Early Determination Proceeding Leads to Withdrawal of Complaint, Again
When the ITC instituted Dissolving Microneedle Patch Technology for Cosmetic and Pharmaceutical Use (Inv. 1189) in early January, the Commission designated the case for early disposition, instructing the ALJ to hold an expedited hearing and issue a decision within 100 days on whether the complainant meets Section 337’s domestic industry requirement.
At the time, I described the case as an ideal candidate for early disposition.
The complainant is pursuing this action without any legal representation and the complaint is not always coherent in its argument and presentation. It is unclear, therefore, whether there is a domestic industry product at all or whether any investments have occurred that could satisfy the domestic industry requirement.
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This is an excellent use of the early disposition process. It will save time and resources for the Commission and the respondent, who would otherwise be stuck paying legal fees and discovery costs for months until the complainant gives up or the case is finally dismissed. Addressing the weakest part of the complainant’s case up front also makes it harder for the complainant to force an undue settlement under the threat of expensive ITC litigation based on a highly questionable Section 337 claim. The end of the 100 day period is in the middle of April, although the complainant may decide to withdraw the complaint before then.
Sure enough, the complainant has now withdrawn its complaint. The withdrawal occurred prior to the beginning of the early evidentiary hearing, which was scheduled to begin this month but was delayed due to the coronavirus.
The ITC has designated four cases for early disposition in the last two years, and three of them have ended with withdrawal of the complaint before a hearing. (In the fourth case, the early determination went in favor of the complainant, who ultimately prevailed in its entire case.) These outcomes show how the program can dissuade complainants from filing meritless Section 337 cases as a tactic to impose litigation costs and uncertainty on respondents during settlement negotiations.
It’s also indicative, however, of the ITC’s reluctance to use the early disposition program for any but the most obviously deficient cases. The four cases the Commission designated for early procedures were out of a total of 18 requests since the beginning of 2018. Considering that most of the cases in where the ITC receives but denies a request for early disposition are ultimately resolved in respondents’ favor, the program is clearly being underutilized.
Image Credit: Alan Levine