Posts Tagged: "Section 337 investigations"

A recent policy change at the U.S. International Trade Commission (ITC) provides a lesson in how to properly draft a key requirement in a Section 337 complaint. The ITC is a popular forum for companies facing unfair competition from imported goods that infringe intellectual property rights. Companies alleging unfair competition can file a complaint asking the ITC to institute what is called a Section 337 investigation and issue exclusion orders barring entry into the United States of the offending goods. To prevail in a Section 337 investigation, the complainant must show, among other things, it has made investments in the US to exploit its intellectual property—the “domestic industry” requirement.

Last week, the United States International Trade Commission (ITC) issued a notice 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, stating that the ITC has “determined to review in part a final initial determination (FID) of the presiding administrative law judge (ALJ) finding a violation of section 337 of the Tariff Act of 1930.”Last year, Allergan, the U.S. manufacturer of Botox, and Medytox, the Korean manufacturer of a similar product, filed a joint complaint against Daewoong, a Korean drug maker, under Section 337 of the Tariff Act of 1930, alleging that Daewoong had stolen Medytox’s botox strain trade secret in Korea and introduced it to the U.S. market. The FID was issued on July 6, 2020, wherein the ALJ found that certain products sold by the Korean drug maker Daewoong and its partner Evolus, Inc. violated section 337 through their importation and sale in the United States of a botulinum neurotoxin product “by reason of the misappropriation of trade secrets.”

Last week, the U.S. Court of Appeals for the Federal Circuit affirmed a decision of the U.S. International Trade Commission in Mayborn Group, Ltd. v. ITC, wherein the U.S. International Trade Commission (the Commission) denied Mayborn’s petition for rescission of a general exclusion order that prohibited the importation of products that infringe U.S. Patent 8,028,850 (the ’850 patent).  The CAFC held that, while Mayborn had standing to appeal, the Commission lacked the authority to adjudicate its patent invalidity claim and an assertion of patent invalidity was insufficient grounds to support a petition to rescind or modify an exclusion order.

Late last month, TiVo won its second intellectual property battle with Comcast at the International Trade Commission (ITC) and is poised to win a third ruling this summer. The agency issued an exclusion order under Section 337 of the Tariff Act to prevent Comcast from importing digital video receivers that violate TiVo’s Rovi cable box patents. Now, unable to win on the argument that it did not infringe on TiVo’s patents, Comcast is trying again, this time attacking the ITC as an institution.

Patent investigations at the International Trade Commission (ITC) have been on an upward trend in the last few years. In 2018, the most recent year with complete data, 74 new complaints were filed and there were 130 active investigations, compared to the 117 active investigations in 2017. The trend appears to be continuing in 2019. In today’s global economy, with so many types of products and components being imported into the United States, a rise in patent investigations means that a large number of U.S. companies and their customers are at risk of having their supply chain disrupted. This can result in a potential loss of income, breached contracts, disgruntled customers and general uncertainty regarding the future.