35, United States Code, are amended to read as follows:

"134. Appeal to the Patent Trial and Appeal Board. "135. Derivation proceedings.". (6) The item relating to section 146 in the table of sections for chapter 13 of title 35, United States Code, is amended to read as follows:

"146. Civil action in case of derivation proceeding.". (k) STATUTE OF LIMITATIONS. - (1) IN GENERAL.-Section 32 of title 35, United States Code, is amended by inserting between the third and fourth sentences the following: "A proceeding under this section shall be com• menced not later than the earlier of either the date that is 10 years after the date on which the misconduct forming the basis for the proceeding occurred, or 1 year after the date on which the misconduct forming the basis for the proceeding is made known to an officer or employee of the Office as prescribed in the regulations established under section 2(b)(2)(D).". (2) REPORT TO CONGRESS.-The Director shall provide on 35 USC 32 note. a biennial basis to the Judiciary Committees of the Senate and House of Representatives a report providing a short description of incidents made known to an officer or employee of the Office as prescribed in the regulations established under section 2(b)(2)(D) of title 35, United States Code, that reflect substantial evidence of misconduct before the Office but for which the Office was barred from commencing a proceeding under section 32 of title 35, United States Code, by the time limitation established by the fourth sentence of that section. (3) EFFECTIVE DATE.-The amendment made by paragraph 35 USC 32 note. (1) shall apply in any case in which the time period for instituting a proceeding under section 32 of title 35, United States Code, had not lapsed before the date of the enactment of this Act. (1) SMALL BUSINESS STUDY.- (1) DEFINITIONS. -ln this subsection- (A) the term "Chief Counsel" means the Chief Counsel for Advocacy of the Small Business Administration; (B) the term "General Counsel" means the General Counsel of the United States Patent and Trademark Office; and (C) the term "small business concern" has the meaning given that term under section 3 of the Small Business Act (15 U.S.C. 632). (2) STUDY.- (A) IN GENERAL.-The Chief Counsel, in consultation with the General Counsel, shall conduct a study of the effects of eliminating the use of dates of invention in deter• mining whether an applicant is entitled to a patent under title 35, United States Code. (B) AREAS OF STUDY.-The study conducted under subparagraph (A) shall include examination of the effects

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of eliminating the use of invention dates, including exam• ining- (i) how the change would affect the ability of small business concerns to obtain patents and their costs of obtaining patents; (ii) whether the change would create, mitigate, or exacerbate any disadvantages for applicants for pat• ents that are small business concerns relative to applicants for patents that are not small business con• cerns, and whether the change would create any advan• tages for applicants for patents that are small business concerns relative to applicants for patents that are not small business concerns; (iii) the cost savings and other potential benefits to small business concerns of the change; and (iv) the feasibility and costs and benefits to small business concerns of alternative means of determining whether an applicant is entitled to a patent under title 35, United States Code. (3) REPORT.-Not later than the date that is 1 year after the date of the enactment of this Act, the Chief Counsel shall submit to the Committee on Small Business and Entrepreneur• ship and the Committee on the Judiciary of the Senate and the Committee on Small Business and the Committee on the Judiciary of the House of Representatives a report on the results of the study under paragraph (2). (m) REPORT ON PRIOR USER RIGHTS.- (1) IN GENERAL.-Not later than the end of the 4-month period beginning on the date of the enactment of this Act, the Director shall report, to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives, the findings and recommendations of the Director on the operation of prior user rights in selected coun• tries in the industrialized world. The report shall include the following: (A) A comparison between patent laws of the United States and the laws of other industrialized countries, including members of the European Union and Japan, Canada, and Australia. (B) An analysis of the effect of prior user rights on innovation rates in the selected countries. (C) An analysis of the correlation, if any, between prior user rights and start-up enterprises and the ability to attract venture capital to start new companies. (D) An analysis of the effect of prior user rights, if any, on small businesses, universities, and individual inventors. (E) An analysis of legal and constitutional issues, if any, that arise from placing trade secret law in patent law. (F) An analysis of whether the change to a first-to• file patent system creates a particular need for prior user rights. (2) CONSULTATION WITH OTHER AGENCIES.-ln preparing the report required under paragraph (1), the Director shall consult with the United States Trade Representative, the Sec• retary of State, and the Attorney General.

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(n) EFFECTIVE DATE.- Applicability. (1) IN GENERAL.-Except as otherwise provided in this sec- 35 USC 100 note. tion, the amendments made by this section shall take effect upon the expiration of the 18-month period beginning on the date of the enactment of this Act, and shall apply to any application for patent, and to any patent issuing thereon, that contains or contained at any time-- (A) a claim to a claimed invention that has an effective filing date as defined in section lOO(i) of title 35, United States Code, that is on or after the effective date described in this paragraph; or (B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim. (2) INTERFERING PATENTS.-The provisions of sections 102(g), 135, and 291 of title 35, United States Code, as in effect on the day before the effective date set forth in paragraph (1) of this subsection, shall apply to each claim of an application for patent, and any patent issued thereon, for which the amend• ments made by this section also apply, if such application or patent contains or contained at any time- (A) a claim to an invention having an effective filing date as defined in section lOO(i) of title 35, United States Code, that occurs before the effective date set forth in paragraph (1) of this subsection; or (B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim. (o) SENSE OF CoNGRESS.-lt is the sense of the Congress that converting the United States patent system from "first to invent" to a system of "first inventor to file" will promote the progress of science and the useful arts by securing for limited times to inventors the exclusive rights to their discoveries and provide inven• tors with greater certainty regarding the scope of protection pro• vided by the grant of exclusive rights to their discoveries. (p) SENSE OF CONGRESS.-lt is the sense of the Congress that converting the United States patent system from "first to invent" to a system of "first inventor to file" will improve the United States patent system and promote harmonization of the United States patent system with the patent systems commonly used in nearly all other countries throughout the world with whom the United States conducts trade and thereby promote greater inter• national uniformity and certainty in the procedures used for securing the exclusive rights of inventors to their discoveries. SEC. 4. INVENTOR'S OATH OR DECLARATION. (a) INVENTOR' S OATH OR DECLARATION.- (1) IN GENERAL.-S ection 115 of title 35, United States Code, is amended to read as follows: "§ 115. Inventor's oath or declaration "(a) NAMING THE INVENTOR; INVENTOR'S OATH OR DECLARA• TION.-An application for patent that is filed under section lll(a) or commences the national stage under section 371 shall include, or be amended to include, the name of the inventor for any invention claimed in the application. Except as otherwise provided in this section, each individual who is the inventor or a joint inventor

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of a claimed invention in an application for patent shall execute an oath or declaration in connection with the application. "(b) REQUIRED STATEMENTS.-An oath or declaration under sub• section (a) shall contain statements that- "(1) the application was made or was authorized to be made by the affiant or declarant; and "(2) such individual believes himself or herself to be the

original inventor or an original joint inventor of a claimed invention in the application. "(c) ADDITIONAL REQUIREMENTS.- The Director may specify additional information relating to the inventor and the invention that is required to be included in an oath or declaration under subsection (a). "(d) SUBSTITUTE STATEMENT.- Regulations. "(!) IN GENERAL.-ln lieu of executing an oath or declara• tion under subsection (a), the applicant for patent may provide a substitute statement under the circumstances described in paragraph (2) and such additional circumstances that the Director may specify by regulation. "(2) PERMITTED CIRCUMSTANCES. -A substitute statement under paragraph (1) is permitted with respect to any individual who- "(A) is unable to file the oath or declaration under subsection (a) because the individual• "(i) is deceased; "(ii) is under legal incapacity; or "(iii) cannot be found or reached after diligent effort; or "(B) is under an obligation to assign the invention but has refused to make the oath or declaration required under subsection (a). "(3) CONTENTS.-A substitute statement under this sub• section shall- "(A) identify the individual with respect to whom the statement applies; "(B) set forth the circumstances representing the per• mitted basis for the filing of the substitute statement in lieu of the oath or declaration under subsection (a); and "(C) contain any additional information, including any showing, required by the Director. "(e) MAKING REQUIRED STATEMENTS IN AsSIGNMENT OF RECORD.-An individual who is under an obligation of assignment of an application for patent may include the required statements under subsections (b) and (c) in the assignment executed by the individual, in lieu of filing such statements separately. "(f) TIME FOR FILING.-A notice of allowance under section 151 may be provided to an applicant for patent only if the applicant for patent has filed each required oath or declaration under sub• section (a) or has filed a substitute statement under subsection (d) or recorded an assignment meeting the requirements of sub• section (e). "(g) EARLIER-FILED APPLICATION CONTAINING REQUIRED STATE• MENTS OR SUBSTITUTE STATEMENT.- "(!) EXCEPTION.-The requirements under this section shall not apply to an individual with respect to an application for patent in which the individual is named as the inventor or

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a joint inventor and who claims the benefit under section 120, 121, or 365(c) of the filing of an earlier-filed application, if• "(A) an oath or declaration meeting the requirements of subsection (a) was executed by the individual and was filed in connection with the earlier-filed application; "(B) a substitute statement meeting the requirements of subsection (d) was filed in connection with the earlier filed application with respect to the individual; or "(C) an assignment meeting the requirements of sub• section (e) was executed with respect to the earlier-filed application by the individual and was recorded in connec• tion with the earlier-filed application. "(2) COPIES OF OATHS, DECLARATIONS, STATEMENTS, OR ASSIGNMENTS.- Notwithstanding paragraph (1), the Director may require that a copy of the executed oath or declaration, the substitute statement, or the assignment filed in connection with the earlier-filed application be included in the later-filed application. "(h) SUPPLEMENTAL AND CORRECTED STATEMENTS; FILING ADDI• TIONAL STATEMENTS.- "(!) IN GENERAL.-Any person making a statement required Regulations . under this section may withdraw, replace, or otherwise correct the statement at any time. If a change is made in the naming of the inventor requiring the filing of 1 or more additional statements under this section, the Director shall establish regulations under which such additional statements may be filed. "(2) SUPPLEMENTAL STATEMENTS NOT REQUIRED.-If an indi• vidual has executed an oath or declaration meeting the require• ments of subsection (a) or an assignment meeting the require• ments of subsection (e) with respect to an application for patent, the Director may not thereafter require that individual to make any additional oath, declaration, or other statement equivalent to those required by this section in connection with the applica• tion for patent or any patent issuing thereon. "(3) SAVINGS CLAUSE.-A patent shall not be invalid or unenforceable based upon the failure to comply with a require• ment under this section if the failure is remedied as provided under paragraph ( 1). "(i) ACKNOWLEDGMENT OF PENALTIES.-Any declaration or statement filed pursuant to this section shall contain an acknowl• edgment that any willful false statement made in such declaration or statement is punishable under section 1001 of title 18 by fine or imprisonment of not more than 5 years, or both.". (2) RELATIONSHIP TO DIVISIONAL APPLICATIONS.-S ection 121 of title 35, United States Code, is amended by striking "If a divisional application" and all that follows through "inventor.". (3) REQUIREMENTS FOR NONPROVISIONAL APPLICATIONS.• Section lll(a) of title 35, United States Code, is amended• (A) in paragraph (2)(C), by striking "by the applicant" and inserting "or declaration"; (B) in the heading for paragraph (3), by inserting "OR DECLARATION'' after "AND OATH"; and (C) by inserting "or declaration" after "and oath" each place it appears.

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(4) CONFORMING AMENDMENT. -The item relating to section 115 in the table of sections for chapter 11 of title 35, United States Code, is amended to read as follows:

"115. Inventor's oath or declaration.". (b) FILING BY OTHER THAN INVENTOR.- (!) IN GENERAL.-Section 118 of title 35, United States Code, is amended to read as follows: "§ 118. Filing by other than inventor "A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient.". (2) CONFORMING AMENDMENT.-S ection 251 of title 35, United States Code, is amended in the third undesignated paragraph by inserting "or the application for the original patent was filed by the assignee of the entire interest" after "claims of the original patent". (c) SPECIFICATION. -Section 112 of title 35, United States Code, is amended- (!) in the first undesignated paragraph- (A) by striking ''The specification" and inserting "(a) IN GENERAL.-The specification"; and (B) by striking "of carrying out his invention" and inserting "or joint inventor of carrying out the invention"; (2) in the second undesignated paragraph- (A) by striking "The specification" and inserting "(b) CONCLUSION.-The specification"; and (B) by striking "applicant regards as his invention" and inserting "inventor or a joint inventor regards as the invention"; (3) in the third undesignated paragraph, by striking "A claim" and inserting "(c) FoRM.-A claim"; (4) in the fourth undesignated paragraph, by striking "Sub• ject to the following paragraph," and inserting "(d) REFERENCE IN DEPENDENT FORMS.-Subject to subsection (e),"; (5) in the fifth undesignated paragraph, by striking "A claim" and inserting "(e) REFERENCE IN MULTIPLE DEPENDENT FORM.-A claim"; and (6) in the last undesignated paragraph, by striking "An element" and inserting "(f) ELEMENT IN CLAIM FOR A COMBINA• TION.-An element". (d) CONFORMING AMENDMENTS.- (!) Sections lll(b)(l)(A) of title 35, United States Code, is amended by striking "the first paragraph of section 112 of this title" and inserting "section 112(a)". (2) Section lll(b)(2) of title 35, United States Code, is amended by striking "the second through fifth paragraphs of

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section 112," and inserting "subsections (b) through (e) of sec• tion 112,". (e) EFFECTIVE DATE.-The amendments made by this section Applicability. shall take effect upon the expiration of the 1-year period beginning 35 USC 111note. on the date of the enactment of this Act and shall apply to any patent application that is filed on or after that effective date. SEC. 5. DEFENSE TO INFRINGEMENT BASED ON PRIOR COMMERCIAL USE. (a) IN GENERAL.-Section 273 of title 35, United States Code, is amended to read as follows: "§273. Defense to infringement based on prior commercial use "(a) IN GENERAL.-A person shall be entitled to a defense under section 282(b) with respect to subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process, that would otherwise infringe a claimed invention being asserted against the person if- "(1) such person, acting in good faith, commercially used the subject matter in the United States, either 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 of such commercial use; and "(2) such commercial use occurred at least 1 year before the earlier of either- ."(A) the effective filing date of the claimed invention; or "(B) the date on which the claimed invention was dis• closed to the public in a manner that qualified for the exception from prior art under section 102(b). "(b) BURDEN OF PROOF.-A person asserting a defense under this section shall have the burden of establishing the defense by clear and convincing evidence. "(c) ADDITIONAL COMMERCIAL USES.- "(1) PREMARKETING REGULATORY REVIEW.-Subject matter for which commercial marketing or use is subject to a premar• keting 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 to be commer• cially used for purposes of subsection (a){l) during such regu• latory review period. "(2) NONPROFIT LABORATORY USE.-A use of subject matter by a nonprofit research laboratory or other nonprofit entity, such as a university or hospital, for which the public is the intended beneficiary, shall be deemed to be a commercial use for purposes of subsection (a)( l), except that a defense under this section may be asserted pursuant to this paragraph only for continued and noncommercial use by and in the laboratory or other nonprofit entity. "(d) EXHAUSTION OF RIGHTS.-Notwithstanding subsection (e)(l), the sale or other disposition of a useful end result by a person entitled to assert a defense under this section in connection with a patent with respect to that useful end result shall exhaust the patent owner's rights under the patent to the extent that

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such rights would have been exhausted had such sale or other disposition been made by the patent owner. "(e) LIMITATIONS AND EXCEPTIONS.- "(!) PERSONAL DEFENSE.- "(A) IN GENERAL.-A defense under this section may be asserted only by the person who performed or directed the performance of the commercial use described in sub• section (a), or by an entity that controls, is controlled by, or is under common control with such person. "(B) TRANSFER OF RIGHT.-Except for any transfer to the patent owner, the right to assert a defense under this section 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. "(C) RESTRICTION ON SITES.-A defense under this sec• tion, when acquired by a person as part of an assignment or transfer described in subparagraph (B), may only be asserted for uses at sites where the subject matter that would otherwise infringe a claimed invention is in use before the later of the effective filing date of the claimed invention or the date of the assignment or transfer of such enterprise or line of business. "(2) DERIVATION.-A person may not assert a 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. "(3) 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 for which it has been established that a commercial use that qualifies under this section occurred, 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) ABANDONMENT OF USE.-A person who has abandoned commercial use (that qualifies under this section) of subject matter may not rely on activities performed before the date of such abandonment in establishing a defense under this sec• tion with respect to actions taken on or after the date of such abandonment. "(5) UNIVERSITY EXCEPI'ION.- "(A) IN GENERAL.-A person commercially using subject matter to which subsection (a) applies may not assert a defense under this section if the claimed invention with respect to which the defense is asserted was, at the time the invention was made, owned or subject to an obligation of assignment to either an institution of higher education (as defined in section lOl(a) of the Higher Education Act of 1965 (20 U.S.C. lOOl(a)), or a technology transfer organization whose primary purpose is to facilitate the commercialization of technologies developed by one or more such institutions of higher education.

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"(B) EXCEPI'ION.-Subparagraph (A) shall not apply if any of the activities required to reduce to practice the subject matter of the claimed invention could not have been undertaken using funds provided by the Federal Government. "(f) UNREASONABLE 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 excep• tional for the purpose of awarding attorney fees under section 285. "(g) INVALIDITY.-A patent shall not be deemed to be invalid under section 102 or 103 solely because a defense is raised or established under this section.". (b) CONFORMING AMENDMENT.-The item relating to section 273 in the table of sections for chapter 28 of title 35, United States Code, is amended to read as follows:

"273. Defense to infringement based on prior commercial use.". (c) EFFECTIVE DATE.-The amendments made by this section Applicability. shall apply to any patent issued on or after the date of the enact• 35 USC 273 note. ment of this Act. SEC. 6. POST-GRANT REVIEW PROCEEDINGS. (a) INTER PARTES REVIEW.-Chapter 31 of title 35, United States Code, is amended to read as follows: "CHAPl'ER 31-INTER PARTES REVIEW "Sec. "311. Inter partes review. "312. Petitions . "313. Preliminary response to petition . "314. Institution of inter partes review. "315. Relation to other proceedings or actions. "316. Conduct of inter partes review. "317. Settlement. "318. Decision of the Board. "319. Appeal.

"§311. Inter partes review "(a) IN GENERAL.-Subject to the provisions of this chapter, Regulations. a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. The Director shall establish, by regulation, fees to be paid by the person requesting the review, in such amounts as the Director determines to be reasonable, considering the aggregate costs of the review. "(b) SCOPE.-A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications. "(c) FILING DEADLINE.-A petition for inter partes review shall be filed after the later of either- "(1) the date that is 9 months after the grant of a patent or issuance of a reissue of a patent; or "(2) if a post-grant review is instituted under chapter 32, the date of the termination of such post-grant review.

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"§312. Petitions "(a) REQUIREMENTS OF PETITION.-A petition filed under section 311 may be considered only if- "(1) the petition is accompanied by payment of the fee established by the Director under section 311; "(2) the petition identifies all real parties in interest; "(3) the petition identifies, in writing and with particu• larity, each claim challenged, the grounds on which the chal• lenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim, including- "(A) copies of patents and printed publications that the petitioner relies upon in support of the petition; and "(B) affidavits or declarations of supporting evidence and opinions, if the petitioner relies on expert opinions; "(4) the petition provides such other information as the Director may require by regulation; and "(5) the petitioner provides copies of any of the documents required under paragraphs (2), (3), and (4) to the patent owner or, if applicable, the designated representative of the patent owner. "(b) PuBLIC AVAILABILITY.-As soon as practicable after the receipt of a petition under section 311, the Director shall make the petition available to the public. "§313. Preliminary response to petition "If an inter partes review petition is filed under section 311, the patent owner shall have the right to file a preliminary response to the petition, within a time period set by the Director, that sets forth reasons why no inter partes review should be instituted based upon the failure of the petition to meet any requirement of this chapter. "§314. Institution of inter partes review "(a) THRESHOLD.-The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1of the claims challenged in the petition. "(b) TIMING.-The Director shall determine whether to institute an inter partes review under this chapter pursuant to a petition filed under section 311within 3 months after- "(1) receiving a preliminary response to the petition under section 313; or "(2) if no such preliminary response is filed, the last date on which such response may be filed. "(c) NOTICE.-The Director shall notify the petitioner and patent owner, in writing, of the Director's determination under subsection (a), and shall make such notice available to the public as soon as is practicable. Such notice shall include the date on which the review shall commence. "(d) No APPEAL.-The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable. "§315. Relation to other proceedings or actions "(a) INFRINGER' S CIVIL ACTION.-

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"(1) INTER PARTES REVIEW BARRED BY CIVIL ACTION.-An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent. "(2) STAY OF CIVIL ACTION.-If the petitioner or real party in interest files a civil action challenging the validity of a claim of the patent on or after the date on which the petitioner files a petition for inter partes review of the patent, that civil action shall be automatically stayed until either- "(A) the patent owner moves the court to lift the stay; "(B) the patent owner files a civil action or counterclaim alleging that the petitioner or real party in interest has infringed the patent; or "(C) the petitioner or real party in interest moves the court to dismiss the civil action. "(3) TREATMENT OF COUNTERCLAIM.-A counterclaim chal• lenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of this subsection. "(b) PATENT OWNER'S ACTION.-An inter partes review may Deadline. not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c). "(c) JOINDER.-If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314. "(d) MULTIPLE PROCEEDINGS.-Notwithstanding sections 135(a), 251, and 252, and chapter 30, during the pendency of an inter partes review, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the inter partes review or other proceeding or matter may proceed, including providing for stay, transfer, consolidation, or termination of any such matter or proceeding. "(e) ESTOPPEL.- "(1) PROCEEDINGS BEFORE THE OFFICE.-The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review. "(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.-The peti• tioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any

125 STAT. 302 PUBLIC LAW 112-29-SEPT. 16, 2011

ground that the petitioner raised or reasonably could have raised during that inter partes review. "§316. Conduct of inter partes review "(a) REGULATIONS.-The Director shall prescribe regulations- "(!) providing that the file of any proceeding under this chapter shall be made available to the public, except that any petition or document filed with the intent that it be sealed shall, if accompanied by a motion to seal, be treated as sealed pending the outcome of the ruling on the motion; "(2) setting forth the standards for the showing of sufficient grounds to institute a review under section 314(a); "(3) establishing procedures for the submission of supple• mental information after the petition is filed; "(4) establishing and governing inter partes review under this chapter and the relationship of such review to other pro• ceedings under this title; "(5) setting forth standards and procedures for discovery of relevant evidence, including that such discovery shall be limited to- "(A) the deposition of witnesses submitting affidavits or declarations; and "(B) what is otherwise necessary in the interest of justice; "(6) prescribing sanctions for abuse of discovery, abuse of process, or any other improper use of the proceeding, such as to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding; "(7) providing for protective orders governing the exchange and submission of confidential information; "(8) providing for the filing by the patent owner of a response to the petition under section 313 after an inter partes review has been instituted, and requiring that the patent owner file with such response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response; "(9) setting forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d) to cancel a challenged claim or propose a reasonable number of substitute claims, and ensuring that any information sub• mitted by the patent owner in support of any amendment entered under subsection (d) is made available to the public as part of the prosecution history of the patent; "(10) providing either party with the right to an oral hearing as part of the proceeding; "(11) requiring that the final determination in an inter partes review be issued not later than 1 year after the date on which the Director notices the institution of a review under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section 315(c); "(12) setting a time period for requesting joinder under section 315(c); and "(13) providing the petitioner with at least 1 opportunity to file written comments within a time period established by the Director.

