Academic journal article Santa Clara High Technology Law Journal

Where Is the ITC Going after Kyocera?

Academic journal article Santa Clara High Technology Law Journal

Where Is the ITC Going after Kyocera?

Article excerpt

I. INTRODUCTION

On October 14, 2008, in Kyocera Wireless Corp. v. International Trade Commission, (1) the U.S. Court of Appeals for the Federal Circuit (CAFC) circumscribed the scope of limited exclusion orders (LEO) issued by the International Trade Commission (ITC or Commission). Prior to Kyocera, the Commission had issued LEOs prohibiting the importation into the United States of both products found to infringe and "downstream" products that incorporate the infringing articles. (2) In Kyocera, the CAFC held that the ITC had no statutory authority to issue a LEO against downstream products of parties not named as respondents in the ITC investigation. (3) Thus, Kyocera represents a significant change in the scope of a LEO and ITC remedies in general.

Through an overview of ITC litigation prior to the Kyocera decision and an analysis of that case, this paper provides an analysis of Kyocera's impact and considers possible changes in light of that decision. This paper ends with a brief discussion of possible changes future complainants and the ITC may encounter.

II. ITC LITIGATION PRIOR TO KYOCERA

A. Brief Overview of the ITC

Section 337 of the Tariff Act of 1930, (4) is an international trade statute that was originally enacted to protect U.S. domestic industries from unfair competition in the importation into the United States of goods made by foreign companies. (5) Over the years, Section 337 has evolved into an alternative and expeditious means for U.S. intellectual property owners seeking to enforce their rights against infringing imports. Compared to traditional patent litigation before a district court, the ITC can provide an alternative-often advantageous-venue to resolve disputes.

The ITC is not a federal court. (6) Instead, it is an independent and quasi-judicial federal administrative agency whose jurisdiction includes unfair trade practices in violation of Section 337. (7) Typically, such cases involve allegations that an imported article infringes a U.S. patent, but the ITC also investigates other forms of unfair competition, such as trademark or copyright infringement, misappropriation of trade secrets, passing off, false advertising, and violations of the antitrust laws. (8)

Unlike an action in federal district court, there are no jury trials in Section 337 investigations. Instead, Section 337 investigations are tried before ITC administrative law judges (ALJs), (9) who are not constitutional Article III judges. (10) The ALJs "conduct formal trial-type hearings under rules of procedure and practice consistent with the Federal Rules of Civil Procedure and the Federal Rules of Evidence." (11) The ITC Commissioners (12) "sit[] as an administrative review board with final decision-making authority." (13) Commission decisions that find a violation of Section 337 and result in the issuance of remedial orders become final at the conclusion of the 60 day presidential review period. (14) The final orders are then appealable to the CAFC. (15)

B. Differences Between the ITC and District Courts

The ITC is experiencing a rise in the number of cases that it hears. In 2007, the number of new ITC cases was nearly 60% more than the number of new cases started in 2003. (16) There were slightly fewer than 80% more active cases in 2007 than in 2003. (17) The rise in popularity of the ITC as an intellectual property litigation venue probably results from a perception by patent owners18 that the ITC presents a number of distinct advantages over the U.S. district court.

1. ITC investigations have been historically faster than district court cases

ITC investigations are required by statute to be complete "at the earliest practicable time after the date of publication of the notice of such investigation." (19) Although investigation periods have increased over time because of an increased case load and the complexity of the cases, the ITC will typically render its final decision within 12-18 months after an action has been initiated. …

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