ITC Exclusion Orders

A patentee may file a complaint with the ITC alleging a Section 337 violation. When the ITC finds a violation has the authority to issue an exclusion order banning the importation of the relevant articles.

If the Commission determines, as a result of an investigation under this section, that there is a violation of this section, it shall direct that the articles concerned, imported by any person violating the provision of this section, be excluded from entry into the United States[.]

— 19 U.S. Code § 1337 (d) (1).

The ITC will typically issue an order unless it determines that an exclusion would cause an unacceptable level of harm to the public.

[U]nless, after considering the effect of such exclusion upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers, it finds that such articles should not be excluded from entry.

— 19 U.S. Code § 1337 (d) (1).

The ITC rarely finds public interest considerations outweigh the need for injunctive relief.

the Commission has found public interest considerations to outweigh the need for injunctive relief in protecting intellectual property rights found to have been violated under Section 337 in only three investigations, all of which were decided prior to the 1988 legislative amendment discussed above, which removed the requirement that a patentee show irreparable harm.

— Spansion, Inc. v. International Trade Com'n, 629 F. 3d 1331, 1360 (Fed. Cir. 2010).

The ITC’s authority to issue an injunction is not constrained by the Supreme Court’s decision in eBay.

Given the different statutory underpinnings for relief before the Commission in Section 337 actions and before the district courts in suits for patent infringement, this court holds that eBay does not apply to Commission remedy determinations under Section 337.

— Spansion, Inc. v. International Trade Com'n, 629 F. 3d 1331, 1359 (Fed. Cir. 2010).

A party must prove three things to show a violation: importation, infringement, and domestic industry.

[T]o show a violation … a complainant can prove three elements: (1) the importation of goods into the United States or sales of imported goods within the United States; (2) infringement by those goods or sales of a valid and enforceable United States patent; and (3) an industry in the United States marketing the patented articles.

— Alloc, Inc. v. International Trade Com'n, 342 F. 3d 1361, 1365 (Fed. Cir. 2003).

A patentee must also establish that the patent at issue is both valid and enforceable.

The criteria set forth in section 337 require not only proof of patent infringement, but also a showing that the infringed patent is valid and enforceable.

— Alloc, Inc. v. International Trade Com'n, 342 F. 3d 1361, 1374-75 (Fed. Cir. 2003).

Infringement may occur after importation and thus Section 337 violations may result from induced infringement.

The International Trade Commission ("Commission") interpreted this provision to cover importation of goods that, after importation, are used by the importer to directly infringe at the inducement of the goods' seller. … [W]e now uphold the Commission's position.

— Suprema, Inc. v. International Trade Com'n, 796 F. 3d 1338, 1340 (Fed. Cir. 2015).

A showing of domestic industry requires that an industry exists or is in the process of being established.

Subparagraphs (B), (C), (D), and (E) of paragraph (1) apply only if an industry in the United States, relating to the articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established.

— 19 U.S. Code § 1337 (a) (2).

A patentee need not show that the domestic industry is harmed– the importation of patented goods–infringement is enough.

The legislative history of the amendments to Section 337 indicates that Congress intended injunctive relief to be the normal remedy for a Section 337 violation and that a showing of irreparable harm is not required to receive such injunctive relief.

— Spansion, Inc. v. International Trade Com'n, 629 F. 3d 1331, 1358 (Fed. Cir. 2010).

The domestic industry requirement has both a technical and an economic prong. The technical prong establishes that the industry produces articles covered by the asserted claims.

To determine whether an industry relates to the protected articles (the "technical prong" of the domestic industry requirement), the Commission examines whether the industry produces articles covered by the asserted claims. ... [The technical prong] is essentially the same as that for infringement, i.e., a comparison of domestic products to the asserted claims.

— Alloc, Inc. v. International Trade Com'n, 342 F. 3d 1361, 1375 (Fed. Cir. 2003).

The economic prong establishes that the industry is economically substantial.

For purposes of paragraph (2), an industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned— (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing.

— 19 U.S.C. § 1337 (a) (3).

An analysis of domestic industry should be based on quantitative evidence.

Prior ITC § 337 investigations confirm that a § 337 analysis is quantitatively based. The ITC first addressed the relevant domestic industry requirement in Certain Cabinet Hinges, and found that the word significant denoted an assessment of the relative importance of the domestic activities.

— Lelo Inc. v. International Trade Com’n, 786 F. 3d 879, 883 (Fed. Cir. 2015).

When both qualitative and quantitative evidence is available, quantitative evidence generally carries more weight.

The Commission erred when it disregarded the quantitative data to reach its domestic industry finding based on qualitative factors. Qualitative factors cannot compensate for quantitative data that indicate insignificant investment and employment.

— Lelo Inc. v. International Trade Com’n, 786 F. 3d 879, 885 (Fed. Cir. 2015).

Licensing activities may satisfy the economic prong for domestic industry when those activities encourage the production of patent-practicing goods.

[Efforts directed toward licensing a patent can satisfy the domestic industry requirement where they would result in the production of] goods practicing the patents.

— InterDigital Commc'ns, LLC v. International Trade Com'n, 707 F.3d 1295, 1299 (Fed.Cir.2013).

Similarly, investments in patent enforcement activities may satisfy the economic prong where those investments are directed at encouraging rather than preventing the manufacture of patented articles.

Motiva's investment in the litigation against Nintendo could indeed satisfy the economic prong of the domestic industry requirement if it was substantial and directed toward a licensing program that would encourage adoption and development of articles that incorporated Motiva's patented technology. … litigation expenses directed at preventing instead of encouraging manufacture of articles incorporating patented technology [do] not satisfy the domestic industry requirement of Section 337[.]

— Motiva, LLC v. International Trade Com’n, 716 F. 3d 596, 600-01 (Fed. Cir. 2013).