Section 337 investigation

• Patents (Section 337(a)(1)(B)). The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer or consignee of articles that infringe a valid and enforceable US patent, or that are made, produced, processed or mined under, or by means of, a process covered by the claims of a valid and enforceable US patent¹.
• Other registered rights (Section 337(a)(1)(B) to (E)). The same acts for articles that infringe a valid and enforceable US copyright registered under title 17 or trademark registered under the Trademark Act of 1946, a registered mask work, or a design protected under chapter 13 of title 17 (vessel hull and deck designs)^1,2.
• Unfair methods and acts (Section 337(a)(1)(A)). Unfair methods of competition and unfair acts in the importation of other articles, or in their sale by the owner, importer or consignee, the threat or effect of which is to destroy or substantially injure a US industry, prevent the establishment of such an industry, or restrain or monopolize trade and commerce in the United States¹.

The USITC says both utility and design patents, as well as registered and common law trademarks, may be asserted, and that other forms of unfair competition involving imported products, such as misappropriation of trade secrets, may also be asserted³. See Design patent.

For patent, copyright, trademark, mask work and design claims, the statute applies only if an industry in the United States, relating to the articles protected by the right concerned, exists or is in the process of being established (Section 337(a)(2))¹. An industry is considered to exist if there is in the United States, with respect to the articles protected by the patent or other right, significant investment in plant and equipment; significant employment of labor or capital; or substantial investment in its exploitation, including engineering, research and development, or licensing (Section 337(a)(3))¹.

The USITC rule on complaints requires a statement as to whether an alleged domestic industry exists or is in the process of being established. For an existing industry the complaint must give a detailed description including facts showing significant or substantial investment and employment, and the relevant operations of any licensees. For an industry in the process of being established it must give facts showing that the complainant is actively engaged in the steps leading to exploitation of its intellectual property rights and that there is a significant likelihood that an industry will be established in the future (19 CFR 210.12(a)(6))⁵.

1. ComplaintThe Commission investigates any alleged violation on complaint under oath or on its own initiative (Section 337(b)(1))¹. Under the USITC rule the complaint must be under oath, state the facts constituting the alleged unfair acts, describe specific instances of unlawful importation or sale with Harmonized Tariff Schedule item numbers, and name each person alleged to be violating the section (19 CFR 210.12(a))⁵.
2. InstitutionThe Commission determines whether the complaint is properly filed and whether an investigation should be instituted within 30 days after the complaint is filed, unless one of the exceptions in the rule applies, such as exceptional circumstances (19 CFR 210.10(a)(1))⁴. On commencing an investigation, the Commission publishes notice in the Federal Register and, within 45 days after initiation, sets a target date for its final determination (Section 337(b)(1))¹.
3. Trial and determinationThe USITC says its investigations include trial proceedings before administrative law judges and review by the Commission³. All legal and equitable defenses may be presented, and the Commission may terminate an investigation in whole or in part by a consent order or on the basis of an agreement between the private parties, including an agreement to arbitrate (Section 337(c))¹.
4. Presidential reviewA violation determination is published in the Federal Register and transmitted to the President with the record (Section 337(j)(1)). If the President, for policy reasons, disapproves it and notifies the Commission before the close of the 60-day period beginning on the day after he receives it, the determination and the action taken have no force or effect (Section 337(j)(2)). Otherwise the determination becomes final at the end of that period, or earlier if the President approves (Section 337(j)(4)). Until it is final, excluded articles are entitled to entry under a bond set in an amount the Commission determines sufficient to protect the complainant from any injury (Section 337(j)(3))¹.
5. AppealAny person adversely affected by a final determination under subsection (d), (e), (f) or (g) may appeal to the US Court of Appeals for the Federal Circuit within 60 days after the determination becomes final (Section 337(c))¹.

An exclusion order or cease and desist order continues in effect until the Commission finds that the conditions that led to it no longer exist (Section 337(k)(1))¹. Orders in patent, copyright, mask work and design cases do not apply to articles imported by and for the use of the United States, or imported for it with the authorization or consent of the Government, and the owner is then entitled to reasonable and entire compensation in the Court of Federal Claims (Section 337(l))¹. See also Compulsory license.

A respondent in a Commission proceeding that is also a party to a civil action with the same parties can ask the district court to stay proceedings on any claim that involves the same issues. The district court shall grant the stay until the Commission's determination becomes final, if the request is made within 30 days after the party is named as a respondent or 30 days after the district court action is filed, whichever is later (28 U.S.C. 1659(a)). After the stay is dissolved, the Commission record is transmitted to the district court and is admissible, subject to a protective order and the evidence rules (28 U.S.C. 1659(b))⁶. A respondent may also raise a counterclaim in the Commission, and must then file a notice of removal of it with a district court (Section 337(c))¹.