Reps. Lee & Lofgren Introduce Bipartisan Bill to Protect Main Street Businesses

WASHINGTON, D.C. - Today, Congresswoman Laurel Lee (R-FL) and Congresswoman Zoe Lofgren (D-CA) introduced the bipartisan Customer Legal Ease and Relief (CLEAR) Act, legislation to establish a clear, uniform "customer stay" rule across all federal courts. The bill will be considered by the House Committee on the Judiciary.

The CLEAR Actaddresses a growing abuse in patent litigation in which patent assertion entities target small retailers, pharmacies, hospitals, and other end users simply for selling or using products they did not design or manufacture. These lawsuits are frequently used to pressure Main Street businesses into quick settlements, regardless of the merits, due to the high cost and complexity of patent litigation.

"Increasingly, local businesses are being dragged into complex patent disputes over products they did not create and do not control,"said Congresswoman 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."

"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," Rep. Lofgren said. "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. The CLEAR Act brings fairness to the patent litigation process, and I'm proud to help lead this bipartisan legislation."

"For too long, retailers have been caught in the crossfire of patent disputes that have nothing to do with our business operations," said Stephanie Martz, chief administrative officer and general counsel, National Retail Federation. "We simply use and sell products manufactured by others. The CLEAR Act recognizes this reality and ensures that patent disputes are resolved where they belong - with the manufacturers who designed and created the products. This legislation will save countless small retailers from being driven out of business by litigation costs alone."

"We commend Reps. Lee and Lofgren for introducing this bill, which will strengthen the patent system by directing disputes to where they can be most effectively resolved," said Hilary Cain, Senior Vice President of Policy, Alliance for Automotive Innovation."This is a balanced approach to make sure patent disputes involving automotive technology are resolved efficiently with the parties responsible for product design and development."

The Problem

Patent lawsuits are increasingly targeting retailers and end users for selling or using common products-such as Wi-Fi routers or point-of-sale systems-rather than the manufacturers that designed them. These cases are costly, inefficient, and often used to force settlements from businesses that lack the technical expertise and resources to litigate complex patent claims.

What the CLEAR ActDoes

The CLEAR Actcodifies a clear, uniform, nationwide customer stay rule while fully preserving the rights of patent holders. Specifically, the bill:

• Stays litigation against retailers or end users when a manufacturer steps in to defend the patent claims and the customer agrees to be bound by the outcome, including any injunction.
• Protects patent owners by lifting the stay if the manufacturer cannot satisfy a damages judgment and authorizing courts to require a bond where appropriate.
• Allows courts to require stipulations regarding product use and to permit limited discovery so claims against manufacturers can proceed efficiently.
• Establishes clear deadlines to ensure stays are requested early and cannot be used to delay litigation.
• Applies only to true retailers and end users, excluding manufacturers and bad-faith actors.