Posts Tagged: "Section 337"

Famously, section 337 investigations before the U.S. International Trade Commission (ITC) are fast. By statute, the ITC must conclude section 337 investigations “at the earliest practicable time . . .” 19 U.S.C. § 1337(b)(1). Investigations institute within 30 days after the Commission receives a complaint, evidentiary hearings (akin to trial) regularly occur within 8–9 months, and the ITC’s target dates for completing investigations routinely land at 14–16 months.

The period following the filing of a section 337 complaint with the U.S. International Trade Commission (ITC) can be chaotic. During this period, the Commission “examine[s] the complaint for sufficiency and compliance with” its rules, 19 C.F.R. § 210.9(a), routinely asks the complainant to provide additional information, and typically decides whether to institute an investigation within 30 days after the complaint is filed, see 19 C.F.R. § 210.10(a)(1). The complainant must address the Commission’s requests for additional information while preparing for the coming investigation. The named respondents must scramble to find counsel, assess the allegations, and ready for battle. And all section 337 litigants confront a series of strategic decisions that can send them on the path to success or failure in the investigation.

Your company (or your client’s company) is an American company. All your offices and employees are here in the United States, likely in the same location. You assemble your products or devices here. You purchase all the parts and components that you don’t make yourself from other American companies, probably by calling or emailing their American salespeople that you have a longtime relationship with. And you sell your products to other American companies. Surely your company thus cannot be sued for patent infringement in the International Trade Commission (ITC), whose mission is to “investigate and make determinations in proceedings involving imports claimed to injure a domestic industry or violate U.S. intellectual property rights.” Not so fast.

On April 20, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential opinion in FS.com v. International Trade Commission affirming the ITC’s determination that fiber optic cable distributor FS.com violated 19 U.S.C. § 1337 by importing goods infringing upon patent claims owned by Corning Optical Communications. This relatively short Federal Circuit decision dealt mainly with FS.com’s enablement arguments on appeal, which the appellate court nixed after finding that skilled artisans would understand an inherent upper limit to allegedly open-ended claims on fiber optic connection densities.

Investigations brought under 19 U.S.C. § 1337, commonly known as “Section 337” cases, at the United States International Trade Commission (ITC) have become a go-to enforcement option for patent owners seeking fast, injunction-type relief against infringing imports. It is well known that the ITC issues powerful remedial orders, including (1) exclusion orders, which order United States Customs and Border Protection (Customs or CBP) to exclude infringing imports imported by Respondents or, in some cases, third parties, and (2) cease-and-desist orders, which order Respondents not to import or sell infringing, imported products in the United States. Because ITC remedial orders are broadly written to cover even unadjudicated products that infringe the subject patents, and because such orders are only prospective in nature, it is critical for ITC litigants and their attorneys to understand the available procedures to adjudicate redesigned products.

On May 17, 2022, the Federal Trade Commission (FTC) submitted to Lisa Barton, Secretary of the International Trade Commission (ITC), a statement they believed was relevant to the public interest considerations before the Commission in a matter involving certain UMTS and LTE cellular communication modules (337-TA-1240). The ITC in many cases will invite statements on the Public Interest, and the FTC is often invited to make a submission. It should be noted, however,  “Public Interest” in the ITC is a matter of statute, and there are four public interest factors which are statutory. Any statement in the Public Interest must address one or more of those factors. Other matters not within the statute are not public interest factors.

On March 8, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed decisions by the International Trade Commission (the Commission) and the Patent Trial and Appeal Board (the Board or PTAB) both 1) declining to ban Renesas Electronics Corporation and other companies from importing into the United States products alleged to infringe upon Broadcom Corporation’s two patents and 2) finding certain claims of Broadcom’s patents obvious. Broadcom filed a complaint at the Commission alleging a violation of 19 U.S.C. § 1337 (Section 337) based on the importation of products by Renesas and other companies that are asserted to infringe U.S. Patents 7,437,583 and 7,512,752. Broadcom’s ’583 patent is “directed to reducing power consumption in computer systems by ‘gating’ clock signals with circuit elements to turn the signals ON and OFF for downstream parts of the circuit.” The ’752 patent is “directed to a memory access unit that improves upon conventional methods of requesting data located at different addresses within a shared memory.”

