SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Demand Letter Transparency Act of 
2013''.

SEC. 2. DEMAND LETTER DISCLOSURE REQUIREMENT.

    (a) Amendment.--Chapter 26 of title 35, United States Code, is 
amended by adding at the end the following new section:
``Sec. 263. Disclosure of Information Related to Patent Ownership
    ``(a) Demand Letter Disclosure.--Any entity that sends 20 or more 
demand letters during any 365-day period shall, not later than the 
disclosure deadline, submit to the Patent and Trademark Office with 
respect to each patent that was the subject in each such letter the 
following:
            ``(1) Identification of the patent and confirmation that 
        the entity that sent the letter is the owner of the patent (or 
        a representative of such person) and is the last recorded 
        entity in the records of the Patent and Trademark Office for 
        purposes of assignment, grant, or conveyance under this 
        chapter.
            ``(2) Identification of the entity that has the right to 
        license the patent or, in the case of a patent already 
        exclusively licensed, the name of the exclusive licensee.
            ``(3) Identification of each entity asserting a claim with 
        regard to a patent in such letter in accordance with subsection 
        (b).
            ``(4) Identification of each obligation to license the 
        patent on reasonable and nondiscriminatory terms, including a 
        copy of each letter of assurance to each standard-setting 
        organization with respect to such obligation, and the financial 
        terms, including the rate, at which such patent has been 
        licensed pursuant to such obligation.
            ``(5) Identification of the ultimate parent entity of such 
        entity.
            ``(6) Identification of the number of entities that 
        received a demand letter from the entity that sent the letter.
            ``(7) Identification of any case that has been filed by 
        such entity relating to each such patent, including the docket 
        number and the court in which the case was filed.
            ``(8) Identification of any ex parte review under chapter 
        30 or inter partes review under chapter 31 of such patent.
            ``(9) Any required registration fee established with regard 
        to this section.
    ``(b) Information Not Readily Accessible.--An entity required to 
disclose the information described under subsection (a) shall include 
with such disclosure a description of any information described under 
subsection (a) that is not disclosed, why such undisclosed information 
was not readily accessible, and the efforts made by such entity to 
access such undisclosed information.
    ``(c) Identification.--
            ``(1) Publicly traded.--For purposes of subsection (a)(3), 
        if the entity to be identified is owned or controlled by a 
        corporation traded on a public stock exchange, an 
        identification of the publicly traded corporation and the 
        public stock exchange shall be sufficient.
            ``(2) Not publicly traded.--For purposes of subsection 
        (a)(3), if the entity to be identified is not owned or 
        controlled by a publicly traded corporation, the information 
        shall identify--
                    ``(A) in the case of a partnership, the name and 
                address of each partner or other entity, holding more 
                than a 5 percent share of that partnership;
                    ``(B) in the case of a corporation, the location of 
                incorporation and the name of each officer of the 
                corporation;
                    ``(C) in the case of an entity that is directly or 
                indirectly controlled by another entity, the name and 
                address of the entity and each other entity, and the 
                name, address, location of incorporation, and each 
                officer or partner of the entity and each other entity; 
                and
                    ``(D) for each individual, the name and address of 
                that individual.
            ``(3) Number of demand letters.--The requirement under 
        subsection (a)(6) shall be updated regularly by the Director.
    ``(d) Failure To Comply.--
            ``(1) Monetary sanctions.--Any entity that does not meet 
        the requirements of this section with regard to a patent or the 
        disclosure requirements with respect to a demand letter under 
        section 264 may be subject to monetary sanctions by a court in 
        an action brought by such entity with regard to infringement or 
        validity of such patent, for an amount to be awarded to the 
        adverse party that covers any cost incurred by the adverse 
        party resulting from the failure of such entity to meet the 
        requirements of this section, including any reasonable cost 
        incurred by such adverse party to discover the correct and 
        complete information described under subsection (a) with regard 
        to such patent, unless such sanctions would be unjust.
            ``(2) Award of damages or fees.--A court in a case 
        involving monetary sanctions described in paragraph (1)--
                    ``(A) may not award treble damages under the second 
                undesignated paragraph of section 284 or attorney's 
                fees under section 285 to the entity described in 
                paragraph (1), unless the denial of such damages or 
                fees would be manifestly unjust; and
                    ``(B) shall consider good faith mistakes in a 
                relevant demand letter when calculating attorneys fees 
                under section 285 and damages under section 284.
    ``(e) Ongoing Duty To Correct or Supplement.--An entity described 
in subsection (a) shall update any filing made pursuant to such 
subsection with correct information not later than 20 days after any 
change in the information described under subsection (a).
    ``(f) Exemption.--This section shall not apply to any of the 
following:
            ``(1) The original inventor or joint inventor.
            ``(2) An institution of higher education (as that term is 
        defined in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001)).
            ``(3) A technology transfer organization whose primary 
        purpose is to facilitate the commercialization of technology 
        developed by one or more institutions of higher education.
    ``(g) Definitions.--In this section:
            ``(1) Demand letter.--The term `demand letter' means any 
        written communication directed to an unaffiliated third party 
        stating or indicating, directly or indirectly, that the 
        intended recipient or anyone affiliated with that recipient is 
        or may be infringing a patent, or may bear liability or owe 
        compensation to another because of such patent.
            ``(2) Disclosure deadline.--The term `disclosure deadline' 
        means the lesser of 30 days after the 20th demand letter is 
        sent or 15 days before the earliest date of compliance 
        described in the 20th demand letter.
            ``(3) Ultimate parent entity.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `ultimate parent entity' has 
                the meaning given such term in section 801.1(a)(3) of 
                title 16, Code of Federal Regulations, or any successor 
                regulation.
                    ``(B) Modification of definition.--The Director may 
                modify the definition of `ultimate parent entity' by 
                regulation.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 26 of title 35, United States Code, is amended by adding at the 
end the following new item:

