Advancing American Innovation Act
- Sponsor
- Rep. Schweikert, David [R-AZ-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Sep 1, 2026
Bottom line
This bill aims to focus ITC resources on protecting genuine domestic industries and enhance transparency in patent infringement cases by requiring disclosure of third-party litigation funders.
What it actually does
The Advancing American Innovation Act amends Section 337 of the Tariff Act of 1930, which governs U.S. International Trade Commission (ITC) investigations into unfair import practices. It refines the definition of "domestic industry" to require substantial investment in licensing activities that lead to product adoption and development in the U.S., and mandates expedited fact-finding for dispositive issues in ITC cases. Additionally, the bill introduces new transparency requirements for third-party litigation funding in patent infringement proceedings before the ITC, requiring disclosure of funder identities and funding agreements.
Proponents argue
Supporters argue that the bill will prevent "patent trolls" or entities primarily engaged in passive licensing from leveraging ITC resources, thereby ensuring the Commission's focus remains on protecting actual U.S. manufacturing and innovation. They also contend that increased transparency in litigation funding will reduce abusive litigation practices, ensure fairness in proceedings, and provide crucial information to all parties.
Opponents contend
Critics might argue that the changes to the "domestic industry" definition could make it harder for certain innovative companies, particularly those with strong R&D but outsourced manufacturing or licensing-heavy business models, to seek protection from unfair import practices. They might also contend that mandating disclosure of third-party funding could deter legitimate investments in litigation, potentially disadvantaging smaller innovators against larger infringers by revealing strategic financial arrangements.
The bill is concise, making it accessible for a reader to understand its core changes within a reasonable timeframe.
Section 2(b)(1)(A)(iii) amending 19 U.S.C. 1337(a)(3)(D)
Refined Definition of Domestic Industry for Licensing Activities
This provision adds a new criterion for establishing a domestic industry, requiring "substantial investment in licensing activities that leads to the adoption and development of articles that incorporate the patent, copyright, trademark, mask work, or design." This means that merely licensing intellectual property is no longer sufficient; the licensing must actively contribute to the development and adoption of products.
Supporters argue
Supporters argue this ensures the ITC protects genuine domestic industries that contribute to the U.S. economy through product development and adoption, rather than entities whose primary business is litigation or passive licensing without tangible domestic output.
Critics contend
Critics might argue this could disadvantage legitimate innovators who license their technology to others for development, especially if they are small entities without the capacity for extensive product development themselves, potentially narrowing access to ITC protection.
Tradeoffs
Balances the desire to protect active domestic innovation against ensuring broad access to intellectual property enforcement for all types of innovators, including those with licensing-focused business models.
Section 2(b)(1)(C) inserting 19 U.S.C. 1337(a)(4)
Restriction on Relying on Licensee Activities for Domestic Industry
This new paragraph specifies that a complainant cannot rely on activities by its licensees to establish a domestic industry unless the license leads to the adoption and development of articles incorporating the intellectual property for sale in the United States. This further reinforces the focus on tangible U.S. economic activity.
Section 2(b)(2)(B) adding 19 U.S.C. 1337(b)(4)
Expedited Initial Determination on Dispositive Issues
This provision mandates the ITC to identify dispositive issues early in an investigation and direct the Administrative Law Judge (ALJ) to issue an initial determination on that issue within 100 days. This determination would stay the investigation pending Commission action, potentially shortening the overall process.
Section 2(b)(3), (4), (5), (6), (7) amending 19 U.S.C. 1337(c), (d)(1), (e)(1), (f)(1), (g)(1)
Enhanced Public Interest Review for Exclusion Orders and Cease and Desist Orders
These amendments consistently integrate and emphasize public interest considerations throughout the ITC's decision-making process for various remedies. The Commission must consider "the public health and welfare, the United States economy (including competitive conditions), the production of like or directly competitive articles in the United States by the complainant and its licensees, and United States consumers" before issuing remedies. It also allows the Commission to terminate an investigation if exclusion would not be in the public interest.
Section 3(a) adding 19 U.S.C. 1337(o)
Mandatory Disclosure of Third-Party Litigation Funders
This new subsection requires complainants in patent infringement proceedings before the ITC to disclose the identity and address of any third-party funder, and to provide the funding agreement for inspection and copying by other named parties. Disclosures must be made promptly and kept updated, with sanctions for non-compliance. A "third party funder" is broadly defined as an entity providing value for a contingent financial interest or holding a 5% or more equity stake in such an entity.
If a person's activities are relied upon to qualify as a domestic industry, that person must formally join the complaint under oath. This ensures formal commitment and accountability from entities whose activities form the basis of a domestic industry claim.
Section 2(b)(2)(A) amending 19 U.S.C. 1337(b)(1)
Why it matters:This is likely standard legislative practice for refining procedural requirements within an existing statute. It's a technical amendment to ensure accountability and integrity in domestic industry claims.
Case for: Supporters argue it adds a layer of verification and accountability, ensuring that claims of domestic industry are genuinely supported by the entities involved and preventing misrepresentation.
Case against: No significant opposition is typically raised against procedural requirements that enhance accountability, provided they do not create undue burdens or significantly alter the substantive rights of parties.
Estimated impact: Minor procedural impact, but ensures greater integrity and formal commitment in domestic industry claims, potentially reducing the likelihood of unsubstantiated claims.
The bill broadly defines "third party funder" to include any entity providing value for a contingent financial interest or holding a 5% or more equity stake in such an entity. It also specifies that the entire funding agreement, not just the identity of the funder, must be disclosed for inspection and copying.
Section 3(a) adding 19 U.S.C. 1337(o)(5) and 1337(o)(1)(B)
Why it matters:Definitions and detailed scope are often placed at the end of sections or in nested clauses, which is common legislative drafting. However, the breadth of this definition and the requirement for full agreement disclosure are substantively significant.
Case for: Proponents argue that a broad definition and full disclosure are necessary to achieve true transparency and prevent circumvention of the rules, allowing parties to fully understand the financial interests and motivations at play in a proceeding.
Case against: Critics might argue that such a broad definition and full disclosure could be overly intrusive, revealing proprietary business information of funders and potentially chilling legitimate funding activities by exposing sensitive financial strategies.
Estimated impact: Significant impact on the litigation funding industry and complainants using such funding, potentially altering the landscape of ITC patent infringement cases by increasing compliance burdens and reducing privacy.