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Understanding ITC Litigation (Section 337 Cases)

Having seen a regular and growing number of queries from Indian Companies on U.S. International Trade Commission (ITC) cases in the US (primarily companies having a domestic market in the US), this is a brief attempt to give clarity on the jurisdiction that ITC provides, types of cases handled, advantages/disadvantages of the ITC routes, among few other characteristics of the cases filed.


U.S. International Trade Commission (ITC) has, in the last few years, become a key destination for both Domestic and Foreign IP litigants for different types of Trade Disputes. ITC, in essence, is basically an independent, quasi-judicial Federal agency with broad investigative responsibilities on matters of trade. ITC is enabled to investigate the effects of dumped and subsidized imports on domestic industries and conduct global safeguard investigations. The Commission is also involved in adjudicating cases involving imports that allegedly infringe intellectual property rights. The Commission also serves as a Federal resource where trade data and other trade policy-related information are gathered and analyzed for the development of sound and informed U.S. trade policy. The Commission makes most of its information and analysis available to the public to promote understanding of international trade issues.

The basic functions of ITC can be viewed here. ITC therefore, not only focuses on IP issues but handles and has jurisdiction over any action that is to be taken by an appropriately hurt entity on issues relating to import injury, handling Freedom of Information Act Requests (FIAR), customs, Antidumping and Countervailing Duties (AD/CVD), among other like matters. However, ITC is best known for its IP practice, wherein, Section 337 investigations conducted by the U.S. International Trade Commission often involve claims regarding intellectual property rights, including allegations of patent infringement and/or trademark infringement by imported goods, which may lead to unfair practices in import trade. Both utility and design patents, as well as registered and common law trademarks, may be asserted in these investigations. Other forms of unfair competition involving imported products, such as infringement of registered copyrights, mask works or boat hull designs, misappropriation of trade secrets or trade dress, passing off, and false advertising, may also be asserted. In addition, antitrust claims relating to imported goods may also be asserted.

337 Investigations:

A primary remedy available in Section 337 investigations is an exclusion order that directs Customs to stop infringing imports from entering the United States. In addition, the Commission may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337. Expedited relief in the form of temporary exclusion orders and temporary cease and desist orders may also be available in certain exceptional circumstances. Section 337 investigations, which are conducted pursuant to 19 U.S.C. § 1337 and the Administrative Procedure Act, include trial proceedings before administrative law judges and review by the Commission.

Many of the highest-profile, multi-forum IP disputes now include proceedings before the ITC. Since ITC cases go to trial faster than almost any forum in the world, they can be the first to be resolved in these multi-forum disputes and often spearhead resolution of the other cases. Most ITC disputes are Patent Infringement Suits filed by Patent holders who must prove that it has a domestic industry with respect to the patent in order to be entitled to relief, against foreign companies that are exporting/ attempting to export potentially patent infringing products to the US. Apart from patent infringement suits, other subject matters relating to, but not limited to, copyright infringement, mask work infringement, misappropriation of trade secrets, passing off, false advertising, and potentially even violations of the antitrust laws may also be asserted under Section 337. However, most of this instant article pertains to allegations being made in the context of patent infringements.


As a procedure, following the key steps taken during the case till the same is disposed of:

1. Section 337 investigations are initiated by the Commission following the receipt of a properly filed complaint that complies with the Commission’s Rules.3A Commission notice announcing the institution of an investigation is published in the Federal Register whenever the Commission votes to institute a Section 337 investigation.

2. When an investigation is instituted, the Chief Administrative Law Judge at the Commission assigns an Administrative Law Judge to preside over the proceedings and to render an initial decision (referred to as an “Initial Determination”) as to whether Section 337 has been violated. The Commission also assigns an investigative attorney from the Commission’s Office of Unfair Import Investigations (“OUII”), who functions as an independent litigant representing the public interest in the investigation.

3. In the notice announcing the initiation of an investigation, the Commission identifies entities that may participate in the investigation as parties, namely, the complainant(s) that allege a violation of Section 337, respondent(s) that are alleged to have violated Section 337, and the Investigative Attorney.

4. Section 337 investigations are conducted in accordance with procedural rules that are similar in many respects to the Federal Rules of Civil Procedure. These Commission procedural rules (found in 19 C.F.R. Part 210) are typically supplemented by a set of Ground Rules issued by the presiding Administrative Law Judge. The procedural rules and Administrative Law Judge’s Ground Rules provide important instructions and details regarding such matters as the taking of discovery and the handling of motions.

5. A formal evidentiary hearing on merits of a Section 337 case is conducted by the presiding Administrative Law Judge, giving parties the right of adequate notice, cross-examination, presentation of evidence, objection, motion, argument, and other rights essential to a fair hearing.

