ITC Section 337
Sidley Austin LLP has one of the premier International Trade Commission practices in the world. The U.S. International Trade Commission (“ITC” or “Commission”) provides a specialized forum for resolving unfair trade practices including patent disputes, and the firm’s experience in trying cases before this administrative agency is renowned. In particular, the firm’s lawyers have decades of experience litigating patent disputes under Section 337 of the Tariff Act of 1930 in the ITC. Coupling the strengths of the firm’s Patent Litigation, International Trade and Appellate practice groups, the ITC Section 337 practice at Sidley provides experienced, trial-tested legal representation to clients worldwide.
Section 337 Actions and the U.S. International Trade Commission
A patent gives its owner the right to exclude others from making, using, selling, offering for sale or importing the patented invention in the United States. Yet enforcing those rights can be a protracted process. When the infringing activity is the importation of a patented article or an article made by a patented process, it may be difficult to take effective action against all of the relevant parties through conventional litigation in the courts.
Section 337 of the Tariff Act of 1930 provides for the investigation of any unfair act in the importation of articles into the United States including the enforcement of intellectual property rights. While almost all Section 337 investigations involve the alleged infringement of U.S. patent rights, the statute authorizes investigations to enforce other intellectual property rights such as trademarks, trade secrets, and copyrights as well as address other unfair methods of competition. Where the unfair act does not involve infringement of a government-issued right, such as a patent, the complaining party will need to demonstrate actual or threatened injury to a domestic industry before the ITC will initiate an investigation. Section 337 is available to all who own and exploit an intellectual property right in the United States regardless of whether or not the complaining party is based in the U.S. or abroad.
A Section 337 case is initiated by filing a detailed complainant with the Commission in Washington, D.C. The Commission institutes an investigation and assigns both an Administrative Law Judge (ALJ) to preside over the investigation and an attorney from the Office of Unfair Import Investigations (OUII) to represent the public interest in each investigation. The ALJ will perform all of the functions of a trial court
e.g., oversee discovery, construe the patent claims, receive briefing from all parties including OUII, receive relevant evidence through formal evidentiary hearings under the Administrative Procedures Act and issue an initial determination regarding infringement and validity and a recommended determination regarding any appropriate remedy.
The Commission reviews the ALJ’s determination and, if the Commission finds a violation of Section 337, may issue an exclusion order banning imports of the infringing goods, administered by the U.S. Customs and Border Protection. It may also issue a cease-and-desist order, enforced by the Commission, requiring a party to stop all commercial activity relating to the infringing products (
e.g., selling from inventory) subject to substantial civil penalties for violation. The Commission may also issue temporary exclusion and cease and desist orders, using guidelines similar to those for preliminary injunctions in a court, to curb infringing activity through the imposition of a bond pending formal resolution of the investigation.
Each remedial order issued by the Commission is reviewed by the President through the Office of the U.S. Trade Representative to ensure that there is no negative impact on U.S. foreign policy. Thereafter, final determinations by the Commission are appealable to the U.S. Court of Appeals for the Federal Circuit.
While a Section 337 investigation is similar to a patent litigation in the District Court, there are also differences. One significant different is the speed of ITC proceedings. It is not unusual at the ITC for a trial on all issues to be scheduled within 6-9 months of the institution of the investigation in contrast to the two or more years in certain district courts. The typical Section 337 case takes only 12 to 15 months until the initial determination. The ITC’s accelerated timetable imposes greater time-pressure, cost, and litigation burdens on the parties to the case. Knowledge of forum, including the “unwritten rules” of practice and policies can be vital in the successful administration of a Section 337 case.
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