Transparency in Assertion of Patents Act - Directs the Federal Trade Commission (FTC) to promulgate rules prohibiting unfair or deceptive acts and practices in the sending of written communications (commonly referred to as "demand letters") stating that the intended recipient, or any person affiliated with the intended recipient: (1) is infringing, or may be infringing, the patent of another; and (2) bears liability or owes compensation.
Requires such rules to establish disclosures that such written communications must contain, including:
Directs the FTC to: (1) prohibit unfair or deceptive assertions in such written communications, and (2) provide education and awareness to the public regarding deceptive communications.
Sets forth the enforcement authority of the FTC and authorizes civil actions by states. Establishes civil penalties applicable to state actions.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2049 Introduced in Senate (IS)]
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.
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 ``Transparency in Assertion of Patents
Act''.
SEC. 2. TRANSPARENCY IN ASSERTION OF PATENTS.
(a) Disclosures.--The Federal Trade Commission (referred to in this
Act as the ``Commission'') shall promulgate rules to prohibit unfair or
deceptive acts and practices in the sending of written communication
that states that the intended recipient of the written communication,
or any person affiliated with the intended recipient, is infringing or
may be infringing the patent of and bears liability or owes
compensation to another. Such rules shall establish the disclosures
that a written communication to which this subsection applies must
contain, including--
(1) a detailed description of--
(A) each patent allegedly infringed, including the
patent number; and
(B) each claim of each patent that is allegedly
infringed;
(2) a clear, accurate, and detailed description, such as
the manufacturer and model number, of each product, device,
business method, service, or technology that allegedly
infringes each claim under paragraph (1)(B) or that is covered
by that claim;
(3) a clear, accurate, and detailed description of how a
product, device, business method, service, or technology under
paragraph (2) allegedly infringes a patent or claim under
paragraph (1);
(4) notice to the intended recipient that the intended
recipient may have the right to have the manufacturer under
paragraph (2) defend against the alleged infringement;
(5) a name, an address, and any other contact information
necessary for an intended recipient to determine the identity
of a person with the right to enforce a patent described under
paragraph (1) or with a direct financial interest in a patent
described under paragraph (1), including each owner, co-owner,
assignee, exclusive licensee, and entity with the authority to
enforce the patent, and the ultimate parent entity (as defined
in section 801.1(a)(3) of title 16, Code of Federal
Regulations, or any successor regulation) of each owner, co-
owner, assignee, exclusive licensee, and entity with the
authority to enforce the patent;
(6) a description of any licensing commitment or
obligation, such as reasonable and non-discriminatory terms,
that applies to a patent or claim under paragraph (1);
(7) if compensation is proposed, the method used to
calculate that proposed amount;
(8) each current instance of reexamination or other post-
grant review of each patent described under paragraph (1) at
the Patent and Trademark Office, any past or ongoing litigation
involving the patent, and the status of such review and any
determinations as to the invalidity of the patent or any of its
claims; and
(9) other disclosures that the Commission considers
necessary to carry out the purpose of this Act.
(b) Exemptions.--The rules promulgated by the Commission under
subsection (a) may exempt from any requirement of that subsection
written communication between parties regarding existing licensing
agreements, and any other written communication, that the Commission
determines is not necessary for the protection of consumers or within
the scope of the purposes of this Act.
(c) Unfair or Deceptive Assertions.--The Commission shall
promulgate rules to prohibit unfair or deceptive assertions in written
communication to which subsection (a) applies. Such rules shall specify
the actions that constitute an unfair or deceptive assertion,
including--
(1) an assertion that falsely threatens administrative or
judicial relief will be sought if compensation is not paid or
the infringement is not otherwise resolved;
(2) an assertion that lacks a reasonable basis in fact or
law; and
(3) an assertion that is likely to materially mislead a
reasonable intended recipient.
(d) Consumer Education.--The Commission shall provide education and
awareness to the public regarding unfair or deceptive patent
assertions.
(e) Rulemaking.--The Commission shall promulgate the rules under
this Act in accordance with section 553 of title 5, United States Code.
(f) Enforcement by the Commission.--A violation of a rule
promulgated under this Act shall be treated as a violation of a rule
defining an unfair or deceptive act or practice under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)). The Commission shall enforce this Act in the same
manner, by the same means, and with the same jurisdiction, powers, and
duties as though all applicable terms and provisions of the Federal
Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and
made a part of this Act. Any person who violates this Act shall be
subject to the penalties and entitled to the privileges and immunities
provided in the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
(g) Enforcement by State Attorneys General.--
(1) Civil action.--In any case in which the attorney
general of a State, or an official or agency of a State, has
reason to believe that an interest of the residents of that
State has been or is threatened or adversely affected by
engagement of any person subject to a rule promulgated under
this Act in a practice that violates the rule, the attorney
general, official, or agency of the State, as parens patriae,
may bring a civil action on behalf of the residents of the
State in an appropriate district court of the United States--
(A) to enjoin further violation of the rule by the
defendant;
(B) to compel compliance with the rule;
(C) to obtain damages, restitution, or other
compensation on behalf of such residents;
(D) to obtain such further and other relief as the
court considers appropriate; or
(E) to obtain civil penalties in the amount
determined under paragraph (2).
(2) Civil penalties.--
(A) Calculation.--For purposes of imposing a civil
penalty under paragraph (1)(E), the amount determined
under this paragraph is the amount calculated by
multiplying the number of separate violations of a rule
by an amount not greater than $16,000.
(B) Adjustment for inflation.--Beginning on the
date that the Consumer Price Index is first published
by the Bureau of Labor Statistics that is after 1 year
after the date of enactment of this Act, and each year
thereafter, the amount specified in subparagraph (A)
shall be increased by the percentage increase in the
Consumer Price Index published on that date from the
Consumer Price Index published the previous year.
(3) Intervention by the commission.--
(A) Notice and intervention.--The State shall
provide prior written notice of any civil action under
paragraph (1) to the Commission and provide the
Commission with a copy of its complaint, except in any
case in which such prior notice is not feasible, in
which case the State shall serve such notice
immediately upon commencing such action. The Commission
shall have the right--
(i) to intervene in the civil action;
(ii) upon so intervening, to be heard on
all matters arising in the civil action; and
(iii) to file petitions for appeal of a
decision in the civil action.
(B) Limitation on state action while federal action
is pending.--If the Commission has instituted a civil
action for violation of this Act, no State attorney
general, or official or agency of a State, may bring an
action under this subsection during the pendency of
that action against any defendant named in the
complaint of the Commission for any violation of this
Act alleged in the complaint.
(4) Construction.--For purposes of bringing any civil
action under paragraph (1), nothing in this Act shall be
construed to prevent an attorney general of a State from
exercising the powers conferred on the attorney general by the
laws of that State to conduct investigations, to administer
oaths or affirmations, or to compel the attendance of witnesses
or the production of documentary and other evidence.
(h) Rule of Construction.--Nothing in this Act shall be construed
as limiting or otherwise affecting in any way--
(1) any other authority of the Commission; or
(2) the application of title 35, United States Code, or any
other provision of law relating to patents.
<all>
Introduced in Senate
Read twice and referred to the Committee on Commerce, Science, and Transportation.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line