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Section 337 Proceedings at the ITC

Recently, the International Trade Commission (ITC) has been in the news for issuing an import ban on certain Apple Watches for patent infringement. While this ban is being reviewed by the Federal Circuit, many are hearing about the “ITC” for the first time. This IP Tip of the Month presents some quick facts about patent infringement proceedings at the ITC.

What is the ITC?

The ITC is a federal agency that can regulate trade in the US by stopping the importation of articles that lead to unfair competition, which includes the importation of goods that infringe a patent. (See, 19 U.S.C. § 337). Because of its statute citation, these ITC proceedings are normally referred to as “Section 337 proceedings.”

What does a patent holder need to prove at the ITC?

  1. Respondent’s articles infringe complainant’s patent.
  2. Respondent’s articles are being imported into the United States.
  3. Complainant is actually producing the patented articles and such activities related to the patented articles satisfy the “domestic industry” requirement, which includes:
    1. significant investment in plant and equipment in the United States;
    2. significant employment of labor or capital in the United States; or
    3. substantial investment in exploitation of the patented articles within the United States, which can include engineering, research and development, or licensing.
  4. Banning respondent’s infringing articles would not cause harm to the public interest.

What remedies can the ITC issue?

If the ITC decides that the complainant has violated 19 U.S.C. § 337 without causing a significant harm to the public interest, then the ITC can issue a limited exclusion order, a cease and desist order, or a general exclusion order. The ITC does not issue monetary damages. The respondent may owe significant fines to the ITC if the remedy is not followed. Exclusion orders (both limited and general) are enforced by U.S. Customs and Border Protection, which stops the infringing goods from entering the United States.

How is an ITC proceeding different than a district court case for patent infringement?

Some significant differences between the ITC and district courts are as follows:

  1. ITC proceedings are fast: After receiving a complaint, the ITC typically reviews and institutes the proceeding within about 30 days. Then, the proceeding is typically tried and decided on within 16 months from the date of institution. The complainant often has the upper hand with respect to timing due to the ITC’s general reluctance to permit extensions of time for deadlines for response. This is very fast compared to district courts, where litigation can take years.
  2. ITC employees have significant patent experience: The administrative law judges (ALJs), the Commission itself, and other staff often have STEM backgrounds and are well versed in patent cases.
  3. ITC proceedings do not use juries: Because of the ITC’s expertise in patent law and the lack of a jury, the parties do not have to spend a lot of time explaining the technology or law to the ALJ or a jury when compared to a district court case.
  4. Complainant can bring a single ITC proceeding against several respondents: Because the ITC has in rem jurisdiction over imported goods, the complainant can bring the proceeding against several respondents without the jurisdiction or venue issues that are commonly faced in district courts.

In sum, a Section 337 proceeding at the ITC can be an important part of a company’s IP enforcement toolbox. If you suspect a party is importing products that infringe upon your patent, you may want to consider filing such a Section 337 proceeding. If you need assistance in determining whether your particular situation would qualify for filing at the ITC and is worth the costs, and whether a filing at the ITC can be combined with other enforcement tools such as district court litigation to achieve your enforcement goals, reach out and let’s discuss.

Category: Intellectual Property, Patents