Representative Laurel Lee (R-FL) has introduced bipartisan legislation establishing a universal "customer stay" rule to protect small businesses in patent litigation.
In a press release, Rep. Lee explained that retailers and other end users, such as hospitals and pharmacies, are increasingly targeted in patent lawsuits for selling or using products they did not manufacture, such as Wi-Fi routers or point-of-sale systems.
Such lawsuits are frequently settled quickly, and at high cost to the end users, a pattern Rep. Lee says is abusive.
Thus, her Customer Legal Ease and Relief (CLEAR) Act establishes a universal "customer stay" rule in all federal courts, meaning litigation can proceed only when the manufacturer cannot satisfy a damages judgment, and authorizes courts to require a bond where appropriate.
Additionally, courts can impose conditions on product use and permit limited discovery (minimal research) to expedite the claims process, set clear stay deadlines, and apply solely to end users and legitimate retailers.
"Increasingly, local businesses are being dragged into complex patent disputes over products they did not create and do not control," said Rep. Lee. "The CLEAR Act is a commonsense, targeted reform that ensures patent disputes are litigated against the right party—the manufacturer—while protecting Main Street businesses in Florida's 15th Congressional District and across the country from predatory lawsuits."
Representative Zoe Lofgren (D-CA), the bill's cosponsor, further commented that "small businesses face enough hurdles as it is." "They don't need to be bogged down with expensive patent lawsuits for using or selling common products that they themselves did not design. It's important that we protect the rights of patent holders, but we also need to ensure that patent disputes are resolved against the correct party," Lofgren added.
Last May, Representative Mike Haridopolos (R-FL) introduced another small business-friendly bill, the Greenlighting Growth Act, which cuts regulations and updates outdated finance reporting laws, addressing an issue arising from the 2012 JOBS Act.