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"(b) CONSIDERATIONS.- ln prescribing regulations under this section, the Director shall consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter. "(c) PATENT TRIAL AND APPEAL BoARD.-The Patent Trial and Appeal Board shall, in accordance with section 6, conduct each inter partes review instituted under this chapter. "(d) AMENDMENT OF THE PATENT.- "(1) IN GENERAL.-During an inter partes review instituted under this chapter, the patent owner may file 1 motion to amend the patent in 1or more of the following ways: "(A) Cancel any challenged patent claim. "(B) For each challenged claim, propose a reasonable number of substitute claims. "(2) ADDITIONAL MOTIONS.-Additional motions to amend may be permitted upon the joint request of the petitioner and the patent owner to materially advance the settlement of a proceeding under section 317, or as permitted by regulations prescribed by the Director. "(3) SCOPE OF CLAIMS.-An amendment under this sub• section may not enlarge the scope of the claims of the patent or introduce new matter. "(e) EVIDENTIARY STANDARDS.-ln an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence. "§317. Settlement "(a) IN GENERAL.-An inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the inter partes review is termi• nated with respect to a petitioner under this section, no estoppel under section 315(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner's institution of that inter partes review. If no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a). "(b) AGREEMENTS IN WRITING.-Any agreement or under• standing between the patent owner and a petitioner, including any collateral agreements referred to in such agreement or under• standing, made in connection with, or in contemplation of, the termination of an inter partes review under this section shall be in writing and a true copy of such agreement or understanding shall be filed in the Office before the termination of the inter partes review as between the parties. At the request of a party Confidentiality. to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause. "§318. Decision of the Board "(a) FINAL WRITTEN DECISION.-If an inter partes review is instituted and not dismissed under this chapter, the Patent Trial

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and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 316(d). "(b) CERTIFICATE.-If the Patent Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal has expired or any appeal 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 by operation of the certificate any new or amended

claim determined to be patentable . "(c) INTERVENING RIGHTS.-Any proposed amended or new claim determined to be patentable and incorporated into a ratent fol• lowing an inter partes review under this chapter shal have the same effect as that specified in section 252 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, before the issuance of a certificate under subsection (b). Public "(d) DATA ON LENGTH OF REVIEW.-The Office shall make avail• information. able to the public data describing the length of time between the institution of, and the issuance of a final written decision under subsection (a) for, each inter partes review.

"§319. Appeal "A party dissatisfied with the final written decision of the

Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter r,artes review shall have the right to be a party to the apf eal. '. (b CONFORMING AMENDMENT.- The table of chapters for part III of title 35, United States Code, is amended by striking the item relating to chapter 31 and inserting the following: "31. Inter Partes Review ...... 311".

(c) REGULATIONS AND EFFECTIVE DATE .- 35 USC 311 note. (1) REGULATIONS.-The Director shall, not later than the date that is 1 year after the date of the enactment of this Act, issue regulations to carry out chapter 31 of title 35, United States Code, as amended by subsection (a) of this section. 35 USC 311 note. (2) APPLICABILITY .- (A) IN GENERAL.-The amendments made by subsection (a) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date. (B) GRADUATED IMPLEMENTATION. -The Director may impose a limit on the number of inter partes reviews that may be instituted under chapter 31 of title 35, United States Code, during each of the first 4 1-year periods in which the amendments made by subsection (a) are in effect, if such number in each year equals or exceeds the number of inter partes reexaminations that are ordered under chapter 31 of title 35, United States Code, in the last fiscal year ending before the effective date of the amend• ments made by subsection (a). (3) TRANSITION.-

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(A) IN GENERAL.-Chapter 31of title 35, United States Code, is amended- (i) in section 312- (1) in subsection (a)- (aa) in the first sentence, by striking "a substantial new question of patentability affecting any claim of the patent concerned is raised by the request," and inserting "the information presented in the request shows that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request,"; and (bb) in the second sentence, by striking ''The existence of a substantial new question of patentability'' and inserting "A showing that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request"; and {II) in subsection (c), in the second sentence, by striking "no substantial new question of patent• ability has been raised," and inserting "the showing required by subsection (a) has not been made,"; and (ii) in section 313, by striking "a substantial new question of patentability affecting a claim of the patent is raised" and inserting "it has been shown that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims chal• lenged in the request". (B) APPLICATION .-The amendments made by this 35 USC 312 note. paragraph- (i) shall take effect on the date of the enactment of this Act; and (ii) shall apply to requests for inter partes reexamination that are filed on or after such date of enactment, but before the effective date set forth in paragraph (2)(A) of this subsection. (C) CONTINUED APPLICABILITY OF PRIOR PROVISIONS.- 35 USC 312 note. The provisions of chapter 31 of title 35, United States Code, as amended by this paragraph, shall continue to apply to requests for inter partes reexamination that are filed before the effective date set forth in paragraph (2XA) as if subsection (a) had not been enacted. (d) PosT-GRANT REVIEW.-Part Ill of title 35, United States Code, is amended by adding at the end the following: "CHAPl'ER 32-POST-GRANT REVIEW "Sec. "321. Post-grant review. "322. Petitions. "323. Preliminary response to petition. "324. Institution of post-grant review. "325. Relation to other proceedings or actions. "326. Conduct of post-grant review. "327. Settlement. "328. Decision of the Board . "329. Appeal .

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"§321. Post-grant review "(a) IN GENERAL.-Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute a post-grant review of the patent. Regulations. The Director shall establish, by regulation, fees to be paid by the person requesting the review, in such amounts as the Director determines to be reasonable, considering the aggregate costs of the post-grant review. "(b) SCOPE.-A petitioner in a post-grant review may request to cancel as unpatentable 1 or more claims of a patent on any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim). "(c) FILING DEADLINE.-A petition for a post-grant review may only be filed not later than the date that is 9 months after the date of the grant of the patent or of the issuance of a reissue patent (as the case may be). "§322. Petitions "(a) REQUIREMENTS OF PETITION.-A petition filed under section 321 may be considered only if- "(l) the petition is accompanied by payment of the fee established by the Director under section 321; "(2) the petition identifies all real parties in interest; "(3) the petition identifies, in writing and with particu• larity, each claim challenged, the grounds on which the chal• lenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim, including- "(A) copies of patents and printed publications that the petitioner relies upon in support of the petition; and "(B) affidavits or declarations of supporting evidence and opinions, if the petitioner relies on other factual evi• dence or on expert opinions; "(4) the petition provides such other information as the Director may require by regulation; and "(5) the _petitioner provides copies of any of the documents required under paragraphs (2), (3), and (4) to the patent owner or, if applicable, the designated representative of the patent owner. "(b) PuBLIC AVAILABILITY.- As soon as practicable after the receipt of a petition under section 321, the Director shall make the petition available to the public. "§323. Preliminary response to petition "If a post-grant review petition is filed under section 321, the patent owner shall have the right to file a preliminary response to the petition, within a time period set by the Director, that sets forth reasons why no post-grant review should be instituted based upon the failure of the petition to meet any requirement of this chapter. "§324. Institution of post-grant review "(a) 'I'HRESHOLD.-The Director may not authorize a post-grant review to be instituted unless the Director determines that the information presented in the petition filed under section 321, if such information is not rebutted, would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable. PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 307

"(b) ADDITIONAL GROUNDS.-The determination required under subsection (a) may also be satisfied by a showing that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. "(c) TIMING.-The Director shall determine whether to institute a post-grant review under this chapter pursuant to a petition filed under section 321 within 3 months after- "(1) receiving a preliminary response to the petition under section 323; or "(2) if no such preliminary response is filed, the last date on which such response may be filed. "(d) NoTICE.-The Director shall notify the petitioner and patent owner, in writing, of the Director's determination under subsection (a) or (b), and shall make such notice available to the public as soon as is practicable. Such notice shall include the date on which the review shall commence. "(e) No APPEAL.-The determination by the Director whether to institute a post-grant review under this section shall be final and nonappealable. "§325. Relation to other proceedings or actions "(a) INFRINGER' S CIVIL ACTION.- "(1) POST-GRANT REVIEW BARRED BY CIVIL ACTION.-A post• grant review may not be instituted under this chapter if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action chal• lenging the validity of a claim of the patent. "(2) STAY OF CIVIL ACTION.-If the petitioner or real party in interest files a civil action challenging the validity of a claim of the patent on or after the date on which the petitioner files a petition for post-grant review of the patent, that civil action shall be automatically stayed until either- "(A) the patent owner moves the court to lift the stay; "(B) the patent owner files a civil action or counterclaim alleging that the petitioner or real party in interest has infringed the patent; or "(C) the petitioner or real party in interest moves the court to dismiss the civil action. "(3) TREATMENT OF COUNTERCLAIM.- A counterclaim chal• lenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of this subsection. "(b) PRELIMINARY INJUNCTIONS. -If a civil action alleging infringement of a patent is filed within 3 months after the date on which the patent is granted, the court may not stay its consider• ation of the patent owner's motion for a preliminary injunction against infringement of the patent on the basis that a petition for post-grant review has been filed under this chapter or that such a post-grant review has been instituted under this chapter. "(c) JOINDER.-If more than 1 petition for a post-grant review under this chapter is properly filed against the same patent and the Director determines that more than 1 of these petitions war• rants the institution of a post-grant review under section 324, the Director may consolidate such reviews into a single post-grant review. "(d) MULTIPLE PROCEEDINGS.- Notwithstanding sections 135(a), 251, and 252, and chapter 30, during the pendency of any post-

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grant review under this chapter, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the post-grant review or other proceeding or matter may proceed, including providing for the stay, transfer, consolidation, or termination of any such matter or proceeding. In determining whether to institute or order a proceeding under this chapter, chapter 30, or chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments pre• viously were presented to the Office. "(e) ESTOPPEL.- "(1) PROCEEDINGS BEFORE THE OFFICE.-The petitioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review. "(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.-The peti• tioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised duriµg that post-grant review. "(f) REISSUE PATENTS.-A post-grant review may not be instituted under this chapter if the petition requests cancellation of a claim in a reissue patent that is identical to or narrower than a claim in the original patent from which the reissue patent was issued, and the time limitations in section 321(c) would bar filing a petition for a post-grant review for such original patent. "§326. Conduct of post-grant review "(a) REGULATIONS.- The Director shall prescribe regulations- "(!) providing that the file of any proceeding under this chapter shall be made available to the public, except that any petition or document filed with the intent that it be sealed shall, if accompanied by a motion to seal, be treated as sealed pending the outcome of the ruling on the motion; "(2) setting forth the standards for the showing of sufficient grounds to institute a review under subsections (a) and (b) of section 324; "(3) establishing procedures for the submission of supple• mental information after the petition is filed; "(4) establishing and governing a post-grant review under this chapter and the relationship of such review to other pro• ceedings under this title; "(5) setting forth standards and procedures for discovery of relevant evidence, including that such discovery shall be limited to evidence directly related to factual assertions advanced by either party in the proceeding; "(6) prescribing sanctions for abuse of discovery, abuse of process, or any other improper use of the proceeding, such

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 309

as to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding; "(7) providing for protective orders governing the exchange and submission of confidential information; "(8) providing for the filing by the patent owner of a response to the petition under section 323 after a post-grant review has been instituted, and requiring that the patent owner file with such response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response; "(9) setting forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d) to cancel a challenged claim or propose a reasonable number of substitute claims, and ensuring that any information sub• mitted by the patent owner in support of any amendment entered under subsection (d) is made available to the public as part of the prosecution history of the patent; "(10) providing either party with the right to an oral hearing as part of the proceeding; "(11) requiring that the final determination in any post• grant review be issued not later than 1 year after the date on which the Director notices the institution of a proceeding under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section 325(c); and "(12) providing the petitioner with at least 1 opportunity to file written comments within a time period established by the Director. "(b) CONSIDERATIONS.- ln prescribing regulations under this section, the Director shall consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter. "(c) PATENT TRIAL AND APPEAL BOARD.-The Patent Trial and Appeal Board shall, in accordance with section 6, conduct each post- grant review instituted under this chapter. "(d) .AMENDMENT OF THE PATENT.- "(!) IN GENERAL.-During a post-grant review instituted under this chapter, the patent owner may file 1 motion to amend the patent in 1or more of the following ways: "(A) Cancel any challenged patent claim. "(B) For each challenged claim, propose a reasonable number of substitute claims. "(2) ADDITIONAL MOTIONS.-Additional motions to amend may be permitted upon the joint request of the petitioner and the patent owner to materially advance the settlement of a proceeding under section 327, or upon the request of the patent owner for good cause shown. "(3) SCOPE OF CLAIMS.-An amendment under this sub• section may not enlarge the scope of the claims of the patent or introduce new matter. "(e) EVIDENTIARY STANDARDS.-ln a post-grant review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.

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"§327. Settlement "(a) IN GENERAL.-A post-grant review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the post-grant review is termi• nated with respect to a petitioner under this section, no estoppel under section 325(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner's institution of that post-grant review. If no petitioner remains in the post-grant review, the Office may terminate the post- grant review or proceed to a final written decision under section 328(a). "(b) AGREEMENTS IN WRITING.-Any agreement or under• standing between the patent owner and a petitioner, ·including any collateral agreements referred to in such agreement or under• standing, made in connection with, or in contemplation of, the termination of a post-grant review under this section shall be in writing, and a true copy of such agreement or understanding shall be filed in the Office before the termination of the post-grant review Confidentiality. as between the parties. At the request of a party to the proceeding, the agreement or understanding shall be treated as business con• fidential information, shall be kept separate from the file of the involved patents, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause. "§328. Decision of the Board "(a) FINAL WRITTEN DECISION.-If a post-grant review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 326(d). "(b) CERTIFICATE.-lf the Patent Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal has expired or any appeal 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 by operation of the certificate any new or amended claim determined to be patentable. "(c) INTERVENING RIGHTS.-Any proposed amended or new claim determined to be patentable and incorporated into a patent fol• lowing a post-grant review under this chapter 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, any• thing patented by such proposed amended or new claim, or who made substantial preparation therefor, before the issuance of a certificate under subsection (b). Public "(d) DATA ON LENGTH OF REVIEW.-The Office shall make avail- infonnation. able to the public data describing the length of time between the institution of, and the issuance of a final written decision under subsection (a) for, each post-grant review.

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"§329. Appeal "A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 328(a) may appeal the decision pursuant to sections 141 through 144. Any party to the post-grant review shall have the right to be a party to the appeal.". (e) CONFORMING AMENDMENT .-The table of chapters for part III of title 35, United States Code, is amended by adding at the end the following: "32. Post-Grant Review ...... 321". (f) REGULATIONS AND EFFECTIVE DATE.- (1) REGULATIONS.- The Director shall, not later than the 35 USC 321 note. date that is 1 year after the date of the enactment of this Act, issue regulations to carry out chapter 32 of title 35, United States Code, as added by subsection (d) of this section. (2) APPLICABILITY. - 35 USC 321 note. (A) IN GENERAL.-The amendments made by subsection (d) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and, except as provided in section 18 and in paragraph (3), shall apply only to patents described in section 3(n)(l). (B) LIMITATION.-The Director may impose a limit on the number of post-grant reviews that may be instituted under chapter 32 of title 35, United States Code, during each of the first 4 1-year periods in which the amendments made by subsection (d) are in effect. (3) PENDING INTERFERENCES.- 35 USC 321 note. (A) PROCEDURES IN GENERAL.-The Director shall determine, and include in the regulations issued under paragraph (1), the procedures under which an interference commenced before the effective date set forth in paragraph (2XA) is to proceed, including whether such interference- (i) is to be dismissed without prejudice to the filing of a petition for a post-grant review under chapter 32 of title 35, United States Code; or (ii) is to proceed as if this Act had not been enacted. (B) PROCEEDINGS BY PATENT TRIAL AND APPEAL BOARD.-For purposes of an interference that is commenced before the effective date set forth in paragraph (2)(A), the Director may deem the Patent Trial and Appeal Board to be the Board of Patent Appeals and Interferences, and may allow the Patent Trial and Appeal Board to conduct any further proceedings in that interference. (C) APPEALS.-The authorization to appeal or have remedy from derivation proceedings in sections 141(d) and 146 of title 35, United States Code, as amended by this Act, and the jurisdiction to entertain appeals from deriva• tion proceedings in section 1295(a)(4)(A) of title 28, United States Code, as amended by this Act, shall be deemed to extend to any final decision in an interference that is commenced before the effective date set forth in para• graph (2XA) of this subsection and that is not dismissed pursuant to this paragraph. (g) CITATION OF PRIOR ART AND WRITTEN STATEMENTS.- (!) IN GENERAL.-Section 301 of title 35, United States Code, is amended to read as follows: 125 STAT. 312 PUBLIC LAW 112-29-SEPT. 16, 2011

"§301. Citation of prior art and written statements "(a) IN GENERAL.-Any person at any time may cite to the Office in writing- "(!) prior art consisting of patents or printed publications which that person believes to have a bearing on the patent• ability of any claim of a particular patent; or "(2) statements of the patent owner filed in a proceeding before a Federal court or the Office in which the patent owner took a position on the scope of any claim of a particular patent. "(b) OFFICIAL FILE.-If the person citing prior art or written statements pursuant to subsection (a) explains inwriting the perti• nence and manner of applying the prior art or written statements to at least 1 claim of the patent, the citation of the rrior art or written statements and the explanation thereof shal become a part of the official file of the patent. "(c) ADDITIONAL INFORMATION .-A party that submits a written statement pursuant to subsection (aX2) shall include any other documents, pleadings, or evidence from the proceeding in which the statement was filed that addresses the written statement. "(d) LIMITATIONS.-A written statement submitted pursuant to subsection (a)(2), and additional information submitted pursuant to subsection (c), shall not be considered by the Office for any purpose other than to determine the proper meaning of a patent claim in a proceeding that is ordered or instituted pursuant to section 304, 314, or 324. If any such written statement or additional information is subject to an applicable protective order, such state• ment or information shall be redacted to exclude information that is subject to that order. "(e) CONFIDENTIALITY.- Upon the written request of the person citing prior art or written statements pursuant to subsection (a), that person's identity shall be excluded from the patent file and kept confidential.". (2) CONFORMING AMENDMENT.- The item relating to section 301 in the table of sections for chapter 30 of title 35, United States Code, is amended to read as follows: "301. Citation of prior art and written statements.". 35 use 301 note. (3) EFFECTIVE DATE.-The amendments made by this subsection shall take effect upon the expiration of the 1-year/eriod beginning on the date of the enactment of this Act an shall apply to any patent issued before, on, or after that effective date. (h) REEXAMINATION.- (1) DETERMINATION BY DIRECTOR.- (A) IN GENERAL.-Section 303(a) of title 35, United States Code, is amended by striking "section 301 of this title" and inserting "section 301 or 302". Applicability . (B) EFFECTIVE DATE .-The amendment made by this 35 USC 303 note. paragraph shall take effect upon the expiration of the 1- year period beginning on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date. (2) APPEAL.- (A) IN GENERAL.-Section 306 of title 35, United States Code, is amended by striking "145" and inserting "144". Applicability. (B) EFFECTIVE DATE.-The amendment made by this 35 USC 306 note. paragraph shall take effect on the date of the enactment

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of this Act and shall apply to any appeal of a reexamination before the Board of Patent Appeals and Interferences or the Patent Trial and Appeal Board that is pending on, or brought on or after, the date of the enactment of this Act. SEC. 7. PATENT TRIAL AND APPEAL BOARD. (a) COMPOSITION AND DUTIES .- (!) IN GENERAL-Section 6 of title 35, United States Code, is amended to read as follows: "§6. Patent Trial and Appeal Board "(a) IN GENERAL.-There shall be in the Office a Patent Trial Establishment. and Appeal Board. The Director, the Deputy Director, the Commis- sioner for Patents, the Commissioner for Trademarks, and the administrative patent judges shall constitute the Patent Trial and Appeal Board. The administrative patent judges shall be persons of competent legal knowledge and scientific ability who are appointed by the Secretary, in consultation with the Director. Any reference in any Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to the Board of Patent Appeals and Interferences is deemed to refer to the Patent Trial and Appeal Board. "(b) DuTIES.-The Patent Trial and Appeal Board shall- "(!) on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a); "(2) review appeals of reexaminations pursuant to section 134(b); "(3) conduct derivation proceedings pursuant to section 135; and "(4) conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32. "(c) 3-MEMBER PANELS .-Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director. Only the Patent Trial and Appeal Board may grant rehearings. "(d) TREATMENT OF PRIOR APPOINTMENTS.- The Secretary of Commerce may, in the Secretary's discretion, deem the appointment of an administrative patent judge who, before the date of the enactment of this subsection, held office pursuant to an appointment by the Director to take effect on the date on which the Director initially appointed the administrative patent judge. It shall be a defense to a challenge to the appointment of an administrative patent judge on the basis of the judge's having been originally appointed by the Director that the administrative patent judge so appointed was acting as a de facto officer.". (2) CONFORMING AMENDMENT.- The item relating to section 6 in the table of sections for chapter 1 of title 35, United States Code, is amended to read as follows: "6. Patent Trial and Appeal Board.". (b) ADMINISTRATIVE APPEALS.-Section 134 of title 35, United States Code, is amended- (!) in subsection (b), by striking "any reexamination pro• ceeding" and inserting "a reexamination"; and

125 STAT. 314 PUBLIC LAW 112-29-SEPT. 16, 2011

(2) by striking subsection (c). (c) CIRCUIT .APPEALS.- (1) IN GENERAL.-Section 141 of title 35, United States Code, is amended to read as follows:

"§ 141. Appeal to Court of Appeals for the Federal Circuit "(a) EXAMINATIONS.-An applicant who is dissatisfied with the final decision in an appeal to the Patent Trial and Appeal Board under section 134(a) may appeal the Board's decision to the United

