Washington DC (April 2) – Despite the fact that the U.S. Constitution vests the judicial power of the United States in the federal courts, dozens of patent disputes are adjudicated every year outside of these courts. Instead, these cases find their way to the U.S. International Trade Commission (ITC), which operates as an administrative patent court for imports. While this is ostensibly justified by Section 337 of the Tariff Act of 1930, it creates a duplicative and disruptive role in the patent system by allowing patent owners to bypass Article III courts.

In a new policy paper, R Street Institute Associate Fellow Bill Watson explores Section 337. The paper explains how its power to prevent “unfair methods of competition” in the U.S. market has created a dual-track patent litigation system in which outcomes are determined by different laws, procedures and remedies depending on the venue.

While the ITC’s power to block infringing imports may be useful in some circumstances, most Section 337 investigations duplicate, and even interfere with, the work of federal courts. Most ITC cases are brought against U.S. companies or large multinational organizations who can easily be sued in court.  This separate litigation venue outside the federal court system frustrates congressional and judicial oversight of U.S. patent law.

The paper argues that in order to remedy this, Section 337 should be amended to ensure that the ITC’s patent powers are available as a gap-filler for when courts cannot act—not as an alternative to them. The author concludes, “[T]wo litigation venues with different rules and remedies is bad for the U.S. patent system. Congress can fix this problem—without leaving patent owners defenseless against foreign infringement—by limiting the ITC’s jurisdiction to cases where federal courts cannot act.”