CLEAR Act

Court-Ordered Stays for Retailers and End Users: Under Section 2, a court must grant a motion to stay part of a legal action against a retailer or end user if the manufacturer is a party to the action or a separate action (Section 299A(a)(1)). This provides relief from being directly involved in patent litigation while the manufacturer is being sued.

Protection from Financial Risk: The bill allows for a stay to remain in place unless there is a showing that the manufacturer cannot satisfy a damages judgment (Section s 299A(b)). This helps ensure that the legal process focuses on the primary manufacturer before targeting those further down the supply chain.

Financial Safeguards: The court has the authority to require a bond or escrow if there is a substantial likelihood that a manufacturer will not satisfy a damages judgment (Section 299A(c)). This provides a mechanism to ensure funds are available.

Mandatory Legal Waivers: To receive a stay, a retailer or end user must agree to waive all defenses under section 282(b) for future actions involving the same product from the same manufacturer (Section 299A(a)(3)(A)). This limits their ability to defend themselves in future related legal matters.

Binding Legal Agreements: The retailer or end user must agree to be bound by any issue decided in the action involving the manufacturer (Section 299A(a)(3)(B)) and any injunction issued (Section 299A(a)(4)). This forces them to accept the outcomes of a legal battle they were stayed from participating in.

Requirement for Financial Security: If a court finds a manufacturer is unlikely to pay damages, the retailer or end user may be required to post a bond or place funds/property in escrow (Section 299A(c)). This could create a financial burden or tie up assets for the individual or entity.