States Court of Appeals for the Federal Circuit. By filing such an appeal, the applicant waives his or her right to proceed under section 145. "(b) REEXAMINATIONS.-A patent owner who is dissatisfied with the final decision in an appeal of a reexamination to the Patent Trial and Appeal Board under section 134(b) may appeal the Board's decision only to the United States Court of Appeals for the Federal Circuit. "(c) POST-GRANT AND INTER PARTES REVIEWS.-A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) or 328(a) (as the case may be) may appeal

the Board's decision only to the United States Court of Appeals for the Federal Circuit. Deadlines. "(d) DERIVATION PROCEEDINGS.- A party to a derivation pro• Notices . ceeding who is dissatisfied with the final decision of the Patent Trial and Appeal Board in the proceeding may appeal the decision to the United States Court of Appeals for the Federal Circuit, but such appeal shall be dismissed if any adverse party to such derivation proceeding, within 20 days after the appellant has filed notice of appeal in accordance with section 142, files notice with the Director that the party elects to have all further proceedings conducted as provided in section 146. If the appellant does not, within 30 days after the filing of such notice by the adverse party, file a civil action under section 146, the Board's decision shall govern the further proceedings in the case.". (2) JURISDICTION .-Section 1295(a)(4)(A) of title 28, United States Code, is amended to read as follows: "(A) the Patent Trial and Appeal Board of the United States Patent and Trademark Office with respect to a patent application, derivation proceeding, reexamination, post-grant review, or inter partes review under title 35, at the instance of a party who exercised that party's right to participate in the applicable proceeding before or appeal to the Board, except that an applicant or a party to a derivation proceeding may also have remedy by civil action pursuant to section 145 or 146 of title 35; an appeal under this subparagraph of a decision of the Board with respect to an application or derivation proceeding shall waive the right of such applicant or party to proceed under section 145 or 146 of title 35;". (3) PROCEEDINGS ON APPEAL.-Section 143 of title 35, United States Code, is amended- (A) by striking the third sentence and inserting the following: "In an ex parte case, the Director shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all of the issues raised in the appeal. The Director shall have the

PUBLIC LAW 112-29-SEPr. 16, 2011 125 STAT. 315

right to intervene in an appeal from a decision entered by the Patent Trial and Appeal Board in a derivation proceeding under section 135 or in an inter partes or post• grant review under chapter 31 or 32."; and (B) by striking the last sentence. (d) CONFORMING .AMENDMENTS.- (!) ATOMIC ENERGY ACT OF 1954.-Section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182) is amended in the third undesignated paragraph- (A) by striking ''Board of Patent Appeals and Inter• ferences" each place it appears and inserting "Patent Trial and Appeal Board"; and (B) by inserting "and derivation" after "established for interference". (2) TITLE 51.-Section 20135 of title 51, United States Code, is amended- (A) in subsections (e) and (f), by striking "Board of Patent Appeals and Interferences" each place it appears and inserting ''Patent Trial and Appeal Board"; and (B) in subsection (e), by inserting "and derivation" after "established for interference". (e) EFFECTIVE DATE.-The amendments made by this section 35 use 6 note. shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to proceedings commenced on or after that effective date, except that- (1) the extension of jurisdiction to the United States Court of Appeals for the Federal Circuit to entertain appeals of decisions of the Patent Trial and Appeal Board in reexamina• tions under the amendment made by subsection (cX2) shall be deemed to take effect on the date of the enactment of this Act and shall extend to any decision of the Board of Patent Appeals and Interferences with respect to a reexamina• tion that is entered before, on, or after the date of the enactment of this Act; (2) the provisions of sections 6, 134, and 141 of title 35, United States Code, as in effect on the day before the effective date of the amendments made by this section shall continue to apply to inter partes reexaminations that are requested under section 311 of such title before such effective date; (3) the Patent Trial and Appeal Board may be deemed to be the Board of Patent Appeals and Interferences for pur• poses of appeals of inter partes reexaminations that are requested under section 311 of title 35, United States Code, before the effective date of the amendments made by this section; and (4) the Director's right under the fourth sentence of section 143 of title 35, United States Code, as amended by subsection (c)(3) of this section, to intervene in an appeal from a decision entered by the Patent Trial and Appeal Board shall be deemed to extend to inter partes reexaminations that are requested under section 311 of such title before the effective date of the amendments made by this section. SEC. 8. PREISSUANCE SUBMISSIONS BY THIRD PARTIES. (a) IN GENERAL.-Section 122 of title 35, United States Code, is amended by adding at the end the following: "(e) PREISSUANCE SUBMISSIONS BY THIRD PARTIES.-

125 STAT. 316 PUBLIC LAW 112-29-SEPT. 16, 2011

"(1) IN GENERAL.-Any third party may submit for consider• ation and inclusion in the record of a patent application, any patent, published patent application, or other printed publica• tion of potential relevance to the examination of the application, if such submission is made in writing before the earlier of- "(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or "(B) the later of- "(i) 6 months after the date on which the applica• tion for patent is first published under section 122

by the Office, or "(ii) the date of the first rejection under section 132 of any claim by the examiner during the examina• tion of the application for patent. "(2) OTHER REQUIREMENTS.-Any submission under para• graph (1) shall- "(A) set forth a concise description of the asserted relevance of each submitted document; "(B) be accompanied by such fee as the Director may prescribe; and "(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.". Applicability . (b) EFFECTIVE DATE.-The amendments made by this section 35 USC 122 note. shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent application filed before, on, or after that effective date.

SEC. 9. VENUE. (a) TECHNICAL AMENDMENTS RELATING TO VENUE.-Sections 32, 145, 146, 154(b)(4)(A), and 293 of title 35, United States Code, and section 21(b)(4) of the Trademark Act of 1946 (15 U.S.C.

107l(b)(4)), are each amended by striking "United States District Court for the District of Columbia" each place that term appears and inserting ''United States District Court for the Eastern District of Virginia". Applicability. (b) EFFECTIVE DATE.-The amendments made by this section 35 use 10n shall take effect on the date of the enactment of this Act and note. shall apply to any civil action commenced on or after that date. 35 USC 41 note. SEC. 10. FEE SETrING AUTHORITY. (a) FEE SETTING .- (!) IN GENERAL.-The Director may set or adjust by rule any fee established, authorized, or charged under title 35, United States Code, or the Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for any services performed by or materials fur• nished by, the Office, subject to paragraph (2). (2) FEES TO RECOVER COSTS.-Fees may be set or adjusted under paragraph (1) only to recover the aggregate estimated costs to the Office for processing, activities, services, and mate• rials relating to patents (in the case of patent fees) and trade• marks (in the case of trademark fees), including administrative costs of the Office with respect to such patent or trademark fees (as the case may be). (b) SMALL AND MICRO ENTITIES.-The fees set or adjusted under subsection (a) for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 50 percent with respect to the application of such fees to any

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small entity that qualifies for reduced fees under section 41{h)(l) of title 35, United States Code, and shall be reduced by 75 percent with respect to the application of such fees to any micro entity as defined in section 123 of that title (as added by subsection (g) of this section). (c) REDUCTION OF FEES IN CERTAIN FISCAL YEARS.-ln each fiscal year, the Director- (1) shall consult with the Patent Public Advisory Com• Consultation. mittee and the Trademark Public Advisory Committee on the advisability of reducing any fees described in subsection (a); and (2) after the consultation required under paragraph (1), may reduce such fees. (d) ROLE OF THE PuBLIC ADVISORY COMMITTEE.-The Director shall- (1) not less than 45 days before publishing any proposed Deadline. fee under subsection (a) in the Federal Register, submit the proposed fee to the Patent Public Advisory Committee or the Trademark Public Advisory Committee, or both, as appropriate; (2)(A) provide the relevant advisory committee described Time period. in paragraph (1) a 30-day period following the submission of any proposed fee, in which to deliberate, consider, and comment on such proposal; (B) require that, during that 30-day period, the relevant Time period. advisory committee hold a public hearing relating to such pro• posal; and (C) assist the relevant advisory committee in carrying out that public hearing, including by offering the use of the

resources of the Office to notify and promote the hearing to the public and interested stakeholders; (3) require the relevant advisory committee to make avail• able to the public a written report setting forth in detail the comments, advice, and recommendations of the committee regarding the proposed fee; and (4) consider and analyze any comments, advice, or rec• ommendations received from the relevant advisory committee before setting or adjusting (as the case may be) the fee.

(e) PuBLICATION IN THE FEDERAL REGISTER.- (1) PuBLICATION AND RATIONALE.- The Director shall- (A) publish any proposed fee change under this section in the Federal Register; (B) include, in such publication, the specific rationale and purpose for the proposal, including the possible expectations or benefits resulting from the proposed change; and (C) notify, through the Chair and Ranking Member Notification . of the Committees on the Judiciary of the Senate and Deadline. the House of Representatives, the Congress of the proposed change not later than the date on which the proposed change is published under subparagraph (A). (2) PuBuc COMMENT PERIOD .-The Director shall, in the publication under paragraph (1), provide the public a period of not less than 45 days in which to submit comments on the proposed change in fees. (3) PuBLICATION OF FINAL RULE.-The final rule setting or adjusting a fee under this section shall be published in

125 STAT. 318 PUBLIC LAW 112-29-SEPT. 16, 2011

the Federal Register and in the Official Gazette of the Patent and Trademark Office. (4) CONGRESSIONAL COMMENT PERIOD.-A fee set or adjusted under subsection (a) may not become effective- (A) before the end of the 45-day period beginning on the day after the date on which the Director publishes the final rule adjusting or setting the fee under paragraph (3); or (B) if a law is enacted disapproving such fee. (5) RULE OF CONSTRUCTION.-Rules prescribed under this section shall not diminish- (A) the rights of an applicant for a patent under title 35, United States Code, or for a mark under the Trademark Act of 1946; or (B) any rights under a ratified treaty. (f) RETENTION OF AUTHORITY.-The Director retains the authority under subsection (a) to set or adjust fees only during such period as the Patent and Trademark Office remains an agency within the Department of Commerce. (g) MICRO ENTITY DEFINED.- (1) IN GENERAL.-Chapter 11 of title 35, United States Code, is amended by adding at the end the following new section: "§ 123. Micro entity defined "(a) IN GENERAL.-For purposes of this title, the term 'micro entity' means an applicant who makes a certification that the applicant- "(1) qualifies as a small entity, as defined in regulations issued by the Director; "(2) has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under section lll(b), or international applications filed under the treaty defined in section 351(a) for which the basic national fee under section 41(a) was not paid; "(3) did not, in the calendar year preceding the calendar year in which the applicable fee is being paid, have a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; and "(4) has not assigned, granted, or conveyed, and is not under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census. "(b) APPLICATIONS RESULTING FROM PRIOR EMPLOYMENT.-An applicant is not considered to be named on a previously filed applica• tion for purposes of subsection (a)(2) if the applicant has assigned, or is under an obligation by contract or law to assign, all ownership rights in the application as the result of the applicant's previous employment.

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"(c) FOREIGN CURRENCY EXCHANGE RATE.-If an applicant's or entity's gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant's or entity's gross income exceeds the threshold specified in paragraphs (3) or (4) of subsection (a). "(d) INSTITUTIONS OF HIGHER EDUCATION.-For purposes of this section, a micro entity shall include an applicant who certifies that- "(1) the applicant's employer, from which the applicant obtains the majority of the applicant's income, is an institution of higher education as defined in section lOl(a) of the Higher Education Act of 1965 (20 U.S.C. lOOl(a)); or "(2) the applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular applications to such an institution of higher education. "(e) DIRECTOR'S AUTHORITY.-ln addition to the limits imposed by this section, the Director may, in the Director's discretion, impose income limits, annual filing limits, or other limits on who may qualify as a micro entity pursuant to this section if the Director determines that such additional limits are reasonably necessary to avoid an undue impact on other patent applicants or owners or are otherwise reasonably necessary and appropriate. At least Deadline. 3 months before any limits proposed to be imposed pursuant to Notification. this subsection take effect, the Director shall inform the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate of any such proposed limits.". (2) CONFORMING AMENDMENT. -Chapter 11 of title 35, United States Code, is amended by adding at the end the following new item:

"123. Micro entity defined .". (h) ELECTRONIC FILING INCENTIVE.- (!) IN GENERAL.-Notwithstanding any other provision of this section, an additional fee of $400 shall be established for each application for an original patent, except for a design, plant, or provisional application, that is not filed by electronic means as prescribed by the Director. The fee established by this subsection shall be reduced by 50 percent for small entities that qualify for reduced fees under section 41(h)(l) of title 35, United States Code. All fees paid under this subsection shall be deposited in the Treasury as an offsetting receipt that shall not be available for obligation or expenditure. (2) EFFECTIVE DATE.-This subsection shall take effect upon the expiration of the 60-day period beginning on the date of the enactment of this Act. (i) EFFECTIVE DATE; SUNSET.- (!) EFFECTIVE DATE.-Except as provided in subsection (h), this section and the amendments made by this section shall take effect on the date of the enactment of this Act. (2) SUNSET.-The authority of the Director to set or adjust any fee under subsection (a) shall terminate upon the expiration of the 7-year period beginning on the date of the enactment of this Act.

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(3) PRIOR REGULATIONS NOT AFFECTED.-The termination of authority under this subsection shall not affect any regula• tions issued under this section before the effective date of such termination or any rulemaking proceeding for the issuance of regulations under this section that is pending on such date. SEC. 11. FEES FOR PATENT SERVICES. (a) GENERAL PATENT SERVICES.-Subsections (a) and (b) of sec• tion 41 of title 35, United States Code, are amended to read as follows: "(a) GENERAL FEES.-The Director shall charge the following fees: "(1) FILING AND BASIC NATIONAL FEES.- "(A) On filing each application for an original patent, except for design, plant, or provisional applications, $330. "(B) On filing each application for an original design patent, $220. "(C) On filing each application for an original plant patent, $220. "(D) On filing each provisional application for an original patent, $220. "(E) On filing each application for the reissue of a patent, $330. "(F) The basic national fee for each international application filed under the treaty defined in section 351(a) entering the national stage under section 371, $330. "(G) In addition, excluding any sequence listing or computer program listing filed in an electronic medium as prescribed by the Director, for any application the speci• fication and drawings of which exceed 100 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium), $270 for each additional 50 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium) or fraction thereof. "(2) EXCESS CLAIMS FEES.- "(A) IN GENERAL.-ln addition to the fee specified in paragraph (1}- "(i) on filing or on presentation at any other time, $220 for each claim in independent form in excess of 3· '"(ii) on filing or on presentation at any other time, $52 for each claim (whether dependent or independent) in excess of 20; and "(iii) for each application containing a multiple dependent claim, $390. "(B) MULTIPLE DEPENDENT CLAIMS.-For the purpose of computing fees under subparagraph (A), a multiple dependent claim referred to in section 112 or any claim depending therefrom shall be considered as separate dependent claims in accordance with the number of claims to which reference is made. "(C) REFUNDS; ERRORS IN PAYMENT.-The Director may by regulation provide for a refund of any part of the fee specified in subparagraph (A) for any claim that is canceled before an examination on the merits, as prescribed by the Director, has been made of the application under sec• tion 131. Errors in payment of the additional fees under

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 321

this paragraph may be rectified in accordance with regula• tions prescribed by the Director. "(3) EXAMINATION FEES.- "(A) IN GENERAL.- "(i) For examination of each application for an original patent, except for design, plant, provisional, or international applications, $220. "(ii) For examination of each application for an original design patent, $140. "(iii) For examination of each application for an original plant patent, $170. "(iv) For examination of the national stage of each international application, $220. "(v) For examination of each application for the reissue of a patent, $650. "(B) APPLICABILITY OF OTHER FEE PROVISIONS .-The provisions of paragraphs (3) and (4) of section lll(a) relating to the payment of the fee for filing the application shall apply to the payment of the fee specified in subpara• graph (A) with respect to an application filed under section lll(a). The provisions of section 371(d) relating to the payment of the national fee shall apply to the payment of the fee specified in subparagraph (A) with respect to an international application. "(4) ISSUE FEES.- "(A) For issuing each original patent, except for design or plant patents, $1,510. "(B) For issuing each original design patent, $860. "(C) For issuing each original plant patent, $1,190: "(D) For issuing each reissue patent, $1,510. "(5) DISCLAIMER FEE.-On filing each disclaimer, $140. "(6) APPEAL FEES.- "(A) On filing an appeal from the examiner to the Patent Trial and Appeal Board, $540. "(B) In addition, on filing a brief in support of the appeal, $540, and on requesting an oral hearing in the appeal before the Patent Trial and Appeal Board, $1,080. "(7) REVIVAL FEES.-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, $1,620, unless the petition is filed under section 133 or 151, in which case the fee shall be $540. "(8) EXTENSION FEES.-For petitions for 1-month extensions of time to take actions required by the Director in an applica• tion- "(A) on filing a first petition, $130; "(B) on filing a second petition, $360; and "(C) on filing a third or subsequent petition, $620. "(b) MAINTENANCE FEES.- "(1) IN GENERAL.-The Director shall charge the following fees for maintaining in force all patents based on applications filed on or after December 12, 1980: "(A) Three years and 6 months after grant, $980. "(B) Seven years and 6 months after grant, $2,480. "(C) Eleven years and 6 months after grant, $4,110.

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Expiration date. "(2) GRACE PERIOD; SURCHARGE.-Unless payment of the applicable maintenance fee under paragraph (1) is received in the Office on or before the date the fee is due or within a grace period of 6 months thereafter, the patent shall expire as of the end of such grace period. The Director may require the payment of a surcharge as a condition of accepting within such 6-month grace period the payment of an applicable mainte• nance fee. "(3) No MAINTENANCE FEE FOR DESIGN OR PLANT PATENT.• No fee may be established for maintaining a design or plant patent in force.". (b) DELAYS IN PAYMENT.-Subsection (c) of section 41 of title 35, United States Code, is amended- (!) by striking "(c)(l) The Director" and inserting: "(c) DELAYS IN PAYMENT OF MAINTENANCE FEES.• "(1) ACCEPTANCE.- The Director"; and (2) by striking "(2) A patent" and inserting: "(2) EFFECT ON RIGHTS OF OTHERS.-A patent". (c) PATENT SEARCH FEES.-Subsection (d) of section 41 of title 35, United States Code, is amended to read as follows: "(d) PATENT SEARCH AND OTHER FEES.- "(l) PATENT SEARCH FEES.- "(A) IN GENERAL.-The Director shall charge the fees specified under subparagraph (B) for the search of each application for a patent, except for provisional applications. The Director shall adjust the fees charged under this para• graph to ensure that the fees recover an amount not to exceed the estimated average cost to the Office of searching applications for patent by Office personnel. "(B) SPECIFIC FEES.-The fees referred to in subpara• graph (A) are- "(i) $540 for each application for an original patent, except for design, plant, provisional, or international applications; "(ii) $100 for each application for an original design patent; "(iii) $330 for each application for an original plant patent; "(iv) $540 for the national stage of each inter• national application; and "(v) $540 for each application for the reissue of a patent. "(C) APPLICABILITY OF OTHER PROVISIONS.-The provi• sions of paragraphs (3) and (4) of section lll(a) relating to the payment of the fee for filing the application shall apply to the payment of the fee specified in this paragraph with respect to an application filed under section lll(a). The provisions of section 371(d) relating to the payment of the national fee shall apply to the payment of the fee specified in this paragraph with respect to an international application. Regulations. "(D) REFUNDS.-The Director may by regulation provide for a refund of any part of the fee specified in this paragraph for any applicant who files a written declaration of express abandonment as prescribed by the Director before an examination has been made of the application under section 131.

