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Death of the ITC?

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Reprinted with permission.


Posted by Maggie Tamburro on 2012/11/12
--- Add comments
Death of the ITC?
Is the ITC a superfluous and redundant infringement tribunal which undermines the U.S. patent system and fails to serve a valid purpose in patent litigation?

The National Law Journal recently published a provocative editorial written by a trade policy analyst, who challenged the propriety of the U.S. International Trade Commission (ITC) in the U.S. patent law system.   The author questioned the validity of a tribunal which allows patent holders to sue, sometimes simultaneously, in two separate forums – federal court and the ITC.

The author asserted that allowing the ITC to operate as a specialized patent court is redundant to the federal court system, undermines integrity of the U.S. patent system, and is bad law.  He states, “The ITC serves no legitimate purpose, disrupts the U.S. patent system and violates international law.”

Protectionism arguments aside, the piece challenged us to ponder the ITC’s role in today’s patent law system – a system many believe is flawed in a variety of ways, not the least of which is duplicative infringement forums.  Kudos to the author for a well written editorial which challenges one’s views and perspective in a thought provoking way.

However, allow me to present a few counter-arguments.

Despite a plethora of long-standing complaints regarding the broken U.S. patent system, including the often unwarranted criticism recently targeted at those who engage in offensive patent litigation (as we discussed in an earlier post), demand for legal services involving intellectual property is actually down for the first time in two years.  According to a recent report published in the ABA Journal, the third quarter of this year showed a decrease of almost 4% in demand for intellectual property services.

About The ITC

The ITC is a U.S. federal investigative agency which operates under a trade statute targeted at unfair practices in U.S. imports and trade.   Section 337 investigations operate under Commission promulgated rules and in conformity with the Administrative Procedure Act.

Comparing the ITC with the federal court system is like comparing apples to oranges.   The ITC and federal court are a different means to a similar end result – that of an exclusion-type order or injunction against an adjudged infringer.  However, the ITC and federal court differ in significant ways that make the ITC a strategically important forum for patent litigation under certain facts and circumstances.

On that note, what follows is a counterpoint to The National Law Journal’s article, along with four compelling reasons why the ITC still serves a valuable legal role as a patent infringement tribunal.

1. Uniqueness of Remedies. Because the ITC involves in rem or product related jurisdiction, it allows for a general exclusion order – a unique order which is applicable not only to those participating in the ITC action, but also those not specifically named.  Thus, a general exclusion order can act to prohibit the importation of infringing products into the U.S., regardless of the source.   In some circumstances this can actually prevent repeat litigation aimed at multiple infringers.

The ITC’s relief is distinct from federal court in some ways – for example exclusion orders only apply to products that are being imported into the U.S., and the ITC cannot award monetary damages.  However, a general exclusion order is both unique and potent.  It is available from the ITC in addition to a limited exclusion order (excluding imports of products from only named parties) and a cease and desist order (directing the parties to cease certain actions, such as sale of certain infringing products already in the U.S.).  The issuance of a general exclusion order is an important legal remedy not available in federal court.  Should the ITC tribunal disappear, so does the ability to request this unique type of relief.

2. Shorter Claim Resolution Time. The ITC can provide a faster route than federal court for resolution of infringement claims. According to an InsideCounsel article published this year, the average time for resolution of patent litigation in the ITC was just over 13 months in 2011, compared to a wait time of around 18 months in 2010 and 2009.

In contrast, the average time it now takes to get to trial stage in district court seems to be increasing, perhaps in part due to the AIA Joinder of Parties provision restricting the joinder of unrelated patent defendants, which I wrote about this year. For example, wait time in the ever popular Eastern District of Texas (termed the “rocket docket” in prior years thanks to speedy expedition of patent cases) has doubled, and is reportedly more than two years on average.

3. Greater Level of Expertise. Litigation brought in the ITC is more likely to involve judges and other experienced legal professionals with expertise in patent litigation and legal matters.  Since the ITC is a federal investigative agency, the filing of a complaint triggers the determination of whether an investigation should take place.  If the investigation moves forward, an ITC investigative staff attorney is assigned to advise on matters that may come before the Commission for review.  In addition, an administrative law judge who is likely experienced in patent matters will preside over the litigation, rather than risking a jury who may be unfamiliar with patent law or the technical issues in the case.  Additionally, in recent years the ITC has added a mediation program available for all Section 337 investigations which utilizes mediators and consultants with experience in patent litigation.

4. Difficulty of Obtaining Injunctive Relief in Federal Court. Following the 2006 U.S. Supreme Court decision in eBay, Inc. v. MercExchange L.L.C., permanent injunctive relief to prohibit infringement of an adjudicated patent infringer became much more difficult to obtain, requiring the meeting of a traditional four-factor test (rather than a presumption of irreparable harm).   This makes the ITC forum more attractive for those seeking exclusion of an adjudged infringer in cases that can also be properly brought under Section 337 – those involving infringing products that are being imported into the U.S.  In short, because the remedies are different (although often achieving a similar result), the eBay factors do not apply to the ITC’s remedy determinations.

In sum, the ITC and federal court are distinctly different patent forums that complement each other as a larger part of the U.S. patent system. Doing away with the ITC would possibly deprive patent holders of important rights and remedies that are otherwise wholly unavailable in federal court, as well as limit legal access to a specialized venue that offers strategic advantages under the right circumstances.

Tell us what you think:  Is the ITC a strategically important forum in addition to federal court, or is it misused, duplicative, and bad patent law?



Maggie Tamburro, JD, IMS ExpertServices - RF Cafe
Maggie Tamburro, JD
mtamburro@ims-expertservices.com
Maggie Tamburro Maggie Tamburro is an attorney, legal writer and commentator who holds a B.A. from The University of Texas and a J.D. from The John Marshall Law School (ranked in 2012 by U.S News & World Report as 6th best in the nation for its legal writing program). Maggie graduated 5th in her class from John Marshall, served as Law Review Associate Editor, and was awarded the Dean's Scholarship Award for three consecutive years. Maggie holds the position of Senior Copywriter at IMS ExpertServices, where she handles the creation and optimization of webpage copy, print material language, and plays an active role in the company’s online social media strategy. Maggie was admitted to the Illinois Bar in 1994 and Florida Bar in 1999 and has significant experience in legal research, editing, and writing. From drafting complex commercial transactional documents to journalistic reporting, Maggie brings a unique blend of background, experience, and perspective to IMS in both the area of law and writing.







This article was originally published in BullsEye, a newsletter distributed by IMS ExpertServices™. IMS Expert Services is the premier expert witness search firm in the legal industry, focused exclusively on providing custom expert witness searches to attorneys. To read this and other legal industry BullsEye publications, please visit IMS Expert Services' recent articles. For your next expert witness search, call us at 877-838-8464 or visit our website.



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Posted  11/14/2012
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