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

Abstract

The International Trade Commission (ITC or Commission) is an adjudicative agency that
safeguards intellectual property (IP) rights among patent litigants. Notably, when an import
infringes a U.S. patent, the ITC investigates the unlawful act under Section 1337 of the Tariff Act of
1930 (Section 337) rather than the Patent Act of 1952 (Patent Act). Today, the ITC and the federal
courts comprise a parallel patent system but support varying standing rules. Section 337
proceedings only require that one ITC complainant demonstrate standing; the federal courts require
all plaintiffs. This difference favors non-practicing entities (NPEs)—a term encompassing patent
trolls. Section 337’s broader standing interpretation, supplemented with the ITC’s domestic industry
requirement, helps NPEs exploit the Commission’s purpose. Even though the ITC does not award
monetary damages, trolls litigating before the Commission may threaten respondents with exclusion
orders—nevertheless forcing settlements and achieving financial relief. Therefore, to reverse NPE
power at the ITC, amendments to Section 337’s current standing and domestic industry requirements
merit consideration.