PACED Act

II Calendar No. 129 116TH CONGRESS 1ST SESSION S. 440 To amend title 35, United States Code, to provide that a patent owner may not assert sovereign immunity as a defense in certain actions before the United States Patent and Trademark Office, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 12, 2019 Mr. COTTON (for himself, Ms. ERNST, and Mr. TOOMEY) introduced the fol- lowing bill; which was read twice and referred to the Committee on the Judiciary JUNE 28 (legislative day, JUNE 27), 2019 Reported by Mr. GRAHAM, with an amendment [Strike out all after the enacting clause and insert the part printed in italic] A BILL To amend title 35, United States Code, to provide that a patent owner may not assert sovereign immunity as a defense in certain actions before the United States Patent and Trademark Office, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 440 RS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Preserving Access to 2 Cost Effective Drugs Act’’ or the ‘‘PACED Act’’. 3 SEC. 2. ABROGATION OF SOVEREIGN IMMUNITY. 4 (a) IN GENERAL.—Title 35, United States Code, is 5 amended— 6 (1) in section 135, by adding at the end the fol- 7 lowing: 8 ‘‘(g) SOVEREIGN IMMUNITY.— 9 ‘‘(1) DEFINITIONS.—In this subsection— 10 ‘‘(A) the term ‘foreign state’ has the mean- 11 ing given the term in section 1603(a) of title 12 28; and 13 ‘‘(B) the term ‘Indian tribe’ has the mean- 14 ing given the term in section 4(e) of the Indian 15 Self-Determination and Education Assistance 16 Act (25 U.S.C. 5304(e)). 17 ‘‘(2) ABROGATION OF SOVEREIGN IMMUNITY.— 18 Except as provided in paragraph (3), and subject to 19 paragraph (4), a patent owner may not assert sov- 20 ereign immunity, including the sovereign immunity 21 accorded to an Indian tribe, as a defense in— 22 ‘‘(A) a derivation proceeding instituted 23 under subsection (a); or 24 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 440 RS ‘‘(B) a review by a court of the United 1 States with respect to a decision reached in a 2 proceeding described in subparagraph (A). 3 ‘‘(3) IMMUNITY OF FOREIGN STATES.—If a pat- 4 ent owner is a foreign state, for the purposes of any 5 proceeding described in paragraph (2)(A), the Pat- 6 ent Trial and Appeal Board shall determine whether 7 the patent owner is immune from the jurisdiction of 8 the Patent Trial and Appeal Board, in accordance 9 with chapter 97 of title 28 as if the Patent Trial and 10 Appeal Board were a court of the United States. 11 ‘‘(4) LIMITATION.—This subsection shall apply 12 only to the extent permitted under the 11th amend- 13 ment to the Constitution of the United States.’’; 14 (2) in section 296— 15 (A) in the section heading, by striking 16 ‘‘and State officials’’ and inserting ‘‘, 17 State officials, and Indian tribes’’; and 18 (B) by adding at the end the following: 19 ‘‘(c) ABROGATION OF TRIBAL SOVEREIGN IMMU- 20 NITY.— 21 ‘‘(1) DEFINITIONS.—In this subsection— 22 ‘‘(A) the term ‘covered claim’ means any 23 claim, counterclaim, or third-party claim that 24 arises under— 25 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 440 RS ‘‘(i) this title relating to infringement 1 of a patent; or 2 ‘‘(ii) section 351 of the Public Health 3 Service Act (42 U.S.C. 262); and 4 ‘‘(B) the term ‘Indian tribe’ has the mean- 5 ing given the term in section 4(e) of the Indian 6 Self-Determination and Education Assistance 7 Act (25 U.S.C. 5304(e)). 8 ‘‘(2) ABROGATION.—In any action that involves 9 a covered claim that is otherwise within the jurisdic- 10 tion of a court of the United States, an Indian tribe 11 may not assert sovereign immunity as a defense.’’; 12 (3) in section 305— 13 (A) in the first sentence, by striking ‘‘After 14 the’’ and inserting the following: 15 ‘‘(a) IN GENERAL.—After the’’; and 16 (B) by adding at the end the following: 17 ‘‘(b) SOVEREIGN IMMUNITY.— 18 ‘‘(1) DEFINITIONS.—In this subsection— 19 ‘‘(A) the term ‘foreign state’ has the mean- 20 ing given the term in section 1603(a) of title 21 28; and 22 ‘‘(B) the term ‘Indian tribe’ has the mean- 23 ing given the term in section 4(e) of the Indian 24 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 440 RS Self-Determination and Education Assistance 1 Act (25 U.S.C. 5304(e)). 2 ‘‘(2) ABROGATION OF SOVEREIGN IMMUNITY.— 3 Except as provided in paragraph (3), and subject to 4 paragraph (4), a patent owner may not assert sov- 5 ereign immunity, including the sovereign immunity 6 accorded to an Indian tribe, as a defense in— 7 ‘‘(A) any reexamination proceeding under 8 this section, including any appeal to the Patent 9 Trial and Appeal Board; or 10 ‘‘(B) a review by a court of the United 11 States with respect to a decision reached in a 12 proceeding described in subparagraph (A). 