Goodwin Insights October 04, 2019

Goodwin Insights

The third quarter included no seismic shifts in policy or any earth-shattering legal interpretations. No matter, it was still an interesting quarter considering the amount of decisions that continue to come out of the hard working ALJs and a generally busy Commission. One trend we continue to watch is the appeal of the ITC to life sciences companies. In calendar year 2019 there have already been seven new life sciences cases instituted (Inv. Nos. 337-TA-1144, -1145, -1146, 1147, 1153, 1167, and 1175). By our count, this is the most life sciences cases in a year the Commission has ever seen. Too early to tell whether this uptick will carry forward, but with a Delaware docket that continues to be overcrowded, chances are good that life sciences momentum at the ITC will continue to pick up.

Interestingly, three of these new life sciences cases involve trade secrets and they are not the only trade secrets cases on-going at the Commission. We have seen trade secrets’ cases grow in number across the country and the ITC is seeing the same increase. As the Commission’s trade secret precedent is relatively light, it will be interesting to see how this trend plays out and what type of guidance the ALJs and Commission put out as these cases reach their later stages.

On a more general level, Section 337 filings were numerous in the beginning of the quarter, but have tapered off somewhat in the last few weeks. With that said, the Commission continues to be very busy this year and if the averages from the previous three quarters continue 2019 will see more institutions than it did in 2018.

The ITC’s appeal continues among non-practicing entities. Particularly, more and more companies that license their IP are relying on the domestic expenditures of their licensees to show a domestic industry. We expect that this trend will continue going forward.

In one notable opinion, the ITC reminded us that activities relied upon for domestic industry ought to have taken place before the complaint is filed. The relevant date to determine domestic industry remains the filing date of the complaint. As the Commission explained it “will consider post-complaint evidence regarding domestic industry only in very specific circumstances,” giving as an example “when a significant and unusual development has occurred after the complaint has been filed.” Unsubstantiated assertion of “explosive growth” projections will not suffice.

Another particularly interesting fact pattern came in an investigation where the respondents attempted to subpoena the Commission itself. The respondents sought discovery from the Commission on past transcripts and information that was arguably not available outside the Commission’s possession. The request was ultimately struck down by the ALJ on the grounds that it was not adequately shown that relevant third parties did not object to the Commission turning over the discovery. It is a rare circumstance where such a subpoena could become relevant and necessary, but it is interesting nonetheless.