The International Trade Commission: An Introduction Steven Carlson Alexander Harguth
Basics What is the International Trade Commission (ITC)? What is the aim of ITC proceedings? Pros & cons of ITC proceedings vs. district court action? What is the interplay between the ITC, the Patent Office, and district courts? 2
The International Trade Commission The U.S. International Trade Commission is an independent, nonpartisan, quasi-judicial federal agency that provides trade expertise to both the legislative and executive branches of government, determines the impact of imports on U.S. industries, and directs actions against certain unfair trade practices, such as patent, trademark, and copyright infringement Six commissioners When the ITC institutes an investigation, Chief Administrative Law Judge ( ALJ ) assigns an ALJ to preside over proceedings 3
Aim of ITC Proceedings Remedy injunctive relief Exclusion order enforced by U.S. Customs and Border Protection Bars importation of the accused product No monetary damages Need to file related district court litigation for monetary damages 4
Elements of an ITC case Importation Infringement Domestic Industry 5
Subject Matter Jurisdiction 19 U.S.C. 1337(a)(i) authorizes the ITC to investigate and remedy importation, sale for importation, or sale after importation of articles that Infringe a valid and enforceable US patent; Are made, produced, processed using a patented process; Infringe a valid, enforceable, and registered US copyright or trademark; or Infringe a registered mask work (17 U.S.C. 901 et seq); Other prohibited unfair acts include activities such as theft of trade secrets, trade dress misappropriation, or false advertising in the importation and sale of articles that destroy or injure the domestic industry, prevent establishment of such industry, or restrain or monopolize trade 6
In Rem Jurisdiction In rem jurisdiction: power over specific piece of property Accused article has entered the US; or Accused article is constructively present by virtue of its sale and imminent importation In rem jurisdiction is required to issue exclusion order Established by verified complaint alleging infringement or other unfair acts by articles that have been imported, sold for importation, sold after importation, including articles that will be imminently imported or sold in US 7
In Personam Jurisdiction In personam jurisdiction: power over specific persons or entities In personam jurisdiction may be required for cease and desist orders Established by personal appearance, appearance by counsel, or personal service of complaint 8
Domestic Industry Domestic industry requirement Complainant must show that an industry exists in the U.S. relating to the articles protected by the patent exists, or is in the process of being established The domestic industry requirement has two prongs: technical and economic The technical prong relates to whether the asserted patents are practiced in the U.S. The economic prong involves investment activities in the U.S. with respect to articles protected by the asserted patents (i.e., a significant investment in plant and equipment; significant employment of labor or capital; or substantial investment in its exploitation, including engineering, research and development or licensing) 9
ITC vs. District Court ITC Jurisdictional advantages: (1) name multiple respondents from U.S. and abroad; (2) in rem jurisdiction Expedited proceedings usually 12-16 months No counterclaims by respondents Discovery: (1) nationwide subpoena power; (2) discovery against foreign respondents; (3) sanctions available against foreign respondents who fail to comply with discovery ALJ expertise: ALJ handles both discovery disputes and hearing (early familiarity) Exclusion orders enforced by U.S. Customs authorities District Court No domestic industry requirement No importation requirement Complaint need not lay out fundamental initial infringement contentions; essentially notice pleading v. fact pleading at ITC Jury Monetary Damages Injunctive relief (?) 10
How fast is fast?: Example of 16-month schedule Filing of complaint Hearing (exact dates will depend on ALJ s schedule & courtroom space) Institution of investigation -1 1 2 3 4 5 6 7 8 9 ALJ s Final ID on violation & RD on remedy 10 11 12 ITC Decision re Pet. For Review 13 14 15 Year 1 Closing of Record (last date of hearing) Note: Schedule assumes a 16month target date Post-Hr g Brief, Prop. Findings, & Prop. Concl. of Law (~10-15 days fr. hr g) Comm n Final Determination If Review Granted (16 month target date) 16 17 18 19 20 Year 2 Petition for Review (12 days fr. service of ID) ID becomes FD if no petition or no review Response to Petition for Review (8 days fr. filing of petition) Rebuttal Post-Hr g Brief, & Rebuttal Prop. Findings (~7 days fr. post-hr g filing) 11
What to do if you are sued in the ITC? (I) Commission has 30 days after the complaint is filed to decide on whether to institute the investigation Complainant has been working on this case for several months and has a head start advantage Act quickly and do as much as possible during the preinitiation phase Investigate possibilities for a design-around option Decide whether to file a counter-suit in ITC Pros and cons of staying related district court litigation 12
What to do if you are sued in the ITC? (II) Reexamination? Declaratory Judgment Action? Settlement by agreement or consent order? 13
Discovery! Discovery begins after the institution of the investigation (and may extend to, and even during, the hearing); Many similarities to district court litigation regarding types of available discovery (e.g., interrogatories, requests for documents, requests for admissions, depositions); Voluminous discovery requests and fast deadlines drive the discovery process; Given the fast procedural schedule, need to plan out discovery especially with respect to discovery of foreign respondents and third parties, as well as expert discovery 14
Pre-Hearing, Hearing & Post- Hearing Markman hearings? Meetings with OUII before filing pre-hearing brief Pre-hearing briefing and more briefing Hearing procedures depend on the ALJ: ALJ vs. jury Petitions for review of the ALJ s initial determination Commission may review the ALJ s initial determination based on petitions by the parties or on its own initiative Commission may request additional briefing 15
Costs, Budget and Staffing Depends on the investigation and role of the party in the investigation Budget will be similar to district court litigation, except that fees and costs will be compressed into one year, instead of spread out over several years Companion district court case Staffing issues 16
Questions?