To establish a transitional program for covered business method patents.

SA 595. Ms. CANTWELL submitted an amendment intended to be proposed
by her to the bill H.R. 1249, to amend title 35, United States Code, to
provide for patent reform; which was ordered to lie on the table; as
follows:

On page 119, strike line 21 and all that follows through
page 125, line 11, and insert the following:

SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS-METHOD
PATENTS.

(a) References.--Except as otherwise expressly provided,
wherever in this section language is expressed in terms of a
section or chapter, the reference shall be considered to be
made to that section or chapter in title 35, United States
Code.
(b) Transitional Program.--
(1) Establishment.--Not later than 1 year after the date of
enactment of this Act, the Director 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, subject to the following
exceptions and qualifications:
(A) Section 321(c) and subsections (e)(2), (f), and (g) of
section 325 shall not apply to a transitional proceeding.
(B) A person may not file a petition for a transitional
proceeding with respect to a covered business-method patent
unless the person or his real party in interest 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
challenges the validity of 1 or more claims in a covered
business-method patent on a ground raised under section 102
or 103 as in effect on the day prior to the date of enactment
of this Act may support such ground only on the basis of--
(i) prior art that is described by section 102(a) (as in
effect on the day prior to the date of enactment of this
Act); or
(ii) prior art that--

(I) discloses the invention more than 1 year prior to the
date of the application for patent in the United States; and
(II) would be described by section 102(a) (as in effect on
the day prior to the date of enactment of this Act) if the
disclosure had been made by another before the invention
thereof by the applicant for patent.

(D) The petitioner in a transitional proceeding, or his
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 that a claim in a patent is
invalid on any ground

[[Page S5391]]

that the petitioner raised during a transitional proceeding
that resulted in a final written decision.
(E) The Director may institute a transitional proceeding
only for a patent that is a covered business-method patent.
(2) Effective date.--The regulations issued pursuant to
paragraph (1) shall take effect on the date that is 1 year
after the date of enactment of this Act and shall apply to
all covered business-method patents issued before, on, or
after such date of enactment, except that the regulations
shall not apply to a patent described in section 6(f)(2)(A)
of this Act during the period that a petition for post-grant
review of that patent would satisfy the requirements of
section 321(c).
(3) Sunset.--
(A) In general.--This subsection, and the regulations
issued pursuant to this subsection, are repealed effective on
the date that is 4 years after the date that the regulations
issued pursuant to paragraph (1) take effect.
(B) Applicability.--Notwithstanding subparagraph (A), this
subsection and the regulations implemented pursuant to this
subsection shall continue to apply to any petition for a
transitional proceeding that is filed prior to the date that
this subsection is repealed pursuant to subparagraph (A).
(c) Request for Stay.--
(1) In general.--If a party seeks a stay of a civil action
alleging infringement of a patent under section 281 in
relation 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 present a clear tactical
advantage for the moving party; and
(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.
(d) Definition.--For purposes of this section, the term
``covered business method patent'' means a patent that claims
a method or corresponding apparatus for performing data
processing operations utilized in the practice,
administration, or management of a financial product or
service, except that the term shall not include patents for
technological inventions. Solely for the purpose of
implementing the transitional proceeding authorized by this
subsection, the Director shall prescribe 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.
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