II 

113TH CONGRESS 

2D SESSION S. 2049 

To curb unfair and deceptive practices during assertion of patents, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 26, 2014 

Mrs. MCCASKILL (for herself and Mr. ROCKEFELLER) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To curb unfair and deceptive practices during assertion of 

patents, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Transparency in Asser5 tion of Patents Act’’. 

6 SEC. 2. TRANSPARENCY IN ASSERTION OF PATENTS. 

7 (a) DISCLOSURES.—The Federal Trade Commission 

8 (referred to in this Act as the ‘‘Commission’’) shall pro9 mulgate rules to prohibit unfair or deceptive acts and 

10 practices in the sending of written communication that 


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1 states that the intended recipient of the written commu2 nication, or any person affiliated with the intended recipi3 ent, is infringing or may be infringing the patent of and 

4 bears liability or owes compensation to another. Such rules 

5 shall establish the disclosures that a written communica6 tion to which this subsection applies must contain, includ7 ing— 

8 (1) a detailed description of— 

9 (A) each patent allegedly infringed, includ10 ing the patent number; and 

11 (B) each claim of each patent that is alleg12 edly infringed; 

13 (2) a clear, accurate, and detailed description, 

14 such as the manufacturer and model number, of 

15 each product, device, business method, service, or 

16 technology that allegedly infringes each claim under 

17 paragraph (1)(B) or that is covered by that claim; 

18 (3) a clear, accurate, and detailed description of 

19 how a product, device, business method, service, or 

20 technology under paragraph (2) allegedly infringes a 

21 patent or claim under paragraph (1); 

22 (4) notice to the intended recipient that the in23 tended recipient may have the right to have the 

24 manufacturer under paragraph (2) defend against 

25 the alleged infringement; 


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1 (5) a name, an address, and any other contact 

2 information necessary for an intended recipient to 

3 determine the identity of a person with the right to 

4 enforce a patent described under paragraph (1) or 

5 with a direct financial interest in a patent described 

6 under paragraph (1), including each owner, co7 owner, assignee, exclusive licensee, and entity with 

8 the authority to enforce the patent, and the ultimate 

9 parent entity (as defined in section 801.1(a)(3) of 

10 title 16, Code of Federal Regulations, or any suc11 cessor regulation) of each owner, co-owner, assignee, 

12 exclusive licensee, and entity with the authority to 

13 enforce the patent; 

14 (6) a description of any licensing commitment 

15 or obligation, such as reasonable and non-discrimi16 natory terms, that applies to a patent or claim under 

17 paragraph (1); 

18 (7) if compensation is proposed, the method 

19 used to calculate that proposed amount; 

20 (8) each current instance of reexamination or 

21 other post-grant review of each patent described 

22 under paragraph (1) at the Patent and Trademark 

23 Office, any past or ongoing litigation involving the 

24 patent, and the status of such review and any deterVerDate Mar 15 2010 03:09 Feb 27, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2049.IS S2049

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1 minations as to the invalidity of the patent or any 

2 of its claims; and 

3 (9) other disclosures that the Commission con4 siders necessary to carry out the purpose of this Act. 

5 (b) EXEMPTIONS.—The rules promulgated by the 

6 Commission under subsection (a) may exempt from any 

7 requirement of that subsection written communication be8 tween parties regarding existing licensing agreements, and 

9 any other written communication, that the Commission 

10 determines is not necessary for the protection of con11 sumers or within the scope of the purposes of this Act. 

12 (c) UNFAIR OR DECEPTIVE ASSERTIONS.—The Com13 mission shall promulgate rules to prohibit unfair or decep14 tive assertions in written communication to which sub15 section (a) applies. Such rules shall specify the actions 

16 that constitute an unfair or deceptive assertion, includ17 ing— 

18 (1) an assertion that falsely threatens adminis19 trative or judicial relief will be sought if compensa20 tion is not paid or the infringement is not otherwise 

21 resolved; 

22 (2) an assertion that lacks a reasonable basis in 

23 fact or law; and 

24 (3) an assertion that is likely to materially mis25 lead a reasonable intended recipient. 


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1 (d) CONSUMER EDUCATION.—The Commission shall 

2 provide education and awareness to the public regarding 

3 unfair or deceptive patent assertions. 

4 (e) RULEMAKING.—The Commission shall promul5 gate the rules under this Act in accordance with section 

6 553 of title 5, United States Code. 

