What follows is another Senate Bill, 2272, this one dealing with prior
rights and reexamination.  Thanks to Keith Stephens for sending it to me.

    It seems to give people who have used a device before it was patented
exemption from infringement.  Why a separate bill is needed for such rights
is puzzling, since anyone sued for infringement can prove such prior use in
public can therefore undermine the validity of the patent.  This could be part
of the first-to-file movement.  Any thoughts?


Greg Aharonian
Internet Patent News Service

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

103RD CONGRESS; 2ND SESSION
IN THE SENATE OF THE UNITED STATES
AS INTRODUCED IN THE SENATE
S.  2272

A BILL
To amend chapter 28 of title 35, United States Code, to provide a defense
to patent infringement based on prior use by certain persons, and for
                             other purposes.

DATE OF INTRODUCTION: JULY 1, 1994

DATE OF VERSION: JULY 5, 1994         -- VERSION: 1

SPONSOR(S):
Mr. DECONCINI (for himself and Mr. BIDEN) introduced the following bill;
   which was read twice and referred to the Committee on the Judiciary

TEXT:
                                 A BILL
To amend chapter 28 of title 35, United States Code, to provide a defense
to patent infringement based on prior use by certain persons, and for
                             other purposes.
 
*  Be it enacted by the Senate and House of Representatives of the United*
*States of America in Congress assembled, 

SECTION 1. SHORT TITLE.
  This Act may be cited as the "Patent Prior User Rights Act of 1994".

SEC. 2. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR USE.
  (a) IN GENERAL.-CHAPTER 28 OF TITLE 35, UNITED STATES CODE, IS AMENDED
BY ADDING AT THE END THEREOF THE FOLLOWING NEW SECTION:

"273. Rights based on prior use; defense to infringement
  "(a) DEFINITIONS.-FOR PURPOSES OF THIS SECTION, THE TERM-
      "(1) 'COMMERCIALLY USED' MEANS THE USE IN INTERSTATE OR INTRASTATE
    COMMERCE, INCLUDING THE USE OF PROCESSES, EQUIPMENT, TOOLING,  AND
    INTERMEDIATE MATERIALS IN THE DESIGN, TESTING OR PRODUCTION OF
    COMMERCIAL PRODUCTS WHETHER OR NOT SUCH PROCESSES, EQUIPMENT,
    TOOLING, AND INTERMEDIATE MATERIALS ARE NORMALLY ACCESSIBLE,
    AVAILABLE, OR OTHERWISE KNOWN TO THE PUBLIC;
      "(2) 'EFFECTIVE AND SERIOUS PREPARATION' MEANS THAT A PERSON, IN
    THE UNITED STATES, HAS-
          "(A) REDUCED TO PRACTICE THE SUBJECT MATTER FOR WHICH RIGHTS
        BASED ON PRIOR USE ARE CLAIMED; AND
          "(B) MADE SERIOUS PLANS, AND A SUBSTANTIAL INVESTMENT OR MUCH
        OF THE INVESTMENT NECESSARY FOR THE SUBJECT MATTER TO BE
        COMMERCIALLY USED; AND
      "(3) 'CRITICAL DATE' MEANS THE FILING DATE OR THE PRIORITY DATE,
    WHICHEVER OCCURS FIRST, OF THE APPLICATION FOR PATENT.

  "(B) IN GENERAL.-A PERSON SHALL NOT BE LIABLE AS AN INFRINGER UNDER A
PATENT GRANTED TO ANOTHER WITH RESPECT TO ANY SUBJECT MATTER CLAIMED IN
THE PATENT THAT SUCH PERSON HAD, ACTING IN GOOD FAITH, COMMERCIALLY USED
IN THE UNITED STATES OR MADE EFFECTIVE AND SERIOUS PREPARATION THEREFOR
IN THE UNITED STATES, BEFORE THE CRITICAL DATE.

  "(C) LIMITATION OF DEFENSE.-SUBJECT TO SUBSECTION (D), RIGHTS BASED ON
PRIOR USE UNDER THIS SECTION EXTEND ONLY TO THE CLAIMED INVENTION THAT
THE PERSON CLAIMING RIGHTS BASED ON PRIOR USE WAS IN POSSESSION OF PRIOR
TO THE CRITICAL DATE.

  "(D) CERTAIN VARIATIONS AND IMPROVEMENTS NOT AN INFRINGEMENT.-THE
RIGHTS BASED ON PRIOR USE UNDER THIS SECTION SHALL INCLUDE THE RIGHT TO
MAKE AND USE VARIATIONS OR IMPROVEMENTS, INCLUDING VARIATIONS IN THE
QUANTITY OR VOLUME OF SUCH USE. SUCH VARIATIONS OR IMPROVEMENTS MAY NOT
INFRINGE ADDITIONAL CLAIMS OF THE PATENT.

  "(E) QUALIFICATIONS.-(1) THE RIGHTS BASED ON PRIOR USE UNDER THIS
SECTION ARE PERSONAL AND SHALL NOT BE LICENSED OR ASSIGNED OR TRANSFERRED
TO ANOTHER EXCEPT IN CONNECTION WITH THE ASSIGNMENT OR TRANSFER OF THE
ENTIRE BUSINESS OR ENTERPRISE TO WHICH THE RIGHTS RELATE.
  "(2) A PERSON MAY NOT CLAIM RIGHTS BASED ON PRIOR USE UNDER THIS
SECTION IF THE ACTIVITY UNDER WHICH SUCH PERSON CLAIMS THE RIGHTS WAS-
      "(A) BASED ON INFORMATION OBTAINED OR DERIVED FROM THE PATENTEE OR
    THOSE IN PRIVITY WITH THE PATENTEE; OR
      "(B) ABANDONED ON OR AFTER THE CRITICAL DATE, EXCEPT THAT FOR
    ABANDONMENT WHICH OCCURS AFTER THE CRITICAL DATE, RIGHTS BASED ON
    PRIOR USE MAY BE USED AS A DEFENSE TO INFRINGEMENT FOR THAT PERIOD OF
    ACTIVITY WHICH OCCURRED PRIOR TO ABANDONMENT IF SUCH ACTIVITY WOULD
    OTHERWISE, IN THE ABSENCE OF ABANDONMENT, HAVE BEEN ALLOWED UNDER
    THIS SECTION.
  "(3) THE RIGHTS BASED ON PRIOR USE UNDER THIS SECTION ARE NOT A GENERAL
LICENSE UNDER ALL CLAIMS OF THE PATENT, BUT ARE RESTRICTED IN SCOPE TO
COVER ONLY THAT SUBJECT MATTER CLAIMED IN THE PATENT THAT HAS BEEN
COMMERCIALLY USED, OR FOR WHICH THERE HAS BEEN EFFECTIVE AND SERIOUS
PREPARATION, IN THE UNITED STATES, BEFORE THE CRITICAL DATE.

  "(F) BURDEN OF PROOF.-In any action in which a person claims a defense
to infringement under this section the burden of proof for establishing
the defense shall be on the person claiming rights based on prior use.".

  (b) TECHNICAL AND CONFORMING AMENDMENT.-THE TABLE OF SECTIONS FOR
CHAPTER 28 OF TITLE 35, UNITED STATES CODE, IS AMENDED BY ADDING AT THE
END THEREOF THE FOLLOWING:
"273. Rights based on prior use; defense to infringement.".


SEC. 3. EFFECTIVE DATE.

  The provisions of this Act and the amendments made by this Act shall
take effect on the date of the enactment of this Act.