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 323

"(2) OTHER FEES.- "(A) IN GENERAL.-The Director shall establish fees for all other processing, services, or materials relating to patents not specified in this section to recover the estimated average cost to the Office of such processing, services, or materials, except that the Director shall charge the following fees for the following services: "(i) For recording a document affecting title, $40 per property. "(ii) For each photocopy, $.25 per page. "(iii) For each black and white copy of a patent, $3. "(B) COPIES FOR LIBRARIES .-The yearly fee for pro• viding a library specified in section 12 with uncertified printed copies of the specifications and drawings for all patents in that year shall be $50.". (d) FEES FOR SMALL ENTITIES.-Subsection (h) of section 41 of title 35, United States Code, is amended to read as follows: "(h) FEES FOR SMALL ENTITIES.- "(1) REDUCTIONS IN FEES.-Subject to paragraph (3), fees charged under subsections (a), (b), and (d)(l) shall be reduced by 50 percent with respect to their application to any small business concern as defined under section 3 of the Small Busi• ness Act, and to any independent inventor or nonprofit organization as defined in regulations issued by the Director. "(2) SURCHARGES AND OTHER FEES.-With respect to its application to any entity described in paragraph (1), any sur• charge or fee charged under subsection (c) or (d) shall not be higher than the surcharge or fee required of any other entity under the same or substantially similar circumstances. "(3) REDUCTION FOR ELECTRONIC FILING.-The fee charged under subsection (a)(l)(A) shall be reduced by 75 percent with respect to its application to any entity to which paragraph (1) applies, if the application is filed by electronic means as prescribed by the Director.". (e) TECHNICAL AMENDMENTS.-S ection 41 of title 35, United States Code, is amended- (1) in subsection (e), in the first sentence, by striking ''The Director" and inserting "WAIVER OF FEES; COPIES REGARDING NOTICE. -The Director"; (2) in subsection (f), by striking "The fees" and inserting "ADJUSTMENT OF FEEs.-The fees"; (3) by repealing subsection (g); and (4) in subsection (i)- (A) by striking "(i)(l) The Director" and inserting the following: "(i) ELECTRONIC PATENT AND TRADEMARK DATA.- "(1) MAINTENANCE OF COLLECTIONS.-The Director"; (B) by striking "(2) The Director" and inserting the following: "(2) AVAILABILITY OF AUTOMATED SEARCH SYSTEMS.-The Director"; (C) by striking "(3) The Director" and inserting the following: "(3) ACCESS FEES.-The Director"; and (D) by striking "(4) The Director" and inserting the following:

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"(4) ANNuAL REPORT TO CONGRESS.-The Director". (f) ADJUSTMENT OF TRADEMARK FEES.-Section 802(a) of divi• sion B of the Consolidated Appropriations Act, 2005 (Public Law 35 USC 41 note. 108-447) is amended- (!) in the first sentence, by striking "During fiscal years 2005, 2006, and 2007,", and inserting "Until such time as the Director sets or adjusts the fees otherwise,''; and (2) in the second sentence, by striking "During fiscal years 2005, 2006, and 2007, the" and inserting "The". (g) EFFECTIVE DATE, APPLICABILITY, AND TRANSITION PROVI• SIONS.--Section 803(a) of division B of the Consolidated Appropria- 35 USC 41 note. tions Act, 2005 (Public Law 108-447) is amended by striking "and shall apply only with respect to the remaining portion of fiscal year 2005 and fiscal year 2006". 35 USC 41 note. (h) PRIORITIZED EXAMINATION F'EE.- (1) IN GENERAL.- (A) FEE.- (i) PRIORITIZED EXAMINATION FEE.-A fee of $4,800 shall be established for filing a request, pursuant to section 2(b)(2)(G) of title 35, United States Code, for prioritized examination of a nonprovisional application for an original utility or plant patent. (ii) ADDITIONAL FEES.-ln addition to the prioritized examination fee under clause (i), the fees due on an application for which prioritized examination is being sought are the filing, search, and examination fees (including any applicable excess claims and application size fees), processing fee, and publication fee for that application. (B) REGULATIONS; LIMITATIONS.- (i) REGULATIONS.- The Director may by regulation prescribe conditions for acceptance of a request under subparagraph (A) and a limit on the number of filings for prioritized examination that may be accepted. (ii) LIMITATION ON CLAIMS.- Until regulations are prescribed under clause (i), no application for which prioritized examination is requested may contain or be amended to contain more than 4 independent claims or more than 30 total claims. (iii) LIMITATION ON TOTAL NUMBER OF REQUESTS.• The Director may not accept in any fiscal year more than 10,000 requests for prioritization until regulations are prescribed under this subparagraph setting another limit. (2) REDUCTION IN FEES FOR SMALL ENTITIES.-The Director shall reduce fees for providing prioritized examination of non• provisional applications for original utility and plant patents by 50 percent for small entities that qualify for reduced fees under section 41(h)(l) of title 35, United States Code. (3) DEPOSIT OF FEES.-All fees paid under this subsection shall be credited to the United States Patent and Trademark Office Appropriation Account, shall remain available until expended, and may be used only for the purposes specified in section 42(c)(3)(A) of title 35, United States Code. (4) EFFECTIVE DATE AND TERMINATION.-

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 325

(A) EFFECTIVE DATE.-This subsection shall take effect on the date that is 10 days after the date of the enactment of this Act. (B) TERMINATION. -The fee imposed under paragraph (l)(A)(i), and the reduced fee under paragraph (2), shall terminate on the effective date of the setting or adjustment of the fee under paragraph (l)(A)(i) pursuant to the exercise of the authority under section 10 for the first time with respect to that fee. (i) APPROPRIATION ACCOUNT TRANSITION FEES.- 35 USC 41 note. (1) SURCHARGE.- (A) IN GENERAL.-There shall be a surcharge of 15 percent, rounded by standard arithmetic rules, on all fees charged or authorized by subsections (a), (b), and (d)(l) of section 41, and section 132(b), of title 35, United States Code. Any surcharge imposed under this subsection is, and shall be construed to be, separate from and in addition to any other surcharge imposed under this Act or any other provision oflaw. (B) DEPOSIT OF AMOUNTS.-Amounts collected pursuant to the surcharge imposed under subparagraph (A) shall be credited to the United States Patent and Trademark Appropriation Account, shall remain available until expended, and may be used only for the purposes specified in section 42(c)(3)(A) of title 35, United States Code. (2) EFFECTIVE DATE AND TERMINATION OF SURCHARGE.• The surcharge provided for in paragraph (1}- (A) shall take effect on the date that is 10 days after the date of the enactment of this Act; and (B) shall terminate, with respect to a fee to which Applicability. paragraph (l)(A) applies, on the effective date of the setting or adjustment of that fee pursuant to the exercise of the authority under section 10 for the first time with respect to that fee. (j) EFFECTIVE DATE.-Except as otherwise provided in this sec- 35 use 41 note. tion, this section and the amendments made by this section shall take effect on the date of the enactment of this Act. SEC. 12. SUPPLEMENTAL EXAMINATION. (a) IN GENERAL.---Chapter 25 of title 35, United States Code, is amended by adding at the end the following: "§ 257. Supplemental examinations to consider, reconsider, or correct information "(a) REQUEST FOR SUPPLEMENTAL EXAMINATION.-A patent owner may request supplemental examination of a patent in the Office to consider, reconsider, or correct information believed to be relevant to the patent, in accordance with such requirements as the Director may establish. Within 3 months after the date Deadline. a request for supplemental examination meeting the requirements Certificate. of this section is received, the Director shall conduct the supple• mental examination and shall conclude such examination by issuing a certificate indicating whether the information presented in the request raises a substantial new question of patentability. "(b) REEXAMINATION ORDERED.-If the certificate issued under subsection (a) indicates that a substantial new question of patent• ability is raised by 1 or more items of information in the request,

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the Director shall order reexamination of the patent. The reexamination shall be conducted according to procedures estab• lished by chapter 30, except that the patent owner shall not have the right to file a statement pursuant to section 304. During the reexamination, the Director shall address each substantial new question of patentability identified during the supplemental exam• ination, notwithstanding the limitations in chapter 30 relating to patents and printed publication or any other provision of such chapter. "(c) EFFECT.- "(1) IN GENERAL.-A patent shall not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent. The making of a request under subsection (a), or the absence thereof, shall not be relevant to enforceability of the patent under section 282. "(2) EXCEPI'IONS.- "(A) PRIOR ALLEGATIONS.- Paragraph (1) shall not apply to an allegation pled with particularity in a civil action, or set forth with particularity in a notice received by the patent owner under section 505(j)(2)(B)(iv)(II) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(2)(B)(iv)(II)), before the date of a supplemental exam• ination request under subsection (a) to consider, reconsider, or correct information forming the basis for the allegation. "(B) PATENT ENFORCEMENT ACTIONS.-ln an action brought under section 337(a) of the Tariff Act of 1930 (19 U.S.C. 1337(a)), or section 281 of this title, paragraph (1) shall not apply to any defense raised in the action that is based upon information that was considered, reconsidered, or corrected pursuant to a supplemental examination request under subsection (a), unless the supplemental examination, and any reexamination ordered pursuant to the request, are concluded before the date on which the action is brought. "(d) FEES AND REGULATIONS.- "(1) FEES.-The Director shall, by regulation, establish fees for the submission of a request for supplemental examination of a patent, and to consider each item of information submitted in the request. If reexamination is ordered under subsection (b), fees established and applicable to ex parte reexamination proceedings under chapter 30 shall be paid, in addition to fees applicable to supplemental examination. "(2) REGULATIONS. -The Director shall issue regulations governing the form, content, and other requirements of requests for supplemental examination, and establishing procedures for reviewing information submitted in such requests. "(e) FRAUD.-If the Director becomes aware, during the course of a supplemental examination or reexamination proceeding ordered under this section, that a material fraud on the Office may have been committed in connection with the patent that is the subject of the supplemental examination, then in addition to any other actions the Director is authorized to take, including the cancellation of any claims found to be invalid under section 307 as a result of a reexamination ordered under this section, the Director shall

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 327

also refer the matter to the Attorney General for such further action as the Attorney General may deem appropriate. Any such referral shall be treated as confidential, shall not be included in the file of the patent, and shall not be disclosed to the public unless the United States charfes a person with a criminal offense in connection with such referra . "(f) RULE OF CONSTRUCTION. -Nothing in this section shall be construed- "(!) to preclude the imposition of sanctions based upon criminal or antitrust laws (including section lOOl(a) of title 18, the first section of the Clayton Act, and section 5 of the Federal Trade Commission Act to the extent that section relates to unfair methods of competition); "(2) to limit the authority of the Director to investigate issues of possible misconduct and impose sanctions for mis• conduct in connection with matters or proceedings before the Office; or "(3) to limit the authority of the Director to issue regula• tions under chapter 3 relating to sanctions for misconduct by representatives practicing before the Office.". (b) CONFORMING AMENDMENT. -The table of sections for chapter 25 of title 35, United States Code, is amended by adding at the end the following new item: "257. Supplemental examinations to consider, reconsider, or correct information .". (c) EFFECTIVE DATE.-The amendments made by this section Applicability. shall take effect upon the expiration of the 1-year period beginning 35 USC 257 note. on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date. SEC. 13. FUNDING AGREEMENTS. (a) IN GENERAL.-Section 202(c)(7)(E)(i) of title 35, United States Code, is amended- (!) by striking "75 percent" and inserting "15 percent"; (2) by striking "25 percent" and inserting "85 percent"; and (3) by striking "as described above in this clause (D);" and inserting "described above in this clause;". (b) EFFECTIVE DATE.-The amendments made by this section Applicability. shall take effect on the date of the enactment of this Act and 35 USC 202 note. shall apply to any patent issued before, on, or after that date. SEC. 14. TAX STRATEGIES DEEMED WITHIN THE PRIOR ART. 35 USC 102 note. (a) IN GENERAL.-For purposes of evaluating an invention under section 102 or 103 of title 35, United States Code, any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art. (b) DEFINITION. -For purposes of this section, the term "tax liability" refers to any liability for a tax under any Federal, State, or local law, or the law of any foreign jurisdiction, including any statute, rule, regulation, or ordinance that levies, imposes, or assesses such tax1iability. (c) ExcLUSIONS.-This section does not apply to that part of an invention that- (1) is a method, apparatus, technology, computer program product, or system, that is used solely for preparing a tax

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or information return or other tax filing, including one that records, transmits, transfers, or organizes data related to such filing; or (2) is a method, apparatus, technology, computer program product, or system used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor. (d) RULE OF CONSTRUCTION.-Nothing in this section shall be construed to imply that other business methods are patentable or that other business method patents are valid. (e) EFFECTIVE DATE; APPLICABILITY.- This section shall take effect on the date of the enactment of this Act and shall apply to any patent application that is pending on, or filed on or after, that date, and to any patent that is issued on or after that date. SEC. 15. BEST MODE REQUIREMENT. (a) IN GENERAL.-Section 282 of title 35, United States Code, is amended in the second undesignated paragraph by striking para• graph (3) and inserting the following: "(3) Invalidity of the patent or any claim in suit for failure to comply with- "(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or "(B) any requirement of section 251.". (b) CONFORMING AMENDMENT.-S ections 119(e)(l) and 120 of title 35, United States Code, are each amended by striking "the first paragraph of section 112 of this title" and inserting "section 112(a) (other than the requirement to disclose the best mode)". Applicability. (c) EFFECTIVE DATE.-The amendments made by this section 35 USC 119 note. shall take effect upon the date of the enactment of this Act and shall apply to proceedings commenced on or after that date. SEC. 16. MARKING. (a) VIRTUAL MARKING.- (1) IN GENERAL.-Section 287(a) of title 35, United States Code, is amended by striking "or when," and inserting "or by fixing thereon the word 'patent' or the abbreviation 'pat.' together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when,". Applicability . (2) EFFECTIVE DATE.-The amendment made by this sub- 35 USC 287 note. section shall apply to any case that is pending on, or commenced on or after, the date of the enactment of this Act. (3) REPORT.-Not later than the date that is 3 years after the date of the enactment of this Act, the Director shall submit a report to Congress that provides- (A) an analysis of the effectiveness of "virtual marking'', as provided in the amendment made by para• graph (1) of this subsection, as an alternative to the phys• ical marking of articles; (B) an analysis of whether such virtual marking has limited or improved the ability of the general public to access information about patents;

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(C) an analysis of the legal issues, if any, that arise from such virtual marking; and (D) an analysis of the deficiencies, if any, of such virtual marking. (b) FALSE MARKING.- (!) CIVIL PENALTY.-Section 292(a) of title 35, United States, Code, is amended by adding at the end the following: "Only the United States may sue for the penalty authorized by this subsection.". (2) CIVIL ACTION FOR DAMAGES.-Subsection (b) of section 292 of title 35, United States Code, is amended to read as follows: "(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.". (3) EXPIRED PATENTS.-Section 292 of title 35, United States Code, is amended by adding at the end the following: "(c) The marking of a product, in a manner described in sub• section (a), with matter relating to a patent that covered that product but has expired is not a violation of this section.". (4) EFFECTIVE DATE.-The amendments made by this sub- Applicability. section shall apply to all cases, without exception, that are 35 USC 292 note. pending on, or commenced on or after, the date of the enactment of this Act. SEC. 17. ADVICE OF COUNSEL. (a) IN GENERAL.-Chapter 29 of title 35, United States Code, is amended by adding at the end the following: "§298. Advice of counsel ''The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.". (b) CONFORMING AMENDMENT. -The table of sections for chapter 29 of title 35, United States Code, is amended by adding at the end the following: "298. Advice of counsel.". SEC. 18. TRANSfflONAL PROGRAM FOR COVERED BUSINESS MEfflOD 35 USC 321 note. PATENTS. (a) TRANSITIONAL PROGRAM.- (!) ESTABLISHMENT.- Not later than the date that is 1 Deadline. year after the date of the enactment of this Act, the Director Regulations. shall issue regulations establishing and implementing a transitional post-grant review proceeding for review of the validity of covered business method patents. The transitional proceeding implemented pursuant to this subsection shall be regarded as, and shall employ the standards and procedures of, a post- grant review under chapter 32 of title 35, United States Code, subject to the following: (A) Section 321(c) of title 35, United States Code, and subsections (b), (e)(2), and (0 of section 325 of such title shall not apply to a transitional proceeding.

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(B) A person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person's real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent. (C) A petitioner in a transitional proceeding who chal• lenges the validity of 1or more claims in a covered business method patent on a ground raised under section 102 or 103 of title 35, United States Code, as in effect on the day before the effective date set forth in section 3(n)(l), may support such ground only on the basis of- (i) prior art that is described by section 102(a) of such title of such title (as in effect on the day before such effective date); or (ii) prior art that- (1) discloses the invention more than 1 year before the date of the application for patent in the United States; and (II) would be described by section 102(a) of such title (as in effect on the day before the effec• tive date set forth in section 3(n)(l)) if the disclo• sure had been made by another before the inven• tion thereof by the applicant for patent. (D) The petitioner in a transitional proceeding that results in a final written decision under section 328(a) of title 35, United States Code, with respect to a claim in a covered business method patent, or the petitioner's real party in interest, may not assert, either in a civil action arising in whole or in part under section 1338 of title 28, United States Code, or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337), that the claim is invalid on any ground that the petitioner raised during that transitional proceeding. (E) The Director may institute a transitional pro• ceeding only for a patent that is a covered business method patent. (2) EFFECTIVE DATE.-The regulations issued under para• graph (1) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any covered business method patent issued before, on, or after that effective date, except that the regula• tions shall not apply to a patent described in section 6(f)(2)(A) of this Act during the period in which a petition for post• grant review of that patent would satisfy the requirements of section 321(c) of title 35, United States Code. (3) SUNSET.- (A) IN GENERAL.-This subsection, and the regulations issued under this subsection, are repealed effective upon the expiration of the 8-year period beginning on the date that the regulations issued under to paragraph (1) take effect. (B) APPLICABILITY.-Notwithstanding subparagraph (A), this subsection and the regulations issued under this subsection shall continue to apply, after the date of the

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repeal under subparagraph (A), to any petition for a transi• tional proceeding that is filed before the date of such repeal. (b) REQUEST FOR STAY.- (1) IN GENERAL.-If a party seeks a stay of a civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a transitional proceeding for that patent, the court shall decide whether to enter a stay based on- (A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial; (B) whether discovery is complete and whether a trial date has been set; (C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or/resent a clear tactical advantage for the moving party; an (D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court. (2) REVIEW.-A party may take an immediate interlocutory appeal from a district court's decision under paragraph (1). The United States Court of Appeals for the Federal Circuit shall review the district court's decision to ensure consistent application of established precedent, and such review may be de novo. (c) ATM EXEMPTION FOR VENUE PURPOSES.-ln an action for infringement under section 281 of title 35, United States Code, of a covered business method patent, an automated teller machine shall not be deemed to be a regular and established place of business for purposes of section 1400(b) of title 28, United States Code. . (d) DEFINITION.- . (1) ) IN GENERAL.-For purposes of this section, the term "covered business method patent" means a patent that claims a method or corresponding apparatus for performing data proc• essing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions. (2) REGULATIONS. -To assist in implementing the transi• tional proceeding authorized by this subsection, the Director shall issue regulations for determining whether a patent is for a technological invention. (e) RULE OF CONSTRUCTION.-Nothing in this section shall be construed as amending or interpreting categories of patent-eligible subject matter set forth under section 101 of title 35, United States Code. SEC. 19. JURISDICTION AND PROCEDURAL MATl'ERS. (a) STATE COURT JURISDICTION.-S ection 1338(a) of title 28, United States Code, is amended by striking the second sentence and inserting the following: "No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights. · For purposes of this subsection, the term 'State' includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands.". (b) COURT OF APPEALS FOR THE FEDERAL CIRCUIT.-Section 1295(a)(l) of title 28, United States Code, is amended to read as follows:

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"(l) of an appeal from a final decision of a district court of the United States, the District Court of Guam, the District Court of the Virgin Islands, or the District Court of the Northern Mariana Islands, in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection;". (c) REMOVAL.- (1) IN GENERAL.-Chapter 89 of title 28, United States Code, is amended by adding at the end the following new section: "§1454. Patent, plant variety protection, and copyright cases "(a) IN GENERAL.-A civil action in which any party asserts a claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights may be removed to the district court of the United States for the district and division embracing the place where the action is pending. "(b) SPECIAL RULES.-The removal of an action under this sec• tion shall be made in accordance with section 1446, except that if the removal is based solely on this section- "(!) the action may be removed by any party; and "(2) the time limitations contained in section 1446(b) may be extended at any time for cause shown. "(c) CLARIFICATION OF JURISDICTION IN CERTAIN CASES.-The court to which a civil action is removed under this section is not precluded from hearing and determining any claim in the civil action because the State court from which the civil action is removed did not have jurisdiction over that claim. "(d) REMAND.-lf a civil action is removed solely under this section, the district court- "(1) shall remand all claims that are neither a basis for removal under subsection (a) nor within the original or supple• mental jurisdiction of the district court under any Act of Con• gress; and "(2) may, under the circumstances specified in section 1367(c), remand any claims within the supplemental jurisdic• tion of the district court under section 1367.". (2) CONFORMING AMENDMENT. -The table of sections for chapter 89 of title 28, United States Code, is amended by adding at the end the following new item: "1454. Patent, plant variety protection, and copyright cases.". (d) PROCEDURAL MATTERS IN PATENT CASES.- (1) JOINDER OF PARTIES AND STAY OF ACTIONS.-Chapter 29 of title 35, United States Code, as amended by this Act, is further amended by adding at the end the following new section: "§299. Joinder of parties "(a) JOINDER OF ACCUSED INFRINGERS.-With respect to any civil action arising under any Act of Congress relating to patents, other than an action or trial in which an act of infringement under section 271(e)(2) has been pied, parties that are accused infringers may be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, or counter• claim defendants only if-

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"(1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and "(2) questions of fact common to all defendants or counter• claim defendants will arise in the action. "(b) ALLEGATIONS INSUFFICIENT FOR JOINDER.-For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit. "(c) WAIVER.-A party that is an accused infringer may waive the limitations set forth in this section with respect to that party.". (2) CONFORMING AMENDMENT.-The table of sections for chapter 29 of title 35, United States Code, as amended by this Act, is further amended by adding at the end the following new item: "299. Joinder of parties.". (e) EFFECTIVE DATE.-The amendments made by this section Applicability . shall apply to any civil action commenced on or after the date 28 use 1295 of the enactment of this Act. note. SEC. 20. TECHNICAL AMENDMENTS. (a) JOINT INvENTIONS.-Section 116 of title 35, United States Code, is amended- (1) in the first undesignated paragraph, by striking ''When" and inserting "(a) JOINT INVENTIONS.-When"; (2) in the second undesignated paragraph, by striking "If a joint inventor" and inserting "(b) OMITTED INVENTOR .- lf a joint inventor"; and (3) in the third undesignated paragraph- (A) by striking ''Whenever" and inserting "(c) CORRECTION OF ERRORS IN .APPLICATION. -Whenever"; and (B) by striking "and such error arose without any deceptive intention on his part,". (b) FILING OF .APPLICATION IN FOREIGN COUNTRY.-Section 184 of title 35, United States Code, is amended- (!) in the first undesignated paragraph- (A) by striking "Except when" and inserting "(a) FILING IN FOREIGN COUNTRY.-Except when"; and (B) by striking "and without deceptive intent"; (2) in the second undesignated paragraph, by striking ''The term" and inserting "(b) .APPLICATION .-The term"; and (3) in the third undesignated paragraph, by striking "The scope" and inserting "(c) SUBSEQUENT MODIFICATIONS, AMEND• MENTS, AND SUPPLEMENTS.-The scope". (c) FILING WITHOUT A LICENSE.-Section 185 of title 35, United States Code, is amended by striking "and without deceptive intent". (d) REISSUE OF DEFECTIVE PATENTS.-Section 251 of title 35, United States Code, is amended- (!) in the first undesignated paragraph- (A) by striking ''Whenever'' and inserting "(a) IN GEN• ERAL.-Whenever"; and

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(B) by striking "without any deceptive intention"; (2) in the second undesignated paragraph, by striking "The Director'' and inserting "(b) MULTIPLE REISSUED PATENTS.• The Director''; (3) in the third undesignated paragraph, by striking "The provisions" and inserting "(c) APPLICABILITY OF THIS TITLE.• The provisions"; and (4) in the last undesignated paragraph, by striking "No reissued patent" and inserting "(d) REISSUE PATENT ENLARGING SCOPE OF CLAIMS.-No reissued patent". (e) EFFECT OF REISSUE.-Section 253 of title 35, United States Code, is amended- (1) in the first undesignated paragraph, by striking "When• ever, without any deceptive intention," and inserting "(a) IN GENERAL.-Whenever''; and (2) in the second undesignated paragraph, by striking "In like manner" and inserting "(b) ADDITIONAL DISCLAIMER OR DEDICATION.- ln the manner set forth in subsection (a),". (0 CORRECTION OF NAMED INVENTOR.-Section 256 of title 35, United States Code, is amended- (1) in the first undesignated paragraph- (A) by striking ''Whenever'' and inserting "(a) CORREC• TION.-Whenever'' ; and (B) by striking "and such error arose without any deceptive intention on his part"; and (2) in the second undesignated paragraph, by striking "The error'' and inserting "(b) PATENT VALID IF ERROR CORRECTED.• The error''.. (g) PRESUMPTION OF VALIDITY.-Section 282 of title 35, United States Code, is amended- (1) in the first undesignated paragraph- (A) by striking "A patent" and inserting "(a) IN GEN• ERAL.-A patent"; and (B) by striking the third sentence; (2) in the second undesignated paragraph- (A) by striking "The following'' and inserting "(b) DEFENSES.-The following''; (B) in paragraph (1), by striking "uneforceability," and inserting "unenforceability."; and (C) in paragraph (2), by striking "patentability," and inserting "patentability." ; and (3) in the third undesignated paragraph- (A) by striking "In actions involving the validity or infringement of a patent" and inserting "(c) NOTICE OF ACTIONS; ACTIONS DURING EXTENSION OF PATENT TERM.• In an action involving the validity or infringement of a patent"; and (B) by striking "Claims Court" and inserting "Court of Federal Claims". (h) ACTION FOR INFRINGEMENT.- Section 288 of title 35, United States Code, is amended by striking ", without deceptive intention,". (i) REVISER' S NOTES.- (1) Section 3(e)(2) of title 35, United States Code, is amended by striking ''this Act," and inserting "that Act,". (2) Section 202 of title 35, United States Code, is amended-

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(A) in subsection (b)(3), by striking "the section 203(b)" and inserting "section 203(b)"; and (B) in subsection (c)(7)(D), by striking "except where it proves" and all that follows through "small business firms; and" and inserting: "except where it is determined to be infeasible following a reasonable inquiry, a preference in the licensing of subject inventions shall be given to small business firms; and". (3) Section 209(d)(l) of title 35, United States Code, is amended by striking "nontransferrable" and inserting "non• transferable". (4) Section 287(c)(2)(G) of title 35, United States Code, is amended by striking "any state" and inserting "any State". (5) Section 37l(b) of title 35, United States Code, is amended by striking "of the treaty'' and inserting "of the treaty.". (j) UNNECESSARY REFERENCES.- (!) IN GENERAL.-Title 35, United States Code, is amended 35 USC 2, 12, 32, by striking "of this title" each place that term appears. 41, 103, 104, 111, 119-123, 132, (2) EXCEPTION. -The amendment made by paragraph (1) 135, 143, 145, shall not apply to the use of such term in the following sections 146, 154, 157, of title 35, United States Code: 162, 172, (A) Section l(c). 182-186, 207, (B) Section 101. 210, 257, 267.

