Title: PALS Act
Policy area: Commerce

Summary:
Prevent Abuse of the Legal System Act or the PALS Act
This bill imposes restrictions on U.S. patent infringement actions and transactions involving entities covered by certain export regulations.
Specifically, the bill's restrictions apply to all entities on a list maintained by the Department of Commerce under the Export Administration Regulations (EAR). Under the EAR, transfers and exports of certain items that implicate national security or foreign policy concerns are restricted when the transaction involves an entity on the list (i.e., a designated entity).
In patent infringement actions involving a designated entity, the pleading alleging infringement shall (1) state with particularity the relevant facts and remedies sought, and (2) identify in detail how each patent claim is found in each allegedly infringing product or service.
In such actions, a designated entity and its representatives may not obtain nonpublic technical information related to another entity's product or service, through discovery or other means. However, this restriction does not apply to a designated entity's legal counsel.
A sale or exclusive license of a U.S. patent to a designated entity shall be prohibited if (1) the designated entity has not undergone a national security review; or (2) a product or service subject to the EAR would infringe the patent, unless an appropriate license is granted.
Certain sales or exclusive license of a U.S. patent involving a designated entity and another foreign entity shall comply with certain antitrust provisions, including Federal Trade Commission notification requirements.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2178 Introduced in Senate (IS)]

<DOC>






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.

    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 ``Prevent Abuse of the Legal System 
Act'' or the ``PALS Act''.

SEC. 2. COVERED INFRINGEMENT ACTIONS.

    (a) Definitions.--In this section--
            (1) the term ``affected proceeding'' means an action for 
        infringement of a patent under title 35, United States Code, an 
        investigation under section 337 of the Tariff Act of 1930 (19 
        U.S.C. 1337), or any other administrative or judicial 
        proceeding in which--
                    (A) a patent issued by the United States Patent and 
                Trademark Office is a subject of the proceeding; and
                    (B) a designated entity--
                            (i) is the owner or exclusive licensee of 
                        the patent described in subparagraph (A);
                            (ii) has a financial interest in the 
                        outcome of the proceeding; or
                            (iii) has direct or indirect control over 
                        the conduct of the litigation of the matter by 
                        the holder of the patent described in 
                        subparagraph (A);
            (2) the term ``covered regulations'' means the Export 
        Administration Regulations under subchapter C of chapter VII of 
        title 15, Code of Federal Regulations; and
            (3) the term ``designated entity'' means--
                    (A) an entity on the entity list maintained by the 
                Bureau of Industry and Security of the Department of 
                Commerce and set forth in Supplement No. 4 to part 744 
                of title 15, Code of Federal Regulations; or
                    (B) any parent, subsidiary, or affiliate of an 
                entity described in subparagraph (A).
    (b) Conduct of Affected Proceedings.--Notwithstanding any other 
provision of law or regulation, the following requirements shall apply 
with respect to an affected proceeding:
            (1) The pleadings alleging infringement of the patent 
        shall, with respect to each patent in which a designated entity 
        has an interest--
                    (A) state with particularity the facts and 
                circumstances constituting that infringement, 
                including--
                            (i) all patent claims alleged to be 
                        infringed; and
                            (ii) all products and services alleged to 
                        be infringed;
                    (B) provide a detailed identification of the 
                specific elements of each patent claim that is found in 
                each product and service identified under subparagraph 
                (A)(ii); and
                    (C) state with particularity all damages or other 
                remedies sought in the proceeding.
            (2) Excluding legal counsel for the designated entity 
        involved, neither the designated entity nor the agents or 
        representatives of the designated entity may obtain through 
        discovery, or by other means, any non-public information of any 
        entity or person related to any technical features or operation 
        of a product or service.
            (3) Upon the filing of the affected proceeding, the 
        designated entity involved shall provide notice of the 
        proceeding to the Department of Justice and the United States 
        Patent and Trademark Office.
            (4) The United States shall have the unconditional right to 
        intervene as a party in the proceeding under rule 24(a) of the 
        Federal Rules of Civil Procedure.
    (c) Restrictions on Certain Patent Transactions.--Notwithstanding 
any other provision of law or regulation, the following requirements 
shall apply with respect to the sale or exclusive license of a patent 
issued by the United States Patent and Trademark Office:
            (1) The sale or license is prohibited if the sale or 
        license is to a designated entity and the entity has not 
        undergone review under section 721 of the Defense Production 
        Act of 1950 (50 U.S.C. 4565).
            (2) The sale or license is prohibited if the sale or 
        license is to or by a designated entity and the manufacture, 
        sale, use, import, or export of a product or service that is 
        subject to the covered regulations would infringe the patent, 
        unless an appropriate license is granted under the covered 
        regulations.
            (3) With respect to a patent not involving a drug or 
        biological product, the sale or license of the patent to or by 
        a designated entity to any foreign entity or affiliate shall 
        require notification pursuant to rules under subsection (d)(1), 
        and the waiting period described in subsection (b)(1), of 
        section 7A of the Clayton Act (15 U.S.C. 18a), notwithstanding 
        any other provision of that Act.
    (d) List.--The Under Secretary of Commerce for Intellectual 
Property and Director of the United States Patent and Trademark Office 
shall maintain a publicly available list of all designated entities.
                                 <all>