A recent decision by the International Trade Commission (ITC) to temporarily rescind a seizure and forfeiture order after the Court of International Trade (CIT) granted summary judgment of non-infringement for certain redesigned products highlights the increasing importance of understanding the CIT’s role in patent disputes and the evolving relationship between the ITC, CIT, and US Customs and Border Protection (CBP).

The ITC is an independent, quasi-judicial federal agency with broad investigative responsibilities on matters of international trade. It has authority to investigate instances of unfair importation pursuant to 19 USC § 1337, which declares unlawful “unfair methods of competition and unfair acts” in the importation of articles into the United States. Section 337 investigations most often involve claims of patent infringement, but can also include trademark and copyright infringement, trade secret misappropriation, and other causes of action.

When the ITC finds a violation with respect to the imported articles at issue in a Section 337 investigation, it typically issues remedial orders to prevent the unfair importation of those articles. The ITC’s remedial orders often include both an exclusion order, barring the importation of infringing products, and a cease-and-desist order barring the sale of infringing products already imported into the United States but not yet sold. In the case of patent-related violations, remedial orders are typically structured to prevent importation of certain products that infringe the claims of the patent. In other words, the ITC’s remedial orders are not necessarily limited to the specific products at issue in the particular Section 337 investigation, but rather extend to new product models and versions that infringe the patent.

Once the ITC issues its remedial orders, CBP is the agency charged with enforcing the ITC’s orders and preventing importation of infringing products. Complications can arise when an importer seeks to import a product that was not at issue in the Section 337 investigation, such as a redesigned product, and CBP must make a determination of whether those redesigned products are subject to the ITC’s orders. If the importer requests an administrative ruling pursuant to 19 CFR Part 177 before importing the product, CBP may issue findings regarding whether the redesigned products are subject to the ITC’s remedial orders. If the importer attempts to import the products without requesting such a ruling, CBP must make the determination of whether to permit or deny the products’ entry at the time of importation. If CBP determines to exclude the products, an importer can file a protest pursuant to 19 CFR Part 174 and seek to demonstrate that the products do not infringe.

Once CBP issues a ruling letter or protest decision containing its findings, that decision is typically appealable to the CIT, subject to certain qualifications, including those discussed below. The CIT is a court of special jurisdiction that has nationwide jurisdiction over civil actions arising out of import transactions and federal transactions affecting international trade. The CIT has jurisdiction to review CBP’s protest decisions pursuant to 28 USC § 1581(a). The CIT has also, on occasion, exercised jurisdiction under other sections of 28 USC § 1581 to review CBP’s actions with respect to enforcement of ITC remedial orders.

The interplay of the ITC, CIT, and CBP has become increasingly important in recent years. The ITC has exclusive jurisdiction to issue, rescind, or modify its remedial orders, and has created rescission and modifications proceedings that provide avenues for importers to adjudicate issues surrounding new or redesigned products. However, CBP is occasionally called upon to make findings with respect to new or redesigned products before an importer avails themselves of the ITC’s rescission and modifications proceedings. This is especially true in situations where importation of the new or redesigned products is necessary to prevent irreparable harm to the importer’s US-based business operations. Pursuant to 28 USC § 1581(a), the CIT has exclusive jurisdiction to review CBP’s denial of protests, and it reviews CBP’s protest denials de novo. Thus, complications may arise when the CBP is the first body to make findings with respect to new or redesigned products in connection with a protest, and those findings are reviewed by the CIT before the ITC has a chance to weigh in.

A recent decision by the ITC to temporarily suspend a seizure and forfeiture order in Certain Road Construction Machines and Components Thereof, demonstrates the increasing importance that CIT decisions can play in multi-forum patent disputes.[1] In June 2019, the ITC found a violation of Section 337 with respect to certain infringing articles imported by Wirtgen America, Inc. and its affiliated entities. The ITC issued a limited exclusion order and a cease-and-desist order against Wirtgen America. In December 2019, CBP excluded certain articles imported by Wirtgen, and Wirtgen filed a protest against the exclusions. In response, CBP issued a letter stating that its determinations with respect to enforcement of the ITC remedial orders are not protestable. Wirtgen then filed a civil action in the CIT challenging CBP’s exclusion of the redesigned products, as well as CBP’s effective denial of Wirtgen’s protest.

In analyzing jurisdiction under 28 USC § 1581(a), the CIT first noted that a CBP “decision may not be protested when [CBP] is merely taking action to effectuate a decision of another agency.”[2] However, the CIT found that CBP’s decision in the case at hand was protestable because CBP was not acting exclusively at the direction of the ITC. The ITC’s remedial orders did not directly address Wirtgen’s redesigned products, and thus, CBP itself was making a decision with respect to the application of the ITC’s orders to Wirtgen’s redesigned products.[3] The CIT also noted that the particular reason why CBP allegedly denied the protest was not relevant to the issue of jurisdiction.[4] Rather, “[t]he question pertinent to subject matter jurisdiction is whether [CBP] acted on its own to exclude the merchandise or was directed by the ITC to do so.”[5] CBP’s decision was ultimately protestable because it was not “solely implement[ing] an ITC determination.”[6] After finding jurisdiction, the CIT subsequently granted partial summary judgment that certain of Wirtgen’s redesigned products did not infringe the patent claims upon which the ITC’s remedial orders were based.[7]

Following the CIT’s decision, Wirtgen filed an emergency motion before the ITC to stay or temporarily rescind the ITC’s seizure and forfeiture order. Following briefing, the ITC denied Wirtgen’s motion with respect to staying the seizure and forfeiture order, but granted the motion with respect to temporarily rescinding the seizure and forfeiture order pending appeal of the CIT’s decision.[8] The ITC found that changed circumstances supported temporarily rescinding the seizure and forfeiture order because “the articles in question are no longer excluded but were released for entry into the United States,” and, therefore, “the conditions which led to such [seizure and forfeiture order] no longer exist.”[9] The ITC further held that its suspension of the seizure and forfeiture order would “appl[y] prospectively to articles that arrive in the United States on or after the date of the accompanying Order and until such time as the CIT’s decision is modified, stayed, or overturned.”[10]

The CIT’s decisions relating to jurisdiction and non-infringement and the ITC’s order suspending its seizure and forfeiture order illustrate the increasing importance of the CIT’s role in patent disputes involving imported articles. The ITC has consistently moved to intervene in CIT cases that may be viewed as impinging on the ITC’s exclusive jurisdiction to issue, rescind, or modify its remedial orders. However, the CIT has typically denied such motions, holding that it has jurisdiction to review CBP’s actions that are not taken exclusively at the direction of the ITC, such as CBP’s determinations with respect to redesigned products that were not directly addressed by an ITC investigation. Understanding the procedures employed by the ITC and CBP to issue and enforce remedial orders, as well as the complexities of the CIT’s jurisdiction and role in reviewing CBP actions, will likely become ever more critical as practitioners seek to invoke the CIT’s jurisdiction in patent disputes.

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