Stop them at the border! USITC proceedings on the rise in light of eBay

Eric Fues at Finnegan Henderson recently wrote a great article (originally published in Patent World in June 07) about the utility of USITC proceedings in light of the US Supreme Court’s May 2006 decision in eBay v MercExchange (which, if you have not been following US patent law, made it harder to obtain injunctions in patent cases).

The USITC (United States International Trade Commission) is the US border protection agency, or, in the words of the USITC:

An independent federal agency determining import injury to U.S.
industries in antidumping, countervailing duty, and global and China safeguard
investigations; directing actions against unfair trade practices involving patent,
trademark, and copyright infringement; supporting policymakers through economic analysis
and research on the global competitiveness of U.S. industries; and maintaining theU.S. Harmonized Tariff Schedule.

The USITC operates under section 337 of the Tariff Act of 1930 – (19 USC 1337) which states that unfair methods of competition and
unfair acts in the importation of articles into the United States, or
their sale for importation, or sale within the United States after
importation, are unlawful. The most common form of complaint is patent infringement.

A famous, recent example, is the dispute between Broadcom and Qualcomm over Chipsets.

What’s different about the USITC?
As Eric points out, the USITC will more readily grant an injunction than the US Courts. This is partly because the equitable considerations from eBay do not apply in USITC proceedings, and it is harder to obtain an injunction from a Court if the patentee is not itself using the patented invention. Other points of patent law do not apply in USITC proceedings either and these can be used to strategic advantage.

Unsurprisingly, there has been a sizeable jump in USITC proceedings in 2007 as compared to 2006.

However, the USITC can not award damages – but they can be sought in parallel Court proceedings.

Strategic implications?
IP Owners should be aware of this forum as a strategic option to obtain an injunction.
Companies importing goods into the US should include possible ITC proceedings in their freedom to operate analysis.

Everyone should be aware that the rules of engagement are different in ITC proceedings.

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