United States: Default Determination Highlights The Importance Of Alleging Every Element

Last Updated: July 11 2017
Article by Jones Day

A recent ITC decision, stemming from a default initial determination, underscores the importance of alleging every element in a complaint.  19 U.S.C. § 1337(g)(l) provides that the Commission, when making a determination on exclusion for a defaulting respondent, "shall presume the facts alleged in the complaint to be true."  Those allegations, however, must still show that the respondent violated Section 337.  In Certain Carbon Spine Board Devices, Inv. No. 337-TA-1008, the ITC investigated Complainant Laerdal's allegations of section 337 violations based on the infringement of certain U.S. patents, copyrights, trade dresses and trademarks.  The ITC determined to issue a limited exclusion order to some, but not all of the respondents, and a cease and desist order to one respondent.  But the Commission also found that certain of Laerdal's allegations relating to trade dress and copyright infringement were not adequately plead to support a violation of Section 337 which reduced the scope of the granted remedy.

Case Summary

Complainant filed an amended complaint on May 19, 2016, alleging Section 337 violations.  All respondents were served with a copy of the amended complaint and the notice of investigation, but none responded.  The ALJ issued an initial determination on November 21, 2016, finding all respondents in default pursuant to Commission Rules 210.16 and 210.17.  The ITC reviewed the initial determination as well as Complainant's allegations regarding its patent, copyright,  trademark, and trade dress misappropriation claims.  The Commission agreed that all Respondents were in default, and, pursuant to § 1337(g)(l), presumed all facts alleged in the complaint were true.  The Commission determined that remedies for the patent and trademark infringement allegations were appropriate, but that Complainant did not adequately allege facts to support a violation for its copyright and trade dress claims.

The Commission found Complainant alleged sufficient facts to establish patent infringement (covering the method of adjusting a cervical collar) and the trademark infringement (covering the use of the "Pocket Mask" mark in CPR devices).  For the patent claim, the Commission presumed true that several respondents induced infringement of the claim by selling cervical collars with instructions to use the cervical collar in an infringing manner.  With respect to the trademark claim, the Commission accepted evidence that respondents were selling products under the "Pocket Mask" brand.  These facts established a Section 337 violation.

In contrast, the Commission found Complainant did not allege sufficient facts to show a infringement of copyrights covering product catalogues because it did not show how respondents' sales constituted infringement.  Further, the Commission stated the alleged articles were useful, hence only their features that would be copyrightable when separated from the article were subject to copyright protection.  Complainant failed to identify such features.  The Commission also held that Complainant failed to plead facts showing how the respondents' creation of catalogues using images of their own products constituted infringement of the registered copyrights.  Finally, the Commission noted that Complainant failed to claim a domestic industry in the catalogues protected by the copyrights, despite the § 337(a)(3) requirement that a complainant show investment in the copyrighted articles.  Complainant alleged protection but did not allege investments with respect to those catalogues.  The Commission held, even presuming the pleaded facts were true, Complainant failed to show that any respondent violated Section 337 with respect to the registered copyrights.

With respect to the allegations of trade dress infringement, the Commission held that Complainant again failed to show that any respondent violated section 337.  A section 337 trade dress infringement violation requires a showing that the infringement has the effect or threat of substantially injuring or preventing the establishment of a domestic industry.  Complainant failed to plead it suffered the requisite harm to support such a finding.  Additionally, the Commission stated Complainant failed to allege a protectable trade dress because the alleged trade dresses were vague and "without limitation."  Finally, the Commission found Complainant did not plead sufficient facts to show its asserted trade dresses were not functional, despite having the burden to do so under the Lanham Act.  The Commission noted, even accepting all the facts in the complaint as true, that Complainant made a legal conclusion unsupported by facts in asserting its products "utilize non-functional trade dress."


This case highlights the importance of alleging every legal element in an ITC complaint.  Limited allegations that do not support a violation of Section 337 may limit the requested remedy in the event of a default determination.

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.

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