PRIOR USER RIGHTS (excerpt from S507 AKA 'Omnibus Patent Act of 1997' Introduced in the US Senate)
TITLE IV--PRIOR DOMESTIC COMMERCIAL USE
SEC. 401. SHORT TITLE.
This title may be cited as the `Prior Domestic Commercial Use Act of 1997'.
SEC. 402. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR DOMESTIC COMMERCIAL USE.
(a) DEFENSE- Chapter 28 of title 35, United States Code, is amended by adding at the end the following new section:
`Sec. 273. Prior domestic commercial use; defense to infringement
`(a) DEFINITIONS- For purposes of this section--
`(1) the terms `commercially used', `commercially use', and `commercial use' mean the use in the United States in commerce or the use in the design, testing, or production in the United States of a product or service which is used in commerce, whether or not the subject matter at issue is accessible to or otherwise known to the public;
`(2) the terms `used in commerce', and `use in commerce' mean that there has been an actual sale or other commercial transfer of the subject matter at issue or that there has been an actual sale or other commercial transfer of a product or service resulting from the use of the subject matter at issue; and
`(3) the `effective filing date' of a patent is the earlier of the actual filing date of the application for the patent or the filing date of any earlier United States, foreign, or international application to which the subject matter at issue is entitled under section 119, 120, or 365 of this title.
`(b) DEFENSE TO INFRINGEMENT-
`(1) IN GENERAL- A person shall not be liable as an infringer under section 271 of this title with respect to any subject matter that would otherwise infringe one or more claims in the patent being asserted against such person, if such person had, acting in good faith, commercially used the subject matter before the effective filing date of such patent.
`(2) EXHAUSTION OF RIGHT- The sale or other disposition of the subject matter of a patent by a person entitled to assert a defense under this section with respect to that subject matter shall exhaust the patent owner's rights under the patent to the extent such rights would have been exhausted had such sale or other disposition been made by the patent owner.
`(c) LIMITATIONS AND QUALIFICATIONS OF DEFENSE- The defense to infringement under this section is subject to the following:
`(1) DERIVATION- A person may not assert the defense under this section if the subject matter on which the defense is based was derived from the patentee or persons in privity with the patentee.
`(2) 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 subject matter claimed in the patent with respect to which the person can assert a defense under this chapter, except that the defense shall also extend to variations in the quantity or volume of use of the claimed subject matter, and to improvements in the claimed subject matter that do not infringe additional specifically claimed subject matter of the patent.
`(3) EFFECTIVE AND SERIOUS PREPARATION- With respect to subject matter that cannot be commercialized without a significant investment of time, money, and effort, a person shall be deemed to have commercially used the subject matter if--
`(A) before the effective filing date of the patent, the person reduced the subject matter to practice in the United States, completed a significant portion of the total investment necessary to commercially use the subject matter, and made a commercial transaction in the United States in connection with the preparation to use the subject matter; and
`(B) thereafter the person diligently completed the remainder of the activities and investments necessary to commercially use the subject matter, and promptly began commercial use of the subject matter, even if such activities were conducted after the effective filing date of the patent.
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Page last updated 1/11/98