Non-Respondent’s Product Cannot Be Adjudicated for Infringement in Context of General Exclusion Order

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The US International Trade Commission issued a general exclusion order (GEO) excluding from entry into the United States products infringing patents directed to luxury vinyl tile, but vacated findings in the Initial Determination (ID) adjudicating infringement for products belonging to entities not named as respondents in the investigation. The Commission explained that a finding should not be made as to whether a non-respondent’s product infringes a patent in the context of a GEO, but instead the analysis should be limited to whether the “alleged” infringement supports a finding that there is a pattern of violation of Section 337. Certain Luxury Vinyl Tile and Components Thereof, USITC Inv. No. 337-TA-1155, Comm’n Op. (Oct. 5, 2020).

The ITC instituted an investigation against multiple respondents. The administrative law judge granted summary determination of violation by certain defaulting respondents and recommended a GEO. Unlike limited exclusion orders (LEO), which only prohibit infringing goods imported by a named respondent in an investigation, GEOs prohibit entry of the infringing products regardless of the source. GEOs are issued when necessary to prevent circumvention of an LEO or when there is a pattern of violation and it is difficult to identify the source of infringing products. In connection with the request for a GEO in this investigation, the complainants accused two additional products from non-respondents of infringement. In the ID, the administrative law judge analyzed the two products and determined that they infringed the asserted patents.

The Commission determined to review the ID in part. On review, the Commission determined that a GEO was appropriate, but vacated the findings of the ID that adjudicated infringement of the asserted patents by the two products belonging to the non-respondents. The Commission explained that in considering a GEO, a finding should not be made as to whether a non-respondent’s product infringes a patent and instead the analysis should be limited to whether there is a pattern of violation of Section 337. The Commission therefore vacated the infringement findings to avoid confusion and possible prejudice to the non-respondents in future proceedings.

Practice Note: A GEO is an attractive remedy for companies confronted by widespread infringement by imported products originating from sources that are difficult to identify or companies that dissolve and re-emerge as new entities and can therefore circumvent an LEO. The Commission has now made it easier to obtain a GEO because “alleged” infringement by products from a non-respondent can be used to show a pattern of violation warranting a GEO without a full adjudication of infringement for those products.

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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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