If you, your company or your client have a United States patent or a federally-registered trademark, copyright, semiconductor mask work or even a boat hull design and a competitor is importing infringing goods into the United States, a United States International Trade Commission (or ITC) proceeding may provide the protection you need. ITC investigations can also be used with other unfair acts such as common law trademark infringement, false designation of origin, trade secret misappropriation or even a violation of the Digital Millennium Copyright Act.
These proceedings have roots dating back to 1916, when the government created the ITC in Washington, D.C., and specifically, to a Tariff Act of 1930. One of the ITC’s primary mandates has been the protection of domestic industry in the United States. In the past few decades, the Commission has become a forum where United States intellectual property (or IP) owners protect themselves from infringing imports. The applicable statute providing this protection is 19 U.S.C. §1337, and these are called Section 337 investigations. If successful, these investigations can actually result in the U.S. Customs and Border Protection agency turning back the competitor’s infringing products from the borders.
An ITC investigation starts with a complaint which usually includes detailed information about the IP, how it is infringed and the “domestic industry” in the United States that is based upon the IP. The analysis of whether a complainant has enough of a domestic industry involves two prongs: technical and economic. For the technical prong, the complainant must show that it practices or exploits the IP right it seeks to enforce. For example, the complainant sells a product in the United States that is covered by its patent or trademark at issue. For the economic prong, the complainant must show a significant investment in the United States of (a) plant and equipment, (b) labor or capital and/or (c) exploitation of the intellectual property, including engineering, research and development, or licensing of a federally registered IP right. The ITC seems to have been broadening its view of what constitutes a satisfactory domestic industry. A foreign corporation with a United States IP right is a perfectly acceptable complainant so long as it has a domestic industry.
A complaint can list many accused parties or respondents, and often does. Thirty days after the complaint is filed, the Commission must decide whether to initiate an investigation. It usually initiates an investigation and handles service of the respondents. An Administrative Law Judge (ALJ) is assigned and a staff attorney from the ITC’s Office of Unfair Import Investigations is appointed to the investigation. The staff attorney is an independent party who is involved in all aspects of the case and represents the public interest. He or she questions deponents, serves discovery requests and solicits testimony.
The ALJ will set a target date of approximately 12 to 18 months for completion of the investigation, depending on the complexity of the subject matter. In a 12-month case, discovery typically lasts six months and the time for answering interrogatories and producing documents can be as short as a few days. The ALJ’s hearing can take a few days or weeks, but because there is no jury and the rules of evidence (especially hearsay) are relaxed, one can expect a fast-moving trial. There are also no damages awarded by the ITC.
After the hearing, the ALJ usually provides a month for post-hearing briefing and then has about two months to draft an “initial determination”. The ALJ’s determination can be appealed with a petition to the ITC’s Commissioners within 10 days. There are six Commissioners - nominated by the President and confirmed by the Senate. No more than three can be from any one political party. The Commission’s recommendation is forwarded to the President, who has 60 days to disapprove the determination. This is rare, but it has happened. The Commission’s decision may also be appealed to the Federal Circuit within 60 days of the decision. The Commission’s decision and/or Federal Circuit opinion does not have res judicata effect for patents.
With no damages and no res judicata effect, why go to the ITC instead of a federal district court? There are many reasons. The speed of the ITC rivals even the “Rocket Docket” of Virginia. The ALJs are conversant in the nuances of patent law and there is no jury. The variety and strength of the remedies, including an exclusion order, is stronger. The ITC handles service of the notice of investigation. Under the Hague Convention, service with a federal court filing can be a long affair. The ITC also has in rem (over the goods) jurisdiction. This provides nationwide jurisdiction over the infringing articles and witnesses, as opposed to in personam jurisdiction. These are all good reasons why an IP owner should consider this wickedly fast and powerful option.
William P. Atkins is a partner with Pillsbury Winthrop Shaw Pittman LLP in its Washington, D.C., and Mclean, Virginia, offices. He concentrations on IP trial work, including 337 investigations.