(C) Subsections (a) and (b) of section 105. (D) The first instance of the use of such term in section lll(b)(S). (E) Section 161. (F) Section 164. (G) Section 171. (H) Section 251(c), as so designated by this section. (I) Section 261. (J) Subsections (g) and (h) of section 271. (K) Section 287(b)(l). (L) Section 289. (M) The first instance of the use of such term in section 375(a). (k) ADDITIONAL TECHNICAL AMENDMENTS.-S ections 155 and 155A of title 35, United States Code, and the items relating to those sections in the table of sections for chapter 14 of such title, are repealed. (1) EFFECTIVE DATE.-The amendments made by this section Applicability . shall take effect upon the expiration of the 1-year period beginning 35 use 2 note. on the date of the enactment of this Act and shall apply to pro• ceedings commenced on or after that effective date. SEC. 21. TRAVEL EXPENSES AND PAYMENT OF ADMINISTRATIVE JUDGES. (a) AUTHORITY To COVER CERTAIN TRAVEL RELATED EXPENSES.-Section 2(b)(ll) of title 35, United States Code, is amended by inserting ", and the Office is authorized to expend funds to cover the subsistence expenses and travel-related expenses, including per diem, lodging costs, and transportation costs, of per• sons attending such programs who are not Federal employees" after "world".

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(b) PAYMENT OF ADMINISTRATIVE JUDGES.-Section 3(b) of title 35, United States Code, is amended by adding at the end the following: "(6) ADMINISTRATIVE PATENT JUDGES AND ADMINISTRATIVE TRADEMARK JUDGES.-The Director may fix the rate of basic pay for the administrative patent judges appointed pursuant to section 6 and the administrative trademark judges appointed pursuant to section 17 of the Trademark Act of 1946 (15 U.S.C. 1067) at not greater than the rate of basic pay payable for level III of the Executive Schedule under section 5314 of title 5. The payment of a rate of basic pay under this paragraph shall not be subject to the pay limitation under section 5306(e) or 5373 of title 5.". SEC. 22. PATENT AND TRADEMARK OFFICE FUNDING. (a) IN GENERAL.-Section 42(c) of title 35, United States Code, is amended- (!) by striking "(c)" and inserting "(c)(l)"; (2) in the first sentence, by striking "shall be available" and inserting "shall, subject to paragraph (3), be available"; (3) by striking the second sentence; and (4) by adding at the end the following: "(2) There is established in the Treasury a Patent and Trade• mark Fee Reserve Fund. If fee collections by the Patent and Trade• mark Office for a fiscal year exceed the amount appropriated to the Office for that fiscal year, fees collected in excess of the appro- 1>_riated amount shall be deposited in the Patent and Trademark Fee Reserve Fund. To the extent and in the amounts provided in appropriations Acts, amounts in the Fund shall be made available until expended only for obligation and expenditure by the Office in accordance with paragraph (3). "(3)(A) Any fees that are collected under sections 41, 42, and 376, and any surcharges on such fees, may only be used for expenses of the Office relating to the processing of patent applications and for other activities, services, and materials relating to patents and to cover a share of the administrative costs of the Office relating to patents. "(B) Any fees that are collected under section 31 of the Trade• mark Act of 1946, and any surcharges on such fees, may only be used for expenses of the Office relating to the processing of trademark registrations and for other activities, services, and mate• rials relating to trademarks and to cover a share of the administra• tive costs of the Office relati!!_g to trademarks.". 35 USC 142 note. (b) EFFECTIVE DATE.-The amendments made by this section shall take effect on October 1, 2011. 35 USC 1note. SEC. 23. SATELLITE OFFICES. Deadline. (a) ESTABLISHMENT.-Subject to available resources, the Director shall, by not later than the date that is 3 years after the date of the enactment of this Act, establish 3 or more satellite offices in the United States to carry out the responsibilities of the Office. (b) PuRPOSES.-The purposes of the satellite offices established under subsection (a) are to- (1) increase outreach activities to better connect patent filers and innovators with the Office; (2) enhance patent examiner retention; (3) improve recruitment of patent examiners;

PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 337

(4) decrease the number of patent applications waiting for examination; and (5) improve the quality of patent examination. (c) REQUIRED CoNSIDERATIONS.- (1) IN GENERAL.-ln selecting the location of each satellite office to be established under subsection (a), the Director• (A) shall ensure geographic diversity among the offices, including by ensuring that such offices are established in different States and regions throughout the Nation; (B) may rely upon any previous evaluations by the Office of potential locales for satellite offices, including any evaluations prepared as part of the Office's Nationwide Workforce Program that resulted in the 2010 selection of Detroit, Michigan, as the first satellite office of the Office; (C) shall evaluate and consider the extent to which the purposes of satellite offices listed under subsection (b) will be achieved; (D) shall consider the availability of scientific and tech• nically knowledgeable personnel in the region from which to draw new patent examiners at minimal recruitment cost; and (E) shall consider the economic impact to the region. (2) OPEN SELECTION PROCESS.-Nothing in paragraph (1) shall constrain the Office to only consider its evaluations in selecting the Detroit, Michigan, satellite office. (d) REPORT TO CONGRESS.-Not later than the end of the third fiscal year that begins after the date of the enactment of this Act, the Director shall submit a report to Congress on- (1) the rationale of the Director in selecting the location of any satellite office required under subsection (a), including an explanation of how the selected location will achieve the purposes of satellite offices listed under subsection (b) and how the required considerations listed under subsection (c) were met; (2) the progress of the Director in establishing all such satellite offices; and (3) whether the operation of existing satellite offices is achieving the purposes under subsection (b). SEC. 24. DESIGNATION OF DETROIT SATELLITE OFFICE. 35 USC 1note. (a) DESIGNATION.-The satellite office of the United States Patent and Trademark Office to be located in Detroit, Michigan, shall be known and designated as the "Elijah J. McCoy United States Patent and Trademark Office". (b) REFERENCES.-Any reference in a law, map, regulation, document, paper, or other record of the United States to the satellite office of the United States Patent and Trademark Office to be located in Detroit, Michigan, referred to in subsection (a) shall be deemed to be a reference to the "Elijah J. McCoy United States Patent and Trademark Office". SEC. 25. PRIORITY EXAMINATION FOR IMPORTANT TECHNOLOGIES. Section 2(b)(2) of title 35, United States Code, is amended• (!) in subparagraph (E), by striking "and" after the semi• colon; (2) in subparagraph (F), by inserting "and" after the semi• colon; and 125 STAT. 338 PUBLIC LAW 112-29-SEPT. 16, 2011 (3) bl adding at the end the following: '(G) may, subject to any conditions prescribed by the Director and at the request of the patent applicant, provide for prioritization of examination of applications for prod• ucts, processes, or technologies that are important to the national economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization, notwithstanding section 41 or any other provision oflaw;". SEC. 26. STUDY ON IMPLEMENTATION. (a) PTO STUDY.-The Director shall conduct a study on the manner in which this Act and the amendments made by this Act are being implemented by the Office, and on such other aspects of the patent policies and practices of the Federal Government with respect to patent rights, innovation in the United States, competitiveness of United States markets, access by small businesses to capital for investment, and such other issues, as the Director considers appropriate. (b) REPORT TO CONGRESS.-The Director shall, not later than the date that is 4 years after the date of the enactment of this Act, submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the results of the study conducted under subsection (a), including recommendations for any changes to laws and regulations that the Director considers appropriate. SEC. 27. STUDY ON GENETIC TESTING. (a) IN GENERAL.-The Director shall conduct a study on effec• tive ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist. (b) ITEMS INCLUDED IN STUDY.-The study shall include an examination of at least the following: (1) The impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diag• nostic testing, and on inhibiting innovation to existing testing and diagnoses. (2) The effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test. (3) The impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to: the interpretation of testing results and performance of testing procedures. (4) The role that cost and insurance coverage have on access to and provision of genetic diagnostic tests. (c) CONFIRMING GENETIC DIAGNOSTIC TEST ACTMTY DEFINED.-For purposes of this section, the term "confirming genetic diagnostic test activity" means the performance of a genetic diagnostic test, by a genetic diagnostic test provider, on an indi• vidual solely for the purpose of providing the individual with an independent confirmation of results obtained from another test provider's prior performance of the test on the individual. (d) REPORT.-Not later than 9 months after the date of enact• ment of this Act, the Director shall report to the Committee on the Judiciary of the Senate and the Committee on the Judiciary PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 339

of the House of Representatives on the findings of the study and provide recommendations for establishing the availability of such independent confirming genetic diagnostic test activity. SEC. 28. PATENT OMBUDSMAN PROGRAM FOR SMALL BUSINESS CON- 35 USC 2 note. CERNS. Using available resources, the Director shall establish and maintain in the Office a Patent Ombudsman Program. The duties of the Program's staff shall include providing support and services relating to patent filings to small business concerns and inde• pendent inventors. SEC. 29. ESTABLISHMENT OF METHODS FOR STUDYING THE DIVER- Deadline. SITY OF APPLICANTS. The Director shall, not later than the end of the 6-month period beginning on the date of the enactment of this Act, establish methods for studying the diversity of patent applicants, including those applicants who are minorities, women, or veterans. The Director shall not use the results of such study to provide any preferential treatment to patent applicants. SEC. 30. SENSE OF CONGRESS. It is the sense of Congress that the patent system should promote industries to continue to develop new technologies that spur growth and create jobs across the country which includes protecting the rights of small businesses and inventors from preda• tory behavior that could result in the cutting off of innovation. SEC. 31. USPTO STUDY ON INTERNATIONAL PATENT PROTECTIONS FOR SMALL BUSINESSES. (a) STUDY REQUIRED.-The Director, in consultation with the Secretary of Commerce and the Administrator of the Small Business Administration, shall, using the existing resources of the Office, carry out a study- (1) to determine how the Office, in coordination with other Federal departments and agencies, can best help small businesses with international patent protection; and (2) whether, in order to help small businesses pay for the costs of filing, maintaining, and enforcing international patent applications, there should be established either- (A) a revolving fund loan program to make loans to small businesses to defray the costs of such applications, maintenance, and enforcement and related technical assist• ance; or (B) a grant program to defray the costs of such applica• tions, maintenance, and enforcement and related technical assistance. (b) REPORT.-Not later than 120 days after the date of the enactment of this Act, the Director shall issue a report to the Congress containing- (!) all findings and determinations made in carrying out the study required under subsection (a); (2) a statement of whether the determination was made that- (A) a revolving fund loan program described under subsection (aX2)(A) should be established; (B) a grant program described under subsection (a)(2)(B) should be established; or 125 STAT. 340 PUBLIC LAW 112-29-SEPT. 16, 2011

(C) neither such program should be established; and (3) any legislative recommendations the Director may have developed in carrying out such study. 35 use 2 note. SEC. 32. PRO BONO PROGRAM. (a) IN GENERAL.-The Director shall work with and support intellectual property law associations across the country in the establishment of pro bono programs designed to assist financially under-resourced independent inventors and small businesses. (b) EFFECTIVE DATE.-This section shall take effect on the date of the enactment of this Act. 35 use 101 note. SEC. 33. LIMITATION ON ISSUANCE OF PATENTS. (a) LIMITATION.-Notwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing a human organism. (b) EFFECTIVE DATE.- Applicability . (1) IN GENERAL.-Subsection (a) shall apply to any applica• tion for patent that is pending on, or filed on or after, the date of the enactment of this Act. (2) PRIOR APPLICATIONs.-Subsection (a) shall not affect the validity of any patent issued on an application to which paragraph (1) does not apply. SEC. 34. STUDY OF PATENT LITIGATION. (a) GAO STUDY.-The Comptroller General of the United States shall conduct a study of the consequences of litigation by non• practicing entities, or by patent assertion entities, related to patent claims made under title 35, United States Code, and regulations authorized by that title. (b) CONTENTS OF STUDY.-The study conducted under this sec• tion shall include the following: (1) The annual volume of litigation described in subsection (a) over the 20-year period ending on the date of the enactment of this Act. (2) The volume of cases comprising such litigation that are found to be without merit after judicial review. (3) The impacts of such litigation on the time required to resolve patent claims. (4) The estimated costs, including the estimated cost of defense, associated with such litigation for patent holders, patent licensors, patent licensees, and inventors, and for users of alternate or competing innovations. (5) The economic impact of such litigation on the economy of the United States, including the impact on inventors, job creation, employers, employees, and consumers. (6) The benefit to commerce, if any, supplied by non-prac• ticing entities or patent assertion entities that prosecute such litigation. (c) REPORT TO CONGRESS.-The Comptroller General shall, not later than the date that is 1year after the date of the enactment of this Act, submit to the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate a report on the results of the study required under this section, including recommendations for any changes to laws and regulations that will minimize any negative impact of patent litiga• tion that was the subject of such study. PUBLIC LAW 112-29-SEPT. 16, 2011 125 STAT. 341

SEC. 35. EFFECTIVE DATE. Applicability. 35 use 1note. Except as otherwise provided in this Act, the provisions of this Act shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued on or after that effective date. SEC. 36. BUDGETARY EFFECTS. The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled "Budgetary Effects of PAYGO Legislation" for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Com• mittee, provided that such statement has been submitted prior to the vote on passage. SEC. 37. CALCULATION OF 60-DAY PERIOD FOR APPLICATION OF PATENT TERM EXTENSION. (a) IN GENERAL.-Section 156(d)(l) of title 35, United States Code, is amended by adding at the end the following flush sentence: "For purposes of determining the date on which a product receives permission under the second sentence of this paragraph, if such permission is transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted on a day that is not a business day, the product shall be deemed to receive such permission on the next business day. For purposes of the preceding sentence, the term 'business day' means any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any legal holiday under section 6103 of title 5.". (b) .APPLICABILITY.-The amendment made by subsection (a) 35 USC 156 note. shall apply to any application for extension of a patent term under section 156 of title 35, United States Code, that is pending on, that is filed after, or as to which a decision regarding the application is subject to judicial review on, the date of the enactment of this Act.

Approved September 16, 2011.

LEGISLATIVE HISTORY-H.R. 1249:

HOUSE REPORTS: No. 112-98, Pt. 1(Comm. on the Judiciary). CONGRESSIONAL RECORD, Vol. 157 (2011): June 22, 23, considered and passed House. Sept. 7, 8, considered and passed Senate. DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2011): Sept. 16, Presidential remarks. 0 Q' IUlU IC 011e1 n11>1U1 y UI u1t11111t1111t11- unernel 11me11ne 1 1merne1.)()Cle!}'

Brief History of the Internet Bany M. Leiner, Vinton G. Cerf, David D. Clark, Robert E.Kahn, Leonard Kleinrock , Daniel C.Lynch, Jon Postel, Lany G.Roberts, Stephen Wolff

Introduction The Internet has revolutionized the computer and communications world like nothing before . The invention of the telegraph, telephone, radio, and computer set the stage for this unprecedented integration of capabilities. The Internet is at once a world-wide broadcasting capability, a mechanism for information dissemination, and a medium for collaboration and interaction between individuals and their computers without regard for geographic location. The Internet represents one of the most successful examples of the benefits of sustained investment and commitment to research and development of information infrastructure. Beginning with the early research in packet switching, the government , industry and academia have been partners in evolving and deploying this exciting new technology .Today, terms like "[email protected]" and "http://www.acm.org" trip lightly off the tongue of the random person on the street. 1

This is intended to be a brief, necessarily cursory and incomplete history. Much material currently exists about the Internet, covering history, technology, and usage. A trip to almost any bookstore will find shelves of 2 material written about the Internet .

In this paper,3 several ofus involved in the development and evolution of the Internet share our views of its origins and history. This history revolves around four distinct aspects. There is the technological evolution that began with early research on packet switching and the ARPANET (and related technologies), and where current research continues to expand the horizons of the infrastructure along several dimensions, such as scale, performance , and higher-level functionality. There is the operations and management aspect of a global and complex operational infrastructure. There is the social aspect, which resulted in a broad community of Internauts working together to create and evolve the technology. And there is the commercialization aspect, resulting in an extremely effective transition of research results into a broadly deployed and available information infrastructure.

The lntemet today is a widespread information infrastructure, the initial prototype of what is often called the National (or Global or Galactic) Information Infrastructure.Its history is complex and involves many aspects - technological, organizational, and community. And its influence reaches not only to the technical fields of computer communications but throughout society as we move toward increasing use of online tools to accomplish electronic commerce, information acquisition, and community operations.

Oril!ins of the Internet ://www.internetsociety.org/internet/what-i nternet/history-internet/brief-history-i nternet 1/13 - - -e---·· - - ·-- --- The first recorded description of the social interactions that could be enabled through networking was a series of memos written by J.C.R. Licklider of MIT in August 1962 discussing his "Galactic Network" concept. He envisioned a globally interconnected set of computers through which everyone could quickly access data and programs from any site. In spirit, the concept was very much like the Internet of today. Licklider was the first head of the computer research program at DARPA,4 starting in October 1962. While at DARPA he convinced his successors at DARPA, Ivan Sutherland, Bob Taylor, and MIT researcher Lawrence G. Roberts, of the importance of this networking concept.

Leonard Kleinrock at MIT published the first paper on packet switching theory in July 1961 and the first book on the subject in 1964. Kleinrock convinced Roberts of the theoretical feasibility of communications using packets rather than circuits, which was a major step along the path towards computer networking . The other key step was to make the computers talk together. To explore this, in 1965 working with Thomas Merrill, Roberts connected the TX-2 computer in Mass.to the Q-32 in California with a low speed dial-up telephone line creating the first (however small) wide-area computer network ever built. The result of this experiment was the realization that the time-shared computers could work well together, running programs and retrieving data as necessary 011 the remote machine, but that the circuit switched telephone system was totally inadequate for the job .Kleinrock's conviction of the need for packet switching was confirmed.

In late 1966 Roberts went to DARPA to develop the computer network concept and quickly put together his plan for the "ARPANET", publishing it in 1967. At the conference where he presented the paper, there was also a paper on a packet network concept from the UK by Donald Davies and Roger Scantlebury of NPL. Scantlebury told Roberts about the NPL work as well as that of Paul Baran and others at RAND. The RAND group had written a paper on packet switching networks for secure voice in the military in 1964. It happened that the work at MIT (1961-1967), at RAND (1962-1965), and at NPL (1964-1967) had all proceeded in parallel without any of the researchers knowing about the other wo1k. The word "packet" was adopted from the work at NPL and the proposed line speed to be used in t he ARPANET design was upgraded from 2.4 kbps to 50 kbps. 5

In August 1968, after Roberts and the DARPA funded community had refined the overall structure and specifications for the ARPANET, an RFQ was released by DARPA for the development of one of the key components, the packet switches called Interface Message Processors (IMP's). The RFQ was won in December 1968 by a group headed by Frank Heart at Bol t Beranek and Newman (BBN). As the BBN team worked on the IMP's with Bob Kahn playing a major role in the overall ARPANET architectural design, the network topology and economics were designed and optimized by Roberts working with Howard Frank and his team at Network 6 Analysis Corporation, and the network measurement system was prepared by Kleinrock's team at UCLA.

Due to Kleinrock's early development of packet switching theory and his focus on analysis, design and measurement, his Network Measurement Center at UCLA was selected to be the first node on the ARPANET. All this came together in September 1969 when BBN installed the first IMP at UCLA and the first host computer was connected. Doug Engelbart's project on "Augmentation of Human Intellect" (which included NLS, an early hypertext system) at Stanford Research Institute (SRI) provided a second node. SRI supported the Network Information Center, led by Elizabeth (Jake) Feinler and including functions such as maintaining tables of host name to address mapping as well as a directory of the RFC's.

One month later, when SRI was connected to the ARPANET, the first host-to-host message was sent from Kleinrock's laboratory to SRI. Two more nodes were added at UC Santa Barbara and University of Utah. These last two nodes incorporated application visualization projects, with Glen Culler and Burton Fried at UCSB investigating methods for display of mathematical functions using storage displays to deal with the problem of refresh over the net, and Robert Taylor and Ivan Sutherland at Utah investigating methods of3-D representations over the net. Thus, by the end of 1969, four host computers were connected together into the initial ARPANET, and the budding Internet was off the ground. Even at this early stage, it should be noted that the networking research incorporated both work on the underlying network and work on how to utilize the network. This tradition continues to this day.

Computers were added quickly to the ARPANET during the following years, and work proceeded on completing a functionally complete Host-to-Host protocol and other network software. In December 1970 the Network Working Group (NWG) working under S. Crocker finished the initial ARPANET Host-to-Host

protocol, called the Network Control Protocol (NCP). As the ARPANET sites completed implementing NCP during the period 1971-1972, the network users finally could begin to develop applications.

