United States: How ITC Is Addressing Its Importation Requirement

A distinguishing aspect of aU.S. International Trade Commissioninvestigation under Section 337 from a district court action is the importation requirement - the accused product must have been imported, or sold for importation, into the U.S.

Specifically, depending on the basis for the alleged violation, the statute requires either unfair acts "in the importation of articles ... into the United States, or in the sale of such articles"¹ or the "importation into the United States, the sale for importation, or the sale within the United States after importation" of an article accused of infringing an intellectual property right.² A well-pled complaint, accordingly, must "[d]escribe specific instances of alleged unlawful importations or sales."³

The importation requirement is frequently one of the less contentious issues in a Section 337 investigation. A complaint may include a picture of the accused product and its packaging that indicates it was made outside the U.S. (e.g., "Made in France") along with a receipt showing it was purchased in the U.S. And parties often stipulate that the importation requirement has been satisfied.

There have been high-profile disputes, but they are not common - e.g., theU.S. Court of Appeals for the Federal Circuit's notable en banc Suprema Inc. v. ITC decision and ClearCorrect Operating LLC v. ITC decision were both decided seven years ago.⁴

Recent Cases

Although importation is a relatively quiet area of dispute, a handful of recent decisions suggests opportunities for ongoing developments or, at least, creative thinking.

In Certain Electrical Connectors and Cages, Components Thereof, and Products Containing the Same, the presiding administrative law judge required a showing of importation for each product accused of infringement.

In Certain Laptops, Desktops, Servers, Mobile Phones, Tablets, and Components Thereof, a respondent moved unsuccessfully for summary determination of no importation under the argument it was not the "owner, importer, or consignee" of the accused products under the statute.

In Certain Toner Supply Containers and Components Thereof (I), the commission took review of a finding of importation in the final initial determination by a respondent that had been terminated by consent order.

And in Certain Flocked Swabs, Products Containing Flocked Swabs, and Methods of Using Same, the presiding ALJ denied a motion to compel discovery of products that had not been, and would not be, imported into the U.S.

The 1241 Investigation

In Certain Electrical Connectors, the complainant at trial accused six categories of products, which included 15 products, of infringing claims from up to three patents.⁵ The ALJ found that several of the accused products had been imported, but also found that the QSFP 2x1 press-fit products had not been imported.⁶

The complainant tried to argue satisfaction of importation for the QSFP 2x1 press-fit products through the importation of similar products, but the ALJ rejected that proposal. The ALJ held "Amphenolcannot satisfy the importation requirement for the QSFP 2x1 Press-fit products by relying on the importation of a different product" and, accordingly, found no violation with respect to the QSFP 2x1 press-fit products.⁷

In reviewing the other elements for violation, the ALJ found:

• The QSFP 2x1 press-fit products, but no other accused products, infringed certain claims of the '767 patent, which was the only patent asserted against it;⁸
• Each claim of the '767 patent infringed by the QSFP 2x1 press-fit products is invalid;⁹
• The technical prong of the '767 patent would be satisfied if the claims were valid;¹⁰ and
• The economic prong of the '767 patent is satisfied.¹¹

That is, the ALJ found no violation as to the '767 patent because (1) the only infringed claims were invalid and (2) the infringing product (the QSFP 2x1 press-fit products) had not been imported. For a violation by the QSFP 2x1 press-fit products, the commission would need to reverse the ALJ's findings of invalidity of the '767 patent and no importation, and sustain the other findings.

The 1241 final initial determination is pending before the commission - a decision whether to review is due June 21 - but the decision highlights the continuing relevance of importation as an element of violation and the importance of closely tracking which products have and have not been imported.

The 1280 Investigation

In Certain Laptops, respondent Amazon.com Inc. filed a motion for summary determination of no importation.¹²

The statute requires importation or sale by "the owner, importer, or consignee" of articles that infringe.¹³ The complainant accused Amazon of infringement based on the domestic resale of products made by respondentSamsung Electronics Co. Ltd. and nonrespondents ASUSTek Computer Inc.,Acer Inc., and Vaio. Amazon argued that it does not sell for importation or import any accused product, and that it is not the owner, importer or consignee upon importation of the accused products it sells.¹⁴

The ALJ denied Amazon's motions for two reasons. First, the ALJ rejected Amazon's proposal that importation included a temporal limitation that requires a respondent to be the owner, importer or consignee upon importation.¹⁵ Second, the ALJ held that even if Amazon's statutory interpretation were correct, there was a factual dispute whether Amazon is an importer under the statute, meaning the issue was not ripe for summary determination.¹⁶

Although a ruling on importation, the order raises possible questions as to the scope of any potential remedial order. Analyzing the potential scope of limited exclusion orders by the commission, the Federal Circuit held in 2008 that the commission cannot exclude the downstream products of unnamed entities simply because they included infringing components of named respondents.¹⁷

In finding issuance of a limited exclusion order, or LEO, includes an in personam element, the Federal Circuit notably held inKyocera Wireless Corp. v. ITC that "[a]ny reading of Section 337(f) that would enable LEOs to exclude articles manufactured by non-respondents would impermissibly render sections of the statute superfluous."¹⁸

ITC remedial orders do not generally name specific models but exclude all "products that infringe." Consequently, if Amazon were found in violation as an importer, a remedial could ostensibly preclude Amazon from importing any "product that infringes" - it would not necessarily be limited to products made by respondent Samsung or nonrespondentsASUS, Acer, or Vaio.