7 (f) ENFORCEMENT BY THE COMMISSION.—A viola8 tion of a rule promulgated under this Act shall be treated 

9 as a violation of a rule defining an unfair or deceptive 

10 act or practice under section 18(a)(1)(B) of the Federal 

11 Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). The 

12 Commission shall enforce this Act in the same manner, 

13 by the same means, and with the same jurisdiction, pow14 ers, and duties as though all applicable terms and provi15 sions of the Federal Trade Commission Act (15 U.S.C. 

16 41 et seq.) were incorporated into and made a part of this 

17 Act. Any person who violates this Act shall be subject to 

18 the penalties and entitled to the privileges and immunities 

19 provided in the Federal Trade Commission Act (15 U.S.C. 

20 41 et seq.). 

21 (g) ENFORCEMENT BY STATE ATTORNEYS GEN22 ERAL.— 

23 (1) CIVIL ACTION.—In any case in which the 

24 attorney general of a State, or an official or agency 

25 of a State, has reason to believe that an interest of 


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1 the residents of that State has been or is threatened 

2 or adversely affected by engagement of any person 

3 subject to a rule promulgated under this Act in a 

4 practice that violates the rule, the attorney general, 

5 official, or agency of the State, as parens patriae, 

6 may bring a civil action on behalf of the residents 

7 of the State in an appropriate district court of the 

8 United States— 

9 (A) to enjoin further violation of the rule 

10 by the defendant; 

11 (B) to compel compliance with the rule; 

12 (C) to obtain damages, restitution, or other 

13 compensation on behalf of such residents; 

14 (D) to obtain such further and other relief 

15 as the court considers appropriate; or 

16 (E) to obtain civil penalties in the amount 

17 determined under paragraph (2). 

18 (2) CIVIL PENALTIES.— 

19 (A) CALCULATION.—For purposes of im20 posing a civil penalty under paragraph (1)(E), 

21 the amount determined under this paragraph is 

22 the amount calculated by multiplying the num23 ber of separate violations of a rule by an 

24 amount not greater than $16,000. 


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1 (B) ADJUSTMENT FOR INFLATION.—Be2 ginning on the date that the Consumer Price 

3 Index is first published by the Bureau of Labor 

4 Statistics that is after 1 year after the date of 

5 enactment of this Act, and each year thereafter, 

6 the amount specified in subparagraph (A) shall 

7 be increased by the percentage increase in the 

8 Consumer Price Index published on that date 

9 from the Consumer Price Index published the 

10 previous year. 

11 (3) INTERVENTION BY THE COMMISSION.— 

12 (A) NOTICE AND INTERVENTION.—The 

13 State shall provide prior written notice of any 

14 civil action under paragraph (1) to the Commis15 sion and provide the Commission with a copy of 

16 its complaint, except in any case in which such 

17 prior notice is not feasible, in which case the 

18 State shall serve such notice immediately upon 

19 commencing such action. The Commission shall 

20 have the right— 

21 (i) to intervene in the civil action; 

22 (ii) upon so intervening, to be heard 

23 on all matters arising in the civil action; 

24 and 


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1 (iii) to file petitions for appeal of a 

2 decision in the civil action. 

3 (B) LIMITATION ON STATE ACTION WHILE

4 FEDERAL ACTION IS PENDING.—If the Commis5 sion has instituted a civil action for violation of 

6 this Act, no State attorney general, or official 

7 or agency of a State, may bring an action under 

8 this subsection during the pendency of that ac9 tion against any defendant named in the com10 plaint of the Commission for any violation of 

11 this Act alleged in the complaint. 

12 (4) CONSTRUCTION.—For purposes of bringing 

13 any civil action under paragraph (1), nothing in this 

14 Act shall be construed to prevent an attorney gen15 eral of a State from exercising the powers conferred 

16 on the attorney general by the laws of that State to 

17 conduct investigations, to administer oaths or affir18 mations, or to compel the attendance of witnesses or 

19 the production of documentary and other evidence. 

20 (h) RULE OF CONSTRUCTION.—Nothing in this Act 

21 shall be construed as limiting or otherwise affecting in any 

22 way— 

23 (1) any other authority of the Commission; or 


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1 (2) the application of title 35, United States 

2 Code, or any other provision of law relating to pat3 ents. 

Æ 


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