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Computer Communication Conference (!CCC). This was the first public demonstration of this new network technology to the public. It was also in 1972 that the initial "hot" application , electronic mail,was introduced . In March Ray Tomlinson at BBN wrote the basic email message send and read software, motivated by the need of the ARPANET developers for an easy coordination mechanism . In July, Roberts expanded its utility by writing the first email utility program to list, selectively read, file, foiward, and respond to messages. From there email took off as the largest network application for over a decade. This was a harbinger of the kind of activity we see on the World Wide Web today, namely, the enormous growth ofall kinds of "people-to-people" traffic.

The Initial Internetting Concepts The original ARPANET grew into the Internet. Internet was based on the idea that there would be multiple independent networks of rather arbitrary design, beginning with the ARPANET as the pioneering packet switching network, but soon to include packet satellite networks, ground-based packet radio networks and other networks. The Internet as we now know it embodies a key underlying technical idea, namely that of open architecture networking. In this approach, the choice ofany individual network technology was not dictated by a particular network architecture but rather could be selected freely by a provider and made to inteiwork with the other networks through a meta-level "Internetworking Architecture" . Up until that time there was only one general method for federating networks. This was the traditional circuit switching method where networks would interconnect at the circuit level, passing individual bits on a synchronous basis along a portion of an end-to-end circuit between a pair of end locations. Recall that Kleinrock had shown in 1961 that packet switching was a more efficient switching method .Along with packet switching, special purpose interconnection arrangements between networks were another possibility. While there were other limited ways to interconnect different networks, they required that one be used as a component of the other, rather than acting as a peer of the other in offering end-to-end service.

In an open-architecture network, the individual networks may be separately designed and developed and each may have its own unique interface which it may offer to users and/or other providers. including other Internet providers. Each network can be designed in accordance with the specific environment and user requirements of that network .There are generally no constraints on the types of network that can be included or on their geographic scope, although certain pragmatic considerations will dictate what makes sense to offer.

The idea of open-architecture networking was first introduced by Kahn shortly after having arrived at DARPA in 1972. This work was originally part of the packet radio program, but subsequently became a separate program in its own right.At the time, the program was called "Internetting". Key to making the packet radio system work was a reliable end-end protocol that could maintain effective communication in the face of jamming and other radio interference, or withstand intermittent blackout such as caused by being in a tunnel or blocked by the local terrain . Kahn first contemplated developing a protocol local only to the packet radio network, since that would avoid having to deal with the multitude of different operating systems, and continuing to use NCP.

However, NCP did not have the ability to address networks (and machines) further downstream than a destination IMP on the ARPANET and thus some change to NCP would also be required . (The assumption was that the ARPANET was not changeable in this regard). NCP relied on ARPANET to provide end-to-end reliability . If any packets were lost, the protocol (and presumably any applications it supported) would come to a grinding halt . In this model NCP had no end-end host error control, since the ARPANET was to be the only network in existence and it would be so reliable that no error control would be required on the part of the hosts.Thus, Kahn decided to develop a new version of the protocol which could meet the needs of an open• architecture network environment. This protocol would eventually be called the Transmission Control Protocol/Internet Protocol (TCP/IP). While NCP tended to act like a device driver, the new protocol would be more like a communications protocol.

Four ground rules were critical to Kahn's early thinking :

Each distinct network would have to stand on its own and no internal changes could be required to any

such network to connect it to the Internet. Communications would be on a best effort basis. Ifa packet didn't make it to the final destination, it would shortly be retransmitted from the source. Black boxes would be used to connect the networks; these would later be called gateways and routers. There would be no information retained by the gateways about the individual flows of packets passing http://www.internetsociety. org/internet/what-internet/history-i nternet/brief-history-i nternet 3/13 -·,...,, • ,,w""" 1 VI U J,g 11 11.1:11 1 1V\. - UJU:N JR:n I tll ltlllt it:, ) lllltfl IR:ft. i)OCUHY

through them, thereby keeping them simple and avoiding complicated adaptation and recovery from various failure modes. There would be no global control at the operations level.

Other key issues that needed to be addressed were:

Algorithms to prevent lost packets from pennanently disabling communications and enabling them to be successfully retransmitted from the source. Providing for host-to-host "pipelining" so that multiple packets could be enroute from source to destination at the discretion of the participating hosts, if the intermediate networks allowed it. Gateway functions to allow it to forward packets appropriately. This included interpreting IP headers for routing, handling interfaces, breaking packets into smaller pieces if necessary, etc. The need for end-end checksums, reassembly of packets from fragments and detection of duplicates, ifany. The need for global addressing Techniques for hos-to-host flow control. Interfacing with the various operating systems There were also other concerns, such as implementation efficiency, internetwork performance, but these were secondary considerations at first.

Kahn began work on a communications-oriented set of operating system principles while at BBN and documented some of his early thoughts in an internal BBN memorandum entitled "Communications Principles for Operating Systems".At this point he realized it would be necessary to learn the implementation details of each operating system to have a chance to embed any new protocols in an efficient way. Thus, in the spring of 1973, after starting the internetting effort, he asked Vint Cerf (then at Stanford) to work with him on the detailed design of the protocol. Cerf had been intimately involved in the original NCP design and development and already had the knowledge about interfacing to existing operating systems. So armed with Kahn's architectural approach to the communications side and with Cerfs NCP experience, they teamed up to spell out the details of what became TCP/IP.

The give and take was highly productive and the first written version 7 of the resulting·approach was distributed at a special meeting of the International Network Working Group (INWG) which had been set up at a conference at Sussex University in September 1973. Cerf had been invited to chair this group and used the occasion to hold a meeting of INWG members who were heavily represented at the Sussex Conference.

Some basic approaches emerged from this collaboration between Kahn and Cerf:

Communication between two processes would logically consist of a very long stream of bytes (they called them octets). The position of any octet in the stream would be used to identify it. Flow control would be done by using sliding windows and acknowledgments (acks). The destination could select when to acknowledge and each ack returned would be cumulative for all packets received to that point. It was left open as to exactly how the source and destination would agree on the parameters of the windowing to be used. Defaults were used initially. Although Ethernet was under development at Xerox PARC at that time, the proliferation of LANs were not envisioned at the time, much less PCs and workstations. The original model was national level networks like ARPANET of which only a relatively small number were expected to exist. Thus a 32 bit IP address was used of which the first 8 bits signified the network and the remaining 24 bits designated the host on that network. This assumption, that 256 networks would be sufficient for the foreseeable future, was clearly in need of reconsideration when LANs began to appear in the late 1970s.

The original Cerf7Kahn paper on the Internet described one protocol, called TCP, which provided all the transport and forwarding services in the Internet. Kahn had intended that the TCP protocol support a range of

transport services, from the totally reliable sequenced delivery of data (virtual circuit model) to a datagram service in which the application made direct use of the underlying network service, which might imply occasional lost, corrupted or reordered packets.However, the initial effort to implement TCP resulted in a version that only allowed for virtual circuits. This model worked fine for file transfer and remote login applications, but some of the early work on advanced network applications, in particular packet voice in the 1970s, made clear that in some cases packet losses should not be corrected by TCP, but should be left to the aonlication to deal with. This Jed to a reoroani7ation of the ori Pinal TCP into two nmtocols. the simnle JP t'd4)://www .internetsociety.or9'i nternet/what-i nternetlllstory-i nternet/brief-history-i nternet 4/13 -··-· . ··--, wt .. _ ll tl.'1.M I I01. - ll lu::sll l tO\ l lll lt:JIII N:t l ll llt:J'l l lttl lel.Y -rr·- ... -...... -. ··· ...... ·-- .... - - - ... ·o-···--··-··....·- -·,:,··-· ·...... ··· ... r ...... - ...... ,·- ...... r ·- - which provided only for addressing and forwarding ofindividual packets, and the separate TCP, which was concerned with service features such as flow control and recovery from lost packets. For those applications that did not want the services of TCP, an alternative called the User Datagram Protocol (UDP) was added in order to provide direct access to the basic service ofIP.

A major initial motivation for both the ARPANET and the Internet was resource sharing - for example allowing users on the packet radio networks to access the time sharing systems attached to the ARPANET. Connecting the two together was far more economical that duplicating these very expensive computers. However, while file transfer and remote login (Telnet) were very important applications, electronic mail has probably had the most significant impact of the innovations from that era. Email provided a new model of how people could communicate with each other, and changed the nature of collaboration, first in the building of the Internet itself (as is discussed below) and later for much of society.

There were other applications proposed in the early days of the Internet, including packet based voice communication (the precursor oflnternet telephony), various models of file and disk sharing, and early "worm" programs that showed the concept ofagents (and, of course, viruses). A key concept of the Internet is that it was not designed for just one application , but as a general infrastructure on which new applications could be conceived, as illustrated later by the emergence of tbe World Wide Web . It is the general purpose nature of the seivice provided by TCP and IP that makes this possible .

Proving the Ideas DARPA let three contracts to Stanford (Cerf), BBN (Ray Tomlinson) and UCL (Peter Kirstein) to implement TCP/IP {itwas simply called TCP in the Cerf/Kahn paper but contained both components).The Stanford team, led by Cerf, produced the detailed specification and within about a year there were three independent implementations of TCP that could interoperate.

This was the beginning oflong term experimentation and development to evolve and mature the Internet concepts and technology. Beginning with the first three networks (ARPANET, Packet Radio, and Packet Satellite) and their initial research communities, the experimental environment has grown to incorporate essentially every form ofnetwork and a very broad-based research and development community. [REK78] With each expansion has come new challenges.

The early implementations of TCP were done for large time sharing systems such as Tenex and TOPS 20. When desktop computers first appeared, it was thought by some that TCP was too big and complex to run on a personal computer. David Clark and his research group at MIT set out to show that a compact and simple implementation of TCP was possible .They produced an implementation, first for the Xerox Alto (the early personal workstation developed at Xerox PARC) and then for the IBM PC. That implementation was fully interoperable with other TCPs, but was tailored to the application suite and performance objectives of the personal computer, and showed that workstations, as well as large time-sharing systems, could be a part of the Internet . In 1976, Kleinrock published the first book on the ARPANET. It included an emphasis on the complexity of protocols and the pitfalls they often introduce.This book was influential in spreading the lore of packet switching networks to a very wide community.

Widespread development of LANS, PCs and workstations in the 1980s allowed the nascent Internet to flourish. Ethernet technology, developed by Bob Metcalfe at Xerox PARC in 1973, is now probably the dominant network technology in the Internet and PCs and workstations the dominant computers. This change from having a few networks with a modest number of time-shared hosts (the original ARPANET model) to having many networks has resulted in a number of new concepts and changes to the underlying technology. First, it resulted in the definition of three network classes (A. B. and C) to accommodate the range ofnetworks. Class A represented large national scale networks (small number ofnetworks with large numbers of hosts); Class B represented regional scale networks; and Class C represented local area networks (large number of networks

with relatively few hosts).

A major shift occurred as a resu lt of the increase in scale of the Internet and its associated management issues. To make it easy for people to use the network, hosts were assigned names, so that it was not necessary to remember the numeric addresses. Originally, there were a fairly limited number of hosts, so it was feasible to maintain a single table of all the hosts and their associated names and addresses. The shift to having a large number of independently managed networks (e.g., LANs) meant that having a single table of hosts was no longer feasible, and the Domain Name System (DNS) was invented by Paul Mockapetris of USC/ISI. The DNS tntp:/fwww .internetsociety.org/internet/what-internet/hi story-internetlbrief-history-i nternet 5113 , ,..,, , .....vo., u, u ,,. 111lt1111t11. - 1mernet 11me11ne IInternet Society

Internet address.

The increase in the size of the Internet also challenged the capabilities of the routers. Originally, there was a single distributed algorithm for routing that was implemented uniformly by all the routers in the Internet. As the number ofnetworks in the Internet exploded, this initial design could not expand as necessary, so it was replaced by a hierarchical model of routing, with an Interior Gateway Protocol (IGP) used inside each region of the futemet, and an Exterior Gateway Protocol (EGP) used to tie the regions together. This design permitted different regions to use a different IGP, so that different requirements for cost, rapid reconfiguration, robustness and scale could be accommodated. Not only the routing algorithm, but the size of the addressing tables, stressed the capacity of the routers.New approaches for address aggregation, in particular classless inter• domain routing (CIDR), have recently been introduced to control the size of router tables.

As the Internet evolved, one of the major challenges was how to propagate the changes to the software, particularly the host software. DARPA supported UC Berkeley to investigate modifications to the Unix operating system, including incorporating TCP/IP developed at BBN. Although Berkeley later rewrote the BBN code to more efficiently fit into the Unix system and kernel, the incorporation of TCP/IP into the Unix BSD system releases proved to be a critical element in dispersion of the protocols to the research community. Much of the CS research community began to use Unix BSD for their day-to-day computing environment. Looking back, the strategy ofincorporating Internet protocols into a supported operating system for the research community was one of the key elements in the successful widespread adoption of the Internet.

One of the more interesting challenges was the transition of the ARPANET host protocol from NCP to TCP/IP as of Jan uary 1, 1983.This was a "flag-day" style transition, requiring all hosts to convert simultaneously or be left having to communicate via rather ad-hoc mechanisms . This transition was carefully planned with in the community over several years before it actually took place and went surprisingly smoothly (but resulted in a distribution of buttons saying "I survived the TCP/IP transition").

TCP/IP was adopted as a defense standard three years earlier in 1980. This enabled defense to begin sharing in the DARPA futemet technology base and led directly to the eventual partitioning of the military and non• military communities. By 1983, ARPANET was being used by a significant number of defense R&D and operational organizations. The transition of ARPANET from NCP to TCP/IP permitted it to be split into a MILNET supporting operational requirements and an ARPANET supporting research needs.

Thus, by 1985, futernet was already well established as a technology supporting a broad community of researchers and developers, and was beginning to be used by other communities for daily computer communications. Electronic mail was being used broadly across several communities, often with different systems, but interconnection between different mail systems was demonstrating the utility of broad based electronic communications between people.

Transition to Widespread Infrastructure At the same time that the Internet technology was being experimentally validated and widely used amongst a subset of computer science researchers, other networks and networking technologies were being pursued. The usefulness of computer networking - especially electronic mail - demonstrated by DARPA and Department of Defense contractors on the ARPANET was not lost on other communities and disciplines, so that by the mid• l 970s computer networks had begun to spring up wherever funding could be found for the purpose. The U.S. Department of Energy (DoE) established MFENet for its researchers in Magnetic Fusion Energy, whereupon DoE's High Energy Physicists responded by building HEPNet. NASA Space Physicists followed with SPAN, and Rick Adrion, David Farber, and Larry Landweber established CSNET for the (academic and industrial) Computer Science community with an initial grant from the U.S.National Science Foundation (NSF). AT&T's

free-wheeling dissemination of the UNIX computer operating system spawned USENET, based on UNIX' built• in UUCP communication protocols, and in 1981 Ira Fuchs and Greydon Freeman devised BITNET, which linked academic mainframe computers in an "email as card images" paradigm.

With the exception of BITNET and USENET, these early networks (including ARPANET) were purpose-built - i.e., they were intended for, and largely restricted to, closed communities of scholars; there was hence little pressure for the individual networks to be compatible and, indeed, they largely were not. In addition , alternate technologies were being pursued in the commercial sector, including XNS from Xerox, DECNet, and IBM's SNA.8 It remained for the British JANET (1984) and U.S.NSFNET (1985) programs to explicitly announce their intent to serve the entire higher education community, regardless of discipline. Indeed, a condition for a httf,://www.internetsociety.org/internet/what-internet/history-internet/brief-history-i nternet 6/13 ·'"'' , ...,..,., ua u ... 1111 ,""' - m1e1T1e1 11me11ne f Internet SOciety U.S. university to receive NSF funding for an Internet connection was that "... the connection must be made available to ALL qualified users on campus."

In 1985, Dennis Jennings came from Ireland to spend a year at NSF leading the NSFNET program. He worked with the community to help NSF make a critical decision - that TCP/IP would be mandatory for the NSFNET program. When Steve Wolff took over the NSFNET program in 1986, he recognized the need for a wide area networking infrastructure to support the general academic and research community, along with the need to develop a strategy for establishing such infrastructure on a basis ultimately independent of direct federal funding. Policies and strategies were adopted (see below) to achieve that end.

NSF also elected to support DARPA's existing Internet organizational infrastructure, hierarchically arranged under the (then) Internet Activities Board (JAB). The public declaration of this choice was the joint authorship by the IAB's Internet Engineering and Architecture Task Forces and by NSF's Network Technical Advisory Group of RFC 985 (Requirements for Internet Gateways ), which fonnally ensured interoperability of DARPA's and NSF's pieces of the Internet.

In addition to the selection of TCP/IP for the NSFNET program, Federal agencies made and implemented several other policy decisions which shaped the Internet of today.

Federal agencies shared the cost of common infrastructure, such as trans-oceanic circuits.They also jointly supported "managed interconnection points" for interagency traffic; the Federal Internet Exchanges (FIX-E and FIX-W) built for this purpose served as models for the Network Access Points and "*IX" facilities that are prominent features of today's Internet architecture. To coordinate this sharing, the Federal Networking Councif 9 was formed. The FNC also cooperated with other international organizations, such as RARE in Europe, through the Coordinating Committee on Intercontinental Research Networking, CCIRN, to coordinate Internet support of the research community worldwide . This sharing and cooperation between agencies on Internet-related issues had a long history. An unprecedented 1981 agreement between Farber, acting for CSNET and the NSF, and DARPA's Kahn, permitted CSNET traffic to share ARPANET infrastructure on a statistical and no-metered-settlements basis. Subsequently, in a similar mode, the NSF encouraged its regional (initially academic) networks of the NSFNET to seek commercial, non-academic customers, expand their facilities to serve them, and exploit the resulting economies of scale to lower subscription costs for all. On the NSFNET Backbone - the national-scale segment of the NSFNET - NSF enforced an "Acceptable Use Policy" (AUP) which prohibited Backbone usage for purposes "not in support of Research and Education." The predictable (and intended) result of encouraging commercial network traffic at the local and regional level, while denying its access to national-scale transport, was to stimulate the emergence and/or growth of "private", competitive, long-haul networks such as PSI, UUNET, ANS Co+RE, and (later) others. This process of privately-financed augmentation for commercial uses was thrashed out starting in 1988 in a series of NSF-initiated conferences at Harvard's Kennedy School of Government on "The Commercialization and Privatization of the Internet" - and on the "com-priv" list on the net itself. In 1988, a National Research Council committee, chaired by Kleinrock and with Kahn and Clark as members, produced a report commissioned by NSF titled "Towards a National Research Network". This report was influential on then Senator Al Gore, and ushered in high speed networks that laid the networking foundation for the future information superhighway. . In 1994, a National Research Council report, again chaired by Kleinrock (and with Kahn and Clark as members again), Entitled "Realizing The Information Future: The Internet and Beyond" was released. This report, commissioned by NSF, was the document in which a blueprint for the evolution of the information superhighway was articulated and which has had a lasting affect on the way to think about its evolution. It anticipated the critical issues of intellectual property rights, ethics, pricing, education, architecture and regulation for the Internet. NSF's privatization policy culminated in April, 1995, with the defunding of the NSFNET Backbone. The funds thereby recovered were (competitively) redistributed to regional networks to buy national-scale Internet connectivity from the now n umerous, private, long-haul networks.

The backbone had made the transition from a network built from routers out of the research community (the "Fuzzball" routers from David Mills) to commercial equipment. In its 8 1/2 year lifetime, the Backbone had grown from six nodes with 56 kbps links to 21 nodes with multiple 45 Mbps links.It had seen the Internet grow to over 50,000 networks on all seven continents and outer space, with approximately 29,000 networks in the United States. http://www.internetsociety. org'internet/what-i nternet/history-internet/brief-history-internet 7/13 • . • • ·-•-• J -• ..•- ",,._ I IV\. - II II.Of In:,\ I 111 lt::,III 1 11 lltlf rJe( i:)()Clety

Such was the weight of the NSFNET program's ecumenism and funding ($200 million from 1986 to 1995) - and the quality of the protocols themselves - that by 1990 when the ARPANET itself was finally decommissioned IO, TCP/IP had supplanted or marginalized most other wide-area computer network protocols worldwide, and IP was well on its way to becoming THE bearer service for the Global Information Infrastructure.

The Role of Documentation A key to the rapid growth of the Internet has been the free and open access to the basic documents, especially the specifications of the protocols.

In 1969 a key step was taken by S. Crocker (then at UCLA) in establishing the Request for Comments (or RFC) series ofnotes. These memos were intended to be an informal fast distribution way to share ideas with other network researchers. At first the RFCs were printed on paper and distributed via snail mail. As the File Transfer Protocol (FTP) came into use, the RFCs were prepared as online files and accessed via FTP.Now, of course, the RFCs are easily accessed via the World Wide Web at dozens of sites around the world. SRI, in its role as Network Infonnation Center, maintained the online directories. Jon Postel acted as RFC Editor as well as managing the centralized administration of required protocol number assignments, roles that he continued to play until his death, October 16, 1998.

The effect of the RFCs was to create a positive feedback loop, with ideas or proposals presented in one RFC triggering another RFC with additional ideas, and so on. When some consensus (or a least a consistent set of ideas) had come together a specification document would be prepared . Such a specification would then be used as the base for implementations by the various research teams.

Over time, the RFCs have become more focused on protocol standards (the "official" specifications), though there are still informational RFCs that describe alternate approaches, or provide background information on protocols and engineering issues. The RFCs are now viewed as the "documents of record" in the Internet engineering and standards community.

The use of specialized email mailing lists has been long used in the development of protocol specifications, and continues to be an important tool. The IETF now has in excess of 75 working groups, each working on a different aspect oflntemet engineering. Each of these working groups has a mailing list to discuss one or more

draft documents under development. When consensus is reached on a draft document it may be distributed as an RFC.

As the current rapid expansion of the Internet is fueled by the realization of its capability to promote information sharing, we should understand that the network's first role in information sharing was sharing the information about its own design and operation through the RFC documents . This unique method for evolving new capabilities in the network will continue to be critical to future evolution of the Internet.

