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IP LitigationITC Litigation

Recent Case Highlights the Breadth of the ITC’s “Sufficient Involvement” Standard for Establishing Jurisdiction over Respondents

August 28, 2017

IP LitigationITC Litigation

Recent Case Highlights the Breadth of the ITC’s “Sufficient Involvement” Standard for Establishing Jurisdiction over Respondents

August 28, 2017

Back to Fish's Litigation Blog

 

The International Trade Commission (“ITC”) wields broad jurisdiction over unfair practices in importation under Section 337.  The importation or sale for importation of an accused product “confers upon the Commission jurisdiction over” the accused products being imported.[1]  19 U.S.C. §1337(a)(1)(C) explicitly prohibits “importation into the United States, the sale for importation, or the sale within the United States after importation” of an infringing product.  Years of litigation at the ITC have only expanded the ITC’s jurisdiction by adding subtle context on how to interpret Section 337.  For instance, ITC precedent has established that a complainant need only prove the importation of a single accused product to satisfy the importation element of Section 337.[2]  Furthermore, even samples of an accused product used solely for promotion meet Section 337’s importation requirement, even if such samples are given away and not sold.[3]

USITC Investigation 337-TA-1001, Certain Digital Video Receivers and Hardware and Software Components Thereof, is a recent example of the ITC’s ever-expanding jurisdiction, where Rovi Corporation and Rovi Guides, Inc. (“Rovi”) filed a complaint alleging that respondents Comcast, ARRIS, and Technicolor[4] unlawfully import “certain digital video receivers and hardware and software components thereof” into the United States.  Respondent Comcast alleged the ITC had no jurisdiction over them since Comcast “does not import the accused products, does not sell the accused products for importation, and does not sell the accused products after importation.”[5]  Complainant Rovi conversely argued that Comcast is “in effect” an importer because Comcast is “heavily involved in the design and manufacture of the accused products.”[6]  Rovi cited supply agreements between Comcast and the other respondents showing Comcast’s footprint in the importation process and how the accused products were designed specifically for Comcast equipment[7].  After hearing arguments from both sides, Administrative Law Judge (“ALJ”) Shaw held that “the evidence shows that Comcast is sufficiently involved with the design, manufacture, and importation of the accused products, such that it is an importer for purposes of Section 337.”[8]  Thanks to their sufficient involvement in the importation process, Comcast was subject to the ITC’s jurisdiction as an importer even though they were not the importers of record, nor did they sell the accused products for importation or after importation. To learn what degree of involvement constitutes sufficient involvement, we must analyze precedent in regards to respondents who were not importers of record in the ITC.

USITC Investigation 337-TA-643, Certain Cigarettes and Packaging Thereof, further elucidates how the ITC obtains jurisdiction over parties who impact importation.  Respondent Alcesia argued that it did not violate Section 337 because it was not “an importer of goods into the United States,” nor did they “warehouse, pack, or ship cigarettes.”[9]  Administrative Law Judge Gildea found substantial evidence proving Alcesia sold cigarettes bearing the trademarks-at-issue for importation, as shown by their customer service agreements and online stores[10].  While Alcesia participated in some importation related activity, respondents claimed they did “not engage in enough activity to have committed an unfair act under section 337.”[11]  The Court noted that “[t]he Commission has previously held that the scope of section 337 is ‘broad enough to prevent every type and form of unfair practice.’”[12]  ALJ Gildea continued, stating the Commission has jurisdiction over a respondent if there is “some nexus between a respondent’s activities and the importation of the [accused] products.”[13]

The Court concluded that the facts suggested Alcesia had “direct involvement in the sale for importation” of the accused products by “advertising cigarettes bearing the trademarks-at-issue on their websites, taking purchase orders from United States customers for said cigarettes, and then arranging for the [****] service to handle and ship the cigarettes to the United States on Alcesia’s behalf.”[14]  Since the online orders were integral for the importers, Judge Gildea held that “Alcesia had sufficient involvement in conducting a sale for importation to support accountability under Section 337.”[15]  The ITC thus held that its jurisdiction could extend to a party who was neither an “owner, importer, or consignee” of the accused product.[16]

