PREVAIL Act

This bill amends patent law to strengthen patent protections and reform proceedings before the Patent Trial and Appeal Board (PTAB). It establishes a code of conduct for PTAB members, limits repetitive challenges, and prevents forum-shopping by requiring petitioners to choose between PTAB and court. It also creates a revolving fund for the USPTO to prevent fee diversion, expands micro-entity status to institutions of higher education, and directs the Small Business Administration to study patent impacts on small businesses.

Sec. 3, Patent Trial and Appeal Board: The Director must prescribe a code of conduct for PTAB members, considering the Code of Conduct for U.S. Judges. Each appeal, derivation, post-grant review, and inter partes review must be heard by at least three members. Any changes to a panel after it is made public must be noted. Supervisory officers cannot direct or influence panel decisions. A member who participates in the decision to institute a review is ineligible to hear that review.

Sec. 4, Inter partes review: A person who financially contributes to preparing for or conducting an inter partes review on behalf of a petitioner is considered a real party in interest. A petitioner must certify that it is a nonprofit with no infringing funding sources, is engaging in potentially infringing conduct, has standing for a declaratory judgment, or has been sued for infringement. The Director must decide rehearing requests within 45 days, extendable by 30 days for good cause. If a review is instituted, the petitioner cannot challenge the patent's validity in court or before the International Trade Commission.

Sec. 5, Post-grant review: Similar to inter partes review, a financial contributor is a real party in interest. Rehearing decisions must be made within 45 days, extendable by 30 days. If a review is instituted, the petitioner cannot challenge validity in court or before the International Trade Commission. The Director must reject petitions presenting prior art or arguments previously presented to the Office, unless exceptional circumstances are shown.

Sec. 6, Reexamination of patents: Requests for ex parte reexamination must identify all real parties in interest. Reexamination cannot be ordered if the request is filed more than one year after the requester is served with an infringement complaint. The Director must reject requests presenting prior art or arguments previously presented, unless exceptional circumstances are shown.

Sec. 7, Elimination of USPTO fee diversion: All fees collected by the USPTO are deposited into a new revolving fund called the United States Patent and Trademark Office Innovation Promotion Fund. These funds are available without fiscal year limitation to cover all expenses of the Office. Patent fees can only be used for patent-related expenses, and trademark fees only for trademark-related expenses.

Sec. 8, Institutions of higher education: The definition of micro entity is expanded to include applicants whose employer is an institution of higher education, who have assigned or are obligated to assign their application to such an institution, who are themselves an institution of higher education, or who are a qualifying nonprofit holding patents on behalf of such an institution.

Sec. 9, Assisting small businesses: The Small Business Administration must submit a report analyzing the impact of patent ownership by small businesses and civil actions against them for patent infringement. The USPTO must make all patent and trademark information available online for free, including search tools, databases, informational materials, and training classes.