INTERNATIONAL TRADE

COMMISSION Team Four: Kayla Martin, Karin Ross, John Lomenick, Lane

Womack, Adrienne Toon, John Cadkin, Christopher Butler, CiCi

Cheng, Steve Gruber, Sara Sharp, Scott Brairton, Joe Kovarik, Greg

Durbin, P. Campos, Bruce Dahl

The International Trade Commission (ITC)

Washington, DC

Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Products Containing the Same, and Components Thereof

Snowmobiles with Engines Having Exhaust Temperature-Controlled Engine Technology and Components Thereof

Windshield Wipers and Components Thereof

Beverage Brewing Capsules, Components

Thereof, and Products Containing the Same

Sample ITC Cases Filed in 2014

Exclusion Order: Enforced at the Border

Patent Litigation: ITC vs. District Court

ITC District Court

Judge Administrative Law Judge (ALJ) Article III judge or magistrate judge

Parties Complainant(s), Respondent(s),

Commission Investigative Attorney

Plaintiff(s), Defendant(s)

Personal

Jurisdiction

In rem over products Requires Personal Jurisdiction

Remedies Preliminary injunction, limited

exclusion order, general exclusion

order, cease & desist order

Damages, preliminary injunction,

permanent injunction

Time to respond to

motions or

discovery (typical)

10 days Varies, ~30 days

Time frame to

resolution (typical)

15-18 months 2-3 years

Counterclaims Available, but must immediately

transfer to district court

Available

Appellate Review Full Commission →Federal Circuit Federal Circuit

Remedies: Orders Issued by the Commission

Exclusion Order

Limited Exclusion Order Apply only to specific parties

Apply to all varieties or models of infringing products,

including future products

General Exclusion Orders Exclude all infringing articles from entry into the U.S.

regardless of source

Only issued if:

Such an order is necessary to prevent t circumvention

of a limited exclusion order

There is a pattern of violation and it is difficult to

identify source of infringing product

Remedies: Orders Issued by the Commission

Cease and Desist Orders

Can be issued alone or in conjunction with

exclusion orders

Usually when significant inventories of infringing

products are already present in the United States

Downstream Products

Exclusion order can extend to products that

incorporate the infringing products, even when

manufacturer of product is not a party to the

investigation

Filing

OUII examination of the filing and

recommendation to the

Commission

Commission decision to institute an

investigation.

Appointment of an Administrative

Law Judge and OUII

representative

Investigation Evidentiary

Hearing

Initial Determination

Commission Review and Final

Decision

Presidential Review and

Appeal to Federal Circuit

19 U.S.C. § 1337 and 19 C.F.R. §§ 201 and 210.

ITC Procedure

ITC Procedure: Legal Standard

• 337 Investigation:

• Looks into whether an imported article

engages in unfair practices in import

trade.

• Governing statute: 19 U.S.C. § 1337.

• Governing rules: 19 C.F.R. §§ 201 and 210.

• There may be other ground rules and

orders that govern as well.

19 U.S.C. § 1337 and 19 C.F.R. §§ 201 and 210.

ITC Procedure: Filing the Case

Complaint in patent cases must be

accompanied by:

Certified prosecution history for each

asserted patent;

Copies of the technical references cited in

the prosecution histories of each asserted

patent;

Copies of license agreements (if relied on).

19 C.F.R. § 210.12.

ITC Procedure: Filing the Case (cont.)

The Office of Unfair Import Investigations (“OUII”) will determine if a complaint is sufficient and has complied with the applicable rules.

The OUII then makes a recommendation to the commission regarding the commencement of an investigation.

The commission decides if the case has merit. The commission will normally respond within 30

calendar days. If the case lacks merit, the commission will

dismiss the case.

If the case has merit, the commission initiates an investigation.

19 U.S.C. § 1337 and 19 C.F.R. § 210.

ITC Procedure: Investigation

A Commission notice announcing the

institution of an investigation is published in

the Federal Register whenever the

Commission votes to institute a Section

337 investigation.

The Chief Administrative Law Judge at the

Commission assigns an Administrative Law

Judge (ALJ) to preside over the

proceedings and to render an Initial

Determination.

19 U.S.C. § 1337 and 19 C.F.R. § 210.

Administrative Law Judges of the ITC

Chief Judge

Charles E. Bullock

Appointed 2002

Judge David P.

Shaw

Appointed 2011

Judge Sandra (Dee)

Lord

Appointed 2013

Judge Theodore R.

Essex

Appointed 2007

Judge Thomas B.

