The International Trade Commission – Another Venue for Patent Enforcement

201510 LM Singapore portPatent Enforcement via Litigation in Court –

In the United States, a patent owner’s protection from patent infringement is codified in 35 U.S.C. § 271(a), which states, “Whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefore, infringes the patent.” It is well known, however, that the United States Patent and Trademark Office as grantor of a patent is not responsible for enforcing a patent and pursuing potential infringers.

The responsibility to enforce the “right to exclude” that is provided by the patent falls upon the Assignee, i.e. the owner of the patent. Infringement is a civil matter, and is thus adjudicated in a court of law. The patent owner (possibly an individual, but more typically a corporate owner) begins the litigation process by filing a Complaint in a United States District Court in either “the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”1 The Complaint sets forth details on the alleged infringing party (the defendant), infringed patent(s), infringing actions by the defendant, and other statements regarding venue and relief sought from the Court.

From that point forward, absent any out-of-court settlement by the parties, litigation may proceed through a number of phases, including the filing of an Answer by the defendant, discovery, claim construction, trial, and awarding of damages (if any) to the prevailing party. Patent infringement litigation is highly complex and expensive, and of course requires the advice of one or more attorneys with a combination of expertise in patent law and litigation.

The USITC – An Alternative Enforcement Option

In circumstances in which the infringing activity is the importing of a patent-protected product into the United States, a patent owner has another enforcement option to consider: the filing of a complaint with the United States International Trade Commission.

The USITC was originally established as the U.S. Tariff Commission in 1916, and was given its present name and most of its current functions under the Trade Act of 1974. The Commission consists of six Commissioners, nominated by the President and confirmed by the Senate, for service of a term of nine years. The Commission has significant powers related to trade matters, including the power to investigate and enforce intellectual property rights conferred by copyrights, trademarks, and patents. A key statute under which the USITC operates is 19 U.S.C. § 13372, “Unfair practices in import trade.”

Among the “Unlawful activities”3 defined in the “337” statute are the following: “The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that – (i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.”

“When a knock-off of your patent-protected product is being imported by an infringing party, the USITC provides another option for enforcement of your patent.”

It should be noted that this definition of unlawful activities is subject to certain constraints. The definition applies4 “only if an industry in the United States, relating to the articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established.” Additionally5, “…an an industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned – (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing.”

The Section 337 Investigation Process6

201510 LM Port of OaklandA USITC Section 337 Investigation is in initiated by the USITC after the filing of a Complaint that is in compliance with the Commission’s rules.7 (In a patent infringement case, the Complainant would typically be the patent owner.) Upon institution of an investigation, an Administrative Law Judge (ALJ) is appointed to preside over the proceedings and to render an initial decision regarding whether a violation of Section 337 has occurred.

An investigative attorney from the Commission’s Office of Unfair Import Investigations (“OUII”) is also assigned to the case as a full party to the investigation. The attorney functions as an independent litigant representing the public interest in the investigation. In the notice announcing initiation of an investigation (published online and in the Federal Register), the Commission identifies the entities that may participate in the investigation as parties, including the complainant(s) that alleges a violation of Section 337, the respondent(s) that is alleged to have violated Section 337, and the OUII staff attorney.

Section 337 investigations are conducted in accordance with procedural rules similar to those of the Federal Rules of Civil Procedure. The procedural rules set forth provide key instructions and details regarding such matters as the taking of discovery and the handling of motions.

The presiding Administrative Law Judge conducts a formal evidentiary hearing on the merits of a Section 337 case. Accordingly, in participating in the hearing, the parties have the right of adequate notice, cross-examination, presentation of evidence, objection, motion, argument, and other rights in conformity with the adjudicative provisions of the Administrative Procedure Act.8

Following the evidentiary hearing, the presiding ALJ issues an Initial Determination (ID) that is certified to the Commission along with the evidentiary record. The Commission may review and adopt, modify, or reverse the ID, or it may decide not to review the ID. In the latter instance, the ID becomes the final determination of the Commission.

If the Determination is that Section 337 has been violated, the Commission may issue an exclusion order barring the products at issue from entry into the United States, as well as a “cease and desist” order directing the violating parties to cease certain actions. The Commission’s exclusion orders are enforced by U.S. Customs and Border Protection. Commission orders become effective within 60 days of issuance unless disapproved by the President for policy reasons. Appeals of Commission orders may be made in the U.S. Court of Appeals for the Federal Circuit.

Exercising Your Option

Large companies often use USITC investigations as one of the weapons in their patent enforcement arsenals. For example, battles in the smartphone patent war between Samsung and Apple have been fought in the USITC as well as in federal court. (In fact, in August of 2013, Samsung prevailed over Apple in a Section 337 complaint, but the Commission’s Determination was overruled by the U.S. Trade Representative acting on behalf of the President.)

However, Section 337 investigations are by no means limited to corporate giants. Small companies can also avail themselves of this option. Among the Section 337 investigations listed (at press time) by the USITC on its “337Info” web page9 is Investigation No. 964 instituted on August 24, 2015, in which Complainants SD3, LLC and SawStop LLC allege the infringement of six U.S. Patents by Robert Bosch GmbH and Robert Bosch Tool Corporation. The outcome of this case remains to be determined, but this is clearly a “David v. Goliath” scenario.

If you have a patent-protected product or process, and you have begun manufacturing it, or are well along in product and/or process development for the purpose of doing so, a USITC enforcement action is another option worth considering if your patent is being infringed by a third party who is importing a knock-off of your product into the United States. The Commission provides basic 337 Investigation information on its, and Intellectual Property Infringement web pages10,11, including numerous links to pages covering specific topics. Section 337 Investigation statistics are available on the “Section 337 Facts and Trends” page12, and its “Frequently Asked Questions” document6 is especially informative.

However, filing a Complaint to trigger a Section 337 Investigation in the USITC is not a casual undertaking. The filing and subsequent procedures are governed by specific rules set forth in 37 C.F.R. § 201. As in other patent legal proceedings, such as patent application filing, prosecution, or litigation, these rules must be followed to the letter. Additionally, there are important strategic issues to be considered in proceeding with this patent enforcement action as an alternative to, or in addition to, patent litigation in court. Thus it is best to seek the advice of a qualified attorney13 with expertise and experience in this area before taking any action.

  1. 28 U.S.C. § 1400(b).
  2. Note that although the statute is 19 U.S.C. § 1337, USITC investigations are referred to as “Section 337” investigations due to the statute’s origin under Section 337 of the Tariff Act of 1930.
  3. 19 U.S.C. § 1337 (a)(1)(B).
  4.  Id., part (a)(2).
  5. Id., part (a)(3).
  6. Summary adapted from USITC “Frequently Asked Questions” document at .
  7. 19 C.F.R. §§ 210.4, 210.8, and 210.12.
  8. 5 U.S.C. §§ 551 et seq.
  13. Readers may contact the authors if a referral to a qualified attorney is needed.

PHOTO CREDIT: “Port of Oakland” by Daniel Parks of Berkley, CA, November 29, 2010. Imported cargo containers await unloading from the Rotterdam Express.  Reproduced per terms of the Creative Commons Attribution 2.0 Generic license.20061013 PE logo GIF R48Word 2x2x300ppi

Authors John M. Hammond P.E. (Patent Innovations, LLC and Robert D. Gunderman P.E. (Patent Technologies, LLC are both registered patent agents and licensed professional engineers. Copyright 2015 John Hammond and Robert Gunderman, Jr.

Note: This short article is intended only to provide cursory background information, and is not intended to be legal advice. No client relationship with the authors is in any way established by this article.

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