What IP holders ought to know about the ITC and the district courts.

• Jurisdiction: United States
• Date: 01 July 2007
• Author: Santos, III, Neil Edward L.,Fernandez, Dennis S.,Patel, Nilesh D.
• Published date: 01 July 2007
• Author: Santos, Neil Edward L., III

Enforcing intellectual property rights is one of the most important facets of intellectual property law. It is unfortunate that there is no enacted statute or promulgated set of rules that "guide" IP holders as to what course of action to take in enforcing their rights. Thus, as a strategic step, IP holders must be aware of the available remedies in different forums.

Oftentimes, IP holders seek refuge in the court system, particularly the district courts, to address infringement matters. However, another forum that is increasingly popular with IP holders is the United States International Trade Commission (ITC). The ITC is an independent, quasi judicial federal agency with broad investigative responsibilities on matters of trade. It adjudicates cases involving importation of goods that allegedly infringe intellectual property rights and provides other relief based on equity.

This article will attempt to detail point by point differences between the district courts and the ITC to help IP holders determine which forum best suits their interests, both substantively and procedurally, and will likewise include statistical information that relates to intellectual property rights enforcement.

The ITC, in relation to intellectual property, primarily deals with Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. [section] 1337. This provision makes unlawful any unfair methods of competition and unfair acts. (1) These acts include patent and copyright infringement; (2) importing articles that threaten to destroy or substantially injure an industry in the United States; (5) preventing the establishment of such an industry; (4) and restraining or monopolizing trade and commerce in the United States. (5) Intellectual property-based im oft investigations are one of the five strategic operations of the ITC. (6) Such proceedings are "conducted in accordance with the Administrative Procedure Act, which affords the parties the opportunity to conduct discovery, present evidence, and make legal arguments before the Administrative Law Judges and the Commission." (7) The procedures also protect the public interest and provide the parties expedited determinations. According to the United States International Trade Commission, the success of the ITC in intellectual property-based import investigations will be determined in part by whether it "facilitate[s] a rules-based international trading system by conducting intellectual property-based import investigations in an expeditious and transparent manner and provid[es] for effective relief when violations of Section 337 are found and relief is warranted." (8)

As compared to the ITC, Federal District Courts have a higher statutory requirement to satisfy to render a valid judgment. The district courts must have personal jurisdiction over the patent infringer, and the patent holder who initiated the litigation has the burden to prove that the court has personal jurisdiction over the patent infringer. (9) The ITC, however, has national in rem jurisdiction over all products imported into the United States. (10) This means that the ITC's jurisdictional requirements are satisfied if the infringing product is physically present in the United States. (11)

Another substantial difference between the district courts and the ITC is each institution's subpoena power. Since the ITC is a federal agency, it has a nationwide subpoena power that gives the complainant an advantage in gathering evidence and testimony. However, the subpoena power of district courts is more limited in scope and must, with high regard, bow down to constitutional limitations. (12)

In terms of remedial relief, the ITC can impose strong injunctive measures after reaching a decision pursuant to a Section 337 investigation; but, unlike the district courts, it can not award money damages. (13) Available injunctions include exclusion orders and cease-and-desist orders. (14) A general exclusion order provides protection against widespread infringement and excludes infringing goods regardless of the source. (15) However, a cease-and-desist order requires personal jurisdiction over the respondent. (16) Additionally, the United States Customs and Border Protection enforces the exclusion orders at every port and border. (17) A limited exclusion will be restricted to one or more named respondents but covers all infringing products both in the present and...