United States: Unpacking The Latest ITC Trends: Part 2

Last Updated: October 4 2019
Article by Elizabeth A. DiMarco and Gregory F. Corbett

In part one of this two-part series, we discussed the latest U.S. International Trade Commission developments involving Patent Trial and Appeal Board proceedings, the public interest and importation. In part two, we will examine ITC developments on domestic industry, as well as recent ITC decisions from the U.S. Court of Appeals for the Federal Circuit and their practical impact, if any, on Section 337 practice.

Developments on the Domestic Industry Requirement

Last month, the commission declined to consider post-complaint domestic industry activities in an investigation where the complainant had asserted that a domestic industry was in the process of being established.1 The commission determined that the “small number” of products — 70 units in total — produced after the filing date did not constitute a significant and unusual development. It also rejected the complainant’s reliance on “the alleged complexity” of the manufacturing process, noting that such an argument “could be made in any investigation.” The commission concluded that the circumstances did not warrant “departing from the general rule that the domestic industry is assessed at the time of the filing of the complaint.”

In a different investigation, the commission confirmed that a 5-year-old investment was quantitatively significant for purposes of establishing the domestic industry requirement.2 There, the complainant submitted domestic industry evidence of current and ongoing investments into service and labor and five-plus-year-old evidence of multimillion-dollar investments in research and development. The administrative law judge found that the service labor revenue alone was “not quantitatively significant” and did not satisfy the economic industry requirement.3

However, the ALJ found that research and development investments made five years earlier covered a product feature that embodied the claimed invention. The prior investments were relevant because the complainant continued to make “qualifying investments” into field service even though the very same service investments were not “significant enough to substantiate a domestic industry on their own.” The commission determined not to review any issues related to domestic industry and those findings became part of its final determination.

The Federal Circuit affirmed, explaining that “nothing in the statutory language” supports a “bright line rule for rejecting research expenditures that are made more than five years earlier.”4

Practice Tips and Takeaways

Even when demonstrating that a domestic industry is in the process of being established, the general rule remains that a complainant must rely on prefiling evidence. For instance, in Certain Digital Cameras, Software, and Components Thereof,5 ALJ MaryJoan McNamara relied on prefiling development and investments in finding that the complainant proved that it was in the process of establishing a domestic industry. Without evidence of prefiling activities, prototypes or samples manufactured after the ITC complaint is filed likely will not be enough to warrant considering post-complaint evidence.

On the other hand, very modest ongoing investments may be sufficient to establish the domestic industry so long as a nexus to prior significant investments can be shown. Complainants asserting that a domestic industry is in the process of being established should consider relying on the reasoning in Automated Teller Machines to tie prefiling research and development to post-complaint evidence.

Developments From the Federal Circuit

In Amarin Pharma Inc. v. ITC, a Federal Circuit majority concluded that the commission has discretion to deny institution where a complaint fails to state a legally cognizable claim.

As a threshold matter, with U.S. Circuit Judge Evan Wallach dissenting, U.S. Circuit Chief Judge Sharon Prost and U.S. Circuit Judge Todd Hughes concluded that the Federal Circuit had subject matter jurisdiction to review the commission’s decision to not institute, because a decision on institution amounts to a “final determination” on the merits within the meaning of Section 337.

On the merits, the majority rejected the notion that Section 337 creates a mandatory duty to institute an investigation. Instead, the majority ruled that, although Section 337 states that “[t]he Commission shall investigate any alleged violation of this section,” the statutory scheme as a whole “contemplates certain scenarios in which the Commission need not institute an investigation,” including where a complaint fails to state a legally cognizable claim.

In the underlying proceedings, the commission declined to institute Amarin’s complaint because all asserted claims required proving a violation of the Food, Drug, and Cosmetic Act. The FDCA does not create a private right of enforcement, and the commission determined that the FDCA precludes any claim that would require the commission, rather than the U.S. Food and Drug Administration, to apply the FDCA.

The Federal Circuit majority affirmed, ruling that a private party cannot state a cognizable claim arising under the FDCA, at least when the FDA “has not taken the position that the articles at issue do, indeed, violate the FDCA.”

Then in the Swagway LLC v. ITC decision this year, the Federal Circuit issued and then later withdrew a decision declaring that ITC trademark rulings have no preclusive effect in district court.

During the underlying commission proceedings, the ALJ found a violation had occurred based on trademark infringement but denied respondent Swagway’s motion for a consent order. The commission, therefore, entered an exclusion order.

A consent order has the same practical effect as an exclusion order in that the respondent agrees not to import the accused products and can be subjected to penalties for violating the consent order. However, a consent order does not have a preclusive effect, whereas a commission exclusion order in a trademark case does have a preclusive effect in district court litigation, at least in the U.S. Courts of Appeal for the Fourth and Sixth Circuits. Swagway appealed the denial of its motion for a consent order on that basis.

On May 9, the Federal Circuit ruled that the commission did not err in upholding the ALJ’s denial of the motion for the entry of a consent order on the ground that an exclusion order in a trademark action does not have a preclusive effect. This finding created a circuit split with potentially broad ramifications on Section 337 trademark practice.

Three months later, on Aug. 14, the Federal Circuit granted a petition for rehearing and vacated its “original decision on the issue of the preclusive effect of the Commission’s trademark decisions under 19 U.S.C. § 1337.” In its Aug. 14, decision, the Federal Circuit did not address the issue of preclusive effect, instead finding that the commission did not err in declining to review the ALJ’s decision to deny Swagway’s motion for a consent order because, “[i]n doing so, the Commission found no error in the ALJ’s disposition of the proposed consent order motion.”6

Practice Tips and Takeaways

On the issue of discretion to deny institution, the majority explicitly declined to address the broader question of whether “the Commission has discretion generally not to institute an investigation.” The Federal Circuit, therefore, left the door open for respondents to avoid institution by attacking the sufficiency of a complaint for failure to state a legally cognizable claim.

However, as a practical matter, commission practice is unlikely to change significantly. Historically, commission decisions to not institute an investigation are very rare.7

In Amarin, the asserted claims were precluded by federal statute as a matter of law. In view of the commission’s historical practices, although the Federal Circuit confirmed in Amarin that the commission does not have a mandatory duty to institute every investigation, there is unlikely to be a significant increase in the number of investigations that are not instituted.

And at least for the immediate term, a finding of trademark infringement in a Section 337 investigation continues to have a preclusive effect in the Fourth and Sixth Circuits. However, the original May 9 ruling may signal a future change in that interpretation of Section 337.


1 Thermoplastic-Encapsulated Electric Motors (II), Inv. No. 337-TA-1073, Comm’n Op. (Aug. 12, 2019).

2 Certain Automated Teller Machines, Inv. No. 337-TA-972.

3 Inv. No. 337-TA-972, Initial Determination, (Nov. 30, 2016).

4 Hyosung TNS, Inc. v. Int’l Trade Comm’n , 926 F.3d 1353 (Fed Cir. 2019).

5 Inv. No. 337-TA-1059 (May 26, 2017).

6 Swagway, LLC v. Int'l Trade Comm'n , No. 18-1672 (Aug. 14, 2019).

7 See U.S. Int’l Trade Comm’n, Section 337 FAQs.

Originally published by Law360

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions