In January 2021, I noted that the U.S. International Trade Commission (ITC) saw a flurry of new complaints filed in the second half of 2020, particularly in November and December. See here. A similar pattern emerged at the end of 2021, culminating with eight Section 337 complaints filed between December 15 - 31, 2021.
Section 337 Investigations at the ITC
The ITC is a federal administrative agency in Washington, DC with broad powers under 19 U.S.C. § 1337 ("Section 337") to investigate and address unfair acts and unfair competition in the importation of articles into the United States. Most Section 337 investigations address issues of patent infringement, but Section 337 investigations can also address infringement of other statutory intellectual property (trademarks, copyrights, etc.) and other unfair acts such as misappropriation of trade secrets, false advertising, breach of contract, and antitrust violations. In comparison to litigating in U.S. District Court, pursuing a patent infringement claim at the ITC provides several advantages for patent owners, including faster resolution on the merits due to statutory requirements, the ability to include unrelated infringers in one matter, the limited availability of counterclaims, results that are less likely to be reversed on appeal, and the powerful remedy of an Exclusion Order prohibiting the entry into the United States of infringing articles.
The Year 2021 was Another Busy Year at the ITC
Despite its effectiveness as a forum for patent owners, the ITC receives a limited number of complaints compared to the U.S. District Courts, mostly due to its jurisdictional requirements - in addition to proving infringement, a patent owner also must show (a) importation of an article associated with the infringement and (b) the existence of a "domestic industry" relating to articles that practice the patent. Over the past 10 years, the ITC has averaged fewer than 50 new complaints per year.
By comparison, 2020 was a busy year at the ITC with 57 new complaints and 10 complaints for ancillary proceedings. This pace continued in 2021, with more than 50 new complaints and 19 complaints for ancillary proceedings, culminating with 14 complaints in November and December - unfortunate holiday gifts for the respondents. Filing complaints at the end of the year provides Complainants with tactical advantage. The ITC procedural rules provide that Respondents must file a detailed response to a complaint within 20 days of the ITC instituting an investigation. See 19 CFR § 210.13. In view of the limited time for Respondents to prepare a response, complaints filed in November and December force Respondents to spend time over the holidays preparing for the investigation.
The Future of Section 337 Investigations at the ITC
IP owners continue to demonstrate confidence in the ITC's fast, reliable, and accurate resolution of IP disputes. Many IP owners are facing more competition from infringing imported products and are looking ways to maintain and grow their position in the market. The busy pace of new complaints filed in 2021 suggests that the ITC will continue to be an important tool for IP owners seeking to use their IP rights to protect their market share. We can expect this trend to continue for years to come.
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