On June 24, 2013, the International Trade Commission (ITC) announced that it will launch a pilot program for early adjudication of potentially-dispositive issues in Section 337 investigations. This pilot program is part of the Commission’s ongoing efforts to streamline the investigation procedures to reduce the cost of investigations and to expedite the process.
Under the new pilot program, the Commission will first select those investigations that appear likely to present grounds for early disposition, namely, the ones that can be resolved on threshold grounds, such as domestic industry (19 U.S.C. § 1337(a)(3)); importation (19 U.S.C. § 1337(a)(1)(A)); and standing. Parties seeking one of these expedited hearings may submit written requests to the Commission during the pre-institution phase.
Once an investigation is selected for the pilot program, the Commission will include in its notice of institution, generally within 100 days, an abbreviated schedule for fact finding on the potentially-dispositive issue identified by the Commission; and an initial determination by the assigned Administrative Law Judge. The assigned judge may request that the 100-day deadline be extended for good cause. However, given the stated purpose of this expedited procedure, such extensions will not likely to be granted liberally.
The pilot program differs from a motion for summary determination in significant ways. First, the assigned judge must render a decision within the set deadline, and the judge may not postpone the issue for trial, as allowed for summary determinations. Second, if the Commission takes review of the initial determination, the Commission’s review is expected to be completed within 30 days, unlike summary determination which has no set deadline.
The pilot program also appears to signal the Commission’s desire to limit the ability of non-practicing entities (NPEs) to use Section 337. Section 337 investigations, including the broad injunctive type relief afforded by ITC exclusion orders and the speed of ITC investigations, have made the Commission appeal to NPEs. The Notice for the pilot program also coincides with the Obama administration’s announcement of regulatory and legislative efforts to curb allegedly abusive patent litigation brought by NPEs.
The pilot program will alleviate the issue that many high-tech companies frequently complained about in the past, of having no realistic mechanism by which to dispose of Section 337 investigations before incurring the costs of a 337 investigation through the evidentiary hearing, often occurring 8-9 months into an investigation.