Pender

Appointed 2011

ITC Procedure: Investigation

The Commission also assigns an

investigative attorney from the

Commission's OUII, who functions as an

independent litigant representing the public

interest in the investigation.

The ALJ will also issue ground rules for the

conduct of the investigation.

19 U.S.C. § 1337 and 19 C.F.R. § 210.

ITC Procedure: Discovery

Same types of discovery as under the Federal Rules of Civil Procedure.

Responses to discovery requests and to discovery-related motions are normally due in 10 days, and extensions are granted sparingly and with reluctance.

The cost of discovery will be incurred over a much shorter period of time.

The discovery cost are largely the same, with an estimated minimum cost of $2 million.

AIPLA Economic survey (2013)

ITC Procedure: Evidentiary Hearing

A formal evidentiary hearing on the merits

is conducted by the presiding ALJ in

conformity with the adjudicative provisions

of the Administrative Procedure Act (5

U.S.C. §§ 551).

Parties have the right of adequate notice,

cross-examination, presentation of

evidence, objection, motion, argument, and

other rights essential to a fair hearing.

19 U.S.C. § 1337 and 19 C.F.R. § 210.

ITC Procedure: Initial Determination

The presiding ALJ issues an Initial

Determination that is certified to the

Commission along with the evidentiary record

after the evidentiary hearing.

Within 45 days after publication of a notice of

investigation, the presiding ALJ sets a target

date for completion of the investigation.

The Judge issues the Initial Determination no

later than four months prior to the target date.

19 U.S.C. § 1337 and 19 C.F.R. § 210.

ITC Procedure: Commission Review

The Commission may review and adopt the initial determination,

modify the initial determination,

reverse the initial determination, or

it may decide not to review the initial determination.

The initial determination becomes final if the Commission declines to review the initial determination.

If the Commission determines that Section 337 has been violated, the Commission may issue an exclusion order barring or a cease and desist order.

19 U.S.C. § 1337.

Enforcement Proceedings

Exclusion Orders enforced by U.S.

Customs and Border Protection.

Exclusion orders become effective within

60 days of issuance.

Once an exclusion order is entered by the

Commission, Customs will take steps to

enforce that order automatically.

Presidential Review

After ITC makes a determination, the

President may: Disapprove the ITC order on policy grounds;

Approve the order; or

Take no action and allow the order to come into

force upon expiration of 60-day review period

President delegates veto authority to

the U.S. Trade Representative

Policy Considerations

Factors to be considered include the

effect the remedy will have on: public health and welfare;

competitive conditions in the U.S. economy;

production of competitive articles in the United

States;

U.S. consumers;

and U.S. foreign relations, economic and

political.

Presidential Disapproval

On August 3, 2013, President Obama,

acting through the U.S. Trade

Representative, disapproved the ITC’s

decision barring Apple from importing some

of its wireless communication products.

However, Presidential disapproval is rare.

Prior to President Obama’s decision in 2013,

the last one was in 1987.

The five prior Presidential disapprovals were

all in the 1970s and ‘80s.

Case Study: Dispute Between Apple and Samsung

Certain Electronic Devices, Including

Wireless Communication Devices, Portable

Music and Data Processing Devices, and

Table Computers, Investigation No. 337-

TA-794 Patent dispute between Apple and Samsung over patents

on wireless communications.

The ITC found one of the two patents asserted by

Samsung to be both valid and infringed

Ruled that the proper relief was a limited exclusion and

cease-and-desist order barring Apple from importing its

iPhone 4, iPhone 3GS, iPad 3G, iPad 3 and iPad 2 models

for sale in the U.S.

Case Study: Dispute Between Apple and Samsung (cont.)

President Obama, acting through the USTR,

overturned the ITC injunction issued against Apple

products.

USTR Policy statement expressed concerns about

potential harm resulting from owners of standards-

essential patents (SEPs) engaging in “patent hold-

up.”

Reviewed policy considerations relating to

competitive conditions in the U.S. economy and

the effect on U.S. consumers.

U.S. Customs & Border Protection

Two processes to enforce exclusion orders

issued by the ITC:

Four-phase process to detect and deny entry to

or seize infringing products at U.S. ports

An administrative ruling process that determines

in advance of importing whether products are

covered by exclusion orders

Before a company attempts to import a certain

product, it may request that CBP determine

through its administrative ruling process

whether the product is covered by a particular

exclusion order.

U.S. Customs & Border Protection’s Process to Enforce Exclusion Orders at the Ports

Thank You!