Title: PACED Act
Policy area: Commerce

Summary:
Preserving Access to Cost Effective Drugs Act or the PACED Act
This bill prohibits patent owners from asserting tribal sovereign immunity as a defense in certain proceedings before the U.S. Patent and Trademark Office, including patent validity challenge proceedings before the Patent Trial and Appeal Board (PTAB). The prohibition also applies to court actions and proceedings before the International Trade Commission.
Sovereign immunity for foreign states shall apply in the PTAB as it applies in federal court.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2514 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 2514

 To amend title 35, United States Code, to provide that a patent owner 
   may not assert sovereign immunity as a defense in certain actions 
  before the United States Patent and Trademark Office, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 7, 2018

 Mr. Cotton (for himself, Mrs. McCaskill, Mr. Perdue, Mrs. Ernst, and 
  Mr. Toomey) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To amend title 35, United States Code, to provide that a patent owner 
   may not assert sovereign immunity as a defense in certain actions 
  before the United States Patent and Trademark Office, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preserving Access to Cost Effective 
Drugs Act'' or the ``PACED Act''.

SEC. 2. ABROGATION OF SOVEREIGN IMMUNITY.

    (a) In General.--Title 35, United States Code, is amended--
            (1) in section 135, by adding at the end the following:
    ``(g) Sovereign Immunity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `foreign state' has the meaning 
                given the term in section 1603(a) of title 28; and
                    ``(B) the term `Indian tribe' has the meaning given 
                the term in section 4(e) of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                5304(e)).
            ``(2) Abrogation of sovereign immunity.--Except as provided 
        in paragraph (3), and subject to paragraph (4), a patent owner 
        may not assert sovereign immunity, including the sovereign 
        immunity accorded to an Indian tribe, as a defense in--
                    ``(A) a derivation proceeding instituted under 
                subsection (a); or
                    ``(B) a review by a court of the United States with 
                respect to a decision reached in a proceeding described 
                in subparagraph (A).
            ``(3) Immunity of foreign states.--If a patent owner is a 
        foreign state, for the purposes of any proceeding described in 
        paragraph (2)(A), the Patent Trial and Appeal Board shall 
        determine whether the patent owner is immune from the 
        jurisdiction of the Patent Trial and Appeal Board, in 
        accordance with chapter 97 of title 28 as if the Patent Trial 
        and Appeal Board were a court of the United States.
            ``(4) Limitation.--This subsection shall apply only to the 
        extent permitted under the 11th amendment to the Constitution 
        of the United States.'';
            (2) in section 296--
                    (A) in the section heading, by striking ``and State 
                officials'' and inserting ``, State officials, and 
                Indian tribes''; and
                    (B) by adding at the end the following:
    ``(c) Abrogation of Tribal Sovereign Immunity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `covered claim' means any claim, 
                counterclaim, or third-party claim that arises under--
                            ``(i) this title relating to infringement 
                        of a patent; or
                            ``(ii) section 351 of the Public Health 
                        Service Act (42 U.S.C. 262); and
                    ``(B) the term `Indian tribe' has the meaning given 
                the term in section 4(e) of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                5304(e)).
            ``(2) Abrogation.--In any action that involves a covered 
        claim that is otherwise within the jurisdiction of a court of 
        the United States, an Indian tribe may not assert sovereign 
        immunity as a defense.'';
            (3) in section 305--
                    (A) in the first sentence, by striking ``After 
                the'' and inserting the following:
    ``(a) In General.--After the''; and
                    (B) by adding at the end the following:
    ``(b) Sovereign Immunity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `foreign state' has the meaning 
                given the term in section 1603(a) of title 28; and
                    ``(B) the term `Indian tribe' has the meaning given 
                the term in section 4(e) of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                5304(e)).
            ``(2) Abrogation of sovereign immunity.--Except as provided 
        in paragraph (3), and subject to paragraph (4), a patent owner 
        may not assert sovereign immunity, including the sovereign 
        immunity accorded to an Indian tribe, as a defense in--
                    ``(A) any reexamination proceeding under this 
                section, including any appeal to the Patent Trial and 
                Appeal Board; or
                    ``(B) a review by a court of the United States with 
                respect to a decision reached in a proceeding described 