Judge Shaw cites USITC Investigation 337-TA-712, Certain Digital Set-Top Boxes and Components Thereof, as primary legal support for denoting Comcast’s activities as “sufficient involvement” in Investigation 337-TA-1001.  Investigation 712 further established that “[s]ufficient involvement in the importation of accused products has been found adequate to establish jurisdiction.”[17]  Respondent Cablevision argued “that because it is not the importer of record of the Accused Products and because the alleged infringement does not occur until after importation, the Commission lacks jurisdiction over Cablevision.”[18]  Even though complainant Cisco was the importer of record, the ALJ found that “Cablevision was sufficiently involved in the manufacture and importation of the Cisco STBs to meet the importation requirement” since Cablevision’s actions “caused the manufacture and importation of the accused product.”[19]

A literal interpretation of Section 337 alone is no longer an adequate representation of the ITC’s jurisdiction under Section 337.  USITC Investigation 337-TA-643 showed us there need only be “some nexus” between respondent’s activities and the importation of the accused products for the ITC to claim sufficient involvement and jurisdiction over the party as an importer.  USITC Investigations 337-TA-712 and 337-TA-1001 further established that sufficient involvement in the importation process is adequate grounds for establishing ITC jurisdiction, and each investigation added factual context to the expanding precedent.  These trends suggest the ITC will continue to broadly define importers under Section 337 as legal precedent continues to expand.

[1] Certain Cigarettes and Packaging Thereof, USITC Inv. 337-TA-643, Order No. 19 at 5 (U.S.I.T.C. Feb. 3, 2009); see also Enercon GmbH v. Int’l Trade Comm’n, 151 F.3d 1376, 1380 (Fed. Cir. 1998).

[2] Certain Purple Protective Gloves, USITC Inv. 337-TA-500, Order No. 17 at 3 (U.S.I.T.C. Sept. 23, 2004) (emphasis added).

[3] See Certain Integrated Circuits, Processes for Making Same, and Products Containing Same, USITC Inv. 337-TA-450, Order No. 15 at 4 (U.S.I.T.C. Nov. 2, 2001) (emphasis added).

[4] The Commission named 16 respondents that combine into the three respondent groups, the Comcast, ARRIS, and Technicolor respondents.  For the full list of respondents, See Inv. 1001 Initial Determination at 2.

[5] Certain Digital Video Receivers and Hardware and Software Components Thereof, USITC Inv. 337-TA-1001, Order No. 26 at 1 (U.S.I.T.C. Nov. 29, 2016).

[6] Id.

[7] The public initial determination re the importation standard in USITC Investigation 1001 contains significant redactions of information describing the nature of the agreements, making it difficult to glean objective guidelines without precedential support.

[8] Certain Digital Video Receivers and Hardware and Software Components Thereof, USITC Inv. 337-TA-1001, Initial Determination at 12 (U.S.I.T.C. June 26th, 2017) (emphasis added).

[9] Certain Cigarettes and Packaging Thereof, USITC Inv. 337-TA-643, Order 19 at 7 (U.S.I.T.C. Feb. 3, 2009).

[10] Id at 7-8; see also “The agreement makes clear that Alcesia by its own definition operates web shops, that its customers purchase cigarettes via online orders, and that postal services handle and ship the cigarettes on Alcesia’s behalf.” Certain Cigarettes and Packaging Thereof, USITC Inv. 337-TA-643, Order No. 19 at 8 (U.S.I.T.C. Feb. 3, 2009).

[11] Id at 9 (emphasis added).

[12] Id at 9.

[13] See Id at 9.

[14] Id at 10.

[15] Id at 10.

[16] Id at 3.

[17] Certain Digital Set-Top Boxes and Components Thereof, USITC Inv. 337-TA-712, Initial Determination at 10-11 (U.S.I.T.C. May 20, 2011).

[18] Id at 11.

[19] Id; Investigation 712 alone provides little context for the specific actions/agreements that describe sufficient involvement beyond the holding since most of the relevant facts listing how Cablevision “caused the manufacture and importation of the Cisco STBs to occur” are redacted from the published initial determination.  USITC Inv. 337-TA-712, ID at 11.

Related Tags

ITC
Section 337
International Trade Commission
Comcast
Rovi
ARRIS
Technicolor
Alcesia
Cablevision

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Matthew Mahoney | Associate

Matthew Mahoney is an associate in the litigation group of Fish & Richardson’s Washington D.C.* office and was previously summer associate with the firm in 2014 and 2015. His practice focuses on patent litigation in federal district courts and before the U.S. International...

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