[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 148 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 148

  To amend section 337 of the Tariff Act of 1930 and title 28 of the 
United States Code to provide effective procedures to deal with unfair 
 practices in import trade and to conform section 337 and title 28 to 
  the General Agreement on Tariffs and Trade, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             January 21 (legislative day, January 5), 1993

Mr. Rockfeller (for himself, Mr. Hatch, and Mr. Wofford) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
  To amend section 337 of the Tariff Act of 1930 and title 28 of the 
United States Code to provide effective procedures to deal with unfair 
 practices in import trade and to conform section 337 and title 28 to 
  the General Agreement on Tariffs and Trade, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Intellectual Property Protection Act 
of 1993''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) 
        is one of the most important laws available to United States 
        businesses to deal with unfair practices in import trade and to 
        enforce intellectual property rights against infringing 
        imports.
            (2) On November 23, 1988, a panel of the General Agreement 
        on Tariffs and Trade (hereafter in this Act referred to as 
        ``GATT'') found section 337 to be in violation of United States 
        obligations under the GATT, because certain procedures under 
        section 337 did not provide national treatment for imported 
        goods and because some aspects of the procedures were 
        unnecessary for effective compliance with United States patent 
        law.
            (3) On November 7, 1989, the United States allowed adoption 
        of the GATT panel report on section 337, thereby assuming an 
        obligation to reform section 337 to comply with its obligations 
        under the GATT.
            (4) Because of the special difficulties in enforcing 
        intellectual property rights against unfairly traded imports, 
        special enforcement procedures that apply only to imports are 
        necessary to effectively enforce intellectual property rights 
        against infringing imports.
            (5) The GATT allows special enforcement procedures when 
        such procedures are not less favorable than the procedures used 
        against domestic products or such procedures are necessary to 
        secure compliance with copyright, patent, trademark, and mask 
        work registration protection laws or regulations.
            (6) To be effective, such enforcement procedures must 
        establish administrative proceedings which can reach multiple 
        parties in one forum, allow efficient foreign discovery, 
        provide expeditious dispute resolution, and provide border 
        enforcement by the United States Customs Service.
    (b) Purpose.--The purpose of this Act is to conform section 337 of 
the Tariff Act of 1930 and title 28 of the United States Code to the 
provisions of the GATT to ensure that section 337 procedures can reach 
multiple parties in one forum, allow efficient foreign discovery, 
provide expeditious dispute resolution even in the absence of a 
deadline for final determinations, and provide border enforcement of 
determinations.

SEC. 3. AMENDMENT OF SECTION 337 OF THE TARIFF ACT OF 1930.

