ITC Requires Early Evidentiary Hearing in Investigation Initiated by NPE

Commentators have expressed concerns over the rising tide of complaints filed by non-practicing entities (NPEs) in the United States International Trade Commission (“ITC” or “Commission”) under Section 337 of the Tariff Act. Features of Section 337 investigations such as the fast pace of litigation, access to injunctive relief in the form of exclusions and cease-and-desist orders, and the possibility of joining multiple respondents in a single action – all of which are available in the ITC to a greater degree than in district court – create the possibility that NPEs will view the ITC as an increasingly favorable forum for patent assertion actions. This possibility has led some to recommend that the ITC take actions to stem the tide of complaints brought by NPEs.

The ITC appears to be listening. In a recently instituted investigation, Certain Products Having Laminated Packaging, Laminated Packaging, and Components Thereof, Inv. No. 337-TA-874 (Laminated Packaging), the ITC took the unusual step of ordering an early evidentiary hearing and initial determination as to whether the complainant has satisfied the economic prong of the domestic industry requirement. Depending on the outcome in this case, this decision may provide respondents an early out in future ITC investigations brought by NPEs.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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