After a slow but steady start to 2020, the US International Trade Commission (ITC) recorded a number of new complaints in the second half of the year. Eight new complaints were filed in December, bringing the total to 57 complaints filed in 2020. As discussed in previous posts (e.g. here and here), the ITC has adapted to the COVID-19 crisis and demonstrated its ability to complete investigations in a timely manner. The rush to the ITC after the pandemic shows the parties’ confidence that the ITC will continue to be a reliable forum for resolving IP disputes.
Section 337 Investigations at the ITC
ITC is a federal administrative agency located in Washington, DC with extensive powers under 19 USC § 1337 (“Section 337”) to investigate and combat unfair conduct and competition in the importation of items into the United States. Most Section 337 investigations deal with patent infringement issues, but Section 337 investigations may include infringement of other legal intellectual property rights (trademarks, copyrights, etc.) and other unfair acts such as the misuse of trade secrets, false advertising, and breach of contract Antitrust violations. Compared to litigation in the U.S. District Court, prosecuting an infringement claim with the ITC offers several advantages for patent owners, including faster resolution of the matter based on legal requirements, the ability to involve unrelated infringers in a matter, the limited availability of counterclaims, Findings that are less likely to be reversed on appeal and the effective remedy against an Exclusion Ordinance banning articles from entering the United States that violate articles.
The ITC’s response to the COVID-19 crisis
Since its first COVID-19 Action Plan in March, the ITC has taken proactive steps to disrupt Section 337 investigations as little as possible. Although all face-to-face hearings were postponed and some procedural plans had to be extended, many investigations stayed on track with the use of changed administrative and procedural rules for detection. As mentioned earlier, the ITC selected WebEx Meeting in July as a secure FedRAMP certified video conferencing solution so that hearings and conferences with sensitive business information can be held remotely. As a result, the investigation is typically uninterrupted, remote conferencing and hearings are held, and most investigations are completed within the established legal timeframe.
2020 was a busy year at ITC
Despite its effectiveness as a forum for patent holders, the ITC receives a limited number of complaints compared to the US district courts, largely due to its jurisdiction requirements. In addition to demonstrating an infringement, a patentee must also demonstrate that (a) a patent has been introduced for articles related to the infringement and (b) the existence of a “domestic industry” for articles practicing the patent. Over the past 10 years, the ITC has filed an average of only 49 new complaints per year.
However, in 2020 the ITC received 57 new complaints. As with most other forums, the first half of 2020 was slow due to the COVID-19 crisis. From January to June, only 16 new complaints were submitted to the ITC. However, starting with busy July, 41 new complaints were filed in the second half of the year, culminating in eight complaints in December – seven of them after December 16 and just in time for the holidays!
The Future of Section 337 Investigations at the ITC
The ITC has shown that it can adapt to the current crisis, which continues to give IP owners confidence in the ITC’s reputation for resolving IP disputes quickly, reliably and accurately. In the current economic climate, IP owners face increased competition from infringing imported products and are looking for ways to maintain and expand their position in the market. The increase in complaints filed in late 2020 suggests that the ITC will continue to be an important tool for IP owners who wish to use their IP rights to protect their market share.