Adduci, Mastriani & Schaumberg LLP

Section 337

UNFAIR METHODS OF COMPETITION AND UNFAIR ACTS: SECTION 337

Unprecedented Experience and Expertise

Adduci, Mastriani & Schaumberg, L.L.P. has a level of experience and expertise in Section 337 investigations before the U.S. International Trade Commission (commonly referred to as the "ITC" or "Commission") that is unmatched. The firm’s attorneys include two former ITC Chairmen, and eight former staff including attorneys from the Office of General Counsel, Office of Unfair Import Investigations, Office of the Administrative Law Judges, and Commissioner aides. The firm has been involved in almost one third of all Section 337 investigations instituted at the ITC since January 2004 (123 out of 395), representing more than 246 parties, both complainants and respondents. The firm also has a significant practice before U.S. Customs and Border Protection ("Customs"), the organization responsible for Section 337 remedial order enforcement.

An Extraordinary Weapon in Intellectual Property Disputes

Section 337 investigations before the ITC provide a private right of action for U.S. companies, or U.S. subsidiaries of foreign companies, to challenge the importation of goods based on the alleged infringement of intellectual property rights (including federally-protected intellectual property rights and common law trademarks and copyrights), or other unfair acts in the importation of goods (such as trade secret misappropriation). Section 337 provides for worldwide discovery, expedited hearings, judges with expertise in intellectual property law, and effective remedies enforced by Customs. 

The essential elements of a Section 337 violation are (1) an unfair act or unfair method of competition, e.g., patent infringement; (2) an importation, sale for importation or sale after importation of the accused product; (3) a domestic industry; and (4) in the case of investigations not involving a federally registered intellectual property right, injury resulting from the unfair act. The elements of importation, domestic industry and, in some instances, injury are necessary because Section 337 is a trade statute.

The remedies under Section 337 – an import ban on infringing products and enforceable cease and desist orders barring the domestic sale and distribution of products found to have been imported in violation of Section 337 – are unique and in many cases more powerful than those available in U.S. district court, where injunctive relief can be very difficult to obtain. The speed with which Section 337 cases are completed – typically within 15-18 months – provides a much quicker resolution than federal district courts but also places significant additional burdens on both complainants and respondents. While Section 337 investigations are similar to intellectual property infringement lawsuits in federal court, the additional elements of importation of infringing products and the existence of a domestic industry relating to the intellectual property must also be shown. In patent-related investigations, the proofs necessary for demonstrating indirect infringement at the ITC also varies from district court practice. The uniqueness of the elements of proof, remedies, and pace of Section 337 investigations demand specialized expertise and experience to succeed.

The reach of Section 337 also extends beyond the protection of intellectual property rights, creating a private right of action to prevent the importation, or sale in the United States after importation, of goods that involve "unfair" methods of competition, including trade secret misrepresentation, mislabeling, false advertising, or false representation of origin. The Commission, for example, has issued numerous remedial orders based on violations of Section 43(a) of the Lanham Act. 

ITC Litigation Requires Intimate Familiarity With the Commission's Rules and Regulations

Many ITC investigations are won or lost by both complainants and respondents due to the regulatory and procedural idiosyncrasies of litigation before the Commission, which differ substantially from those in district court. The complex interplay between determinations of ITC Administrative Law Judges and the Commission frequently affects the outcome of Section 337 investigations. The firm's in-depth understanding of the ITC's complex rules and procedures assures that clients avoid pitfalls and unforced procedural errors that can be fatal given the crushing pace of Section 337 litigation.  Our attorneys' understanding of the agency's practices and interpretations of its rules is a significant edge for firm clients in investigations before the ITC. Our attorneys not only have extensive experience practicing before and within the ITC, but have also helped revise the ITC's rules, practices and procedures, and have a deep and comprehensive understanding of the underlying and overarching policies that the rules were drafted to serve.

The Remedial Phase of ITC Investigations Poses Unique Challenges

The ITC's unique remedies also pose unusual and complex challenges for parties to Section 337 investigations. If the Commission finds a violation of Section 337, it then must make a determination as to the scope of appropriate relief and whether the imposition of any remedial measures would be contrary to the public interest of the United States. The Commission's scrutiny of the effect on the public interest of remedial orders has increased significantly in recent years and has become an important element in ITC litigation. The firm's attorneys have great experience navigating the remedial phase of ITC investigations and helping parties to raise and respond to public interest concerns.

The Enforcement Phase of ITC Investigations

The enforcement process for the Commission's remedial orders is complex and involves coordination between the ITC, Customs, and the parties. The two agencies share responsibility for determining the scope and application of ITC remedial orders. Customs plays a key role in the enforcement of Commission exclusion orders, because the ITC's remedial orders are very broad and do not specify specific models of infringing goods. Consequently, for both complainants and respondents, coordination with the Commission and Customs is essential to the proper enforcement of ITC exclusion orders. The firm's team of Customs and ITC experts has deep experience working with the two agencies to ensure that complainants receive the relief to which they are entitled without burdening legitimate trade.

Specific Benefits to Clients:

As a quasi judicial federal agency, the ITC has its own, special complex rules and procedures. Firms less experienced in handling cases before the ITC or lacking the specialized expertise that our attorneys have acquired since the 1970's may have inadequate time to learn the rules during the accelerated investigation schedule. Understanding the agency's practices and interpretations of its rules is fundamental to success in cases brought to the ITC. Because Section 337 cases are usually completed within fifteen months compared to the two to three years often required to pursue a similar case in federal district court, clients benefit from working with a firm that truly understands how the ITC operates and how to maintain the initiative in cases.

Our attorneys not only have served as legal counsel to the ITC, but have also helped revise the ITC's statutes, rules and procedures. Consequently, we easily keep up with the rapid pace and demands of Section 337 investigations. Furthermore, since we have represented both complainants and respondents in these cases, we are familiar with the inherent strengths and weaknesses of both positions. Clients therefore receive the benefit of highly effective legal strategies and guidance regardless of their role in a case.

We are especially well qualified to work with clients in high technology industries. Moreover, our cases have involved a wide range of products, including: smartphones, GPS equipment, footwear, semiconductor memory modules and connectors, automobile condensers and back supports, automobile tires, biotechnology products, global positioning receivers, fiber optic modems, rotary printers, air impact wrenches, flow measurement devices, exercise machines, vertical milling machines, bearings, tonometers, electric power tools and textile machinery components.

 
Chambers Top Ranked
Syndicate content

1133 Connecticut Avenue, NW | Washington, DC 20036 | Tel: 202-467-6300 | Fax: 202-466-2006 map it

© 2017 Adduci, Mastriani & Schaumberg, LLP