``263. Disclosure of Information Related to Patent Ownership.''.
    (c) Regulations.--The Director may promulgate such regulations as 
are necessary to establish a registration fee in an amount sufficient 
to recover the estimated costs of administering section 263 of title 
35, United States Code, as added by subsection (a), to facilitate the 
collection and maintenance of the information required by such section, 
and to ensure the timely disclosure of such information to the public.
    (d) Demand Letter Database.--
            (1) Establishment.--Not later than 180 days after the date 
        of the enactment of this Act, the Director, in consultation 
        with the Attorney General and the Federal Trade Commission, 
        shall establish a publicly accessible and searchable database 
        of the information obtained pursuant to section 263 of title 
        35, United States Code, as added by subsection (a), to be 
        maintained at and updated by the Office.
            (2) Protection of information.--The Director shall allow 
        recipients of a demand letter (as such term is defined under 
        section 263(g), as added by subsection (a)) to request the 
        redaction of the company name, company-specific information, or 
        any other company information from the database described in 
        paragraph (1).

SEC. 3. DEMAND LETTER REQUIREMENT.

    (a) Amendment.--Chapter 26 of title 35, United States Code, as 
amended by section 2(a), is amended by adding at the end the following 
new section:
``Sec. 264. Requirements for patent infringement demand letters
    ``(a) In General.--Any entity sending a demand letter shall include 
in any demand letter sent to another entity the following:
            ``(1) An identification of each patent that is or may be 
        allegedly infringing.
            ``(2) An identification of each claim of each patent 
        identified under paragraph (1) that is allegedly infringed.
            ``(3) For each claim identified under paragraph (2), an 
        identification of each accused apparatus, product, feature, 
        device, method, system, process, function, act, service, or 
        other instrumentality (referred to in this section as an 
        `accused instrumentality') alleged to infringe the claim.
            ``(4) For each accused instrumentality identified under 
        paragraph (3), an identification with particularity, if known, 
        of--
                    ``(A) the name or model number of each accused 
                instrumentality; and
                    ``(B) the name of each accused method, system, 
                process, function, act, or service, or the name or 
                model number of each apparatus, product, feature, or 
                device that, when used, allegedly results in the 
                practice of the claimed invention.
            ``(5) For each accused instrumentality identified under 
        paragraph (3), an explanation of--
                    ``(A) where each element of each asserted claim 
                identified under paragraph (2) is found within the 
                accused instrumentality;
                    ``(B) whether each such element is infringed 
                literally or under the doctrine of equivalents; and
                    ``(C) with detailed specificity, how the terms in 
                each asserted claim identified under paragraph (2) 
                correspond to the functionality of the accused 
                instrumentality.
            ``(6) For each claim that is alleged to have been infringed 
        indirectly, a description of--
                    ``(A) the direct infringement;
                    ``(B) any person alleged to be a direct infringer 
                known to the party alleging infringement; and
                    ``(C) the acts of the alleged indirect infringer 
                that contribute to or are inducing the direct 
                infringement.
            ``(7) A description of the right of the party alleging 
        infringement to assert each--
                    ``(A) patent identified under paragraph (1); and
                    ``(B) patent claim identified in paragraph (2).
            ``(8) A description of the principal business of the party 
        alleging infringement.
            ``(9) A list of each complaint filed, of which the party 
        alleging infringement has knowledge, that asserts or asserted 
        any of the patents identified under paragraph (1).
            ``(10) Identification of any case that has been filed by 
        such entity relating to each patent identified under paragraph 
        (1), including the docket number and the court in which the 
        case was filed.
            ``(11) Identification of any ex parte review under chapter 