The commission, however, has previously limited the scope of an LEO against downstream products of named respondents to those products that incorporate a fellow respondent's infringing component.

Specifically, in Certain GPS Devices and Products Containing Same, the commission in 2010 found that an LEO covering respondents' GPS devices only extended to those GPS devices that included GPS chips of respondent SiRF.¹⁹ The LEO did not exclude respondents' GPS devices that included other entities' GPS chips, which had not been considered by the commission.²⁰

By analogy, any remedial order against Amazon could be limited to products made by entities considered by the commission and found to infringe, although the actual outcome is difficult to predict based on precedent. As this investigation was recently stayed pending settlement,²¹ it appears this issue will not be resolved in the near term.

The 1259 Investigation

In Certain Toner Supply Containers, the complaint named 26 respondents. Twenty-two of those respondents were found in default, three - including Sun Data Supply Inc. - were terminated through a consent order, and one was terminated through a withdrawal of the complaint against that entity.²² The presiding ALJ granted an unopposed motion for summary determination of violation.²³

No entity sought review of the final initial determination, although the commission determined to review the final initial determination in part.²⁴ Specifically, the commission determined to review the final initial determination's findings as to whether terminated respondent Sun Data Supply satisfied the importation requirement, as well as the economic prong of the domestic industry requirement.²⁵

Although the notice does not make clear why the commission determined to review whether Sun Data Supply satisfied the importation requirement, the notice does make clear that the commission closely reviews importation before issuing its final determination.

The 1279 Investigation

In Flocked Swabs, the complainant sought to compel discovery of products that had not been imported and for which there was no evidence they would be imported before the close of the evidentiary record.²⁶

The complainant argued it was entitled to the discovery under the theory it is more efficient to adjudicate all products at the hearing than adjudicating products piecemeal - the theory under which respondents can generally obtain an adjudication on new designs.²⁷ The ALJ rejected this argument, expressly noting a clear intent by respondents to import the new designs and to want them adjudicated, unlike this case.²⁸

The order in Flocked Swabs appears to be part of the evolution of the interplay between importation and new designs.

Twenty years ago, a complainant would seek discovery of "products in development," since it was burdensome and highly sensitive information for a respondent to produce, which a respondent would often resist.²⁹ Subsequently, respondents made a point to produce discovery regarding new products to obtain an adjudication of noninfringement - and avoid risk of the new products being ensnared in any remedial order - which a complainant would seek to prevent.³⁰

With the order in Flocked Swabs, the complainant has come full circle and tried (unsuccessfully) to burden the respondent with discovery obligations - trying to force discovery regarding products that have not been and will not likely be imported using the tangential theory for adjudicating new designs.

Conclusion

In general, importation continues to be one of the less hotly contested issues. But when a dispute does arise, it can be interesting academically and possibly important proofwise. The areas where it has recently arisen are still developing, and one should expect equally interesting areas where it arises in the future.

Footnotes

1 19 U.S.C. § 1337(a)(1)(A).

2 19 U.S.C. § 1337(a)(1)(B)-(E).

3 19 C.F.R. § 210.12(a)(3).

4 Suprema Inc. v. Int'l Trade Comm'n, 742 F.3d 1350, 1352 (Fed. Cir. 2015);ClearCorrect Operating, LLC v. Int'l Trade Comm'n, 810 F.3d 1283 (Fed. Cir. 2015).

5 Inv. No. 337-TA-1241, Final ID at 5 (March 1, 2022).

6 Id. at 14-19, 18.

7 Id. at 18, 19.<

8 Id. at 219-221, 382-383.

9 Id. at 382-83.

10 Id. at 383.

11 Id.

12 Inv. No. 337-TA-1280, Order No. 23 at 1 (March 24, 2022).

13 19 U.S.C. § 1337(a)(1)(B), see also 19 U.S.C. §§ 1337(a)(1)(A), (C), (D).

14 Amazon Mot. for Summary Det. of No Imp. at 1 (EDIS Doc ID 763721); Inv. No. 337-TA-1280, Order No. 23 at 1-2.

15 Inv. No. 337-TA-1280, Order No. 23 at 5.

16 Id. at 6.

17 Kyocera Wireless Corp. v. Int'l. Trade Comm'n, 545 F.3d 1340, 1356 (Fed. Cir. 2008).

18 Id.

19 Inv. No. 337-TA-602, Advisory Opinion at 5 (April 20, 2010).

20 Id.

21 Inv. No. 337-TA-1280, Order No. 35.

22 Inv. No. 337-TA-1259, Notice of Comm'n Det. at 2-3 (Apr. 29, 2022) (EDIS Doc ID 168561).

23 Inv. No. 337-TA-1259, Final ID at 1, 10, 102 (March 15, 2022).

24 Inv. No. 337-TA-1259, Notice of Comm'n Det. at 4 (Apr. 29, 2022).

25 Id.

26 Inv. No. 337-TA-1279, Order No. 45 at 5 (May 2, 2022).

27 Id. at 3.

28 Id. at 4.

29 See, e.g., Certain Audio Processing Integrated Circuits, and Products Containing Same, Inv. No. 337-TA-538, Order No. 7 (July 18, 2005).

30 See, e.g., Certain Media Devices, including Televisions, Blu-Ray Disc Players, Home Theater Systems, Tablets and Mobile Phones, Components Thereof and Associated Software, Inv. No. 337-TA-882, Order No. 43 (Feb. 14, 2014).

Previously published in Law 360.

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