Adduci, Mastriani & Schaumberg LLP

Demystifying Section 337

Aug 28 2013
Michael Doane discusses practice before the ITC during a Cleveland Metropolitan Bar Association CLE event.  


To register for this event, visit the CMBA website.

To read Mr. Doane's guest blog post, click here. 

Background on the August 28, 2013, CLE Event:

Although occasionally referred to as an “obscure” or “little-known” federal agency in the media, the U.S. International Trade Commission (“ITC”) has become a significant forum for resolving intellectual property-based disputes. Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, gives the ITC the authority to investigate unfair acts, including infringement of intellectual property rights, in the importation of articles into the United States. If the requirements of Section 337 are met, the infringing products are excluded from importation into the United States. Although a trade remedy statute, the procedural benefits of a Section 337 investigation along with this effective remedy have made the ITC an attractive forum for intellectual property owners and consequently an important voice in the ongoing development of intellectual property law and policy.
For example, the ITC has been at the center of the debate over the enforcement of standard essential patents (“SEPs”). The question, which has been commented on by both the United States Trade Representative and the Federal Trade Commission, is whether or the circumstances under which the ITC should issue an exclusion order based on infringement of a SEP subject to a FRAND/RAND obligation. In a recent Section 337 investigation, which was part of what has been called the “Smart Phone Wars,” the ITC issued an exclusion order barring the importation of against i-Phone models, which was subsequently disapproved by the United States Trade Representative for “policy reasons.” The policy reasons related to the allegation that the asserted patent was a SEP.
Another controversial issue that the ITC has faced is the propriety of non-practicing entities (“NPEs”) using the ITC and Section 337 to enforce their patents. In order to successfully bring a Section 337 investigation, the complainant must establish that it has a domestic industry in the United States relating to products that practice the asserted intellectual property rights or that exploit the intellectual property right through licensing, engineering or research and development. NPEs rely on their licensing activities as the basis for their domestic industry in a Section 337 investigation. Targets of the NPEs, particularly NPEs whose business model is often referred to as a patent assertion entities (“PAE”) claim that these entities are abusing Section 337 and that the number of Section 337 investigations since eBay filed by NPEs has increased dramatically. The statistics do not bear this out, however, and the ITC’s case law clarifying the requirements for basing a domestic industry on licensing activities continues to evolve.
In any event, intellectual property rights owners should not disregard federal agency when deciding how best to enforce their intellectual property rights. A Section 337 investigation provides complainants with procedural benefits not available in district court, including broad discovery and resolution in 18 months or less, administrative law judges with expertise in intellectual property law, and an effective remedy. It is these advantages that have placed the ITC at center stage in the debate over and development of intellectual property law and policy.
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