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The Advantages of Litigating Patent Infringement Lawsuits in the ITC

By Peter J. Toren
May 26, 2005

Many American companies have become increasingly frustrated at what they perceive as the lack of respect for intellectual property rights by foreign countries. While this situation is likely to improve with time as countries such as China and India realize that the protection of intellectual property rights can be an engine for growth, in the short run, U.S. companies should consider whether they are doing enough to prevent the importation of products that were manufactured overseas and that may infringe U.S. patents. Most IP practitioners are certainly aware that U.S. patent owners may sue a foreign manufacturer in federal district court in the United States for patent infringement and can seek damages and an injunction against the further importation of the infringing products. Many IP practitioners may not be familiar, however, with Section 337 investigations that are conducted by the International Trade Commission (“ITC”). This avenue provides a relatively quick remedy against foreign infringers and may offer significant advantages over traditional litigation in federal court.

Before turning to the respective advantages and disadvantages of filing a complaint with the ITC as compared with federal district court, it is important to have a basic understanding of an ITC action. In order to commence an ITC action, a party generally files a complaint with the ITC, which is a quasi-judicial agency created by Congress to monitor and curtail unfair international trade practices. The ITC then determines whether the request meets the basic criteria for an ITC action and, if it does, the Commission assigns an Administrative Law Judge (“ALJ”) to the matter. The ALJ sets the procedural schedule, resolves discovery disputes and conducts a formal hearing on the merits of the investigation in conformity with the requirements of the Administrative Procedures Act. The ITC also assigns an investigative attorney from the Office of Unfair Import Investigation (“OUII”) whose primary function is to represent the public interest in the investigation. After the hearing, the ALJ issues an Initial Determination that is forwarded to the Commission to review and either adopt, modify or revise.

Section 337 provides that if an industry in the United States “exists” or is “in the process of being established,” it shall be unlawful, among other things, to import any products which infringe upon a valid U.S. patent or registered copyright, registered trademark or upon a registered semiconductor chip. 19 U.S.C. '1337(B)-(D). A complainant in a Section 337 action does not need to prove actual injury; rather, because the ITC is responsible for enforcing trade laws, to assert standing a complainant must show that the articles allegedly infringing are imported. Id. Therefore, actions involving wholly domestic articles or declaratory actions by foreign corporations to challenge the validity of a U.S. patent are not permitted in the ITC.

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