Formation of the Broad Community The Internet is as much a collection of communities as a collection of technologies, and its success is largely attributable to both satisfying basic community needs as well as utilizing the community in an effective way to push the infrastructure forward . This community spirit has a long history beginning with the early 1 · 1 ,, http://www.internetsociefy.org'interMt/what-internet/history-internet/bri et-history-internet 8/13 c, 11:11 n1s1ory or me Internet - Internet Timeline I Internet Society 1-\Kt' NtH. 1ne eany AKt'I\Nt 1 researcners worxea as a c1ose-Kmt community to accompusn tne mma1 demonstrations of packet switching technology described earlier. Likewise, the Packet Satellite, Packet Radio and several other DARPA computer science research programs were multi-contractor collaborative activities that heavily used whatever available mechanisms there were to coordinate their efforts, starting with electronic mail and adding file sharing, remote access, and eventually World Wide Web capabilities. Each of these programs formed a working group, starting with the ARPANET Network Working Group. Because of the unique role that ARPANET played as an infrastructure supporting the various research programs, as the Internet started to evolve, the Network Working Group evolved into Internet Working Group.

In the late 1970s, recognizing that the growth of the Internet was accompanied by a growth in the size of the interested research community and therefore an increased need for coordination mechanisms, Vint Cerf, then manager of the Internet Program at DARPA, formed several coordination bodies - an International Cooperation Board (ICB), chaired by Peter Kirstein of UCL, to coordinate activities with some cooperating European countries centered on Packet Satellite research, an Internet Research Group which was an inclusive group providing an environment for general exchange ofinformation, and an Internet Configuration Control Board (ICCB), chaired by Clark. The ICCB was an invitational body to assist Cerf in managing the burgeoning Internet activity.

In 1983, when Bany Leiner took over management of the Internet research program at DARPA, he and Clark recognized that the continuing growth of the Internet community demanded a restructuring of the coordination mechanisms. The ICCB was disbanded and in its place a structure of Task Forces was formed, each focused on a particular area of the technology (e.g. routers, end-to-end protocols, etc.). The Internet Activities Board (JAB) was formed from the chairs of the Task Forces.

It of course was only a coincidence that the chairs of the Task Forces were the same people as the members of the old ICCB, and Dave Clark continued to act as chair. After some changing membership on the IAB, Phill Gross became chair ofa revitalized Internet Engineering Task Force (IETF), at the time merely one of the IAB Task Forces. As we saw above, by 1985 there was a tremendous growth in the more practical/engineering side of the Internet. This growth resulted in an explosion in the attendance at the IETF meetings, and Gross was compelled to create substructure to the IETF in the form of working groups.

This growth was complemented by a major expansion in the community. No longer was DARPA the only major player in the funding of the Internet. In addition to NSFNet and the various US and international government• funded activities, interest in the commercial sector was beginning to grow. Also in 1985, both Kahn and Leiner left DARPA and there was a significant decrease in Internet activity at DARPA. As a result, the IAB was left without a primary sponsor and increasingly assumed the mantle of leadership .

The growth continued, resulting in even further substructure within both the IAB and IETF. The IETF combined Working Groups into Areas, and designated Area Directors. An Internet Engineering Steering Group (IESG) was formed of the Area Directors. The IAB recognized the increasing importance of the IETF, and restructured the standards process to explicitly recognize the IESG as the major review body for standards. The IAB also restructured so that the rest of the Task Forces (other than the IETF) were combined into an Internet Research Task Force (IRTF) chaired by Postel, with the old task forces renamed as research groups.

The growth in the commercial sector brought with it increased concern regarding the standards process itself. Starting in the early I 980's and continuing to this day, the Internet grew beyond its primarily research roots to include both a broad user community and increased commercial activity. Increased attention was paid to making the process open and fair. This coupled with a recognized need for community support of the Internet eventually led to the formation of the Internet Society in 1991, under the auspices of Kahn's Corporation for National Research Initiatives (CNRI) and the leadership of Cerf; then with CNRI.

In 1992, yet another reorganization took place. In 1992, the Internet Activities Board was re-organized and re• named the Internet Architecture Board operating under the auspices of the Internet Society. A more "peer" relationship was defined between the new IAB and IESG, with the IETF and IESG taking a larger responsibility for the approval of standards. Ultimately, a cooperative and mutually supportive relationship was formed between the lAB, IETF, and Internet Society. with the Internet Society taking on as a goal the provision of service and other measures which would facilitate the work of the IETF.

The recent development and widespread deployment of the World Wide Web has brought with it a new community, as many of the people working on the WWW have not thought of themselves asprimarily network researchers and developers. A new coordination organization was formed, the World Wide Web Consortium (W3C). Initially led from MIT's Laboratory for Computer Science by Tim Berners-Lee (the inventor of the http://www.internetsociety. ag/internet/what-i nternet/histay-i nternet/brief-history-i nternet 9/13 -··-• . ··-•...• J -• w ,_ 111-11w - Ult.QI I IG\ I ll l ltslllft:f J ll llttl l lt:fl. 181}' w w w J ana ru vezza, wjL nas taKen on me respons10111ty ror evo1vmg me vanous proroco,s ana stanaaras associated with the Web.

Thus, through the over two decades of Internet activity, we have seen a steady evolution of organizational structures designed to support and facilitate an ever-increasing community working collaboratively on Internet issues.

Commercialization of the Technology Commercialization of the Internet involved not only the development of competitive, private network services, but also the development of commercial products implementing the Internet technology. In the early 1980s, dozens of vendors were incorporating TCP/IP into their products because they saw buyers for that approach to networking. Unfortunately they lacked both real information about how the technology was supposed to work and how the customers planned on using this approach to networking . Many saw it as a nuisance add-on that had to be glued on to their own proprietary networking solutions: SNA, DECNet, Netware, NetBios. The DoD had mandated the use of TCP/IP in many of its purchases but gave little help to the vendors regarding how to build useful TCP/IP products.

After two years of conferences, tutorials, design meetings and workshops, a special event was organized that invited those vendors whose products ran TCP/IP well enough to come together in one room for three days to show off how well they all worked together and also ran over the Internet. In September of 1988 the first lnterop trade show was born. 50 companies made the cut. 5,000 engineers from potential customer organizations came to see if it all did work as was promised. It did. Why? Because the vendors worked extremely hard to ensure that everyone's products interoperated with all of the other products - even with those of their competitors. The Interop trade show has grown immensely since then and today it is held in 7 locations around the world each year to an audience of over 250,000 people who come to learn which products work with each other in a seamless manner, learn about the latest products, and discuss the latest technology.

In parallel with the commercialization efforts that were highlighted by the lnterop activities, the vendors began to attend the IETF meetings that were held 3 or 4 times a year to discuss new ideas for extensions of the TCP/IP protocol suite. Starting with a few hundred attendees mostly from academia and paid for by the government, these meetings now often exceed a thousand attendees, mostly from the vendor community and paid for by the attendees themselves . This self-selected group evolves the TCP/IP suite in a mutually cooperative manner.The reason it is so useful is that it is composed of all stakeholders: researchers, end users and vendors.

As the network grew larger, it became clear that the sometime ad hoc procedures used to manage the network would not scale. Manual configuration of tables was replaced by distributed automated algorithms, and better tools were devised to isolate faults. In I 987 it became clear that a protocol was needed that would permit the elements of the network, such as the routers, to be remotely managed in a unifom1 way. Several protocols for this purpose were proposed, including Simple Network Management Protocol or SNMP (designed, as its name would suggest, for simplicity, and derived from an earlier proposal called SGMP) ,HEMS (a more complex design from the research community) and CMIP (from the OSI community).A series of meeting led to the decisions that HEMS would be withdrawn as a candidate for standardization, in order to help resolve the contention, but that work on both SNMP and CMIP would go forward, with the idea that the SNMP could be a more near-term solution and CMIP a longer-term approach . The market could choose the one it found more suitable. SNMP is now used almost universally for network-based management.

In the last few years, we have seen a new phase of commercialization .Originally, commercial efforts mainly http://www.internetsociefy.orginternetlwhat-internet/history-internet/brief-history-i nternet 10/13 -··-· • ,._,.,. 1 .... u.., "'"",ltjl - 1111er1'181 11meune IInternet Society comprised vendors providing the basic networking products, and service providers offering the connectivity and basic Internet services. The Internet has now become almost a "commodity" service, and much of the latest attention has been on the use of this global information infrastructure for support of other commercial services. This has been tremendously accelerated by the widespread and rapid adoption of browsers and the World Wide Web technology, allowing users easy access to information linked throughout the globe. Products are available to facilitate the provisioning of that information and many of the latest developments in technology have been aimed at providing increasingly sophisticated information services on top of the basic Internet data communications.

History of the Future On October 24, 1995,the FNC unanimously passed a resolution defining the term Internet. This definition was developed in consultation with members of the internet and intellectual property rights communities. RESOLUTION: The Federal Networking Council (FNC) agrees that the following language reflects our definition of the term "Internet" "Internet" refers to the global information system that -(i) is logically linked together by a globally unique address space based on the Internet Protocol (IP) or its subsequent extensions/follow-ons ; (ii) is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/ IP) suite or its subsequent extensions/follow-ons, and/or other IP-compatible protocols; and (iii) provides, uses or makes accessible, either publicly or privately, high level services layered on the communications and related infrastructure described herein .

The Internet has changed much in the two decades since it came into existence. It was conceived in the era of time-sharing , but has survived into the era of personal computers, client-server and peer-to-peer computing , and the network computer. It was designed before LANs existed , but has accommodated that new network technology, as well as the more recent ATM and frame switched services. It was envisioned as supporting a range of functions from file sharing and remote login to resource sharing and collaboration, and has spawned electronic mail and more recently the World Wide Web . But most important, it started as the creation ofa small band of dedicated researchers, and has grown to be a commercial success with billions of dollars of annual investment.

One should not conclude that the Internet has now finished changing. The Internet, although a network in name and geography, is a creature of the computer, not the traditional network of the telephone or television industry. It will, indeed it must, continue to change and evolve at the speed of the computer industry if it is to remain relevant. It is now changing to provide new services such as real time transport, in order to support, for example, audio and video streams.

The availability of pervasive networking (i .e., the Internet) along with powerful affordable computing and communications in portable form (i.e., laptop computers, two-way pagers, PDAs, cellular phones), is making possible a new paradigm ofnomadic computing and communications . This evolution will bring us new applications - Internet telephone and, slightly further out, Internet television. It is evolving to pennit more sophisticated forms of pricing and cost recovery, a perhaps painful requirement in this commercial world. It is changing to accommodate yet another generation ofunderlying network technologies with different

characteristics and requirements, e.g. broadband residential access and satellites. New modes of access and new forms of service will spawn new applications, which in tum will drive further evolution of the net itself.

The most pressing question for the future of the Internet is not how the technology will change, but how the process of change and evolution itself will be managed . As this paper describes, the architecture of the Internet has always been driven by a core group of designers, but the form of that group has changed as the number of interested parties has grown. With the success of the Internet has come a proliferation of stakeholders - stakeholders now with an economic as well as an intellectual investment in the network .

We now see, in the debates over control of the domain name space and the form of the next generation IP addresses, a struggle to find the next social structure that will guide the Internet in the future.The form of that structure will be harder to find, given the large number of concerned stakeholders. At the same time, the industry struggles to find the economic rationale for the large investment needed for the future growth, for example to upgrade residential access to a more suitable technology. If the Internet stumbles, it will not be because we lack for technology, vision, or motivation. It will be because we cannot set a direction and march collectively into the future.

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Footnotes I Perhaps this is an exaggeration based on the lead author's residence in Silicon Valley. 2 On a recent trip to a Tokyo bookstore, one of the authors counted 14 English language magazines devoted to the Internet. 3 An abbreviated version of this article appears in the 50th anniversary issue of the CACM, Feb . 97. The authors would like to express their appreciation to Andy Rosenbloom, CACM Senior Editor, fur both instigating the writing of this article and his invaluable assistance in editing both this and the abbreviated version . 4 The Advanced Research Projects Agency (ARPA) changed its name to Defense Advanced Research Projects Agency (DARPA) in 1971, then back to ARPA in 1993, and back to DARPA in 1996. We refer throughout to DARPA, the current name. 5 It was from the RAND study that the false rumor started claiming that the ARPANET was somehow related to building a network resistant to nuclear war. This was never true of the ARPANET, only the unrelated RAND study on secure voice considered nuclear war. However, the later work on lntemetting did emphasize robustness and survivability, including the capability to withstand losses oflarge portions of the underlying networks. 6 Including amongst others Vint Cert; Steve Crocker, and Jon Postel. Joining them later were David Crocker who was to play an important role in documentation of electronic mail protocols, and Robert Braden, who developed the first NCP and then TCP for IBM mainframes and also was to play a long term role in the ICCB and IAB. 7 This was subsequently published as V. G. Cerf and R. E. Kahn, "A protocol for packet network interconnection" IEEE Trans. Comm. Tech ., vol. COM-22, V 5, pp.627-641, May 1974. 8 The desirability of email interchange, however, led to one of the first "Internet books"· !%@::A Directory of Electronic Mail Addressing and Networks, by Frey and Adams, on email address translation and forwarding. 9 Originally named Federal Research Internet Coordinating Committee, FRICC. The FRICC was originally formed to coordinate U.S. research network activities in support of the international coordination provided by

the CCIRN. l O The decommissioning of the ARPANET was commemorated on its 20th anniversary by a UCLA symposium in 1989.

References P Baran, "On Distributed Communications Networks", IEEE Trans. Comm. Systems, March 1964. V. G. Cerf and R. E.Kahn, "A protocol for packet network interconnection", IEEE Trans. Comm. Tech., vol. COM-22, V 5 , pp. 627-641, May 1974. S. Crocker, RFCOO l Host software, Apr-07-1969. R.Kahn, Communications Principles for Operating Systems. httemal BBN memorandum, Jan. 1972. Proceedings of the IEEE, Special Issue on Packet Communication Networks, Volume 66, No. 11,November 1978. (Guest editor: Robert Kahn, associate guest editors: Keith Uncapher and Harry van Trees) L. KJeinrock, "Information Flow in Large Communication Nets", RLE Quarterly Progress Report, July 1961. L. KJeinrock, Communication Nets: Stochastic Message Flow and Delay, Mcgraw-Hill (New York), 1964. L. KJeinrock, Queueing Systems: Vol II,Computer Applications, John Wiley and Sons (New York), 1976 J.C.R. Licklider & W. Clark, "On-Line Man Computer Communication", August 1962. L. Roberts & T. Merrill, "Toward a Cooperative Network of Time-Shared Computers", Fall AFIPS Conf., Oct. 1966. L. Roberts, "Multiple Computer Networks and lntercomputer Communication", ACM Gatlinburg Conf., httf)://www .internetsociety.orginternet/what-i nternet/history-i nternet/brief-history-i nternet 12/13

- - ...'.-····- ...... _ ..·-·---·-·, October 1967.

Authors Bany M. Leiner was Director of the Research Institute for Advanced Computer Science. He passed away in April 2003 .

Vinton G. Cerf is Vice President and Chief Internet Evangelist at Google.

David D. Clarlc is Senior Research Scientist at the MIT Laboratory for Computer Science.

Robert E. Kahn is President of the Corporation for National Research Initiatives.

Daniel C. Lynch is a founder and of the Interop networking trade show and conferences.

Jon Postel served as Director of the Computer Networlcs Division of the Information Sciences Institute of the University of Southern California until his untimely death October 16, 1998.

Dr. Lawrence G. Roberts is CEO, President, and Chairman of Anagran, Inc.

Stephen Wolff is CTO of lntemet2.

Send any comments to Vint Cerf or any of the authors

1775 Wiehle Avenue, Suite 201, Reston, VA 20190-5108 U.S.A. +l-703-439-2120 Galerie Jean-Malbuisson 15, CH-1204 Geneva, Switzerland +41 22 807 1444

http://www.internetsociety.orginternetlwhat-internet/history-internet/brief-history-internet 13113 Intellectual Property on the Internet: What's Wrong with Conventional Wisdom?

by James Bessen and Eric Mask.in Revised 2004•

Introduction The growth of the Internet has put pressure on traditional intellectual property protections such as copyright and patent. Some forms of information, when made accessible on the Internet, are easily copied. Because the costs of copying are low and because copying is often anonymous, publishers have often responded with more aggressive enforcement of existing intellectual property rights and with calls for extensions of those rights to cover additional content, new media and new forms of access. This effort can actually be seen as part of a twenty-year trend toward tighter intellectual property enforcement and extensions of intellectual property rights. Yet this response and this trend toward tighter intellectual property rights are not always appropriate, especially on the Internet. This paper argues that the Internet and World Wide Web possess characteristics that may make such policy inappropriate-the Web is a "community" that is highly interactive and dynamic. Indeed, much of the software that runs the web is Free/Open Source software. This paper summarizes a formal economic model applied to such an interactive and dynamic environment. The model suggests that both individual publishers an d society more generally may benefit from weak intellectual property enforcement and protection in such an environment. As policy-makers address this new environment they should tread carefully . The conventional view that tighter intellectual property protections always improve innovation incentives is based on a limited economic model that often is inappropriate in such highly interactive and dynamic environments. The Traditional Intellectual Property Model The conventional argument for tight intellectual property protection is that it preserves the incentive for authors and inventors to create. The argument goes as follows: Creative activity typically involves substantial development costs. Artists, authors and inventors are not necessarily motivated exclusively or even primarily by the prospect of financial gain. Nevertheless, the potentially high expense of originating, developing and distributing creative works imply that many creators need a financial return to recoup their development costs. This return provides the "innovation incentive." If a work is copied, the original author/inventor may lose potential sales and profits, and thus an environment that permits copying reduces the innovation incentive. With a smaller prospect of profits, some

• This article is a revised an updated version of a presentation originally presented at "Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property," January, 1997. authors/inventors will be unable or unwilling to make the initial investment in development. They will choose not to create. Intellectual property rights inhibit imitation, and thus counteract this effect. With such protection, authors and inventors are encouraged to create and, because creative activity is enhanced, society benefits as well. Thus, in this model tighter intellectual property is better. Tighter protection leads to less imitation, which promotes innovation incentives, which ultimately enhance social welfare. The argument is compelling and has been a mainstay in support of strong intellectual property protection for over two hundred years. Yet the economic model underlying this traditional argument is surprisingly limited. The simple truth is that much creative activity is not the work of lone creators. Rather, it is interactive and involves the contributions of many different parties. Indeed, innovation is often sequential, where each creator improves improves on the work of the previous iteration. The standard model equates imitation and copying. However, when innovation is sequential, imitation is more than copying; it adds important value. But the conventional model is based on the idea of the single creator. There is a strong cultural image of creative activity as the work of a romantic individual: the artist in the garret or the inventor in the garage. Part of the persuasiveness of the standard model relies on our habit of thinking of creative activity as the province of such lone geniuses. One place where this habit of thought conflicts with reality is the World Wide Web. The Web has often been called a community. Itprovides a fine opportunity for individual creators to publish their works, but it also includes many opportunities for interactive communication and so constitutes a good environment for sequential improvement. It is helpful to examine examples of interactive and sequential innovation on the Web in order to understand the inappropriateness of the traditional intellectual property model here. Some Examples of Interactive and Sequential Innovation

Interactive Forums A common example of interactive creation is the interactive forum. As print periodicals have come to the Web, they have frequently set up sites where readers and the public-at-large can submit independent comment and opinion. Typically various forms of dialogue are established with authors of articles that also appear in print. Sometimes these take the form of real-time dialogue and other times e-mail archives. The authors contribute new material and pursue lines of discussion with readers; readers provide feedback and often expand the discussion. The result is a greatly expanded version of "Letters to the Editor," with much more complicated intellectual property rights. One interactive site where intellectual property concerns have come into conflict with uninitiated communication is the Online Guitar Archive (OLGA). OLGA was founded in 1992 by James Bender. It is an archive of some 28,000 user-submitted guitar tablatures as well as guitar lessons and other aids to guitarists. The site, formerly hosted by the University of Nevada-Las Vegas, was highly popular, with users downloading some 200,000 files per week. Guitar tablatures are a form of music notation indicating fret and string fingering and are usually accompanied by song lyrics. Because guitar chords can often be fingered different ways, the tablatures provide

2 performance instructions. In particular, they help guitarists who want to sound like performers on CD's and other recordings. Often, sheet music is not available, and even when it is, it generally does not closely match recording performances. Sheet music is typically notated by musicians other than the original performers. Although it is transcribed from recordings, different musicians typically hear a recording differently and, in any case, commercial sheet music tends to present simplified fingerings with a "pretty" sound. The guitar tablatures found in OLGA are worked out by individual guitarists listening to recordings and represent individual interpretations and fingerings. As such they add unique value to both the recording and to sheet music where it exists. The important economic significance is that the tablatures are a complement to the sound recordings, not a substitute. Both the creator of the tablature and the user learning a song will start by listening to a recording. Although guitar tabs may in some circumstances substitute for sheet music, they are overall a strong economic complement to the recordings. As such, the distribution of guitar tablatures over the Internet probably constitutes a violation of traditional intellectual property rights. Certainly the record company EMI thinks so, for in January 1996 it sent a letter to UNLV threatening to take legal action. UNLV promptly shut down the site and several mirror sites were shut as well. Some mirror sites have stayed open, although with a diminished ability to accept new guitar tabs. Guitarists on the Web became incensed and began a boycott of EMI recordings. OLGA itself, lacking clear legal standing, was unable to get a direct response from EMI in order to open discussions at resolving this situation. In 1998, these difficulties were compounded by the Harry Fox Agency, an organization that licenses recorded music. Without identifying any particular songs that allegedly violated copyrights, the Harry Fox Agency gave OLGA seven days to shut down its entire archive, including mirrored sites, and refused to discuss licensing. OLGA has continued only by starting a new archive that accepts only guitar chords without complete lyrics. Within the context of the traditional intellectual property model, EMI's action made sense. But in a world like the Web where interactive users add unique value, EMI seems short-sighted. A better course of action, in our view, would have been for EMI to host the OLGA site, creating links between guitar tabs of EMI recording artists and information about their records, sound clips, fan club information, etc. Indeed, other companies are spending large sums in establishing new sites to dojust those sort of things. What could be better than to sponsor an already• existing site that has a proven volume of traffic? The traditional intellectual property model fails to recognize the added value brought by additional parties. And so it turns out to be a poor guide for both company intellectual property activity or for social policy.

Sequential Improvement Software publishing provides a particularly useful example of sequential innovation because software intellectual property protection went through a natural economic experiment during the l980's. Software distribution on the Web is an important area of publishing in its own right, but large numbers of other publishers are affected by software intellectual property concerns in two other ways. First, common forms of Web activity have been potentially threatened by software patent holders attempting to exercise their patent rights. Patents with broad claims over common activities seem to appear regularly, including the Compton multimedia patent, the Freeny electronic sales patent, and the Unisys GIF patent.

