CLEAR Act
- Bill Number
- H.R. 7140
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Commerce
- Status
- Introduced
- Latest Action
- 2026-01-16: Referred to the House Committee on the Judiciary.
- Last Updated
- 2026-02-12T15:22:35Z
AI-Generated Summary
Purpose
The CLEAR Act (H.R. 7140) aims to shield small retailers and end users from patent infringement lawsuits when they are not the primary creators of the accused product. It promotes fairness in patent litigation by prioritizing actions against manufacturers, reducing the burden on "main street" businesses and consumers who simply sell or use products.
Key Provisions
- Mandatory Stay of Proceedings: In patent infringement cases, courts must grant a stay (a pause) on claims against a retailer or end user if:
- The product's manufacturer is already involved in the same or a related lawsuit over the patent.
- The retailer or end user does not make, assemble, integrate, or modify the product (or its key parts).
- The retailer or end user agrees to waive certain defenses (under existing patent law section 282(b), which covers prior art and other challenges) and be bound by the manufacturer's case outcome, including any final judgment or injunction (a court order to stop certain activities).
- Lifting the Stay: The pause ends if evidence shows the manufacturer cannot pay potential damages.
- Bond or Escrow Requirement: If there's a strong chance the manufacturer won't pay damages, the court may require the retailer or end user to post a bond (a financial guarantee) or place funds/assets in escrow (a secure holding) as security.
- Stipulations and Limited Discovery: Courts can require the retailer or end user to agree on how much they used or sold the product and allow narrow evidence collection on that topic.
- Timing for Filing: Motions for a stay must be filed within six months of key events, such as the first complaint identifying the product, the manufacturer joining the case, or the court's initial scheduling order.
- Court Discretion Preserved: This does not limit judges' ability to issue stays under other rules.
- Definitions:
- Accused instrumentality: The product or process accused of infringing the patent.
- End user: Someone using the product only for its normal, intended purpose without directing its creation.
- Manufacturer: The entity that creates, assembles, supplies, or modifies the product.
- Retailer: A business mainly earning revenue from selling consumer goods/services to the public (or its affiliates, meaning related companies under common control).
The law applies to lawsuits where the complaint is served after its enactment date.
Significant Changes to Existing Law
This bill adds a new section (299A) to Chapter 29 of U.S. patent law (Title 35 of the U.S. Code), which previously lacked specific protections for retailers and end users in multi-party infringement suits. It introduces a mandatory stay mechanism, shifting focus from secondary parties to manufacturers, and requires binding agreements on case outcomes—changes not present in current law, which allows patent holders to sue anyone in the supply chain without such pauses or constraints.
Potential Impacts
- On Citizens and Businesses: Small retailers and end users (e.g., local stores or consumers using everyday products like electronics) face fewer lawsuits and lower legal costs, potentially reducing prices passed on to buyers. It discourages "patent trolling" (frivolous suits by non-practicing entities seeking quick settlements).
- On Government Agencies and Courts: Federal courts may see streamlined dockets with fewer parallel cases, easing judicial workload in patent disputes. No direct impact on agencies like the U.S. Patent and Trademark Office, but it could indirectly affect patent enforcement patterns.
- On International Relations: Minimal direct effects, though it might influence how foreign manufacturers handle U.S. patent risks, possibly encouraging more U.S.-based production or licensing to avoid secondary suits.
Main Stakeholders Affected
- Retailers and End Users: Primary beneficiaries, protected from costly litigation.
- Manufacturers: Gain as primary targets but may face increased pressure to defend products; must ensure they can cover damages to keep stays in place.
- Patent Holders: Plaintiffs (e.g., inventors or companies) may need to sue manufacturers first, potentially complicating enforcement but reducing scattershot lawsuits.
- Courts and Legal System: Handle stay motions and related hearings, promoting efficiency.
Notable Legal, Constitutional, or Political Implications
- Legal: Enhances efficiency in patent law by consolidating related claims, reducing duplicative litigation and forum-shopping (choosing favorable courts). It balances intellectual property rights with protections against abusive suits, without altering core patent validity rules.
- Constitutional: No apparent conflicts with U.S. Constitution provisions like due process or property rights in patents; the stay is procedural and includes safeguards like bonds to protect plaintiffs' interests.
- Political: Supports pro-small business agendas by targeting patent abuse, potentially appealing to bipartisan interests in innovation and economic relief, though patent holders may view it as weakening enforcement incentives.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2026-01-16: Referred to the House Committee on the Judiciary.
- 2026-01-16: Introduced in House
- 2026-01-16: Introduced in House
Bill Versions
- Customer Legal Ease and Relief Act — issued 2026-01-16 — PDF (5 pages)