After a slow but steady start to 2020, the U.S. International Trade Commission (ITC) saw a flurry of new complaints filed in the second half of the year. Eight new complaints were filed in December, resulting in a total of 57 complaints filed in 2020. As discussed in previous posts (e.g. here and here), the ITC adapted to the COVID-19 crisis and demonstrated its ability to conclude investigations in a timely manner. The post-pandemic rush to the ITC demonstrates the confidence of litigants that the ITC will continue to be a reliable forum for resolving IP disputes.
Section 337 Investigations at the ITC
The ITC is a federal administrative agency in Washington, DC with broad powers under 19 U.S.C. § 1337 (“Section 337”) to investigate and address unfair acts and unfair competition in the importation of articles into the United States. Most Section 337 investigations address issues of patent infringement, but Section 337 investigations can also address infringement of other statutory intellectual property (trademarks, copyrights, etc.) and other unfair acts such as misappropriation of trade secrets, false advertising, breach of contract, and antitrust violations. In comparison to litigating in U.S. District Court, pursuing a patent infringement claim at the ITC provides several advantages for patent owners, including faster resolution on the merits due to statutory requirements, the ability to include unrelated infringers in one matter, the limited availability of counterclaims, results that are less likely to be reversed on appeal, and the powerful remedy of an Exclusion Order prohibiting the entry into the United States of infringing articles.
The ITC’s Response to the COVID-19 Crisis
From its initial COVID-19 Action Plan in March, the ITC has proactively undertaken measures to conduct Section 337 investigations with as little interruption as possible. Although all in-person hearings were postponed and some Procedural Schedules had to be extended, many investigations stayed on track through the use of modified administrative and procedural rules for discovery. In July, as we discussed previously, the ITC selected WebEx Meeting as its secure FedRAMP-certified video teleconferencing solution so that hearings and conferences involving Confidential Business Information could proceed remotely. As a result, investigations are generally proceeding without interruption, remote conferences and hearing are being held, and most investigations are being concluded within the allotted statutory time frame.
2020 was a Busy Year at the ITC
Despite its effectiveness as a forum for patent owners, the ITC receives a limited number of complaints compared to the U.S. District Courts, mostly due to its jurisdictional requirements — in addition to proving infringement, a patent owner also must show (a) importation of an article associated with the infringement and (b) the existence of a “domestic industry” relating to articles that practice the patent. Over the past 10 years, the ITC has averaged only 49 new complaints per year.
In 2020, however, the ITC received 57 new complaints. As with most other fora, the first half of 2020 was slow due to the COVID-19 crisis; only 16 new complaints were filed at the ITC from January to June. Starting with busy July, however, 41 new complaints were filed in the second half of the year, culminating with eight complaints in December — seven of which were filed after December 16 and just in time for the holidays!
The Future of Section 337 Investigations at the ITC
The ITC has demonstrated that it can adapt to the current crisis, giving IP owners continued confidence in the ITC’s reputation for fast, reliable, and accurate resolution of IP disputes. In the current economic situation, IP owners are facing more competition from infringing imported products and are looking ways to maintain and grow their position in the market. The increase in complaints filed at the end of 2020 suggests that the ITC will continue to be an important tool for IP owners seeking to use their IP rights to protect their market share.