3 Second, many forms of "content" are really offered in a package with software, that is, an integral part of the content delivery is the software that makes delivery possible. For example, news is provided on the Web in databases, as a fax service, in customized editions, as an e-mail service, as a real-time service, as a radio-distributed service, in addition to traditional means of delivery. Database providers also typically provide a bundled service with unique means of database access, and technologies are available to provide technically-controlled access to just about any content. The particular importance of software for our discussion is that software typically undergoes rapid sequential development: each innovation is imitated and improved upon by competitors, each making a unique contribution. Software concepts originally conceived in the 60's, such as electronic publishing , hypertext, multimedia and artificial intelligence, have required decades of sequential improvements by many firms before achieving widespread commercial success. During the mid-1980's the intellectual property status of software changed, constituting a limited economic experiment. Software had been largely protected by copyright prior to this time and although a series of court battles served to further define the nature of this protection, copyright protection was largely perceived as preventing direct copying, but not most other forms of imitation, such as providing products with similar functions but a somewhat different appearance. Before this time, relatively few patents for software inventions had been upheld. During the l980's and 1990s, however, court decisions sharply extended patent protection for software. The result was a dramatic explosion in the number of software patents granted each year (see Figure 1) to over 20,000, comprising over 15% of all patents granted (Figure 2).. Nearly 200,000 software patents have been granted to date in the US. According to the traditional economic model, this significant extension of intellectual property protection should have sharply increased innovation incentives. Firms that had previously chosen not to develop new products because of an unfavorable imitation climate should have now entered the market. Projects that had been rejected as too risky, given the difficulty of recouping development costs, should now have become viable and so R&D spending ought to have risen. To many people in the software and computer industries, the extension of patents to software appeared as an attempt to "fix what ain't broke." These industries were already highly innovative; firm entry, the number of new products and R&D investment were all high relative to sales. Still, the high level of innovation was not necessarily inconsistent with the traditional model. The innovating firms may have simply been the "tip of the iceberg," that is, they may have exploited the most profitable innovation opportunities , sufficiently profitable to overcome the loss from imitation. Following this reasoning, however, strengthening of intellectual property rights should have produced an even higher level of innovative activity. Moreover, we might expect stronger incentives to make it easier for more innovative startup firms to enter the industry. Indeed, small startup firms have been an important source of innovation in the software industry in the past. But this is not what happened. An analysis by James Bessen and Robert Hunt (2004) paints a detailed picture of software patenting. Software patents have been largely acquired by large established firms. Moreover, most of these are hardware firms-they may incorporate software in their products (e.g., in an office copier), but software is not their primary product. The small startups that have been so important to innovation in the software industry have, in fact, a very low "propensity to patent." So software patents cannot have provided these firms

4 stronger innovation incentives. More important, Bessen and Hunt find that the firms that did acquire relatively large numbers of software patents during the 90s actually reduced their R&D spending relative to sales. Clearly these results are difficult to reconcile with the traditional model. It would seem that (a.) software patents have been obtained largely on the basis of R&D that would have been performed in any case, and, (b.) the extension of patent protection did not have a major positive influence on either R&D spending or the entry of new firms. Imitation does not appear to prevent innovation in a highly dynamic environment with rapid sequential innovation. Something more than the traditional model is involved. Brief Economic Analysis A richer economic model needs to recognize: 1. Creative imitation differs from copying; imitators can add important value. 2. Some environments are static, others are highly dynamic with sequential improvement. Intellectual property may work very differently in each of these environments. 3. Some creative works have single authors, others have multiple, sequential authors. 4. The contribution of additional authors is often unpredictable and the value of each potential contribution is often the private knowledge of that author. Developing such a formal model is beyond the scope of this paper, however, some major results of such a model as developed elsewhere [Bessen and Maskin, 2000] can be summarized as follows: l. Imitation can increase the overall incentives to create in a dynamic environment. Most creative activity, in fact, tends to be partly imitation. 2. Strong intellectual property rights can decree the incentives to create by reducing licensing and other sharing of information. 3. Overall, moderately weak intellectual property protection is optimal. The best sort of intellectual property rights are strong enough to prevent direct copying and knock-off products, but weak enough to encourage the greatest amount of cross-licensing and sharing of information between competitors. The first three decades of the semiconductor industry provide an example of intellectual property protections working well in a dynamic environment. Beginning with Bell Labs (which licensed its basic patents on the transistor to all interested parties-all of whom must be considered potential competitors-at a low fee), semiconductor companies broadly cross-licensed whole patent portfolios. Patents did not prevent new companies from entering the industry and companies shared important patents. This environment finally changed, with the substantial tightening of intellectual property rights in the early l980's. Free/Open Source software also taps into the dynamism of sequential and complementary innovation. Free/Open Source licenses allow imitation and complementary improvements. Some licenses require these improvements to be shared, others licenses just encourage sharing, and sharing facilitates dynamic innovation. Conclusion Publishers will do best by recognizing and encouraging the complementary contributions of others. Society will do best by recognizing that subsequent authors/inventors may make important additions to original contributions. Intellectual property protections should be limited to achieve a balance that prevents direct copying but that encourages value-adding imitation.

5 Sometimes intellectual property policy is described as balancing the protection of incentives to create ideas against the benefit to society of disseminating those ideas. This analysis suggests that policy needs to address not only the general (and somewhat amorphous) dissemination of ideas, but also the specific practice of imitating to improve, especially in dynamic environments. The Internet in particular is a highly interactive environment with sequential innovation, and attempts to impose new intellectual property protections or to extend existing protections on the Internet may be inappropriate because they fail to consider the value of creative imitation. As Robert Frost wrote in Mending Wall, "Before I built a wall I'd ask to know What I was walling in or walling out."

6 References Bessen, James and Robert M. Hunt. 2004. "The Software Patent Experiment," OECD, forthcoming. Bessen, James and Eric Maskin. 2000. "Sequential Innovation, Patents and Imitation," MIT Working Paper 00-01.

7 Figure I.

Software Patents Granted

Thousands

25 ...... ------.....------.---=------..

0-----+-+--+--+--+--+--+--+--+--+-+-+-+-+--t--t--tf--1 1--1---+--+--I 76 78 80 82 84 86 88 90 92 94 96 98 2000 2002

Note : The table plots software patents by grant date, not application date.

8 Figure 2.

Software Patent Share Percent of all patents 16% ..------....------

76 78 80 82 84 86 88 90 92 94 96 98 2000 2002

Note: The table plots software patents by grant date. not application date.

9 ..,...,. , o,.,." ..,iau;:,u .::,ummary 18Dle, c.;aJendar Years 1963 to 2015, 03/2016 update

Him> Lisdnr of Ylm•blt PTMT Rmoru

U.S. PATENT AND TRADEMARK OFFICE Patent Technology Monitoring Team (PTMT)

U.S. Patent Statistics Chart Calendar Years 1963 - 2015

The fi0IIowmg table d1' sp ays the ca endar year a ong w1 counts of patent app.r1cat1ons and grants, blY document category: Utl11ty T•tt,l Utillt)·Patent Utility Utility Patent Utility Pat.at lltillCJ Patfft Applltadou, Ud1lty httDt Patent Ytar•f Ulillty htmt Applltatiolll, Fonl1a Appllcatioa1, 1>n11a Plaat Patcat Total Patent Patent htnat Craau, Gnats, Dtt1111 ftHt Mum Tetal Gnats, V.ar of Appllntioa Appllntioa•, Pate•t Applludo9: Gnats. Gnab, Forelp Patent Parat Pateat Pateat Ford111 Application Foffl1a ort1111 All0rl1l• Appllcatiou All erGnat U.S.Ori1la AppHutioat U.S. Font111 or11111 Gnab Grants Gnab Gnats Ori1i• arGraat or1,1a P.n..t Total Ori1l11 or111a Orl&I• hrtnt Percut Sbare Total Sbare nan

2015 n/a•• n la•• n /a•• 589,410 )9,091 1,140 629,647 140,969 157,438 SH :?9H,.f07 25,986 1,074 Sil 315,979 Sl '.!OIS

2014 285,096 29),706 50.1 578,802 )5J78 1.06) 615,24) 144,621 156,0S6 Sl.9 )00,677 2),6S7 1,072 626 326,0)2 SI 2014

2013 287,8)1 283.781 49.6 571.612 )6,0)4 1,406 609,052 lll,59) 144.242 Sl.9 277)135 23,468 847 798 302,9-48 SI 201)

2012 261,782 27-4 ,033 so.s S42,81S )2.799 1.149 576,763 121,026 132.129 52.2 253.155 21,951 860 822 276,788 S2 2012

2011 247,750 25S ,8l2 S0.8 SOJ,582 30,467 1.139 535.188 108,622 I IS.883 51.6 224.505 21JS6 82) 1.029 247,71) SI lOll

2010 241,977 2,48,2,49 50.6 "'90.226 29.0S9 992 520.277 107.791 111.823 50.9 219.61-4 22,799 981 947 244J41 so 2010

2009 2'.?4,912 231.194 50.7 456,106 25JI06 959 -482 .871 82J82 84,967 50.8 167.349 '.?),116 1.009 45) 191,927 so 1009

2008 231,588 2:?-4 ,733 49'.? 4S6J21 27,711 1,209 485,)12 77,502 80,270 50.9 157,772 25,565 1,240 647 185,224 so '.?008

2007 241J47 214,807 47 .l 4S6,IS4 27,7S2 1,049 484,955 79,526 77,756 49.4 IS7.2R2 24,062 1,047 508 1"2,899 49 2007

2006 221,784 204,111) 47 .9 42S.967 25.515 I.ISi 452,633 89,823 8),949 48.J 173.772 20,965 1.149 519 196,40S 48 2006

200S 207,867 182,866 46.8 390.733 25.55) 1.222 -417.508 74.637 69,169 48.1 l,U,806 12,951 716 245 157,718 48 2005

2004 189,5)6 167,407 46 .9 356.94) 23,975 1.221 382.139 84.270 80.020 48.7 164,290 IS.695 1,016 298 181,299 48 200-4

2003 IU.941 ISJ .SOO 44.8 342.441 22.602 1,0()0 366.043 87.1193 81.130 48.0 169,023 16.574 994 421 1n.012 47 2003

2002 184.24S 1SO.!OO 449 334.445 20.904 1.144 356,493 86,971 80,360 48.0 167Jll 15,451 I.Ill 460 184.375 47 2002

2001 177,511 148,997 45 .6 326,50& 18,180 944 345,732 87,600 7.S,435 47 .2 166,035 16,117 1 514 480 181,970 46 2001

2000 164,795 lll,1)1 44J 295,926 18.292 191 JIS,015 85,068 72,426 46.0 157.494 11,413 S48 524 175,979 45 2000

1999 149,825 120.362 44 5 27R,187 17.761 863 288,811 U,906 69,579 45J 153,485 14,732 420 448 169,0115 44 1999

1998 135.483 107,579 44J 24].0t,2 17.107 no 260 .819 &0,2&9 67228 45.6 147.517 14,766 561 298 163,142 44 1998

1997 120.445 94,812 44.0 215.2S7 16.S46 621 232,424 61,708 50.276 44.9 111.984 11.414 )94 277 124,069 44 1997

1996 106.892 118.295 45 2 195.187 15.161 665 211.013 61.104 .f8.S41 44 .3 109.645 11.410 362 279 121,696 4) 1996

1995 123.958 88.419 41.6 212.377 15.4()9 452 228,238 55,739 4S,UO 45.0 101,419 11,712 )87 )16 113,834 4) 1995

1994 107,2)) 82,624 4),5 189.RS7 15,774 4S9 206.090 56,066 '45,610 44 .9 101,676 11.095 499 )17 11),587 4) 1994

1993 99,955 74,78R 428 174.743 13.635 )61 1118,739 SJ.2)1 4S,111 4S.9 9RJ42 10,6)0 442 ll2 109,746 44 199)

1992 92,425 80,650 46,6 173.075 13.078 354 186,507 52,25) 45,191 46 .4 97,444 9269 321 )60 107.]94 45 1992

1991 87,955 76,351 46 .5 164 "\06 13,061 46) 177,830 51,l11 4S.J34 47.0 96..SI I 9.569 )SJ 26) 106,696 46 1991

1990 90,64) 73.915 449 164.558 11.288 41' 176.264 '47.391 -12 .974 47 .6 90J65 8,024 )18 )10 99.077 47 1990

1989 82.370 70.380 46.1 152.150 I2,61S JU 165,748 50,185 45.JS'.?. 41.5 95.531 6,092 5&7 )17 102.533 41 19119

19811 75,19:? 64,6)) 462 139,825 11,289 )11 151,491 40,497 37,427 48.0 77,924 5,619 425 244 84,272 47 19118

1987 68,ltS S9,602 46.6 127,917 11,15) JRS 139,455 4),520 )9,432 47 .S 82,9S2 5,959 229 245 R9J8S 47 19Po7

1986 65,487 56,946 46 .5 122.433 9,912 )20 ll2.665 38.126 32.734 46.2 70,860 UIS 224 260 76,862 45 1986

1985 63,874 53,1)2 45 .4 117.006 9.SSI 2)1 126.781 39,SSS J2.l06 44 .8 71.661 S,066 242 276 77.24S 44 1985

1984 61,841 49,443 44 .4 111.284 8.739 25) 120,276 JU67 28.833 42 .9 67.200 4 ,938 212 JOO 72,650 42 1984

19113 S9J90 44.lll 42.7 10),703 8.082 255 112.040 )2,871 23.989 42.2 56,860 4.563 197 )62 61,982 41 1983

1982 6JJ16 46.)09 42.2 109.625 8,174 188 117,987 33,1!196 23.992 41.-4 S7.88H 4,944 17) 271 6).276 40 191'2

1981 62,404 44,01)9 41.4 106,413 7,375 178 113,966 39,223 26,5411 40.4 65,771 4,145 IRl l6S 11,064 39 19111

1980 62,091 42.2)1 40.5 104,)29 7,RJO 220 112,)79 l7J55 24,464 )9.6 61,119 l,949 111 285 66,170 )8 1980

1979 60,535 )9,959 39.R 100.494 7,S l9 196 108.209 30,078 18.776 38.4 48,8S4 l,119 131 )09 52,41) J7 1979

1978 61,441 l9,47S 39.1 100,916 7,538 194 108,648 41.2SS 24.847 37.6 66,102 3.862 186 364 70,514 37 1978

1977 62,863 )8,068 37.7 100,9)1 7.2S8 188 108,377 41,484 2),785 36.4 65.269 l.929 11) 410 69,781 )6 1977

1976 65.050 )7.294 36.4 102.344 7.061 175 109,580 44,280 25.946 )6.9 70.216 4.564 176 422 7S.JSH 1976

1975 64.44S )6,569 36.2 101.014 6.292 150 lff7 ,4S6 46.115 is.us 35.1 72,000 4,282 150 )78 76,810 1975

1974 64,093 38,445 ]7 .S 102,SJS S,l 18 155 108,011 50,645 25,63) 3).6 76,278 4,304 261 435 81.278 ll 1974 http://www.uspto .gov/webloffices/ac/idoloeip/taf/us _stat.htm 1/2 --- , "'"'"' """"""""' .;:,u111111c1ry ,aoie, 1.;a1enc1ar Years 1963to 2015, 0312016 update

1973 66,93S 37,144 35 .7 104.079 S,425 118 109,622 51.500 22,643 30.S 74 ,14] ,4 ,033 132 314 78,622 30 1973

1972 6S.943 33,lSS )),6 99.298 S,867 135 I OS JOO SI.SIB 2),292 31 1 74,810 2.901 199 27S 78,185 30 1972

1971 71,089 33.640 32.) 104.129 6.211 ISS lll.09S 55,976 22,341 2R.S 7R.317 3,IS6 71 246 81.790 2R 1971

1970 72J43 )0,8)2 29.9 103,175 5 ,996 188 109JS9 47.072 17JS7 26 .9 64,429 3.214 S2 269 67,964 26 1970

1969 68,243 30,507 30 ,9 q& ,750 S.496 Ill 104J S7 SOJ94 17.U,S 2S.4 67.SS9 )J)S 10) 233 71.230 2S' 1969

1968 67.180 26.291 28.1 9).,'71 S.1 11 9S 98 .737 45.781 ))J2) 22.S 59,104 3,352 72 186 62,714 22' 1968

1967 61,651 24.0-l6 l8 0 85,697 4 ,744 103 90.544 Sl.273 14J79 21.9 6S.6'2 3 .165 IS 196 69,091 21 • 1967

1966 66.XSS 21.670 24 .S M8.S2S 4 .8S3 104 93.482 54,634 13,771 20.1 61,40S 3,118 114 179 71,886 20• 1966 196S 72,317 22,.312 23.6 94,629 S,413 108 JOO.ISO SOJ31 12,526 19.9 62.8S7 3,424 120 246 66.647 19 • 1965 1964 67.013 20,579 23.S 87,592 S,2S9 120 92,911 18,410 8,96S IR .9 47J7S 2,686 128 200 S0,389 IR • 1964

1963 66,715 19,154 233 85 .869 4,968 14S 90.Hl 37 ,174 & ,SOS 11.6 45,679 2,96S 129 198 48,971 18 ' 1963

NOTES:

(•) counts ofapplications exclude reissue patent applications. (..) not available ; finalized application breakouts by origin will be available in mid-summer

DATA SOURCES:

Data sources for counts of patent applications:

1963 - present, utility patent applications : U.S. Patent and Trademarlc Office (USPTO) submissions to the World Intellectual Property Organization (WIPO); provisional applications are excluded 1963 - present, design patent applications : USPTO submissions to WIPO 1963 - 1964, plant patent applications :Statistical Abstracts (publication) 1965 - present, plant patent applications :USPTO submissions to WIPO

Data sources for counts of patent grants:

1963 - present, utility patents : TAF database 1963 - 1976, design patents : USPTO submissions to World Intellectual Property Organization (WIPO) 1963 - 1964, plant patents : Statistical Abstracts (publication) 1965 - 1976, plant patents : USPTO submissions to WIPO 1963 - 1976, reissue patents :A11nual J11dex Patents (publication) I 977 - present, all patent types : TAF database

Data sources for the column labeled "Total Patent Grants, Foreign Origin Percent Share":

1963 - 1974 :S1a1i.<1i<·al Ah.,tracts (publication) (please note that 1963 - 1969 data exclude counts of rcissue patents) 1977 - present : TAF database

Contact Information

Questions regarding this report should be directed to:

U.S. Patent and Trademark Office Electronic Information Products Division - PTMT P.0Box 1450 Alexandria VA 22313-1459

tel: (571) 272-5600 fax: (571) 273 110 email: oeip@u§oto.gov

address of PTMT pages at the USPTO Web Site: http://wwwuspto gov/weblofficcslac/ido/ocipltaflreports.hlm selected PTMT files available for download at :hnp-//www uspto gov/web/offices/ac/ido/oeip/taf7data/

H2ms > Li•dne of VJp1ble PJMJ Ra,ora

Last Modified: 06/10/2016 09:32:24

http://www.uspto.gov/web/offices/acfldo'oei/us_stat.htm 212 INFORMATIGONP;?'

113TH CONGRESS 2D SESSION H. R. 4763

To amend the Tariff Act of 1930 with respect to requirements for domestic> industries, and for other purposes .

IN THE HOUSE OF REPRESE NTATIVES

MAY 29, 2014 Mr. GARDENAS (for himself and Mr. FARENTHOLD) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL To amend the Tariff Act of 1930 with respect to requirements for domestic industries, and for other purposes.

l Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 4 This Act may be cited as the "Trade Protection Not 5 Troll Protertion Act".

6 SEC. 2. UNFAIR PRACTICES IN IMPORT TRADE. 7 (a) IN GENERAL.-Section 337 of the Tariff Act of 8 1930 (19 U.S.C. 1337) is amended as follows:

9 (1) Subsection (a) is amended• 10 (A) in paragraph ( 3)- 3 1 (C) or (D) of subsection (a)(3) in order to meet the 2 legal standard set forth in subsection (a)(3), the 3 Commission may not initiate an investigation until 4 the Commission has first conducted a preliminary 5 investigation of whether it is likely that an industry 6 in the United States exists or is in the process of 7 being established ·within the meaning of subsection

8 (a)(2).

9 ''(B) In the preliminary investigation under 10 subparagraph (A), the complainant's case shall be 11 limited to the assertions and evidence set forth in 12 the complaint, and confidential business information 13 contained in the compla int . that may be disclosed 14 under protective order, and the Commission shall ac- 15 cept additional facts, evidence, and argument from 16 named respondents and the public. 17 "(C) The Commission shall render its deter- 18 mination in the preliminary investigation under this 19 paragraph not later than 45 days after the filing of 20 the complaint. If the Commission finds that it is not 21 likely that an industry in the United States exists or 22 is in the process of being established, the Commis- 23 sion may not initiate an investigation of the matter 24 alleged in the complaint.''. 25 (3) Subsection (c) is amended-

•HR 4763 lli 5 1 "(ii) upon a finding under clause (i) that the 2 articles should not be excluded, shall terminate the 3 investigation, in whole or in part, without making

4 any further determination.";

5 (B) in the second sentence, by striking 6 "Each determination" and inserting the fol- 7 lowing: 8 "(2) Each determination"; and 9 (C) in the third sentence, by striking "eq- 10 uitable defenses" and inserting "equitable de- 11 fenses, including equitable defenses and prin- 12 ciples applied to any remedy considered in 13 United States district courts,''. 14 (4) Subsection (d)( l) is amended- 15 (A) by striking "considering the effect of 16 such exclusion upon the public health and wel- 17 fa.re," and inserting "considering equitable de- 18 fenses and principles and the effect of such ex- 19 clusion upon the public interest, including the 20 public health and welfare,"; and 21 (B) by striking "and United States con- 22 sumers," and inserting "United States con- 23 sumers, whether protected articles in the 24 United States will be protected by an exclusion 25 order, and whether the complainant or its Ii-

•HR 4763 m 7 1 sumers, whether protected articles m the

2 United States will be protected by an exclusion 3 order, and whether the complainant or its li- 4 censees can meet market demand for protected

5 art1.c1es,".

6 (7) Subsection (g)( l) is amended, in the matter 7 following subparagraph (E)- 8 (A) by striking "considering the effect of 9 such exclusion upon the public health and wel- 10 fare," and inserting "considering equitable de- 11 fenses and principles and the effect of such ex- 12 clusion upon the public interest, including the 13 public health and welfare,"; and 14 (B) by striking "and United States con- 15 sumers," and inserting "United States con- 16 sumers, whether protected articles in the 17 United States will be protected by an exclusion 18 order, and whether the complainant or its li- 19 censees can meet market demand for protected 20 articles,". 21 (b) EFFECTIVE DATE.-The amendments made by 22 subsection (a) shall apply to complaints filed under seetion 23 337 of the Tariff Act of 1930 on or after the date of the 24 enactment of this Act.

•HR 4763 m