        30 or any inter partes review under chapter 31 for each patent 
        identified under paragraph (1).
            ``(12) For each patent identified under paragraph (1), 
        whether such patent is subject to any licensing term or pricing 
        commitments through any agency, organization, standard-setting 
        body, or other entity or community.
            ``(13) The identity of any person other than the party 
        alleging infringement, known to the party alleging 
        infringement, who--
                    ``(A) owns or co-owns a patent identified under 
                paragraph (1);
                    ``(B) is the assignee of a patent identified under 
                paragraph (1); or
                    ``(C) is an exclusive licensee to a patent 
                identified under paragraph (1).
            ``(14) The identity of any person other than the party 
        alleging infringement, known to the party alleging 
        infringement, who has a legal right to enforce a patent 
        identified under paragraph (1) through a civil action under any 
        Act of Congress relating to patents or is licensed under such 
        patent.
            ``(15) The identity of any person with a direct financial 
        interest in the outcome of the action, including a right to 
        receive proceeds, or any fixed or variable portion thereof.
            ``(16) A description of any agreement or other legal basis 
        for a financial interest described in paragraph (13).
            ``(17) A description of how the recipient of the demand 
        letter can access the demand letter database of the Patent and 
        Trademark Office.
            ``(18) At the bottom of such letter, a clear statement of 
        the following: `You are not required to respond to this letter 
        by law.'.
    ``(b) Information Not Readily Accessible.--An entity required to 
disclose the information described under subsection (a) shall include 
with such disclosure a description of any information described under 
subsection (a) that is not disclosed, why such undisclosed information 
was not readily accessible, and the efforts made by such entity to 
access such undisclosed information.
    ``(c) Demand Letter Defined.--In this section, the term `demand 
letter' shall have the meaning given that term under section 263(g).''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 26 of title 35, United States Code, as amended by section 2(b), 
is amended by adding at the end the following new item:

``264. Requirements for patent infringement demand letters.''.

SEC. 4. PENALTIES.

    (a) Amendment.--Chapter 26 of title 35, United States Code, as 
amended by sections 2(a) and 3(a), is amended by adding at the end the 
following new section:
``Sec. 265. Penalties
    ``(a) Disclosure of Information to the Patent and Trademark Office 
Violation.--Any entity that receives a demand letter and that believes 
the requirements under section 263 have not been met with respect to 
such patent may submit to the Office in writing a petition--
            ``(1) describing the requirements that have not been met 
        under section 263; and
            ``(2) anything else the Director determines to be 
        necessary.
    ``(b) Demand Letter Requirement Violation.--Any entity that 
receives a demand letter that does not meet the requirements described 
under section 264 may submit to the Office in writing a petition--
            ``(1) describing the requirements that have not been 
        included in such letter; and
            ``(2) anything else the Director determines to be 
        necessary.
    ``(c) Notice of Intent To Abandon.--If the Office determines that 
the requirements of section 263 or 264 have not been met with respect 
to a patent, the Office shall notify the patent owner that the patent 
will be voided unless a fee is paid not later than 3 months after the 
date on which the notification is sent. The Director may accept the 
payment of any fee required by this subsection if the delay is shown to 
the satisfaction of the Director to have been unintentional or 
unavoidable. The Director shall consider good faith mistakes in the 
determination of whether to void a patent under this section.
    ``(d) Demand Letter Defined.--In this section, the term `demand 
letter' shall have the meaning given that term under section 263(g).''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 26 of title 35, United States Code, as amended by sections 2(b) 
and 3(b), is amended by adding at the end the following new item:

``265. Penalties.''.
    (c) Regulations.--Not later than 180 days after the date of the 
enactment of this Act, the Director shall establish, by regulation, a 
fee for filing a petition under section 265 in such amounts as the 
Director determines to be reasonable.

