ITC Section 337 Update - July 2, 2013

by King & Spalding
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ITC Launches Section 337 Investigation Pilot Program On New 100-Day ID Procedure – On Monday, June 24, 2013, the Commission advised that it launched a Pilot Program to test whether early rulings on certain dispositive issues in some Section 337 investigations could limit unnecessary litigation, saving time and costs for all parties involved.  Under the Pilot Program, the Commission will identify, at institution, investigations that are likely to present a dispositive issue and direct the ALJ to rule on the issue by Initial Determination (“ID”) within 100 days of institution (subject to a limited extension for good cause) following expedited fact finding and an abbreviated hearing limited to the identified issue.  The Commission made it clear that the Pilot Program “is not limited to the issue of domestic industry (for example, other possible issues might include importation and standing).”  As reported in our April 15, 2013 Section 337 Update, the 100-Day ID Procedure began in Certain Products Having Laminated Packaging, Laminated Packaging, and Components Thereof, Inv. No. 337-TA-874, where the ALJ was directed to implement this procedure and issue an early ID by July 5, 2013, to address whether the economic prong of the domestic industry has been satisfied.  A News Release and Article with details about the program are available on the ITC’s website www.usitc.gov.

Apple Requests USTR To Overturn Exclusion Order Issued In 794 Investigation – With respect to the Presidential Review period under 19 U.S.C. §1337(g), Apple filed a request to the United States Trade Representative (“USTR”), the President’s delegate, to overturn the Commission’s decision to issue an exclusion order in the 794 investigation on June 4, 2013.  USTR has decided to undertake a review of this issue.  Apple’s Written Submission to the USTR dated June 19, notes that Commissioner Aranoff explicitly invited the President to “decid[e] whether to disprove the remedy the Commission is issuing” and that the Commission’s decision in the 794 investigation is in conflict with the White House’s task force recommendation to harmonize the standard to obtain ITC exclusion orders with the eBay factors test for injunctive relief in the U.S. District Courts.  Apple proposes that:  “Given the special considerations that attend FRAND patents, the public interest dictates that the ITC could properly issue an exclusion order on a FRAND patent only in limited circumstances – such as where the accused infringer is a foreign entity not subject to jurisdiction in a United States court, or where the alleged infringer had refused to pay FRAND royalties set by a court or arbiter.”  In contrast, in its Submission to USTR dated June 19, Samsung proposes that “SEPs should be eligible for an injunction or exclusion order … where the implementer, like Apple here, is unwilling to engage in licensing negotiations or neutral arbitration to arrive at a FRAND license.”

Administration’s Joint Strategic IP Enforcement Plan Includes Evaluation Of ITC Exclusion Orders – Comments Requested – The Administration released last week the 2013 Joint Strategic Plan for Intellectual Property Enforcement that includes a roadmap for the Administration’s IP focus over the next three years.  As part of the initiative on transparency and public outreach, the Plan includes an evaluation of the enforcement of exclusion orders issued by the ITC, whereby the U.S. Intellectual Property Enforcement Coordinator (“IPEC”) will chair a new interagency working group to “improve the process for enforcement of Section 337/ITC exclusion orders.”  One focus of the working group will ensure that U.S. Customs and Border Protection (“CBP”) uses transparent and accurate procedures for determining whether an article is covered by an ITC exclusion order.  One change under consideration is whether the Customs ruling request process should be an inter parte proceeding involving all relevant parties to the ITC investigation, as opposed to the current importer initiated ex parte process.  The working group will be comprised of representatives from the ITC, Department of Homeland Security, Department Of Commerce, Treasury, Department of Justice, offices within the Executive Office of the President including the United States Trade Representative, OSTP, NEC, and other relevant agencies as necessary.  To inform such review, IPEC has sought public input through issuance of a Federal Register Notice. Submissions must be received by July 21, 2013.

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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