13 ‘‘(3) IMMUNITY OF FOREIGN STATES.—If a pat- 14 ent owner is a foreign state, for the purposes of any 15 proceeding described in paragraph (2)(A), the Office 16 or the Patent Trial and Appeal Board, as applicable, 17 shall determine whether the patent owner is immune 18 from the jurisdiction of the Office or the Patent 19 Trial and Appeal Board, as applicable, in accordance 20 with chapter 97 of title 28 as if the Office or the 21 Patent Trial and Appeal Board, as applicable, were 22 a court of the United States. 23 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 440 RS ‘‘(4) LIMITATION.—This subsection shall apply 1 only to the extent permitted under the 11th amend- 2 ment to the Constitution of the United States.’’; 3 (4) in section 316, by adding at the end the fol- 4 lowing: 5 ‘‘(f) SOVEREIGN IMMUNITY.— 6 ‘‘(1) DEFINITIONS.—In this subsection— 7 ‘‘(A) the term ‘foreign state’ has the mean- 8 ing given the term in section 1603(a) of title 9 28; and 10 ‘‘(B) the term ‘Indian tribe’ has the mean- 11 ing given the term in section 4(e) of the Indian 12 Self-Determination and Education Assistance 13 Act (25 U.S.C. 5304(e)). 14 ‘‘(2) ABROGATION OF SOVEREIGN IMMUNITY.— 15 Except as provided in paragraph (3), and subject to 16 paragraph (4), a patent owner may not assert sov- 17 ereign immunity, including the sovereign immunity 18 accorded to an Indian tribe, as a defense in— 19 ‘‘(A) an inter partes review instituted 20 under this chapter; or 21 ‘‘(B) a review by a court of the United 22 States with respect to a decision reached in a 23 proceeding described in subparagraph (A). 24 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 440 RS ‘‘(3) IMMUNITY OF FOREIGN STATES.—If a pat- 1 ent owner is a foreign state, for the purposes of any 2 review described in paragraph (2)(A), the Patent 3 Trial and Appeal Board shall determine whether the 4 patent owner is immune from the jurisdiction of the 5 Patent Trial and Appeal Board, in accordance with 6 chapter 97 of title 28 as if the Patent Trial and Ap- 7 peal Board were a court of the United States. 8 ‘‘(4) LIMITATION.—This subsection shall apply 9 only to the extent permitted under the 11th amend- 10 ment to the Constitution of the United States.’’; and 11 (5) in section 326, by adding at the end the fol- 12 lowing: 13 ‘‘(f) SOVEREIGN IMMUNITY.— 14 ‘‘(1) DEFINITIONS.—In this subsection— 15 ‘‘(A) the term ‘foreign state’ has the mean- 16 ing given the term in section 1603(a) of title 17 28; and 18 ‘‘(B) the term ‘Indian tribe’ has the mean- 19 ing given the term in section 4(e) of the Indian 20 Self-Determination and Education Assistance 21 Act (25 U.S.C. 5304(e)). 22 ‘‘(2) ABROGATION OF SOVEREIGN IMMUNITY.— 23 Except as provided in paragraph (3), and subject to 24 paragraph (4), a patent owner may not assert sov- 25 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 440 RS ereign immunity, including the sovereign immunity 1 accorded to an Indian tribe, as a defense in— 2 ‘‘(A) a post-grant review instituted under 3 this chapter; or 4 ‘‘(B) a review by a court of the United 5 States with respect to a decision reached in a 6 proceeding described in subparagraph (A). 7 ‘‘(3) IMMUNITY OF FOREIGN STATES.—If a pat- 8 ent owner is a foreign state, for the purposes of any 9 review described in paragraph (2)(A), the Patent 10 Trial and Appeal Board shall determine whether the 11 patent owner is immune from the jurisdiction of the 12 Patent Trial and Appeal Board, in accordance with 13 chapter 97 of title 28 as if the Patent Trial and Ap- 14 peal Board were a court of the United States. 15 ‘‘(4) LIMITATION.—This subsection shall apply 16 only to the extent permitted under the 11th amend- 17 ment to the Constitution of the United States.’’. 18 (b) AMENDMENTS TO THE TARIFF ACT OF 1930.— 19 Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) 20 is amended by adding at the end the following: 21 ‘‘(o) ABROGATION OF TRIBAL SOVEREIGN IMMU- 22 NITY.— 23 ‘‘(1) DEFINITIONS.—In this subsection— 24 ‘‘(A) the term ‘covered person’— 25 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6401 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 440 RS ‘‘(i) means a person; and 1 ‘‘(ii) includes— 2 ‘‘(I) an Indian tribe; and 3 ‘‘(II) any other person that 4 claims immunity on account of the 5 sovereign status of an Indian tribe; 6 and 7 ‘‘(B) the term ‘Indian tribe’ has the mean- 8 ing given the term in section 4(e) of the Indian 9 Self-Determination and Education Assistance 10 Act (25 U.S.C. 5304(e)). 