Executive Summary

It is no secret that intellectual property protection has become one of the battlegrounds for 21-st century international competition among companies. But two recent developments have crystallized what may be an accelerating trend toward the use of a rather unusual, not widely known forum in which to litigate intellectual property disputes: the International Trade Commission, a federal agency in Washington, D. C.

The International Trade Commission (or the "ITC") is responsible for administering a statute called "Unfair Practices in Import Trade," 19 U.S.C. § 1337. The statute, commonly referred to as "Section 337," is an alternative to the U.S. district courts as a forum for intellectual property litigation, and it has a number of important advantages for plaintiffs. Under Section 337, a company whose patent, copyright, trademark, or other IP right is being infringed upon by imports can ask the ITC to enter an order barring such imports from entry into the U.S. market. This remedy, called an "exclusion order," is ultimately enforceable by Customs, with the assistance of the ITC staff itself. Since the United States remains the largest market in the world for most products, this is quite a club. A plaintiff (called a "complainant" at the ITC) must be able to show that its IP is valid and infringed. The other major condition on the remedy is that the complainant must, unlike in a district court case, have a "domestic industry" in the United States that exploits the IP at issue. The definition of "domestic industry," however, is very broad. It includes manufacturing, but also research and development in the United States, and even licensing another company in the United States to use the IP. Indeed, even foreign-based companies that meet one of these tests can file a Section 337 case, and more and more of them have chosen to do so, as long as they meet one of the domestic industry criteria. . . .

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