Unrecognized Risks of ITC Remedial Orders

Article by C. Larry O'Rourke, Thomas L. Jarvis, and Paul C. Goulet

Originally published in Managing Intellectual Property Patent Yearbook 2003

The United States International Trade Commission (ITC) is a quasi-judicial federal agency charged with administering several areas of trade law. A primary mission of the ITC is to exclude from importation into the United States products that infringe domestic intellectual property rights. Because American consumers are the world's largest and most profitable market for most goods, exclusion from the US market can have devastating consequences for importers.

The ITC investigates complaints filed by owners of US IP rights and can issue remedial orders against manufacturers, importers, and those who sell goods after importation that are found to infringe those IP rights. Both US and foreign-based companies can file complaints with the ITC. And both US and foreign-based companies can be the targets of ITC investigations. When the ITC determines that goods are imported in violation of the law, it can issue exclusion orders directing the US Customs Service to prohibit further importations of a broad range of goods related to those IP rights. Thus, any business, anywhere in the world, that sells goods imported into the United States may find its products excluded, without any prior notice, from the largest market in the world. Consequently, a company that fails to keep abreast of investigations at the ITC puts its business at risk.

The Consequences of Inaction

Increasingly, the ITC is launching investigations and issuing exclusion orders that can cover products made by companies that are not a party to the investigation and that may not be aware of the investigation. Consider the following examples:

Some ITC investigations are directed to components made by a manufacturer that is named as the "respondent" to the investigation, even though the component may enter the US as part of a finished product made and imported by a compay that is not a party to the ITC investigation: see Integrated Circuits, Process For Making Same, And Products Containing Same, Investigation No 337-TA-450 (complainant UMC sought and obtained an ITC order excluding from importation not only the infringing integrated circuits made by respondent SIS, but also "downstream" products containing those circuits).

Some other ITC investigations name only a few manufacturers and importers of the accused goods, but result in general exclusion orders that apply to all such goods regardless of the manufacturer or importer: see Lens-Fitted Film Packages, Investigation No 337-TA-406 (complainant Fuji sought and obtained an ITC order excluding from importation all infringing lens-fitted film packages, regardless of manufacturer or importer).

And some other ITC cases are directed to components of certain manufacturers but seek exclusion orders against both the components and finished goods containing the component, regardless of who manufactured or imported the component or the finished product: see...