On April 26, 2018, the US International Trade Commission (the “Commission”) released an advanced copy of amendments to its rules and practices (available here). These amendments will be effective 30 days after publication in the Federal Register notice (likely later this week) and will affect the conduct of investigations under Section 337 of the Tariff Act of 1930. Under Section 337, the Commission investigates unfair acts in the importation of products into the United States. These investigations commonly center on allegations of patent infringement or trade secret misappropriation –including theft that takes place entirely abroad – but may also involve allegations of infringement of trademarks, copyrights, mask works, and other forms of intellectual property or other unfair acts.
The amended rules address several key procedural issues, including:
- The addition of a “100-day” proceeding, which permits an administrative law judge (“ALJ”) to rule on potentially dispositive issues within 100 days of institution of the investigation. The ALJ is authorized to hold expedited hearings and stay discovery of any remaining issues during the 100-day proceeding.
- The authority to sever an investigation into separate proceedings at any time prior to institution or within 30 days from institution, based on a motion from any party.
- To permit a party to serve objections to a subpoena or move to quash within the later of 10 days after receipt of the subpoena or within such time as the ALJ may allow.
- To permit the Commission to effect service electronically through secure storage and transmittal, where appropriate.
Through these and other amendments, the Commission intends to increase efficiencies in the resolution of Section 337 disputes. Of particular note is the long-awaited establishment of the 100-day proceeding. It could allow both complainants and respondents to focus quickly on issues that will resolve the dispute without expending considerable time and resources to address all aspects of the dispute over an extended time. While the 100-day proceeding has been around in “pilot program” form for more than two years, the proceedings have rarely been used. The 100-day proceeding determination will be made following an evidentiary hearing, which means there could be increased activity at the start of an already compressed investigation. This addition will encourage early disposition of specific issues and could also encourage early settlement as parties will have increased certainty on the remaining issues under dispute.
The ability to sever investigations and proceed on parallel tracks also holds the potential to isolate or resolve distinct allegations. The Commission may determine to institute multiple investigations, where, for example, a complaint involves a number of unrelated technologies or products or where unrelated patents or multiple unfair acts are at issue. This may assist in preventing cases from becoming unwieldy; and it may also subject all parties to what appears like litigation on multiple fronts, with separate schedules for discovery, depositions, briefing, and trial. This process may also prove to be an advantage to complainants, who will have the opportunity to raise the possibility as part of its pre-institution draft complaint review. In that way, complainants may be prepared for severed and separated investigations in advance.
Other amended procedures seek to streamline service, objections, and subpoena practices, all of which could increase the pace in an already extremely fast-moving forum. The quick resolution of high-value disputes may make litigants more likely to seek resolution of their IP disputes at the Commission.