International Trade Commission (ITC)

The International Trade Commission (ITC) is an independent, quasi-judicial federal agency responsible for adjudicating cases involving imports into the U.S. that allegedly infringe on U.S. intellectual property rights. U.S. intellectual property holders may seek enforcement through the ITC, either alongside or as an alternative to traditional court litigation, to prevent the importation of infringing products.

ITC and Intellectual Property

Governed by Section 337 of the Tariff Act of 1930, the ITC addresses unfair competition methods and acts involving patent and copyright infringement. These include importing goods that could harm or substantially injure an industry in the U.S., preventing the establishment of such an industry, or monopolizing trade and commerce within the country. Brand owners may also use the ITC to protect their trademarks and trade dress rights from infringing imports.

ITC vs. Federal District Court

The enforcement of intellectual property rights through the ITC differs from Federal District Courts in several key aspects:

• Jurisdiction: The ITC has national in rem jurisdiction over all imported products into the U.S., requiring only the physical presence of the infringing product for its jurisdictional requirements to be met.

• Subpoena Power: Unlike district courts, the ITC has nationwide subpoena power, aiding in evidence and testimony collection.

• Relief Measures: The ITC can impose injunctive measures, such as excluding infringing articles from entry into the United States, enforceable at all ports and borders. However, it cannot award monetary damages.

• Evidence Admissibility: The ITC allows all useful and relevant evidence, unlike district courts, which are bound by the Federal Rules of Evidence and Civil Procedure.

Impact of PTAB Proceedings on PatentActions at ITC

ITC investigations seldom stay for Patent Trial and Appeal Board (PTAB) proceedings, including inter partes reviews (IPRs), due to the ITC's statutory mandate to complete Section 337 investigations promptly. Historically, the ITC has only suspended its investigations when a PTAB proceeding issues a final written decision before the ITC determines a violation and issues remedial orders. Previous ITC holdings indicate that the Commission may suspend enforcement of remedial orders based on a final PTAB decision issued after the Commission's violation determination, provided the decision addresses the validity of all claims involved.

Domestic Industry Requirement

A significant difference from the Federal Court is the ITC's domestic industry requirement, which requires a substantial U.S. investment in bringing to market, commercializing, or developing the product protected by the asserted patent.

The ITC's governing statute, 19 U.S.C. 1337, states that the ITC can provide relief for infringement of a patent and other intellectual property rights "only if an industry in the United States, relating to the articles protected by the patent ... exits or is in the process of being established" (10 U.S.C. 1337(s)(2)).

The statute provides that an industry in the U.S. shall be considered to exist if, concerning the articles protected by the patent, there is in the U.S.:

• (A) significant investment in plant and equipment;

• (B) significant employment of labor or capital; and

• (C) substantial investment in its exploitation, including engineering, research and development, or licensing.

This provision was interpreted to demand proof that articles protected by the patent were manufactured within the U.S. However, in 1988, the statute was amended to "provide protection for U.S. industries that were based on the creation and exploitation of intellectual property even if they did not produce the ultimate products that embodied that technology." Despite this amendment, it remains unclear whether unenumerated activities, such as warehousing, distribution, quality, control, and sales and marketing, could be used to satisfy the domestic industry requirement. The ITC looks unfavorably upon sales and marketing activities to satisfy the domestic industry requirement.

Distinguishing ITC from Federal District Court

Characteristics that distinguish ITC proceedings from those in District Court include:

1. Speed of investigation: Generally, the time from filing a complaint to initiating a trial is 8 to 9 months. This is much quicker than federal court proceedings.

2. Remedy: The remedial orders offered by the ITC include (a) exclusion orders, which order the U.S. Customs and Border Protection agency (Customs) to exclude infringing products imported by the respondent or third parties, and (b) cease-and-desist orders, which order Respondents not to import or sell infringing importing products in the U.S. This is in contrast to the federal courts, where obtaining injunctive relief is almost impossible due to the eBay holding.

3. IPR Proceedings: ITC proceedings are not stayed based on IPR filings or proceedings.

4. Discovery: ITC encourages broad discovery to help develop a broad record. Unlike federal court proceedings, the ITC has no proportionality concerns for discovery.

5. Burder Shift: If the ITC finds a violation and issues a remedial order, the burden of establishing noninfringement effectively shifts to the respondent for the subsequent importation of redesigned products.

Redesign

A respondent may seek to introduce a redesign during the pendency of an ITC proceeding or after ITC proceedings in response to an exclusion order.

If a violation is found and the ITC issues remedial orders, a redesign (1) will be presumed to infringe by Customs unless and until the importer demonstrates that it does not infringe, and (2) will be covered by an ITC remedial order if it is later found to infringe. Therefore, a respondent must introduce a redesign in a manner that results in an adjudication of infringement.

The respondent must ensure adjudication if the redesign is introduced during a pending ITC proceeding. The respondent should import the product and provide sufficient discovery, including documents, expert opinions, and contentions, to allow the Commission to thoroughly consider and adjudicate it. The respondent should also present an affirmative case of noninfringement. If confronted with evidence of noninfringement by the respondent, the complainant must either present evidence of infringement or withdraw its allegations concerning the products.

If the redesign is introduced after ITC proceedings, the respondent has several options for obtaining and adjudicating it. Two available forums for such an adjudication are Customs and the ITC.

Customs has adapted its procedures under 19 C.F.R. 177 to allow for efficient adjudication of redesigned products and other products potentially subject to exclusion under ITC exclusion orders. The ITC complainant can participate, providing for an adversarial proceeding. However, Custom rulings are not appealable.

The ITC has various procedures for adjudicating a redesign of a product subject to an ITC remedial order initiated by either the respondent, the complainant, or a prospective importer.

Enforcement proceedings at the ITC are initiated by a complainant to determine whether a remedial order, such as a cease-and-desist order, has been violated. The redesigned product may be presented and adjudicated during this proceeding to determine whether the remedial order covers it. The determination of the enforcement proceeding is appealable.

Modification proceedings at the ITC are a means of obtaining binding and appealable adjudications to determine whether a remedial order covers a redesigned product. Modification proceedings may be initiated by either an importer or an intellectual property holder.

Lastly, an advisory opinion may be used to adjudicate a redesign. While similar to modification proceedings, advisory opinions are not binding on Customs and are not appealable to the Federal Circuit.

How TCP Law Can Help

ITC proceedings offer a viable means to enforce U.S. intellectual property rights against infringing importations. An intellectual property attorney at TCP Law can help enforce your IP rights at the ITC against infringing imports.

For assistance with enforcing your IP rights or with any other IP issue, please contact TCP Law at info@tcplawfirm.com or 917-612-1059.