Your competition is infringing your patent rights and you want to take some action to protect your rights. You are aware that patent litigation in a federal district court isn’t necessarily streamlined and can get bogged down in procedural skirmishes that are unrelated to the underlying substantive issues of infringement and validity. You also know that your competition’s products arise from international trade. Here is what you need to know about using the United States International Trade Commission (ITC) to enforce your U.S. patent rights.
The ITC and Section 337. The ITC is an independent, quasi-judicial federal agency that can take action against certain unfair trade practices such as patent infringement. In response to a complaint by a patent enforcer or on its own initiative, the ITC determines (under section 337, Tariff Act of 1930, Investigations of Unfair Practices in Import Trade) whether there is patent infringement in the importation of products into, or their subsequent sale in, the United States. A section 337 investigation requires formal evidentiary hearings held before an administrative law judge. If a violation is found, the ITC may issue an order excluding the infringing products from entry into the United States and/or directing the infringer to cease and desist from certain actions. The ITC investigation process has many characteristics in common with patent infringement litigation in federal district court, but there also are important differences.
A section 337 action can be used to exclude infringing products from entry into the United States. Where infringement is shown, injury need not be shown to establish a violation of section 337. The ITC cannot award money damages, however. To obtain such damages, the patent owner must file a separate action in federal district court. Also, the ITC will not consider so-called paper patents; section 337 requires proof that there is an industry in the United States relating in some manner to the products at issue, and that a patent owner itself or its licensee is practicing at least one claim of the asserted patent.
Advantages for the Patent Enforcer. The ITC is relatively speedy: the judge usually calls for completion of the investigation in 12-18 months. The reach of the ITC is extensive: the ITC has nationwide jurisdiction over accused infringers and products, and can even require foreign plant inspections for discovery. There are no juries, and the ITC’s judges are highly experienced in patent matters. Upon conclusion of the investigation, the ITC record becomes available for use in patent litigation in federal district court.
Disadvantages for the Patent Enforcer. The patent enforcer must lay out its case extensively right at the beginning, and may incur high initial legal fees due to the fast-paced, highly concentrated nature of an ITC investigation. A separate district court trial is required to recover damages, and the accused infringer can stay such proceedings until conclusion of the ITC’s investigation. Also, the President of the United States can reject an ITC exclusion order within 60 days on policy grounds.
Basic Procedure and Timing. A typical section 337 investigation has a schedule that is highly expedited relative to district court litigation. The patent owner commences a 337 action by filing a complaint with the ITC. Within 30 days, the ITC determines whether an investigation should be instituted. Upon institution of an investigation, the ITC serves the complaint and the notice of investigation on the accused infringer and the embassy in Washington, D.C. or the government of the foreign country represented by the accused infringer. The accused infringer has 20 days from the date of service to file a written response. (However, this may be shortened to 10 days if the investigation involves a motion for temporary relief.) The patent enforcer may move for a summary determination at any time after 20 days following the date of service. Within 45 days after institution of the investigation, the ITC sets a target date for completion of the investigation such as 15 months after institution. The ITC judge makes an initial determination three to four months before the target date, and the initial determination becomes official 45 days later. Fourteen days are allowed for reconsideration. If the President does not disapprove the official determination within 60 days, the determination becomes final.
Detailed Complaint and Response. The patent owner’s complaint must contain a statement of the facts constituting the alleged violation, a description of specific instances of alleged unlawful importations or sales, a brief summary of any court or agency litigation for the alleged violation, and a description of the relevant domestic industry and relevant operations of any licensees. The domestic industry description must recite significant investment in plant and equipment, or significant employment of labor or capital, or substantial investment in the exploitation of the subject patent including engineering, research and development, or licensing. The complaint also must include a description of the patent enforcer’s business and its interests in the relevant domestic industry, a showing that the patent enforcer is the owner or exclusive licensee of the subject patent, a certified copy of the patent, a certified copy of each assignment of the patent, a certified copy of the patent’s prosecution history, and an identification of each licensee under the patent. The complaint also must list each foreign patent and each pending and denied patent application corresponding to the patent, with an indication of the prosecution status of each such foreign patent application, and further include a nontechnical description of the invention of the patent, a reference to the specific claims in the patent that allegedly cover the article imported or sold by the accused infringer, and a showing that the accused infringer is importing or selling the article covered by the patent.
The accused infringer’s written response must contain a response to each allegation in the complaint and in the notice of investigation, a concise statement of the facts constituting each ground of defense, and a specific admission, denial, or explanation of each fact alleged in the complaint and notice. The response also must include statistical data on the quantity and value of imports of the involved article, the Harmonized Tariff Schedule item number for importations of the accused imports, a statement concerning the accused infringer’s capacity to produce the subject article and the relative significance of the U.S. market to its operations, and the name and address of the supplier of the accused imports. A showing of noncoverage must be provided in the response for each involved claim in the patent including visual representations of the accused imports, and the response must supply the basis for any assertion of patent invalidity or unenforceability.
Some Section 337 Examples. In response to a Cirrus Logic complaint filed in October 2003, the ITC investigated Wolfson Microelectronics for alleged patent infringement in digital-to-analog converters originating in the United Kingdom. Another ITC investigation was instituted after American Biophysics filed a complaint in August 2003 against Blue Rhino’s insect traps from China. The ITC also investigated Skylink Technologies’ garage door opener transmitters from Hong Kong and Canada after a July 2003 complaint filed by The Chamberlain Group alleging patent infringement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
