Intellectual property practitioners are eyeing at least three major trends at the U.S. International Trade Commission (ITC). First is the scrutiny over whether complainants in IP cases can prove they have a U.S. presence; second is the scrutiny over the details of complaints during the pre-institution phase; and lastly, the balance of concurrent Patent Trial and Appeal Board (PTAB) and ITC proceedings.
Regarding domestic industry details, Finnegan partner Smith Brittingham told Managing Intellectual Property that a lot of companies are outsourcing their manufacturing overseas, which makes it harder for them to argue that they have domestic industry.
“It may be that the commission is taking a look a little more closely to see whether that rises to the level that they’re expecting,” he said.
When trying to prove that clients have a U.S. presence, IP attorneys must show that within the United States, there is a significant investment in plant and equipment, significant investment of labor or capital, or a substantial investment in engineering, research and development or licensing.
Smith says the commission might require companies to allocate their overall investments to just their patented items.
“That can be difficult because businesses typically don’t keep records or divide up their investments in this way,” he said.
Domestic industry is not the only issue for IP practitioners; the ITC is also paying close attention to cases before institution.
Smith points out that although the ITC instituted a proceeding related to semiconductors in 2022, it declined to investigate some of the respondents listed in the initial complaint.
“That’s a bit of a departure,” he says, noting that this case is a reminder for practitioners to have all their details in order in complaints.
He adds that complainants might list multiple businesses as respondents, but they really need to make sure they have the requisite evidence against each company. Otherwise, the commission could decline to institute the proceeding against certain businesses – as it did in the semiconductor case.
Lastly, practitioners can file PTAB proceedings as part of their ITC strategy. Smith says the commission has stated that it will suspend enforcement of any exclusion orders if the inter partes review (IPR) finishes before the ITC proceeding and the patent is found invalid.
“If your IPR finishes early, that’s a get-out-of-jail-free card if you’ve invalidated the patent,” he says.
He adds that practitioners should make an early decision about whether to file IPRs, and prepare to submit them before ITC complaints are made, if they know such complaints are coming.
“The earlier you can get it on file, the likelier it will invalidate those patents before the ITC can issue an exclusion order,” he says. “The commission has stated that it won’t rescind or suspend an existing exclusion order based only on a PTAB decision if the board takes longer than the ITC–which it usually does.”
