ITC’s Intrusion into Domestic Patent Disputes Continues Unchallenged
Last week, the Supreme Court denied a petition for review in Comcast v. ITC, leaving the Federal Circuit’s highly deferential approach to ITC jurisdiction fully intact. As a result, the ITC will undoubtedly continue to rely on expansive interpretations of its own authority under Section 337 to adjudicate and issue trade remedies in domestic patent disputes tangentially involving imported products.
Two recently filed Section 337 complaints show how the ITC’s expanded jurisdiction is likely to involve the agency in a greater range of disputes with no policy justification.
In Chemical Mechanical Planarization Slurries and Components Thereof, Cabot Microelectronics is accusing DuPont of infringing its patent describing a particular composition for chemicals used during the semiconductor fabrication process. One facet of the case that ought to be significant is that DuPont does not import the accused product—it manufacturers that product in the United States. In its Section 337 complaint, Cabot tries to rely on a single instance of importation that occurred when one of DuPont’s overseas customers returned an exported shipment and on the fact that DuPont imports raw materials used to make the slurry. Presumably it is those raw materials (which are not accused of infringing any patent) that Cabot hopes to exclude from the U.S. market.
And in Completion Drill Bits and Products Containing the Same, Varel International Industries is seeking an exclusion order against Taurex drill bits on the grounds that Taurex induces infringement of a method patent that describes using a certain kind of drill bit in a particular way to remove a frac plug. Like in Comcast, the accused Drill Bits in this investigation do not (and indeed cannot) infringe the complainant’s method patent; nor does the respondent infringe by performing the steps of the patent with the accused article. Instead, the respondent is accused of inducing or contributing to infringement by its customers.
It’s worth noting as always that neither complainant in these two new cases would have any trouble enforcing their patent rights in court. That’s especially true considering that in both cases the alleged infringement is performed in the United States by an American company.
In its public interest statement to the Commission, Taurex remarks that its overseas supplier “is not a company that makes knock-off products that are typically the focus of ITC actions.” Alas, while Section 337 can be an effective tool to challenge knock-offs, the vast majority of ITC patent cases are brought against American companies or large multinationals that are simultaneously defending themselves in a parallel lawsuit in federal court. The main reason companies litigate patent disputes at the ITC is simply that the agency’s procedures and remedies are more favorable for patent owners.
If the ITC can adjudicate every patent dispute where the alleged infringer also imports something, the agency is going to get very busy. And patent remedies in the United States are going to become more arbitrary as the ITC threatens to block whatever upstream component happens to be imported.
Image Credit: Bill Smith
