ITC Policy Project Series: Timeliness Provisions in the Advancing America’s Interests Act

This is our third post on the recently reintroduced Advancing America’s Interests Act (AAIA). The act revises 19 U.S. Code § 1337 – Unfair practices in import trade (Section 337), which gives the International Trade Commission (ITC) patent-enforcement authority over imports. The AAIA refocuses Section 337 on trade policy by reining in the ITC’s wide-ranging enforcement actions.

The AAIA changes fall into three categories: Domestic industry provisions, public interest provisions and timeliness provisions. Our first post analyzes the domestic industry provisions; our second considers the public interest provisions.

This post delves into the timeliness provisions. We will lay out changes made to the current statute, explain the reasons behind the changes and examine the empirical case for making them.

Revised Timeliness Provisions

The AAIA’s timeliness provisions promise to reduce the average time to disposition at the ITC by requiring the Commission to identify potentially dispositive issues and requiring an administrative law judge (ALJ) to decide such issues early in the investigation.

The current statute, Section 1337(b)(1), requires the ITC to investigate “any violation of this section on complaint under oath.” The investigation must conclude “at the earliest practicable time.” And, to “promote expeditious adjudication,” the Commission must publish a target date for completing proceedings. By rule, the target date is generally within 16 months of institution. The ALJs must reach their initial determination four months before the target date to allow time for Commission review.

The proposed revised statute keeps the current requirements and adds a new concluding Section 4, which requires the Commission to consider case-dispositive issues early in the proceeding:

(4)(A) The Commission shall identify, at the beginning of an investigation, whether the investigation presents a dispositive issue appropriate for an expedited fact finding and an abbreviated hearing limited to that issue, and shall direct the assigned administrative law judge to issue an initial determination on such issue not later than 100 days after the investigation is instituted.

(B) Any initial determination by the assigned administrative law judge under subparagraph (A) shall stay the investigation pending Commission action.

New Section 1337(b)(1)(4) codifies an existing rule with two notable changes.

First, the AAIA requires the ITC to identify any dispositive issues that could be heard on an expedited basis and to direct the ALJ to decide those issues within 100 days of institution.

Current regulation 19 C.F.R. § 210.10(b)(3) allows the ITC to identify such issues and to direct the ALJ to decide those issues within 100 days:

(b)(3) The Commission may order the administrative law judge to issue an initial determination within 100 days of institution of an investigation as provided in § 210.42(a)(3) ruling on a potentially dispositive issue as set forth in the notice of investigation. The presiding administrative law judge is authorized, in accordance with § 210.36, to hold expedited hearings on any such designated issue and also has discretion to stay discovery of any remaining issues during the pendency of the 100-day proceeding.

ALJs can also identify and adjudicate dispositive issues under a pilot program, active for the past two years. But neither the ALJs nor the ITC has shown much appetite for 100-day proceedings. Typically, they will refuse to address issues identified by the parties, citing the issue’s complexity or the statutory time constraints.

Second, the AAIA relieves some of the time constraints on ITC proceedings. As proposed, the ALJ’s initial decision triggers an automatic stay until the Commission takes action, presumably affirming or reversing the determination. Under the current system, the ALJ has the discretion to stay discovery during the 100 days or place the proceedings on hold but only after “taking into account the Commission’s obligation to complete investigations expeditiously and avoiding an extension of the target date.”

These Changes Are Needed

Unlike a district court, the ITC rarely resolves dispositive or simplifying issues early in the case.

R Street has reviewed case files for the roughly 60 investigations instituted in 2022. Of these, 19 contained requests for early disposition. Nearly all of the requests were denied, although the ALJ, sua sponte, instituted a 100-day proceeding in one investigation.

The most common issue—cited in seven of the 19 requests—was that no domestic industry existed. That is no surprise, as non-practicing entities had a record year at the ITC and, by definition, do not practice the patent they seek to enforce.

The ITC uniformly rejected the no-domestic-industry requests we reviewed as too complex to be decided within 100 days. This is surprising. By rule, the complaint must “include a detailed description of the relevant domestic industry,” containing “facts showing” the statutory domestic industry standard is met, including any “relevant operations of any licensees.”

Presumably, the patentee would have assembled all relevant evidence supporting its domestic industry before filing a complaint. Likewise, the patentee should possess all information relevant to domestic industry, making any discovery relatively straightforward. There is no reason, then, that the domestic industry issue should be too complex for early consideration in every investigation.

Patent ineligibility under Alice v. CLS Bank—cited in five requests—was the third most common issue. These requests were also uniformly rejected, most frequently due to the issue’s supposed complexity. This is also surprising.

District courts often decide the patent-ineligibility defense on a motion to dismiss without needing discovery or claim construction. And the Federal Circuit has “repeatedly affirmed § 101 rejections at the motion to dismiss stage, before claim construction or significant discovery has commenced.” In such cases, the patent and its claims are sufficient evidence to decide eligibility.

But the ITC finds no such cases on its docket, despite the ready evidence of the patents and the ALJ’s ability to decide whatever limited discovery and claim construction issues might be required during the 100-day process.

This reluctance to follow the current procedure may be rooted in the current statute’s imperative to finish cases expeditiously. For example, if the ALJ decides a dispositive issue—even assuming the decision would dispose of the case—a reversal by the Commission could throw the proceeding into overdrive since the ALJ can’t assume that any part of the 100 days will be tacked onto the proceeding’s target date. This means ALJs must balance the chance to dispose of an investigation early versus the risk of extending beyond the target date. Since there is no reward for finishing a proceeding early, and 18 months is generally accepted as the outer limit for any ITC proceeding, the requests for early disposition are simply declined.

The statute addresses that 18-month default, in part, by staying the investigation pending Commission review. This gives the ITC and its ALJs a statutory counterbalance to the imperative to resolve cases quickly. If that counterbalance is sufficient, the AAIA may lead the ITC to resolve investigations on the front end, thereby lowering the overall average time for these investigations to be decided.