II 

116TH CONGRESS 

1ST SESSION S. 2178 

To impose requirements in certain actions for patent infringement, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 18, 2019 

Mr. RUBIO (for himself and Mr. CORNYN) introduced the following bill; which 

was read twice and referred to the Committee on the Judiciary 

A BILL 

To impose requirements in certain actions for patent 

infringement, 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 ‘‘Prevent Abuse of the 

5 Legal System Act’’ or the ‘‘PALS Act’’. 

6 SEC. 2. COVERED INFRINGEMENT ACTIONS. 

7 (a) DEFINITIONS.—In this section— 

8 (1) the term ‘‘affected proceeding’’ means an 

9 action for infringement of a patent under title 35, 

10 United States Code, an investigation under section 


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1 337 of the Tariff Act of 1930 (19 U.S.C. 1337), or 

2 any other administrative or judicial proceeding in 

3 which— 

4 (A) a patent issued by the United States 

5 Patent and Trademark Office is a subject of 

6 the proceeding; and 

7 (B) a designated entity— 

8 (i) is the owner or exclusive licensee of 

9 the patent described in subparagraph (A); 

10 (ii) has a financial interest in the out11 come of the proceeding; or 

12 (iii) has direct or indirect control over 

13 the conduct of the litigation of the matter 

14 by the holder of the patent described in 

15 subparagraph (A); 

16 (2) the term ‘‘covered regulations’’ means the 

17 Export Administration Regulations under sub18 chapter C of chapter VII of title 15, Code of Federal 

19 Regulations; and 

20 (3) the term ‘‘designated entity’’ means— 

21 (A) an entity on the entity list maintained 

22 by the Bureau of Industry and Security of the 

23 Department of Commerce and set forth in Sup24 plement No. 4 to part 744 of title 15, Code of 

25 Federal Regulations; or 


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1 (B) any parent, subsidiary, or affiliate of 

2 an entity described in subparagraph (A). 

3 (b) CONDUCT OF AFFECTED PROCEEDINGS.—Not4 withstanding any other provision of law or regulation, the 

5 following requirements shall apply with respect to an af6 fected proceeding: 

7 (1) The pleadings alleging infringement of the 

8 patent shall, with respect to each patent in which a 

9 designated entity has an interest— 

10 (A) state with particularity the facts and 

11 circumstances constituting that infringement, 

12 including— 

13 (i) all patent claims alleged to be in14 fringed; and 

15 (ii) all products and services alleged 

16 to be infringed; 

17 (B) provide a detailed identification of the 

18 specific elements of each patent claim that is 

19 found in each product and service identified 

20 under subparagraph (A)(ii); and 

21 (C) state with particularity all damages or 

22 other remedies sought in the proceeding. 

23 (2) Excluding legal counsel for the designated 

24 entity involved, neither the designated entity nor the 

25 agents or representatives of the designated entity 


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1 may obtain through discovery, or by other means, 

2 any non-public information of any entity or person 

3 related to any technical features or operation of a 

4 product or service. 

5 (3) Upon the filing of the affected proceeding, 

6 the designated entity involved shall provide notice of 

7 the proceeding to the Department of Justice and the 

8 United States Patent and Trademark Office. 

9 (4) The United States shall have the uncondi10 tional right to intervene as a party in the proceeding 

11 under rule 24(a) of the Federal Rules of Civil Proce12 dure. 

13 (c) RESTRICTIONS ON CERTAIN PATENT TRANS14 ACTIONS.—Notwithstanding any other provision of law or 

15 regulation, the following requirements shall apply with re16 spect to the sale or exclusive license of a patent issued 

17 by the United States Patent and Trademark Office: 

18 (1) The sale or license is prohibited if the sale 

19 or license is to a designated entity and the entity 

20 has not undergone review under section 721 of the 

21 Defense Production Act of 1950 (50 U.S.C. 4565). 

22 (2) The sale or license is prohibited if the sale 

23 or license is to or by a designated entity and the 

24 manufacture, sale, use, import, or export of a prod25 uct or service that is subject to the covered regulaVerDate Sep 11 2014 22:28 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2178.IS S2178

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1 tions would infringe the patent, unless an appro2 priate license is granted under the covered regula3 tions. 

4 (3) With respect to a patent not involving a 

5 drug or biological product, the sale or license of the 

6 patent to or by a designated entity to any foreign 

7 entity or affiliate shall require notification pursuant 

8 to rules under subsection (d)(1), and the waiting pe9 riod described in subsection (b)(1), of section 7A of 

10 the Clayton Act (15 U.S.C. 18a), notwithstanding 

11 any other provision of that Act. 

12 (d) LIST.—The Under Secretary of Commerce for In13 tellectual Property and Director of the United States Pat14 ent and Trademark Office shall maintain a publicly avail15 able list of all designated entities. 

Æ 


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