,,ii #aagth ,,congress #ast ,session ,s4 #ci ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #be1 #bjba,mr4 ,inhofe introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to ensure the continued strength and leadership of the ,united ,states in the research and development of key technologies for future wireless telecommunications standards and infrastructure by providing additional authority for sanctions against certain foreign entities that pose a threat to national security1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,protecting ,american ,innovation and ,development ,act of #bjba4 #b4 ,addressing threats to national security with respect to wireless communications research and development ,chapter #d of title ,,ii of the ,trade ,expansion ,act of #aifb 7#ai ,u4,s4,c4 #ahfb et seq47 is amended by adding at the end the following3 #bcd4 ,statement of policy ,it is the policy of the ,united ,states-- 7#a7 to ensure the continued strength and leadership of the ,united ,states with respect to the research and development of key technologies for future wireless telecommunications standards and infrastructure2 7#b7 that the national security of the ,united ,states requires the ,united ,states to maintain its leadership in the research and development of key technologies for future wireless telecommunications standards and infrastructure2 and 7#c7 that the national security and foreign policy of the ,united ,states requires that the importation of items that use1 without a license1 a claimed invention protected by a patent that is essential for the implementation of a wireless communications standard and is held by a ,united ,states person1 be controlled to ensure the achievement of the policies described in paragraphs 7#a7 and 7#b74 #bce4 ,list of foreign entities that threaten national security with respect to wireless communications research and development 7a7 ,in general ,the ,secretary of ,commerce 7in this section referred to as the ,secretary7 shall establish and maintain a list of each foreign entity that the ,secretary determines-- 7#a7 7,a7 uses1 without a license1 a claimed invention protected by a patent that is essential for the implementation of a wireless communications standard and is held by a covered person2 and 7,b7 is a person of concern or has as its ultimate parent a person of concern2 or 7#b7 is a successor to an entity described in paragraph 7#a74 7b7 ,watch list 7#a7 ,in general ,the ,secretary shall establish and maintain a watch list of each foreign entity-- 7,a7 7i7 that is a person of concern or has as its ultimate parent a person of concern2 and 7ii7 with respect to which a covered person has made the demonstration described in paragraph 7#b7 in a petition submitted to the ,secretary for the inclusion of the entity on the list2 or 7,b7 that is a successor to an entity described in subparagraph 7,a74 7#b7 ,demonstration described 7,a7 ,in general ,a covered person has made a demonstration described in this paragraph if the person has reasonably demonstrated to the ,secretary that-- 7i7 the person owns at least one unexpired patent that is essential for the implementation of a wireless communications standard2 7ii7 a foreign entity that is a person of concern1 or has as its ultimate parent a person of concern1 has been1 for a period of more than #ahj days1 selling wireless communications devices in or into the ,united ,states1 directly or indirectly1 that are claimed1 labeled1 marketed1 or advertised as complying with that standard2 7iii7 the covered person has offered to the foreign entity or any of its affiliates-- 7,i7 a license to the person's portfolio of patents that are essential to that standard2 or 7,,ii7 to enter into binding arbitration to resolve the terms of such a license2 and 7iv7 the foreign entity has not executed a license agreement or an agreement to enter into such arbitration1 as the case may be1 by the date that is #ahj days after the covered person made such an offer4 7,b7 ,demonstration of essentiality ,a covered person may demonstrate under subparagraph 7,a77i7 that the person owns at least one unexpired patent that is essential for the implementation of a wireless communications standard by providing to the ,secretary any of the following3 7i7 ,a decision by a court or arbitral tribunal that a patent owned by the person is essential for the implementation of that standard4 7ii7 ,a determination by an independent patent evaluator not hired by the person that a patent owned by the person is essential for the implementation of that standard4 7iii7 ,a showing that wireless communications device manufacturers together accounting for a significant portion of the ,united ,states or world market for such devices have entered into agreements for licenses to the person's portfolio of patents that are essential for the implementation of that standard4 7iv7 ,a showing that the person has previously granted licenses to the foreign entity described in subparagraph 7,a77ii7 or any of its affiliates with respect to a reasonably similar portfolio of the person's patents that are essential for the implementation of that standard4 7,c7 ,accounting of wireless communications device market ,a showing described in subparagraph 7,b77iii7 may be made either by including or excluding wireless communications device manufacturers that are persons of concern4 7#c7 ,procedures 7,a7 ,adding a foreign entity to the watch list 7i7 ,in general ,the ,secretary may add a foreign entity to the watch list under paragraph 7#a7 only after notice and opportunity for an agency hearing on the record in accordance with 7except as provided in clause 7ii77 sections #eed through #eeg of title #e1 ,united ,states ,code4 7ii7 ,matters considered at hearing ,an agency hearing conducted under clause 7i7-- 7,i7 shall be limited to consideration of-- 7aa7 whether the demonstration described in paragraph 7#b7 has been reasonably made2 and 7bb7 the amount of bond to be required in accordance with section #bcf2 and 7,,ii7 may not include the presentation or consideration of legal or equitable defenses or counterclaims4 7,b7 ,administrative procedure ,except as provided in subparagraph 7,a71 the functions exercised under this section and section #bcf shall not be subject to sections #eea1 #eec through #eei1 or #gja through #gjf of title #e1 ,united ,states ,code4 7c7 ,movement between lists ,a foreign entity on the watch list required by subsection 7b77#a7 may