On January 19, consumer tech giant Apple filed a complaint with the U.S. International Trade Commission (USITC) asking the agency to institute a Section 337 investigation against Swedish telecom firm Ericsson, asserting a trio of patents related to millimeter wave technology used by electronic devices communicating on mobile 5G networks. The Section 337 complaint is the latest salvo in a legal battle that highlights the mounting tension surrounding standard-essential patents (SEPs) and where infringement litigation fits into the fair, reasonable and non-discriminatory (FRAND) obligations that standards-setting organizations (SSOs) impose upon SEP owners.

In late June, medical technology firm Masimo Corporation and its consumer device subsidiary Cercacor Laboratories filed a complaint with the U.S. International Trade Commission (ITC) asking the agency to institute a Section 337 investigation into several versions of the Apple Watch. Masimo’s allegations, which also include trade secret litigation ongoing in U.S. district court, follow an increasingly familiar narrative in which a Big Tech player, in this case Apple, engages in licensing negotiations with a small tech developer, only to poach employees and ideas from the smaller firm without paying the original developers.

On April 29, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed an International Trade Commission (ITC) decision in Bio-Rad Laboratories v. International Trade Commission & 10X Genomics, Inc. finding that Bio-Rad infringed the patent claims at issue; that 10X Genomics (10X) practiced the claims; and rejecting Bio-Rad’s defense that it could not be liable for infringement because it co-owned the asserted 10X patents. 10X filed a complaint against Bio-Rad Laboratories with the ITC, alleging that Bio-Rad violated the Tariff Act of 1930 for importing and selling microfluidic systems and gene sequencing components covered by three of its patents. 19 U.S.C. § 1337. The ITC affirmed the findings of its Administrative Law Judge, who found that Bio-Rad violated the statute and infringed the 10X patents, and determined that the patents were, in fact, being practiced by 10X as required for liability under the statute.

Korean company Daewoong and its U.S. counterpart Evolus recently found themselves in a dispute with U.S.-Irish company Allergan and its counterpart Medytox over misappropriation of both a bacterial strain and the manufacturing process to make cosmetic injection products from that strain. Daewoong recently received Food and Drug Administration (FDA) approval to market an injection in the United States that competes with Botox, owned by Allergan-Medytox. In order to prevent this entrance into the market, Allergan-Medytox filed a complaint with the International Trade Commission (ITC) to block imports of the new product under Section 337. The only relationship between Allergan and Medytox is an anticompetitive market allocation agreement. Daewoong’s new product posed a threat to the profitability of Allergan’s agreement with Medytox and therefore became the subject of a dispute before the ITC. Importantly, the manufacture of the products occurs in Korea and the injectables are then imported into the United States.

In September, the International Trade Commission (ITC) decided to review an initial final determination (FID) in the Matter of “Certain Botulinum Toxin Products, Processes for Manufacturing or Relating to Same and Certain Products Containing Same,” Investigation No. 337-TA-1145, a complaint filed by Allergan against Botox products made by Daewoong and its partner, Evolus, a “performance beauty company”. On Wednesday, the ITC issued a Final Determination in the case, finding that the sale and importation of the products into the United States violated Section 337 of the U.S. Tariff Act. The Commission issued a Limited Exclusion Order (LEO) prohibiting importation of the products by Daewoong and Evolus for a period of 21 months, as well as a cease and desist order against Evolus preventing the Company from selling, marketing, or promoting the products in the United States for a period of 21 months. However, the Commission reversed the FID’s finding that a trade secret exists with respect to Medytox’s bacterial strain.

In late August, the U.S. International Trade Commission published a notice of institution of a Section 337 investigation on behalf of the Regents of the University of California, which is now underway. The University filed a complaint in July alleging that a series of major retailers including Amazon.com, Bed Bath & Beyond, IKEA, Target and Walmart have infringed patents through the importation of certain filament light-emitting diodes (LEDs) and products containing the same. The ITC action is part of an enforcement campaign that is being hailed by the firm representing the university as a “first-of-its-kind university-led effort” to vindicate patent rights owned by the institution.

Although many readers might be more familiar with patent infringement claims asserted in Section 337 actions at the ITC, BIC Vice President and General Counsel Steve Burkhart notes that trademark and trade dress infringement claims in a Section 337 context aren’t terribly different. “We’ve had our three-dimensional trademark registration for decades,” Burkhart said, adding that one of the defendants in the ITC action was familiar with BIC’s trademark because it was cited as a basis for denying their own trademark application filed with the U.S. Patent and Trademark Office. “Quantitatively, you may see more Section 337 filings on the patent side but there are many examples in the patent and trademark areas where filings encounter denials because of prior art,” Burkhart said.