February 19, 2022

Announcing ‘Talkin’ Trade’: Section 337 Actions at the ITC—A Potentially Powerful Source of Leverage

IPWatchdog is happy to host Talkin’ Trade,” a podcast presented by Ropes & Gray that explores the world of Section 337 unfair import investigations at the U.S. International Trade Commission.

The United States International Trade Commission (ITC) is an independent, quasi-judicial federal agency based in Washington, DC tasked with a variety of trade-related responsibilities. Perhaps most notably, the ITC is responsible for enforcing Section 337 of the Tariff Act, a trade statute designed to protect American industries from injuries caused by the importation of goods connected to unfair acts.

The large majority of these so-called “Section 337 investigations” have focused on allegations of patent infringement, but the ITC can adjudicate disputes involving trademark infringement, copyright infringement, trade secret misappropriation, and even false advertising or antitrust claims. The Court of Appeals for the Federal Circuit has explained that the ITC’s mission is to protect against “any type and form of unfair practice” in import trade.

The ITC’s main advantages to a complainant are the speed of the investigations and the potent remedies it issues. Section 337 proceedings are extremely fast, often taking less than 18 months from the filing of the complaint to a Final Determination from the Commission, and they rarely suffer from delays or stays that can affect a federal district court action. The default remedy—an exclusion order enforced by U.S. Customs that bars affected products from entry into the United States—can be a source of powerful leverage in business disputes.

A complainant triggers a potential investigation by filing a complaint with the ITC.  Within 30 days, the ITC typically institutes a Section 337 investigation, which is then presided over by an administrative law judge (ALJ).  The parties involved conduct discovery and proceed to an evidentiary hearing before the ALJ, which is conducted much like a bench trial in district court—however, as an administrative proceeding, the ITC has its own procedural rules, and the Federal Rules of Evidence do not apply.  After the hearing, the ALJ issues an “Initial Determination,” which can then be reviewed and either affirmed or reversed by the full Commission.  The Commission’s Final Determination, in turn, is appealable to the Federal Circuit.

At a high level, to prove a violation of Section 337 and obtain an exclusion order, a complainant must show three elements:

  1. an “unfair act” committed by the proposed respondent, such as patent infringement;
  2. an importation of a product that is the subject of the unfair act; and
  3. a “domestic industry” – a significant or substantial investment in the U.S. that is harmed by the unfair act.

Over decades, the ITC has developed a wealth of case law concerning each of these elements.

To explore the ins and outs of these unique and sometimes overlooked proceedings, Ropes & Gray’s intellectual property litigation group has created the podcast series Talkin’ Trade. Each episode will be hosted by Ropes & Gray IP litigator and Section 337 practice chair Matt Rizzolo, and focuses on a different aspect of Section 337 unfair import proceedings, sometimes also discussing recent ITC-related current events or news.

The first episode provides an Introduction to Section 337 and the ITC and also features Ropes & Gray IP litigators Matt Shapiro and Brendan McLaughlin.

 

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.