May 4, 2021

What to Know About the US International Trade Commission

As the international e-commence business continues to grow, more infringing products find their way into the US markets. This can make it difficult for intellectual property owners to stop infringing products from selling in the US.  For the right cases, the ITC can be a very desirable forum and offers intellectual property owners powerful remedies against imported infringing products. With an ITC exclusion order on hand, intellectual property owners can work with the US Customs to identify and block infringing products at the border, and a cease and desist order can further prevent offending companies from marketing, selling, or distributing infringing products already inside the US.

Background on the ITC

Among its many responsibilities, the ITC can adjudicate cases involving imports that allegedly infringe intellectual property rights under Section 337 of the Tariff Act of 1930, known as section 337 investigations. Most Section 337 investigations involve claims of patent infringement, but can also include trademark and copyright infringement, trade secret misappropriation, violation of antitrust laws, and false advertising and false designation of origin.  The ITC can conduct Section 337 investigations both on its own initiative and through filings made by companies and individuals. An administrative law judge will preside over all hearings and motions of these investigations and then prepares an initial determination setting out the rulings. The initial determination is subject to review by the Commissioners, which may adopt, modify or reverse it. If the Commission declines to review the initial determination, it becomes the final determination. Otherwise, the Commission can review any issue in the investigation and affirm or reverse the administrative law judge’s decision or remand it for further consideration. The final determination issued by the Commission do not take effect immediately and is subject to disapproval by the President, although presidential disapproval is rare. If the President does not specifically disapprove the ITC’s decision within the sixty-day review period, the decision becomes effective. Parties who are adversely affected by the decision can then appeal it to the US Court of Appeals for the Federal Circuit.

How ITC Investigations Work

An ITC investigation has increasingly become an alternative avenue to litigate intellectual property disputes by both US companies and foreign companies with a US presence. The two main advantages of an ITC investigation are the speed and remedies. An ITC investigation are mandated by statue to conclude at the earliest practicable time. Unlike district court cases, which can last for years, a final determination is generally issued within fifteen to sixteen months.

Discovery at the ITC is also very expedited, where parties typically have ten days to respond to discovery requests. In addition, the potential remedies are powerful. Although the ITC does not award money damages, it can offer injunctive relief, including exclusion orders preventing infringing products from entering the US and cease and desist orders stopping the selling of infringing products already in the US. Specifically, a limited exclusion order bans infringing products from the manufacturers or importers identified in the investigation, while a general exclusion order blocks all infringing products irrespective of the source. Therefore, a general exclusion order may even prohibit the importation of goods by manufacturers or importers that were never parties to a Section 337 investigation. While limited exclusion orders are more common, a general exclusion order could be granted if it is necessary to prevent circumvention of an exclusion order limited to products of named parties in the investigation or there is a pattern of violation and it is difficult to identify the source of infringing products.

Additionally, the standard of obtaining injunctive relief for patent infringement from the ITC is lower than the district court. District courts may grant injunctions for a patent infringement but is not required to do so. However, if the ITC finds a violation, it “shall direct that the articles concerned . . . be excluded from entry into the United States,” unless it decides not to issue the injunction based on public interest reasons. That means, if patent infringement is found, the likelihood of obtaining injunctive relief is higher for patent owners in the ITC than in the district courts.

For more information on international business law, please contact a Kerr Russell attorney.

About the author:

Chaoyi-Ding-Attorney-Kerr-RussellChaoyi Ding is an international lawyer, providing invaluable assistance to clients operating in the US and elsewhere. She specializes in registering Chinese owned enterprises in the US, cross-border business transactions, mergers and acquisitions and, joint ventures. She assists Chinese companies with commercial transactions, contracts, tax, employment, real estate and supply chain matters in the US. Chaoyi is knowledgeable in the law and regulation of foreign direct investments and in export control matters. She holds law degrees from Wuhan University in China and the Michigan State University College of Law. Chaoyi is fluent in both Mandarin and English.

 

 

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