GSB Vol. 14, NO. 4, Pg. 28. Stopping Infringing Goods at the Docks: An Overview of the International Trade Commission.

Author:Larry Roberts and Wilson White
 
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Georgia Bar Journal

Volume 14.

GSB Vol. 14, NO. 4, Pg. 28.

Stopping Infringing Goods at the Docks: An Overview of the International Trade Commission

GSB JournalVol. 14, NO. 4December 2008Stopping Infringing Goods at the Docks: An Overview of the International Trade CommissionLarry Roberts and Wilson WhitePatent holders attempting to bar infringement through traditional court litigation face increasingly difficult standards and protracted legal battles. Most recently, in 2006 the U.S. Supreme Court issued a decision in eBay, Inc. v. MercExchange, LLC(fn1) that altered the landscape for patent owners seeking an injunction against infringers.

Previously, a patent owner was virtually assured of obtaining a permanent injunction against the infringer if the patent owner prevailed in court. Under the eBay decision, however, a patent owner now has to satisfy the traditional four-pronged test for injunctive relief: (1) it has suffered an irreparable injury; (2) remedies available at law are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be disserved by a permanent injunction.(fn2) As a result, injunctive relief for a patent owner is by no means assured.

Meanwhile, with the possible exception of certain "rocket dockets" in various federal court jurisdictions across the country, patent owners continue to be frustrated by the clogged federal court system and the length of time to bring a case to trial. In the majority of cases, the infringer continues its conduct as the case awaits trial. Although this continued infringement adds to the damages that the patent owner can recover if he prevails, the market for the patented product may erode to such an extent that the patent owner might never recover. Thus, patent owners need an avenue for speedier resolution of patent infringement cases.

As a result, patent owners are increasingly choosing the U.S. International Trade Commission (ITC or Commission) as an alternative forum for the enforcement of patent rights. The ITC is a quasi-judicial governmental agency that conducts investigations into allegations of certain unfair practices in import trade. Among other duties, the ITC is empowered under Section 337 of the Tariff Act of 1930, as amended, to combat unfair import trade practices and to enforce U.S. intellectual property rights at the border. Section 337 makes unlawful the import of articles or goods that infringe U.S. patents, copyrights and trademarks.(fn3) If imports are found to violate Section 337, an exclusion order may be issued directing the U.S. Customs Service to prevent these products from entering the United States.(fn4) In addition to an exclusion order, Section 337 also permits the ITC to issue cease and desist orders to stop the use and sale of infringing products that have already been imported into the United States.(fn5)

The ITC Procedure

Section 337 was originally drafted to help level the playing field for domestic manufacturers against foreign companies that imported infringing products into the United States, and its powers are limited to imported goods. Nonetheless, many U.S. companies have outsourced their manufacturing operations overseas, and many foreign companies have set up manufacturing operations in the United States. The ITC's jurisdiction is thus able to affect the operations of both domestic and foreign companies and has become an advantageous forum for enforcing patent rights.

To initiate an action before the ITC, an aggrieved patent owner files a complaint requesting a Section 337 investigation. There are two basic requirements for establishing ITC subject-matter jurisdiction: unfair trade importation and domestic industry. The importation element simply means that the goods are manufactured outside the United States and imported into the country. The...

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