I 
115TH CONGRESS 
2D SESSION 
H. R. 7036 
To amend title 35, United States Code, with respect to actions for patent 
infringement, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 5, 2018 
Mr. CHABOT introduced the following bill; which was referred to the Com-
mittee on the Judiciary, and in addition to the Committee on Foreign Af-
fairs, for a period to be subsequently determined by the Speaker, in each 
case for consideration of such provisions as fall within the jurisdiction of 
the committee concerned 
A BILL 
To amend title 35, United States Code, with respect to 
actions for patent infringement, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Zero Tolerance for 
Electronics Theft Act’’ or the ‘‘ZTE Theft Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
VerDate Sep 11 2014 
23:16 Oct 12, 2018
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H7036.IH
H7036
pamtmann on DSKBFK8HB2PROD with BILLS
(1) The Federal Bureau of Investigation (FBI) 
has determined that certain foreign actors pose a se-
rious threat to the telecommunications supply chain. 
(2) Through cyber espionage and other delib-
erate acts, billions of dollars in trade secrets, intel-
lectual property, and technology are stolen each year 
from the Federal Government, corporations, and 
academic institutions. 
(3) The People’s Republic of China (China) is 
one of the two largest participants in cyber espio-
nage. 
(4) A 2012 report by the Permanent Select 
Committee on Intelligence of the House of Rep-
resentatives found that China exerts cyber espionage 
capabilities through telecommunications components 
and systems marketed directly to businesses and 
other entities in the United States. 
(5) A 2018 report by the Office of the United 
States Trade Representative found that Chinese gov-
ernment-owned entities were responsible for a sub-
stantial number of patent infringements. 
(6) ZTE Corporation, based in China, dem-
onstrates the risks associated with doing business in 
countries sanctioned by the United States and pro-
vides a model, as well as advocates for, the use of 
VerDate Sep 11 2014 
23:16 Oct 12, 2018
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H7036.IH
H7036
pamtmann on DSKBFK8HB2PROD with BILLS
shell companies to subvert the export control laws of 
the United States, explicitly stating that ‘‘[t]he big-
gest advantage of [this model] is that it is more ef-
fective, [because it’s] harder for the U.S. Govern-
ment to trace it or investigate the real flow of the 
controlled commodities.’’. 
(7) United States businesses provide an esti-
mated 25 to 30 percent of the components used in 
products of ZTE Corporation, including smart-
phones. 
(8) The FBI determined that ZTE Corporation 
sold banned technology to Iran and used the meth-
ods discussed in paragraph (6) to mask its trans-
action history in an effort to undermine investiga-
tions of the Department of Commerce. 
(9) Since 2008, ZTE Corporation has been the 
defendant, counterclaimant, or respondent in 722 
court actions. 
(10) On March 23, 2017, the Department of 
Justice stated that ‘‘ZTE Corporation has agreed to 
enter a guilty plea and to pay a $430,488,798 pen-
alty to the United States for conspiring to violate 
the International Emergency Economic Powers Act 
by illegally shipping U.S.-origin items to Iran, ob-
VerDate Sep 11 2014 
23:16 Oct 12, 2018
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H7036.IH
H7036
pamtmann on DSKBFK8HB2PROD with BILLS
structing justice and making a material false state-
ment.’’. 
(11) ZTE Corporation has also previously 
reached settlement agreements with the Bureau of 
Industry and Security of the Department of Com-
merce and the Office of Foreign Assets Control of 
the Department of the Treasury. 
(12) The Bureau of Industry and Security sub-
sequently found ZTE Corporation in violation of the 
settlement agreement with the Bureau due to— 
(A) falsification of reports and correspond-
ence with the Bureau; and 
(B) failure to discipline all individuals 
named in the settlement agreement. 
(13) On March 13, 2018, the Bureau of Indus-
try and Security notified ZTE Corporation that the 
agency would activate a conditionally suspended de-
nial order, due to the determination by the agency 
that ZTE Corporation had continuously made false 
statements to the United States Government. 
(14) On June 7, 2018, Secretary of Commerce 
Wilbur Ross announced that ZTE Corporation— 
(A) agreed to additional penalties and com-
pliance measures which would supplant a prior 
order of the Bureau; and 
VerDate Sep 11 2014 
23:16 Oct 12, 2018
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H7036.IH
H7036
pamtmann on DSKBFK8HB2PROD with BILLS
(B) would be removed from the Depart-
ment of Commerce’s Denied Persons List, a list 
of individuals and entities that have been de-
nied export privileges. 
SEC. 3. SENSE OF CONGRESS. 
It is the sense of Congress that— 
(1) ZTE Corporation poses a significant risk to 
the economy and national security of the United 
States; and 
(2) ZTE Corporation engages and will continue 
to engage in the theft of intellectual property to the 
detriment of businesses in the United States. 
SEC. 4. INJUNCTION. 
Section 283 of title 35, United States Code, is 
amended— 
(1) by striking ‘‘The several courts’’ and insert-
ing the following: 
‘‘(a) IN GENERAL.—The several courts’’; and 
(2) by adding at the end the following: 
‘‘(b) SPECIAL RULE.— 
‘‘(1) PRELIMINARY
INJUNCTION
IN
CERTAIN 
CASES.—Notwithstanding any other provision of law, 
when a covered entity is a party to a civil action for 
patent infringement brought under this title, an op-
posing party, if seeking a preliminary injunction 
VerDate Sep 11 2014 
23:16 Oct 12, 2018
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H7036.IH
H7036
pamtmann on DSKBFK8HB2PROD with BILLS