July 4, 2023
IAM
Leaders of corporate IP departments may be tempted to neglect the public interest issue in a US International Trade Commission investigation, considering that the ITC has completely denied issuing remedial orders due to public interest concerns in only three investigations.
This is a mistake.
Instead, chief IP officers should instruct their ITC litigation counsel to seriously consider the public interest analysis and submit thorough argument on this issue at all available avenues and as early as possible.
For respondents, doing so may result in the ITC tailoring its remedial relief accordingly if the commission finds a violation.
A failure to seriously consider the public interest analysis and submit thorough evidence and argument could result in a missed opportunity.
The ITC investigates alleged unfair acts under Section 337 of the Tariff Act of 1930. These unfair acts include, for example,patent infringement and trade secret misappropriation.
Known for its powerful remedial relief and incredible speed, the ITC can prevent an entire line of products from entering the United States, typically completing its investigations in approximately 15 to 18 months.
Should the ITC determine that Section 337 has been violated, it directs that the violative articles be excluded from entry into the US, unless the “public interest” dictates otherwise.
To determine whether the public interest counsels against the remedial relief sought, the ITC considers:
There were three investigations – and none since 1984 – in which public interest concerns prompted the commission to completely deny the issuance of remedial relief.
But in other cases, the public interest led the ITC to delay a remedial order.
For instance, the commission has delayed the imposition of remedies to allow affected third party consumers to transition to non-infringing products after determining that the exclusion would adversely impact the public interest.
Cases to research include:
Indeed, a delay in issuing remedial relief of even several months may afford a respondent with enough time to finalize a strategic plan regarding how to proceed when the exclusion order issues, such as a plan for a redesigned product replacing an infringing product.
Additionally, the commission has tailored its relief in response to the public interest issue in other ways.
It has provided exemptions to its relief for products involved in research use, service parts, and has grandfathered products to prevent disruption to customers that already have violative products in the United States.
Examples of these cases include:
In Baseband Processor Chips, the commission determined to issue a limited exclusion order and a cease-and-desist order covering infringing processor chips and certain handheld wireless communication devices containing the violative chips.
The commission then determined that the public interest warranted an exception in the limited exclusion order that permitted the importation of models of handheld wireless communication devices that were being imported on or before the issue date of
the limited exclusion order.
The ITC provided reasons for its grandfathering exception:
In sum, the commission seeks to balance the intellectual property holder’s rights and the public interest in enforcing intellectual property rights. In doing so, it sometimes tailors its relief to achieve this balance.
Respondents should thoroughly consider the public interest factors throughout the investigation to determine if the ITC should tailor the requested relief due to public interest concerns, whether it be delayed or limited in some other respect.
Respondents should present a thorough analysis at all available avenues to convince the commission to tailor the requested relief.
This demonstration may convince the ITC to delay issuance of the requested remedial relief or exempt certain products from the relief, potentially saving respondents both significant financial loss and hardship.
Originally printed in IAM on July 4, 2023. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm’s clients.
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