SEC. 5. FEDERAL TRADE COMMISSION ENFORCEMENT.

    (a) Enforcement.--A violation of section 263 or 264 of title 35, 
United States Code, as added by sections 2 and 3, respectively, shall 
be treated as a violation of a rule defining an unfair or deceptive act 
or practice under section 18(a)(1)(B) of the Federal Trade Commission 
Act (15 U.S.C. 57a(a)(1)(B)). The Commission shall enforce such rules 
in the same manner, by the same means, and with the same jurisdiction, 
powers, and duties as though all applicable terms and provisions of the 
Federal Trade Commission Act were incorporated into and made a part of 
this section. Any entity who violates this section shall be subject to 
the penalties and entitled to the privileges and immunities provided in 
the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
    (b) Rule of Construction.--Nothing in this section shall be 
construed--
            (1) to limit the authority of the Federal Trade Commission 
        under any other provision of law; or
            (2) except as specifically provided in this section to 
        provide the Federal Trade Commission with any additional 
        authority.

SEC. 6. DEFINITIONS.

    In this Act:
            (1) Director.--The term ``Director'' means the Under 
        Secretary of Commerce for Intellectual Property and Director of 
        the United States Patent and Trademark Office.
            (2) Office.--The term ``Office'' means the United States 
        Patent and Trademark Office.

SEC. 7. EFFECTIVE DATE.

    The amendments made by this Act shall take effect upon the 
expiration of the 6-month period beginning on the date of the enactment 
of this Act and shall apply to an entity that sends a demand letter (as 
such term is defined under section 263(g) of title 35, United States 
Code, as added by section 2(a)) on or after that date.
Demand Letter Transparency Act of 2013 - Requires any entity that sends a specified number of demand letters during any 365-day period to submit to the U.S. Patent and Trademark Office (USPTO), with respect to each patent that was the subject in each letter, a disclosure identifying:  the patent, including a confirmation that the entity that sent the letter is the owner of the patent and is the last recorded entity in USPTO records for purposes of assignment, grant, or conveyance; the entity that has the right to license the patent or the name of the exclusive licensee; each entity asserting a claim with regard to the patent; each obligation to license the patent and the financial terms at which such patent has been licensed; the ultimate parent entity of such entity; the number of recipients of the letter;  any case that has been filed by such entity relating to such patent; and any ex parte review or inter partes review of such patent.  Defines &quot;demand letter&quot; as any written communication directed to an unaffiliated third party stating or indicating that the intended recipient, or anyone affiliated with that recipient, is or may be infringing a patent, or may bear liability or owe compensation to another because of such patent. Authorizes a court, in a patent infringement or validity action brought by an entity that does not meet such USPTO disclosure requirements, to sanction such entity for an amount to be awarded to the adverse party to cover any costs incurred as a result of such violation. Exempts from such disclosure requirements: (1) original or joint inventors, (2) institutions of higher education, and (3) technology transfer organizations facilitating the commercialization of technology developed by institutions of higher education.  Directs the USPTO to establish a publicly accessible and searchable database of the information obtained pursuant to such disclosures. Requires any demand letter sent to another entity to include specified information concerning:  each claim of each patent allegedly infringed, including each accused instrumentality; each party alleging infringement; the direct infringement for each claim alleged to have been infringed indirectly; the principal business of the party alleging infringement; each complaint filed that asserts or asserted any of the same patents, each case filed by such entity, and any ex parte or inter partes review for each patent; whether the patent is subject to any licensing term or pricing commitments; owners, co-owners, assignees, or exclusive licensees of the patent; any person who has a legal right to enforce the patent; any person with a direct financial interest in the outcome of the action; and  how the recipient can access the USPTO demand letter database.  Permits a recipient of a demand letter to file a petition with the USPTO if it believes that disclosure or patent letter information requirements have not been met. Directs the USPTO, if it determines that a requirement has not been met, to notify the patent owner that the patent will be voided unless a fee is paid.  Requires the USPTO to consider good faith mistakes in the determination of whether to void a patent.  Directs the Federal Trade Commission (FTC) to enforce a violation of this Act as an unfair or deceptive act or practice.
Demand Letter Transparency Act of 2013