NPE Power Reversal: Amending ITC Standing Under Section 337 and Domestic Industry

Abstract

The International Trade Commission (ITC or Commission) is an adjudicative agency thatsafeguards intellectual property (IP) rights among patent litigants. Notably, when an importinfringes a U.S. patent, the ITC investigates the unlawful act under Section 1337 of the Tariff Act of1930 (Section 337) rather than the Patent Act of 1952 (Patent Act). Today, the ITC and the federalcourts comprise a parallel patent system but support varying standing rules. Section 337proceedings only require that one ITC complainant demonstrate standing; the federal courts requireall plaintiffs. This difference favors non-practicing entities (NPEs)—a term encompassing patenttrolls. Section 337’s broader standing interpretation, supplemented with the ITC’s domestic industryrequirement, helps NPEs exploit the Commission’s purpose. Even though the ITC does not awardmonetary damages, trolls litigating before the Commission may threaten respondents with exclusionorders—nevertheless forcing settlements and achieving financial relief. Therefore, to reverse NPEpower at the ITC, amendments to Section 337’s current standing and domestic industry requirementsmerit consideration.