COMMISSION OPINION IMPLICATES PUBLIC INTEREST STRATEGY
Time to read: 6 mins
Guidance from the U.S. International Trade Commission (“Commission”) in Certain Microfluidic Devices suggests there may be risk in relying on public interest evidence that has not been presented to the administrative law judge (“ALJ”), especially when that evidence is from third parties. This decision presents important strategic considerations for Section 337 litigants and interested third parties in investigations where the exclusion and/or cease-and-desist orders—the only two available remedies—may raise public interest concerns.
Prior to issuing a remedy, the Commission must consider the so-called “public interest factors”: the effect of the requested orders upon (1) the public health and welfare, (2) competitive conditions in the U.S. economy, (3) the production of like or directly competitive articles in the U.S., and (4) U.S. consumers.1 The Commission considers the public interest factors either with or without the benefit of an evidentiary record on the issue, depending on whether it has delegated public interest fact-finding to the ALJ.2 Regardless of whether such delegation occurs, the Commission considers comments related to the public interest from the parties and public after the ALJ makes a determination on the merits of a Section 337 violation.3 In the past, consideration of the public interest factors has led the Commission to tailor its remedies to alleviate harm to the public interest, and in rare instances, deny relief altogether.4
In Certain Microfluidic Devices, the products at issue were microfluidic “chips” used in a biomedical research, including research related to cancer and cardiovascular disease.5 The Commission delegated public interest fact-finding to the ALJ, and the parties proffered evidence at the evidentiary hearing regarding the effect of the proposed exclusion and cease-and-desist orders on the public interest, although none of the evidence was from third parties.6 On that record, the ALJ issued an Initial Determination (“ID") finding a violation of Section 337 and a Recommended Determination (“RD”) finding that the requested exclusion and cease-and-desist orders need not be tailored or denied in view of public interest concerns.7
Thereafter, on October 5, 2018, the Commission solicited comments from the public concerning the effect of the ALJ’s recommended relief on the public interest.8 In response, the Commission received three third-party submissions generally arguing that the exclusion and cease-and-desist orders would not negatively impact their research.9 Approximately two months later, on December 4, 2018, the Commission determined to review-in-part the ALJ’s ID and requested briefing from the parties and public on the issues of remedy, public interest, and bonding.10 During the reply stage of that briefing, Respondent presented—for the first time—thirteen letters from medical researchers that were submitted in opposition to a district court injunction involving the same products at issue in the ITC investigation.11 Those third-party letters claimed that important research related to the public health and welfare would be negatively impacted, either temporarily or permanently, if researchers were to lose access to Respondent’s products.12
As a result, the Commission requested supplemental public interest briefing on June 10, 2019, to allow the parties and public to respond to the third-party evidence submitted through Respondent’s reply brief, and to allow further submissions on the issue of public interest.13 The Commission also took the unusual step of notifying the third parties referenced in Respondent’s reply brief of the Commission’s request for supplemental public interest briefing. In response to the Commission’s June 10th notice, eight third parties submitted comments claiming that their biomedical research would be negatively impacted by discontinued access to Respondent’s products.14 The Commission ultimately found a violation of Section 337 and issued an exclusion and cease-and-desist order that exempted otherwise infringing products currently used by researchers who have a “documented need to continue receiving the devices for a specific current ongoing research project for which that need cannot be met by any alternative product . . . .”15
The Commission’s willingness to tailor remedies to alleviate public interest concerns is not the sole takeaway from Certain Microfluidic Devices, however. The Commission made clear in a footnote that public interest evidence should be presented at the evidentiary hearing where public interest is delegated for discovery and fact-finding by the ALJ:
The Commission’s notice of investigation required the parties to develop the evidentiary record before the ALJ to include public interest evidence and information from potentially impacted third parties. See 82 Fed. Reg. at 42115 (requiring the AU I to “take evidence or other information and hear arguments from the parties and other interested persons with respect to the public interest in this investigation ....”) (emphasis added). The Commission considers the development of the evidentiary record on the public interest pursuant to delegation under Rule 210.50(b)(1) as a serious matter. To develop a robust record on the public interest, Rule 210.50(b)(1) recognizes that testing information and evidence, including from third parties, within the adversarial process conducted by the ALJ ensures reliable findings of fact, within a fair proceeding governed by the APA, with its attendant due process protections. Accordingly, although the Commission is required to consider the public interest before issuing a remedy in every case in which it finds a violation, where public interest is delegated to the ALJ, it is important, even if not technically required, that all parties to the proceeding—complainant, respondent, and OUII—seek factual information and statements from knowledgeable sources, including interested third parties, during fact discovery, and present this information and evidence subject to cross-examination and rebuttal at the hearing so that the ALJ’s RD will provide a complete and reliable factual record on the statutory public interest considerations.16
These comments indicate a potential risk in relying on evidence that has not been subject to the adversarial process before the ALJ, especially when that evidence is from third parties. This paradigm changes the approach to public interest evidence in Section 337 Investigations. Litigants should be prepared to develop a thorough record, including garnering evidence from third parties, when the Commission delegates public interest fact-finding to the ALJ. Parties must also carefully consider their position at the outset of an investigation regarding whether public interest fact-finding should be delegated. Put simply, in view of Certain Microfluidic Devices, practitioners cannot assume they can safely wait until Commission review to prove their public interest case, and they must tailor their strategy accordingly.
June 3, 2020
1 19 U.S.C. § 1337(d)(1).
2 The Commission has the authority to hold its own hearing on the issue of public interest pursuant to 19 C.F.R. § 210.50(a)(4)(v), but such hearings are very rare.
3 19 C.F.R. § 210.50(a)(4).
4 See, e.g., Certain Microfluidic Devices, Inv. No. 337-TA-1068, Comm’n Op. at 28 (Jan. 10, 2020).
5 Id. at 34.
6 Id. at 29-30.
8 83 Fed. Reg. 50409.
9 The parties also submitted comments on the public interest within 30 days of the RD, pursuant to 19 C.F.R. § 210.50(a)(4)(i).
10 83 Fed. Reg. 63672, 63673 (Dec. 11, 2018).
11 Certain Microfluidic Devices, Inv. No. 337-TA-1068, Comm’n Op. at 6 (Jan. 10, 2020).
13 84 Fed. Reg. 27802 (June 14, 2019); see also 84 Fed Reg.31912 (July 3, 2019) (modifying briefing schedule); Certain Microfluidic Devices, Inv. No. 337-TA-1068, Comm’n Op. at 7 (Jan. 10, 2020).
14 Third party Samsung submitted a response seeking clarification of the one of the Commission’s questions.
15 Limited Exclusion Order, at 1-2 (Dec. 18, 2019); Cease and Desist Order, at 3-4 (Dec. 18, 2019). The “documented need” is satisfied by filling out a questionnaire attached to the Commission’s orders. See also Certain Microfluidic Devices, Inv. No. 337-TA-1068, Comm’n Op. at 25-28, 46-47 (Jan. 10, 2020).
16 Certain Microfluidic Devices, Inv. No. 337-TA-1068, Comm’n Op. at 30, n. 26 (Jan. 10, 2020).