1. ITC and Trademark Infringement Cases
By: Benita Collier

2. Section 337 Litigation before ITC (International Trade Commission)
Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337 declares unlawful certain unfair practices in import trade, including infringement of intellectual property rights. With respect to intellectual property, Section 337 prohibits the importation into the United States, the sale of importation, or the sale within the United States after importation of articles that infringe a valid and enforceable U.S. patent, copyright, trademark or mask work.
Federal litigation is not the only solution for some trademark infringement cases

3. Infringement Litigation before the ITC
Opting to litigate before the ITC has benefits:
Final decision in 16 to 18 months from initiation of investigation
In rem jurisdiction
Practical relief such as exclusion orders and cease and desist orders that are broader in scope than a district court injunction
The ITC is an independent federal agency that, among other things, has the authority under Section 337 of the Tariff Act of to investigate the importation of “articles” that allegedly infringe intellectual property rights.

4. Elements of an ITC Complaint
ITC Complainant must allege the following:
Ownership of IP rights and infringement of those rights;
Importation of allegedly infringing articles
ITC jurisdiction only as to imported goods.
If a product was manufactured in the U.S., exported and then re-imported, then such importation would come within the jurisdiction of the ITC
Existence of protectable domestic industry
A significant investment in plant and equipment;
A significant investment of labor or capital; or
A substantial investment in its exploitation, including, engineering, research and development or licensing
Each of these elements must be set forth in considerable detail in the complaint.
Louis Vuitton case (Inv. No. 337-TA-754, Order No. 16 (March 5, 2012), ITC found that domestic industry existed based on Louis Vuitton’s manufacturing facility in CA, its building improvements, number of workers employed and its investments in plant and equipment

5. Jurisdiction and Remedies of the ITC
Commission has in rem jurisdiction over imported goods rather than personal jurisdiction over the parties who import goods. The commission’s remedial orders may reach the products of parties over whom district court may not have jurisdiction.
Exclusion orders – do not require personal jurisdiction
General exclusion order – direct Customs to exclude infringing goods from the U.S. regardless of whether the person importing goods were parties to the investigation that led to the order. (For multiple infringers)
Granted if: 1) limited exclusion would be circumvented or 2) there is pattern of violation and difficult to determine the source of infringing goods
Limited exclusion order – direct Customs to exclude all infringing goods imported by parties found to have violated Section 337.

6. In rem jurisdiction: Examples:
Cease and Desist orders – directed at parties rather than goods. Must have personal jurisdiction over respondent before issuing order.
Prohibit the domestic use, sale and marketing of infringing goods
The penalty for violating any ITC order is up to $100,000 per day, per violation.
In rem jurisdiction: Examples:
Louis Vuitton case (Inv. No. 337-TA-754, General Exclusion Order (May 30, 2012)
Louis Vuitton filed a complaint against two individuals, and companies in California, Texas, New York and China. General exclusion order granted because named parties produced up to 200,000 units per style, per month and anonymity of internet sales operations made it highly difficult to identity the source of the infringing products.
Converse case (Inv. No. 337-TA-936, General Exclusion Order (June 23, 2016) Converse filed a complaint against over 30 respondents in Italy, Australia, Canada, China, Japan, New York, California, Washington, Maryland, Illinois and Arkansas. General exclusion order granted because respondents were likely to circumvent limited exclusion order by using 3rd party intermediaries to import infringing shoes. In addition, ITC found a widespread pattern of importation of infringing shoes by numerous sources, which were difficult to identify.
Philip Morris USA case (Inv. No. 337-TA-643, General Exclusion Order (September 21, 2009) ITC granted a general exclusion order to prevent the importation of Philip Morris’ gray market cigarettes. The cigarettes were materially different from those in the US market because they did not warning labels. ITC held that limited exclusion would be circumvented and a general pattern of infringement because of hundreds of websites sold the product.

7. ITC Process and Timeline
Typically ITC completes its investigation and renders a decision within approx. 16 to 18 months of institution of investigation
Once complaint filed, 30 day informal review period to determine if jurisdictional and other requirements are met.
Certified copy of registrations, certified copies of file history per mark, domestic industry
Commission votes to institute investigation. Serve respondent(s) and publish a notice in the Federal Register describing scope of investigation (include time period for public to comment re public interest
Answer due 20 days after complaint served. 10 added days for foreign defendants
Discovery starts after notice published and last 4 – 5 months
Document requests, interrogatories, requests for admissions, depositions
Responses due within 10 DAYS.
Unless move for summary determination, ALJ holds bench trial after discovery and issue details Initial Determination (ID). ID includes finding of fact and conclusions of law.

8. If a violation is found, the ID will contain a recommendation regarding the remedy and set the bond amount
The parties have the option to petition the ITC to review the determination.
If the ID is not reviewed, it becomes the final order.
Where a violation is found and an exclusion order issued, the President had the authority to reject final orders of the ITC within 60 days; otherwise, the order becomes effective and relief is immediate.
Temporary relief akin to a preliminary injunction is possible. A temporary exclusion order may requested, Commission decides within 90 to 150 days of publication in Federal Register.
Granted if: 1) likelihood of success on merits; 2) irreparable harm will be caused; 3) balance of hardship and 4) public interest. Will remain in effect for duration of investigation.

9. Downside to the ITC Route
No monetary damages. District court may award monetary damages and injunctive relief.
Injunctive relief is harder to obtain in district court because factors must be satisfied.
ITC cannot provide customized relief. District courts have broader discretion.
Counterclaims are not permitted in ITC proceeding.
No jury trial offered.
ITC determination is not binding on district courts.
May be used as evidence and strong indicator of how district court will rule.

10. Statistics
The number of cases decided on the merits in which a violation is found:
2011 – 17 investigations, ITC found 6 violations
2013 – 21 investigations, ITC found 11 violations
2015 – 11 investigations, ITC found 7 violations
2016 – 16 investigations, ITC found 11 violations
2017 – 3 investigations, ITC found 2 violations
As of December 31, 2015, there were 94 active exclusion orders.