6. Following a hearing on the merits of the case, the Administrative Law Judge issues an Initial Determination (“ID”) that is certified to the Commission along with the evidentiary record. The commission may review and adopt, modify, or reverse the ID or it may decide not to review the ID. If the Commission declines to review an ID, the ID becomes the final determination of the Commission.

7. In the event that the Commission determines that Section 337 has been violated, the Commission may issue an exclusion order barring the products at issue from entry into the United States, as well as a “cease and desist” an order directing the violating parties to cease certain actions. The Commission’s exclusion orders are enforced by U.S. Customs and Border Protection. Commission orders become effective within 60 days of issuance unless disapproved by the President for policy reasons.

8. All appeals of Commission orders entered in Section 337 investigations are heard by the U.S. Court of Appeals for the Federal Circuit.

Owing to extremely pressing and short time durations between activities relating to cross-examination, presentation of evidence, objection, motion, arguments, litigating in the ITC enables an efficient resolution in a short period of time, and in a pressure-packed forum that can make or break the commercial success of the products at issue, wherein the entire case, starting from the complaint to discovery, pretrial hearings, trial, post-trial briefs, to subsequent review by the Commission, typically happens within about 18 months.

Other pointers:

  1. Remedies: Unlike in federal district court litigation, ITC does not enable money damages as a remedy and the commission has the authority to issue only two types of remedial orders: (1) limited or general exclusion orders and (2) cease and desist orders. Exclusion orders can include Limited Exclusion Order (LEO) that direct the U.S. Customs and Border Protection (CBP) to exclude all infringing articles imported by parties found by the commission to have violated Section 337, whereas a General Exclusion Order (GEO) directs CBP to exclude infringing goods from the United States, regardless of whether the persons importing those goods were parties to the investigation that led to the issuance of the GEO.
  1. Jurisdiction: ITC possesses the authority to investigate whether certain allegedly imported and infringing articles should be allowed into the US and to provide appropriate remedial relief, if necessary. In sum, the commission has in rem jurisdiction over imported goods rather than in personam jurisdiction over the parties who import those goods and the commission’s remedial orders can reach the products of parties over whom a district court may not have personal jurisdiction.
  1. Subject Matter Jurisdiction: ITC can only try cases wherein the complainant proves to the satisfaction of the ITC, that there has been importation into the United States, sale for importation, or sale within the United States after importation by the owner, importer, or consignee, of articles that infringe a U.S. patent. A second requirement is that a complainant must allege and establish the existence of a protectable domestic industry. For instance, in patent-based investigations, violation of Section 337 can be found “only if an industry in the United States, relating to the articles protected by the patent concerned, exists or is in the process of being established.”

Exemplary Cases

1. In Dec 2010, Motorola Mobility brought a patent infringement case at ITC against Microsoft concerning five of Motorola Mobility’s patents. Of the five, the claims were brought down to just one patent, namely U.S. Patent No. 6,069,896, which specifies a peer-to-peer wireless invention. The dispute was actually between Google and Microsoft, since Google bought Motorola Mobility about a year ago, largely to boost its patent holdings. The concerned patented technology uses Microsoft’s Xbox gaming consoles, wherein the Commissioners at the U.S. ITC refused an appeal by Motorola Mobility to examine findings of ITC Administrative Law Judge David P. Shaw that were determined in March 2013. Shaw found that Microsoft did not infringe a single patent held by Motorola Mobility. Six Commissioners at the ITC agreed with the administrative law judge’s initial determination, including that “Motorola failed to establish indirect infringement on the merits.” They concluded that the investigation was now “terminated” in a notice.

2. In June 2013, ITC cleared video-streaming site Netflix of infringing four patents owned by digital entertainment company Rovi. In its preliminary order, administrative law judge, David Shaw, rejected Rovi’s infringement claims covering interactive television program guides. One patent was found invalid. The complaint was filed in April 2010, targeting Netflix and consumer electronics companies Roku, LG Electronics, Mitsubishi, and Vizio. Roku, which is the only one of those not to strike a licensing deal with Rovi, was cleared by the ITC on June 7 2013 of infringing one The asserted patents mainly cover the ability to customize the display of TV programs, such as recommending shows based on customer preferences. Several claims within one patent – “Interactive computer system for providing television schedule information” – were found invalid on the grounds of anticipation and obviousness.

In sum, the speedy and specialized nature of the ITC forum makes the commission an attractive proposition for getting relief, without factoring into issues such as equitable balance, counterclaims, inordinate costs (although ITC has short-term high costs), which are typical in federal district courts.

About the Author: Sheetal Tiwari, Trademark Attorney, at Khurana & Khurana, IP Attorneys and can be reached at [email protected]

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