be moved to the list required by subsection 7a71 pursuant to procedures established by the ,secretary1 on or after the date that is one year after being included on the watch list if the foreign entity is not able to reasonably demonstrate that it has entered into a patent license agreement or a binding arbitration agreement with each covered person that has made the demonstration described in subsection 7b77#b7 with respect to the entity4 7d7 ,removal from lists ,a foreign entity on the list required by subsection 7a7 or on the watch list required by subsection 7b77#a7 may petition the ,secretary to be removed from that list on the basis that the conditions that led to the inclusion of the foreign entity on the list no longer exist4 ,the burden of proof shall be on the foreign entity4 7e7 ,definitions ,in this section3 7#a7 ,affiliate ,the term affiliate1 with respect to an entity1 means any entity that owns or controls1 is owned or controlled by1 or is under common ownership or control with1 the entity4 7#b7 ,country of concern ,the term country of concern means a country with respect to which the ,secretary determines that-- 7,a7 persons in the country persistently use1 without obtaining a license1 patents-- 7i7 essential to the implementation of wireless communications standards2 and 7ii7 held by a covered person2 and 7,b7 that use of patents poses a threat to-- 7i7 the ability of the ,united ,states to maintain a wireless communications research and development infrastructure2 and 7ii7 the national security of the ,united ,states1 pursuant to the policy set forth in section #bcd4 7#c7 ,covered person ,the term covered person means-- 7,a7 a covered ,united ,states person2 or 7,b7 an affiliate of a covered ,united ,states person-- 7i7 headquartered in1 or organized under the laws of1 a country that is a member of the ,european ,union or the ,north ,atlantic ,treaty ,organization2 and 7ii7 engaged in wireless communications research and development4 7#d7 ,covered ,united ,states person ,the term covered ,united ,states person means a ,united ,states person engaged in wireless communications research and development in the ,united ,states4 7#e7 ,person of concern ,the term person of concern means a person that is-- 7,a7 an individual who is a citizen or national 7as defined in section #aja7;a7 of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #aaja7;a777 of a country of concern2 or 7,b7 an entity that is headquartered in1 or organized under the laws of1 a country of concern4 7#f7 ,united states person ,the term ,united ,states person means-- 7,a7 an individual who is a ,united ,states citizen or an alien lawfully admitted for permanent residence to the ,united ,states2 7,b7 an entity organized under the laws of the ,united ,states or any jurisdiction within the ,united ,states1 including a foreign branch of such an entity2 or 7,c7 any person in the ,united ,states4 7#g7 ,wireless communications standard ,the term wireless communications standard means-- 7,a7 a cellular wireless telecommunications standard1 including such a standard promulgated by the #crd ,generation ,partnership ,project 7commonly known as #c;,,gpp7 or the #crd ,generation ,partnership ,project #b 7commonly known as #c;,,gpp#b72 or 7,b7 a wireless local area network standard1 including such a standard designated as ,,ieee #hjb4aa as developed by the ,institute of ,electrical and ,electronics ,engineers 7commonly known as the ,,ieee74 #bcf4 ,import sanctions with respect to certain foreign entities that threaten national security 7a7 ,in general ,any foreign entity on the list required by section #bce7;a7 may be subject to such controls on the importing of goods or technology into the ,united ,states as the ,president may prescribe4 7b7 ,entry under bond 7#a7 ,in general ,unless otherwise prescribed by the ,president1 a product described in paragraph 7#b7 may not enter the ,united ,states except under bond prescribed by the ,secretary of ,commerce in an amount determined by the ,secretary to be sufficient to protect from injury a covered ,united ,states person that made the demonstration described in section #bce7;b77#b7 with respect to the entity that has been selling the product directly or indirectly in or into the ,united ,states4 7#b7 ,products described ,a product described in this paragraph is a wireless communications device-- 7,a7 produced or sold by-- 7i7 a foreign entity on the watch list required by section #bce7;b72 7ii7 a successor of such an entity2 or 7iii7 an affiliate of an entity described in clause 7i7 or 7ii72 and 7,b7 that is claimed1 labeled1 marketed1 or advertised as complying with a wireless communications standard that was the basis for the inclusion of the foreign entity on the watch list4 7c7 ,forfeiture of bond 7#a7 ,in general ,if a foreign entity on the watch list required by section #bce7;b7 is moved to the list required by section #bce7;a7 and becomes subject to controls under subsection 7a71 a bond paid under subsection 7b7 shall be forfeited to a covered ,united ,states person that made the demonstration described in section #bce7;b77#b7 with respect to the entity4 7#b7 ,terms and conditions ,the ,secretary of ,commerce shall prescribe the procedures and any terms or conditions under which bonds will be forfeited under paragraph 7#a74 7d7 ,definitions ,in this section1 the terms affiliate and covered ,united ,states person have the meanings given those terms in section #bce7;d74 4 #c4 ,controls on imports of goods or technology against persons that raise national security concerns ,section #bcc of the ,trade ,expansion ,act of #aifb 7#ai ,u4,s4,c4 #ahfd7 is amended to read as follows3 #bcc4 ,import sanctions for export violations 7a7 ,in general ,a person described in subsection 7b7 may be subject to such controls on the importing of goods or technology into the ,united ,states as the ,president may prescribe4 7b7 ,persons described ,a person described in this subsection is a person that-- 7#a7 violates any national security export control imposed under section #agee of the ,export ,control ,reform ,act of #bjah 7#ej ,u4,s4,c4 #dhad7 or any regulation1 order1 or license issued under that section2 or 7#b7 raises a national security concern under-- 7,a7 section #bce or any regulation1 order1 or license issued under that section2 or 7,b7 the ,export ,control ,reform ,act of #bjah 7#ej ,u4,s4,c4 #dhja et seq47 or any regulation1 order1 or license issued under that ,act4 4