11 ‘‘(2) ABROGATION.—In any proceeding under 12 this section, no covered person may assert as a de- 13 fense the sovereign immunity that is accorded to an 14 Indian tribe.’’. 15 (c) TECHNICAL AND CONFORMING AMENDMENT.— 16 The table of sections for chapter 29 of title 35, United 17 States Code, is amended by striking the item relating to 18 section 296 and inserting the following: 19 ‘‘296. Liability of States, instrumentalities of States, State officials, and Indian tribes for infringement of patents.’’. SECTION 1. SHORT TITLE. 20 This Act may be cited as the ‘‘Preserving Access to Cost 21 Effective Drugs Act’’ or the ‘‘PACED Act’’. 22 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 440 RS SEC. 2. ABROGATION OF SOVEREIGN IMMUNITY. 1 (a) IN GENERAL.—Title 35, United States Code, is 2 amended— 3 (1) in section 135, by adding at the end the fol- 4 lowing: 5 ‘‘(g) SOVEREIGN IMMUNITY.— 6 ‘‘(1) DEFINITIONS.—In this subsection— 7 ‘‘(A) the term ‘foreign state’ has the mean- 8 ing given the term in section 1603(a) of title 28; 9 and 10 ‘‘(B) the term ‘Indian tribe’ has the mean- 11 ing given the term in section 4(e) of the Indian 12 Self-Determination and Education Assistance 13 Act (25 U.S.C. 5304(e)). 14 ‘‘(2) ABROGATION OF SOVEREIGN IMMUNITY.— 15 Except as provided in paragraph (3), and subject to 16 paragraph (4), a patent owner may not assert sov- 17 ereign immunity, including the sovereign immunity 18 accorded to an Indian tribe, as a defense in— 19 ‘‘(A) a derivation proceeding instituted 20 under subsection (a); or 21 ‘‘(B) a review by a court of the United 22 States with respect to a decision reached in a 23 proceeding described in subparagraph (A). 24 ‘‘(3) IMMUNITY OF FOREIGN STATES.—If a pat- 25 ent owner is a foreign state, for the purposes of any 26 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 440 RS proceeding described in paragraph (2)(A), the Patent 1 Trial and Appeal Board shall determine whether the 2 patent owner is immune from the jurisdiction of the 3 Patent Trial and Appeal Board, in accordance with 4 chapter 97 of title 28 as if the Patent Trial and Ap- 5 peal Board were a court of the United States. 6 ‘‘(4) LIMITATION.—This subsection— 7 ‘‘(A) shall apply only to the extent per- 8 mitted under the 11th amendment to the Con- 9 stitution of the United States; and 10 ‘‘(B) shall not apply with respect to— 11 ‘‘(i) any State of the United States; or 12 ‘‘(ii) any institution of higher edu- 13 cation, as defined in section 101 of the 14 Higher Education Act of 1965 (20 U.S.C. 15 1001), that is a public institution in a 16 State of the United States.’’; 17 (2) in section 296— 18 (A) in the section heading, by striking 19 ‘‘and State officials’’ and inserting ‘‘, 20 State officials, and Indian tribes’’; and 21 (B) by adding at the end the following: 22 ‘‘(c) ABROGATION OF TRIBAL SOVEREIGN IMMU- 23 NITY.— 24 ‘‘(1) DEFINITIONS.—In this subsection— 25 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 440 RS ‘‘(A) the term ‘covered claim’ means any 1 claim, counterclaim, or third-party claim that 2 arises under— 3 ‘‘(i) this title relating to infringement 4 of a patent; or 5 ‘‘(ii) section 351 of the Public Health 6 Service Act (42 U.S.C. 262); and 7 ‘‘(B) the term ‘Indian tribe’ has the mean- 8 ing given the term in section 4(e) of the Indian 9 Self-Determination and Education Assistance 10 Act (25 U.S.C. 5304(e)). 11 ‘‘(2) ABROGATION.—In any action that involves 12 a covered claim that is otherwise within the jurisdic- 13 tion of a court of the United States, an Indian tribe 14 may not assert sovereign immunity as a defense.’’; 15 (3) in section 305— 16 (A) in the first sentence, by striking ‘‘After 17 the’’ and inserting the following: 18 ‘‘(a) IN GENERAL.—After the’’; and 19 (B) by adding at the end the following: 20 ‘‘(b) SOVEREIGN IMMUNITY.— 21 ‘‘(1) DEFINITIONS.—In this subsection— 22 ‘‘(A) the term ‘foreign state’ has the mean- 23 ing given the term in section 1603(a) of title 28; 24 and 25 VerDate Sep 11 2014 21:06 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6203 E:\BILLS\S440.RS S440 pamtmann on DSKBFK8HB2PROD with BILLS 13 •S 440 RS ‘‘(B) the term ‘Indian tribe’ has the mean- 1 ing given the term in section 4(e) of the Indian 2 Self-Determination [Text truncated for display. Full text available on Congress.gov.]