    (a) Investigation.--Section 337(b) of the Tariff Act of 1930 (19 
U.S.C. 1337(b)) is amended--
            (1) by striking ``; Time Limits'' in the heading;
            (2) in paragraph (1), by striking ``The Commission shall 
        conclude any such investigation'' and all that follows through 
        the end period and inserting the following: ``The Commission 
        shall conclude any such investigation and make its 
        determination under this section at the earliest practicable 
        time after the date of publication of notice of such 
        investigation. To promote expeditious adjudication, the 
        Commission shall, within 30 days of the initiation of an 
        investigation, establish a target date for its final 
        determination.''; and
            (3) by striking the fifth sentence in paragraph (3).
    (b) Determination; Review.--Section 337(c) of such Act is amended--
            (1) by striking ``a settlement agreement'' in the first 
        sentence and inserting ``an agreement between the parties'';
            (2) by striking ``subsection (d) or (e)'' in the second 
        sentence and inserting ``subsection (d), (e), or (f) (and each 
        declaration under subsection (o))''; and
            (3) by striking ``(f), or (g)'' in the fourth sentence and 
        inserting ``(f), (g), or (o)''.
    (c) Exclusion of Articles From Entry.--Section 337(d) of such Act 
is amended by inserting after the first sentence the following new 
sentence: ``No article shall be excluded from entry where the 
Commission determines that the owner, importer, or consignee of the 
article has established a sufficient counterclaim directly related to 
the unfair methods or acts determined by the Commission to exist.''.
    (d) Entry Under Bond.--Section 337(e) of such Act is amended--
            (1) in the last sentence of paragraph (1), by striking 
        ``determined by the Commission'' and all that follows through 
        the end period and inserting: ``prescribed by the Secretary in 
        an amount determined by the Commission to be sufficient to 
        protect the complainant from any injury. If the Commission 
        later determines that the respondent has violated the 
        provisions of this section, the bond may be forfeited to the 
        complainant.'';
            (2) by adding at the end of paragraph (2), the following 
        new sentence: ``If the Commission later determines that the 
        respondent has not violated the provisions of this section, the 
        bond may be forfeited to the respondent.''; and
            (3) by adding at the end thereof the following new 
        paragraph:
            ``(4) The Commission may prescribe the terms and conditions 
        under which bonds may be forfeited under paragraphs (1) and 
        (2).''.
    (e) Cease and Desist Orders.--Section 337(f)(1) of such Act is 
amended--
            (1) by inserting after the first sentence the following new 
        sentence: ``A permanent cease and desist order shall not be 
        issued if the Commission determines that the owner, importer, 
        or consignee of the article has established a sufficient 
        counterclaim directly related to the unfair methods or acts 
        determined by the Commission to exist.''; and
            (2) by adding at the end thereof the following: ``If a 
        temporary cease and desist order is issued in addition to, or, 
        in lieu of, an exclusion order under subsection (e), the 
        Commission may require the complainant to post a bond as a 
        prerequisite to the issuance of an order under this subsection. 
        If the Commission later determines that the respondent has not 
        violated the provisions of this section, the bond may be 
        forfeited to the respondent. The Commission may prescribe the 
        terms and conditions under which bonds may be forfeited under 
        this paragraph.''.
    (f) Conditions Applicable for General Exclusion Orders.--Section 
337(g) of such Act is amended by adding at the end thereof the 
following new paragraph:
            ``(3) The authority of the Commission to issue an exclusion 
        from entry of articles shall be limited to persons determined 
        by the Commission to be violating this section unless the 
        Commission determines that--
                    ``(A) a general exclusion from entry of articles is 
                necessary to prevent circumvention of an exclusion from 
                entry limited to such persons; or
                    ``(B) there is a pattern of violation of this 
                section and it is difficult to identify the persons 
                responsible.''.
    (g) Entry Under Bond After Referral to President.--Section 
337(j)(3) of such Act is amended by striking ``shall be entitled to 
entry under bond'' and all that follows through the end period and 
inserting ``shall, until such determination becomes final, be entitled 
to entry under bond prescribed by the Secretary in an amount determined 
by the Commission to be sufficient to protect the complainant from 
injury. If the determination becomes final, the bond may be forfeited 
to the complainant. The Commission may prescribe the terms and 
conditions under which bonds may be forfeited under this paragraph.''.
    (h) Declaratory Relief.--Section 337 of such Act is amended by 
adding at the end thereof the following new subsection:
    ``(o) Complaint for Declaratory Relief by Owner, Importer, or 
Consignee.--In a case of actual controversy as to the existence of 
unfair methods of competition and unfair acts described in subsection 
(a), upon the filing of a complaint for declaratory relief under oath 
by the owner, importer, or consignee of an imported article (or part 
thereof), the Commission may declare the rights and other legal 
relations of the parties, whether or not further relief is or could be 
sought. A declaration made under this subsection shall have the force 
and effect of a final determination of the Commission and shall be 
reviewable as such. In the case of unfair acts involving the validity 
of patents as described in subsection (a)(1)(B), such a declaration 
shall be only for the purpose of determining whether there is a 
violation of this section and shall not have the effect of claim or 
issue preclusion.''.

SEC. 4. AMENDMENT OF TITLE 28, UNITED STATES CODE.

    (a) In General.--Chapter 111 of title 28, United States Code, is 
amended by adding at the end thereof the following new section:
``Sec. 1659. Stay of certain actions pending disposition of related 
              proceedings before the United States International Trade 
              Commission
    ``(a) Stay.--In a civil action involving parties that are also 
parties to a proceeding before the United States International Trade 
Commission pursuant to section 337 of the Tariff Act of 1930 (19 U.S.C. 
1337), at the request of a party that is a respondent in the proceeding 
before the Commission (other than a respondent to a counterclaim in a 
proceeding for declaratory relief), a district court shall stay, until 
the determination of the Commission becomes final, proceedings in the 
civil action with respect to any claim that involves the same issues 
involved in the proceeding before the Commission.
    ``(b) Use of Commission Record.--After dissolution of a stay under 
subsection (a), portions of the record of the proceeding before the 
United States International Trade Commission that bear on issues in a 
civil action shall be admissible in the civil action, subject to such 
protective order as the district court determines necessary and to the 
extent permitted under the Federal Rules of Evidence and the Federal 
Rules of Civil Procedure.''.
    (b) Clerical Amendment.--The chapter analysis for chapter 111 of 
title 28, United States Code, is amended by adding at the end the 
following new item:

``1659. Stay of certain actions pending disposition of related 
                            proceedings before the United States 
                            International Trade Commission.''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act apply to complaints filed and 
investigations initiated under section 337 of the Tariff Act of 1930 
(19 U.S.C. 1337) after the date of the enactment of this Act.

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