Protecting the P&C Industry’s Intellectual Assets
investigations prior to filing the complaint –
so the other guys can be caught with their
pants down with a short discovery process
to prepare a rebuttal. If you are on the receiving end of a complaint, it is best to have
an attorney familiar with ITC practice on
speed-dial. Respondents also don’t get
counter-claims heard at the ITC (they get
transferred to a district court), though they
can file an ITC complaint if they meet the
previously mentioned requirements, and can
seek to stay a counterpart district court case.
The ITC’s is not to be trifled with (just
like your hometown sheriff). If you meet
the “domestic industry” criteria such as
the investment activities described above
(e.g., investment in product exploitation,
R&D, engineering, licensing, etc.), the ITC
can stop infringement of your U.S. based
intellectual property. The ITC can issue
temporary exclusion orders of devices that
will be blocked from import (impounded)
into the United States by U.S. Customs. A
temporary cease-and-desist order regard-
ing any commercial actions surrounding
the infringing product (e.g., selling or dis-
tributing from inventory) may also be is-
sued and enforced by the ITC. Once the
ITC completes a Section 337 investiga-
tion, which can move quickly (i.e., 6-24
months; but, 12-18 months most typi-
cally), permanent exclusion and cease and
desist orders can be issued. These orders
generally last the life span of the IP (e.g.,
the remaining years a patent is valid) or
some other period set by the ITC.
The standard for injunctive relief in the
ITC is arguably lower than in district court.
In a U.S. Federal District court, the plaintiff
must first show: that there will be irreparable harm, that there are no adequate rem-edies in law, that a remedy is warranted in
light of the balance of hardships between
plaintiff and defendant, and that public interest would not be disserved by a permanent injunction. In contrast, the ITC may
issue an exclusion order preventing product
import after finding of trademark violation
with only consideration of the public interest element that the District Court weighs
in its deliberations. Upon a showing that
a limited exclusion order would be circumvented or a pattern of violation and
difficulty in identifying the infringing product’s source, a general exclusion order may
be issued. Such orders can block foreign
products even if the entity producing them
is unknown, which is particularly helpful in
dealing with “fly-by-night” counter-fitters.
Violate an ITC order . . . ooohhh that’s
gonna leave a mark! Violation of ITC orders can results in fines of twice the imported goods value or $100,000 per day!
It’s not all a bed of roses at the ITC
sheriff’s office though. For example, rulings in recent years at the Federal Circuit
and ITC levels have indicated that getting
a general exclusion order may be more
difficult in the case of down-stream products that have the infringing technology
as only a PART of the article. Take home
message: name as many infringers (e.g.,
importers, manufacturers) as possible in
the complaint. Additionally, if U.S. foreign
policy will be detrimentally affected, as determined by the U.S. Trade Representative
over a 60-day review, then ITC orders may
be over-ridden (rarely, as in 25 year gaps
from one White House over-ride to the
next). But, if the ITC’s decision does not
go your way, you can appeal to the Court
of Appeals for the Federal Circuit.
And, there are things you won’t get
using the ITC route, like monetary dam-
ages. You need to file a complaint in a
U.S. district court to seek those types of
damages, the same as you must do when
dealing with infringers that are domesti-
cally producing the article. District court
is also an alternative venue to get injunc-
tive relief for either foreign or domestic
infringers, which may be custom tailored
to address specific issues of the case.
District court also offers the opportunity
for a jury trial, in case you’re not jazzed
about dealing with ITC commissioners.
The ITC’s “rocket docket” speed is its
strong advantage in stopping profit-eating
infringers. But, keep in mind that the cost of
an ITC case will likely be similar to a multi-year district court case, with the invoices being piled together in short order. This is a
double-edged sword, as one edge of the rapidly piling bills bites you while the other edge
of the accelerated legal expenses is also cutting the other guy. Unlike district court, you
don’t have the opportunity to recover legal
fees from the other guy if you win.
If you have deep pockets, your attorney
(or team of attorneys) probably should have
a combination of relevant intellectual property and scientific/technical expertise; ITC
rules, practice and procedures knowledge;
international trade law knowledge; and
Administrative Procedures Act familiarity . . .
meaning, call in the Ghost Busters. Moreover,
unlike district court cases where less than 10
percent go to trial, over 40 percent of ITC
cases are plead before the Administrative
Law Judge – so it’s best you have someone
who knows the rules of this game. If you
are a small business like some of us (i.e., on
a tight budget), consider seeking guidance on
preparing a complaint to the ITC from the
Trade Remedy Assistance Office.
Regardless of whether you are the
complainant or respondent, be prepared
to find a reasonable business solution
outside the court-room. In the end, this
is about cutting deals and making money,
not racking up legal bills. But, having
Marshall Dillon with his meaty paw resting on his holstered Colt six-shooter, belted on by his shiny buckin’-bronco buckle,
and crisp white ten-gallon Stetson, steely-eyed in the background, silently mouthing Clint Eastwood’s “Make My Day”. .
. well, that never hurt nuthin, did it? CW
