U.S. Officials, Attorneys Notice Spike in Intellectual Property Cases at ITC
Government officials and intellectual property attorneys speaking at an April 22 event sponsored by the Washington International Trade Association said that they have observed an increase in intellectual property rights cases filed with the International Trade Commission and that they expect this trend to continue. ITC official Lynn Levine noted that the number of Section 337 investigations more than tripled, from 11 cases to 34, between fiscal year 2000 and FY 2006. These investigations are requested by companies seeking to prevent the importation of products that infringe their patents, trademarks and/or copyrights. Another 34 Section 337 cases have been filed so far this fiscal year, Levine added, with more expected in the remaining five months.

Levine and others attributed the spike in Section 337 filings to growing public awareness of the benefits of taking IPR cases to the ITC instead of a federal court. For example, a 2007 dispute between Broadcom and Qualcomm received extensive mainstream media coverage after the ITC banned imports of cell phones, personal digital assistants and other products that contain chips and chipsets made by Qualcomm that the ITC found to have violated a patent held by Broadcom. Attorney David Nickel said the benefits of Section 337 cases – a quick and efficient forum, the ITC commissioners’ IPR expertise and the available remedies (including bans on imports of infringing articles and prohibitions on violative conduct) – make them the most powerful weapon for a U.S. patent holder. In contrast to litigating an IPR case in federal court, Nickel said, where discovery proceedings are slow and there can be difficulties in naming multiple defendants, in a Section 337 case a complainant can bring multiple foreign and domestic parties into one forum (provided that they can prove importation) and the discovery process is broad and more efficient.

Panelists noted that ITC action is only one part of a Section 337 proceeding and that U.S. Customs and Border Protection has an important role to play as well in enforcing the exclusion orders issued by the ITC. CBP’s enforcement efforts were criticized in a recent report from the Government Accountability Office, which said CBP “has allocated few resources to carry out its role in this complex area, lacks data to track its enforcement of exclusion orders, and has not given sufficient attention to addressing the procedural weaknesses” the GAO has previously identified. CBP official Dwayne Rawlings said at the April 22 event that the agency is working to correct these deficiencies by formalizing a method to collaborate with parties to ITC proceedings to determine the scope of their orders and how they should be enforced.

In a breakdown of pending Section 337 cases, Levine said that accused imports come from 28 foreign locales and that there are respondents from China in about 20 of the 53 investigations. Approximately 50 percent of the cases relate to electronics, telecommunications, computer and semiconductor products while the remainder address mechanical, biotech/pharmaceutical, chemical and various consumer products.