                in subparagraph (A).
            ``(3) Immunity of foreign states.--If a patent owner is a 
        foreign state, for the purposes of any proceeding described in 
        paragraph (2)(A), the Office or the Patent Trial and Appeal 
        Board, as applicable, shall determine whether the patent owner 
        is immune from the jurisdiction of the Office or the Patent 
        Trial and Appeal Board, as applicable, in accordance with 
        chapter 97 of title 28 as if the Office or the Patent Trial and 
        Appeal Board, as applicable, were a court of the United States.
            ``(4) Limitation.--This subsection shall apply only to the 
        extent permitted under the 11th amendment to the Constitution 
        of the United States.'';
            (4) in section 316, by adding at the end the following:
    ``(f) Sovereign Immunity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `foreign state' has the meaning 
                given the term in section 1603(a) of title 28; and
                    ``(B) the term `Indian tribe' has the meaning given 
                the term in section 4(e) of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                5304(e)).
            ``(2) Abrogation of sovereign immunity.--Except as provided 
        in paragraph (3), and subject to paragraph (4), a patent owner 
        may not assert sovereign immunity, including the sovereign 
        immunity accorded to an Indian tribe, as a defense in--
                    ``(A) an inter partes review instituted under this 
                chapter; or
                    ``(B) a review by a court of the United States with 
                respect to a decision reached in a proceeding described 
                in subparagraph (A).
            ``(3) Immunity of foreign states.--If a patent owner is a 
        foreign state, for the purposes of any review described in 
        paragraph (2)(A), the Patent Trial and Appeal Board shall 
        determine whether the patent owner is immune from the 
        jurisdiction of the Patent Trial and Appeal Board, in 
        accordance with chapter 97 of title 28 as if the Patent Trial 
        and Appeal Board were a court of the United States.
            ``(4) Limitation.--This subsection shall apply only to the 
        extent permitted under the 11th amendment to the Constitution 
        of the United States.''; and
            (5) in section 326, by adding at the end the following:
    ``(f) Sovereign Immunity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `foreign state' has the meaning 
                given the term in section 1603(a) of title 28; and
                    ``(B) the term `Indian tribe' has the meaning given 
                the term in section 4(e) of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                5304(e)).
            ``(2) Abrogation of sovereign immunity.--Except as provided 
        in paragraph (3), and subject to paragraph (4), a patent owner 
        may not assert sovereign immunity, including the sovereign 
        immunity accorded to an Indian tribe, as a defense in--
                    ``(A) a post-grant review instituted under this 
                chapter; or
                    ``(B) a review by a court of the United States with 
                respect to a decision reached in a proceeding described 
                in subparagraph (A).
            ``(3) Immunity of foreign states.--If a patent owner is a 
        foreign state, for the purposes of any review described in 
        paragraph (2)(A), the Patent Trial and Appeal Board shall 
        determine whether the patent owner is immune from the 
        jurisdiction of the Patent Trial and Appeal Board, in 
        accordance with chapter 97 of title 28 as if the Patent Trial 
        and Appeal Board were a court of the United States.
            ``(4) Limitation.--This subsection shall apply only to the 
        extent permitted under the 11th amendment to the Constitution 
        of the United States.''.
    (b) Amendments to the Tariff Act of 1930.--Section 337 of the 
Tariff Act of 1930 (19 U.S.C. 1337) is amended by adding at the end the 
following:
    ``(o) Abrogation of Tribal Sovereign Immunity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `covered person'--
                            ``(i) means a person; and
                            ``(ii) includes--
                                    ``(I) an Indian tribe; and
                                    ``(II) any other person that claims 
                                immunity on account of the sovereign 
                                status of an Indian tribe; and
                    ``(B) the term `Indian tribe' has the meaning given 
                the term in section 4(e) of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                5304(e)).
            ``(2) Abrogation.--In any proceeding under this section, no 
        covered person may assert as a defense the sovereign immunity 
        that is accorded to an Indian tribe.''.
    (c) Technical and Conforming Amendment.--The table of sections for 
chapter 29 of title 35, United States Code, is amended by striking the 
item relating to section 296 and inserting the following:

``296. Liability of States, instrumentalities of States, State 
                            officials, and Indian tribes for 
                            infringement of patents.''.
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