Firms Eye ITC Opportunities Post-Lashify Ruling

In 2024, there was an uptick in US International Trade Commission (ITC) cases, and that trend could continue into 2025, especially in light of a recent ruling by the Court of Appeals for the Federal Circuit.

In early April, the Federal Circuit said that the ITC applied a legally incorrect understanding of the test for the economic prong of the domestic industry requirement.

The court vacated the ITC’s ruling that Lashify, a beauty company, did not meet the economic prong of the domestic industry requirement. The economic prong means that there must be an industry in the US related to the patent that has been asserted.

With that, the ITC asserted that Lashify failed to satisfy this requirement after the forum excluded expenses relating to sales, marketing, warehousing, quality control, and distribution from its analysis.

The ruling overturned the ITC’s established practice of excluding this type of evidence from its consideration of the economic prong.

Speaking on how this development may impact law firms, Finnegan partner Smith Brittingham told Managing IP that there’s a likelihood that more clients will feel comfortable trying to satisfy the domestic industry and file a complaint.

“The decision removes some doubt or concerns for some types of companies that might have worried that their domestic industry allegations are borderline. As a result, I wouldn’t be surprised if more companies feel comfortable going to the ITC,” he said. “Nobody wants to go to the ITC and win on everything but domestic industry.”

He added that he hasn’t heard from any potential complainants yet.

“I’ve heard from at least one in-house counsel who doesn’t love the idea of potentially having more ITC cases filed against them,” he says. “From the respondent’s side, there is understandable concern that this will expand the universe of potential complainants.”

What is to come in 2025 as a result of this ruling is still unclear, however firms did see some ITC opportunities in 2024.

A report from expert witness agency WIT Legal found that there were 52 ITC investigations in 2024, a 41% increase from 37 in 2023. Patent-related investigations at the ITC also went up from 32 in 2023 to 40 in 2024, a rise of 25%.

Smith notes that the number of investigations in 2023 was “really low”.

“One of the questions everybody had was whether 2023 was a trend or just a blip. Maybe we have the same question about 2024. But overall, most people seem to be satisfied that 2023 was more of an aberration,” he said.

Firms are also paying attention to the types of companies that are filing at the ITC.

Smith said that the number of non-practicing entity (NPE) complaints at the ITC declined significantly in 2023. But even though the number of cases increased in 2024, the NPE-driven cases didn’t go up significantly that year.

“So, these are cases that are presumably being filed by more traditional ITC complainants rather than just a return to a large number of NPE cases.”

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