Sec. 4. Customer-suit exception
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/bill/114/s/1137/is/section-4·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Chapter 29 of title 35, United States Code, is amended by adding at the end the following: In this section— the term covered customer means a retailer or end user that is accused of infringing a patent or patents in dispute based on— the sale, or offer for sale, of a covered product or covered process without material modification of the product or process in a manner that is alleged to infringe a patent or patents in dispute; or the use by such retailer, the retailer’s end user customer, or an end user of a covered product or covered process without material modification of the product or process in a manner that is alleged to infringe a patent or patents in dispute; the term covered manufacturer means a person who manufactures or supplies, or causes the manufacture or supply of, a covered product or covered process, or a relevant part thereof; the term covered process means a process, method, or a relevant part thereof, that is alleged to infringe the patent or patents in dispute where such process, method, or relevant part thereof is implemented by an apparatus, material, system, software or other instrumentality that is provided by the covered manufacturer; the term covered product means a component, product, system, service, or a relevant part thereof, that— is alleged to infringe the patent or patents in dispute; or implements a process alleged to infringe the patent or patents in dispute; for purposes of this section, the term end user shall include an affiliate of such an end user, but shall not include an entity that manufactures or causes the manufacture of a covered product or covered process or a relevant part thereof; the term retailer means an entity that generates its revenues predominately through the sale to the public of consumer goods or services, or an affiliate of such entity, but shall not include an entity that manufactures or causes the manufacture of a covered product or covered process or a relevant part thereof; and for purposes of the definitions in paragraphs
(5)and (6), the terms use and sale mean the use and the sale, respectively, within the meanings given those terms under section 271. In a civil action in which a party asserts a claim for relief arising under any Act of Congress relating to patents (other than an action that includes a cause of action described in section 271(e)), the court shall grant a motion to stay at least the portion of the action against a covered customer that relates to infringement of a patent involving a covered product or covered process if— the covered manufacturer is a party to the action or a separate action in a Federal court of the United States involving the same patent or patents relating to the same covered product or covered process; the covered customer agrees to be bound as to issues determined in an action described in paragraph
(1)without a full and fair opportunity to separately litigate any such issue, but only as to those issues for which all other elements of the common law doctrine of issue preclusion are met; and the motion is filed after the first pleading in the action but not later than the later of— 120 days after service of the first pleading or paper in the action that specifically identifies the covered product or covered process as a basis for the alleged infringement of the patent by the covered customer, and specifically identifies how the covered product or covered process is alleged to infringe the patent; or the date on which the first scheduling order in the case is entered. If the covered manufacturer has been made a party to the action on motion by the covered customer, then a motion under subsection
(b)may only be granted if the covered manufacturer and the covered customer agree in writing to the stay. A stay entered under this section may be lifted upon grant of a motion based on a showing that— the action involving the covered manufacturer will not resolve major issues in the suit against the covered customer, such as that a covered product or covered process identified in the motion to lift the stay is not a material part of the claimed invention or inventions in the patent or patents in dispute; or the stay unreasonably prejudices or would be manifestly unjust to the party seeking to lift the stay. In the case of a stay entered under this section based on the participation of the covered manufacturer in a separate action described in subsection (b)(1), a motion under paragraph
(1)may only be granted if the court in such separate action determines that the showing required under paragraph
(1)has been made. If, following the grant of a motion to stay under this section, the covered manufacturer in an action described in subsection (b)(1)— obtains or consents to entry of a consent judgment involving one or more of the issues that gave rise to the stay; or fails to prosecute to a final, non-appealable judgment a final decision as to one or more of the issues that gave rise to the stay, the court may, upon motion, determine that such consent judgment or unappealed final decision shall not be binding on the covered customer with respect to one or more of the issues that gave rise to the stay based on a showing that such an outcome would unreasonably prejudice or be manifestly unjust to the covered customer in light of the circumstances of the case. Nothing in this section shall be construed to limit the ability of a court to grant any stay, expand any stay granted pursuant to this section, or grant any motion to intervene, if otherwise permitted by law. . The table of sections for chapter 29 of title 35, United States Code, is amended by adding at the end the following: 299A. Customer stay. .