The ITC in 2019: Duplicative Litigation
The ITC Policy Project’s main goal is to publish and analyze data about patent litigation at the ITC in order to make the case for why and how Section 337 should be reformed. To that end, we’re publishing a series of “Year in Review” posts focused on what happened (or didn’t happen) at the ITC in 2019.
We previously wrote about the ITC’s growing caseload and increasingly prominent role as an administrative patent court. This post will look at the problem of duplicative litigation.
The Myth of the Unreachable Foreign Infringer
The most commonly offered justification for the ITC’s patent powers is that federal courts lack the power to prevent infringement from foreign manufacturers.
For example, former ITC Commissioner Deanna Tanner-Okun testified before Congress that “the relief afforded by the ITC is often essential to ensuring meaningful protection of U.S. IPR [because] a U.S. company cannot easily obtain relief in district court against an infringing foreign manufacturer.” And Alden Abbott, currently general counsel at the Federal Trade Commission, wrote in a paper for the Heritage Foundation in 2016 that patent owners are “virtually defenseless when protecting themselves against foreign parties [because] U.S. federal courts are . . . often powerless to enforce IP rights when the infringer is located outside of U.S. jurisdiction.”
Similarly, the Federal Circuit in Suprema v. ITC warned that “weaken[ing] the Commission’s overall ability to prevent unfair trade acts involving infringement of a U.S. patent [by] curtailing the Commission’s gap-filling authority . . . would be an open invitation to foreign entities (which might for various reasons not be subject to a district court injunction) to circumvent Section 337.”
All of these statements rely on a gross mischaracterization of the ITC’s actual caseload. It is true that Section 337 can help patent owners enforce their rights against shady foreign pirates hiding behind obscure overseas supply chains, but that’s not how most international commerce works. In reality, most ITC investigations are duplicative additions to lawsuits between the same parties in district court.
Parallel Litigation
Of the 45 new Section 337 complaints filed in 2019, only 11 were not part of a dispute also being litigated in district court. That means at least 76 percent of ITC cases instituted last year were not necessary to assert jurisdiction over alleged infringers. When we exclude non-patent cases, the portion of ITC investigations with parallel litigation rises to 80 percent. This makes 2019 a typical year—since 2017, there has been parallel district court litigation in 78 percent of all ITC cases.
Domestic Respondents
Not only is the typical respondent in an ITC investigation not a shady foreign pirate, they’re likely to be located in the United States. In line with a long-term trend, most named respondents in new Section 337 investigations filed in 2019 had a U.S. address.
In new 2019 investigations, respondents included major American companies like Amazon, Cisco, Motorola, Target, Walmart, Google, Apple, Dell, HP, Microsoft, Comcast, Verizon and General Electric. And there are at least 10 companies currently defending themselves in ITC litigation that have been or are currently asserting their own U.S. patents as a complainant in their own Section 337 case.
End Overlapping Jurisdiction
The availability of duplicative ITC litigation does nothing to address the handful of cases involving genuinely unreachable foreign infringers, but it does lead to forum shopping, patent hold-up, abusive litigation and conflicting judgments. Congress could end these problems by eliminating the jurisdictional overlap between the ITC and district courts. One way to do that would be to amend 28 U.S.C. §1659, which currently allows a defendant to stay a district court lawsuit pending conclusion of an ITC investigation. This rule should be reversed so that ITC investigations are disallowed when the respondent is clearly subject to the jurisdiction of a federal court.
