Alert August 16, 2010

ITC Authorizes Comments on Public Interest Issues in Response to Filing of Section 337 Complaints

In a notice published on July 8, 2010, the U.S. International Trade Commission (“ITC”) authorized its Secretary to solicit comments on any public interest issues which may be raised by a complaint of violation of Section 337 of the Tariff Act.1  Under this authority, on July 16, 2010 the ITC issued its first notice inviting the “complainant, proposed respondents, other interested parties, and members of the public” to file comments on “any public interest issues raised by the complaint.”2  The notice required interested parties to file comments within only five business days of the publication of the notice.3

Background

The ITC was established in 1930 to protect business interests in the United States against unfair competition from imported goods.  The ITC investigates infringement of intellectual property rights in response to a complaint filed by a rights holder under Section 337.   If the ITC finds a violation of Section 337, it must issue an exclusion order to exclude products from entering the United States, unless it also determines that the exclusion is not in the public interest.4  The default remedy is the limited exclusion order (“LEO”), which applies to the parties named in the investigation.  A general exclusion order (“GEO”), which applies against any person, may be  issued if the complainant meets additional requirements.5

In the past, the administrative law judge (“ALJ”), who makes an initial recommendation as to the appropriate remedy, typically was not authorized to receive evidence regarding the matters of public interest.6  During the final determination of the remedy, the Commission generally would invite written comments on matters of public interest from the complainant, respondents and other interested parties.  However, in the Kyocera investigation, this proved inadequate to address the substantial public interest issues at stake, and the Commission elected to hold a two-day hearing to receive evidence on the issues of remedy and the public interest.7  In the wake of Kyocera, to enable the Commission to review a developed record on public interest issues rather than have to receive evidence on the public interest in the first instance, the Commission has authorized the ALJ to receive evidence on the public interest in certain investigations.8 

Effect of the New Notice Requirement

In the July 8, 2010 notice, the ITC did not provide a specific reason for the new policy of requesting comments from any interested party on the matters of public interest, but these comments will no doubt assist the ITC in understanding the nature of the public interest issues raised by a complaint before commencing an investigation.  In particular, the comments received may help the Commission in deciding whether to direct the ALJ to receive evidence on the matters of public interest, thereby avoiding the need to receive such evidence during the final determination of the remedy. 

An interested party that does not respond within five business days to a solicitation for comments will have another opportunity to provide such comments after the ALJ makes an initial determination.9  However, at that time there may not be an evidentiary record on public interest issues if the Commission did not authorize the ALJ to receive such evidence.  The Commission may also be less willing to receive evidence on the public interest in the first instance if an interested party did not avail itself of the opportunity to comment prior to institution of the investigation.

Conclusion

Under the new ITC practice, when the ITC requests comments on the matters of public interest, interested parties are being given the opportunity to bring such matters to ITC’s attention early in the process.  In some situations, this may be beneficial to the interested party.  A case-by-case analysis will be required to assess the potential benefits and risks of submitting comments.  Since an entity must submit a response within only five business days after the notice is issued in response to the filing of a new complaint, the filing of a new complaint should serve as a signal to evaluate promptly whether a response might be advisable and consider the content of any such response.