With rapid developments in substantive and procedural law, as well as technical advances in artificial intelligence resources, this article examines what trends may lie ahead at the US International Trade Commission (ITC) in 2020 and beyond.
More oral witness testimony
Predicting coming trends in any forum is a risky endeavour, but at least one trend is guaranteed to come to fruition this year at the ITC: an increase in oral witness testimony
during ITC hearings. Not long ago, five of the six administrative law judges (ALJs) required that witness testimony be submitted through written witness statements rather than through oral direct testimony.1 However, with the addition of Judge Cameron Eliot in April of 2019, three of the six ALJs now have standard ground rules that require all witness testimony to be presented through live direct and cross examination at the evidentiary hearing.2
Moreover, ALJs will not necessarily be receptive to accepting written witness statements in lieu of live testimony even if both parties stipulate to it. For instance, in Certain LTE- and 3G-compliant cellular communications devices, ALJ McNamara ruled that parties seeking to use written witness statements would need to file a motion for leave to do.3
ITC hearings rarely last longer than one week.4 The practical impact of shifting from hundreds (sometimes thousands) of pages of witness statements to live oral testimony in a one-week timeframe will typically decrease the amount of evidence that a party can introduce. To ensure that sufficient evidence enters the record on key issues, parties are likely to narrow the contested issues to be addressed at the hearing and in briefing.5
Though the commission itself has the statutory authority to determine questions of fact and law, the ITC may need to give greater deference to ALJ findings that hinge on credibility assessments if those assessments are based on live testimony. To that end, Federal Circuit precedent suggests that the commission could face restrictions on its ability to overturn ALJ findings that turn on “demeanour-based” credibility assessments.6
Entering 2020 with half of the ALJs requiring all witnesses to testify live and four of the six ALJs requiring at least some witness testimony to be presented orally, we can expect to see more live examination of witnesses during ITC hearings than ever before.7
Tailored remedial orders
Although the ITC declined to comment on the public interest issues raised by the two related Qualcomm v Apple investigations (investigation nos 1065 and 1093), the ITC has reiterated that tailored relief is sometimes appropriate in view of the public interest even where the public interest factors are not strong enough to justify entirely precluding a remedy.8
For instance, in Certain Microfluidic Devices, the commission found that the remedial relief offered to a complainant should be tailored in view of the public interest, and rejected the ALJ’s conclusion to the contrary.9
The commission explicitly encouraged the development of a more robust record of evidence relevant to public interest, noting that “it is important, even if not technically required, that all parties to the proceeding– complainant, respondent, and Office of Unfair Import Investigations (OUII) – seek factual information and statements from knowledgeable sources, including interested third parties, during fact discovery.”10 As investigations move forward in 2020, OUII staff may take a more active role in seeking evidence relevant to public interest or urging the private parties to do so.
Increase in non-patent unfair acts
Although section 337 applies to a variety of unfair acts in the importation of articles into the US, historically, close to 90% of section 337 investigation have been based solely on claims of patent infringement.11 Nevertheless, a number of developments in 2019 suggest that ITC practice may see an increase in ITC complaints based on non-patent unfair acts.
First, there is “a growing recognition among professionals in firms, government, academia,
and other settings on the importance of trade secrets.”12 At least one federal district court has now held that an ITC determination regarding trade secret misappropriation has preclusive effect in subsequent district court litigation.13 This is contrary to ITC determinations on patent infringement, which have no preclusive effect in district court.
In 2019, there was an increase over prior years in the number of complaints based solely on trade secret misappropriation claims, a trend that may continue in 2020 and beyond.14
Secondly, in Amarin v International Trade Commission, although the Federal Circuit rejected the specific claim at issue as preempted by federal statute, the Federal Circuit nonetheless left the door open to entirely new unfair act causes of action, including causes of action arising under the Food, Drug, and Cosmetics Act.15
Finally, the ITC recently determined to review a significant number of issues related to trademark and trade dress infringement in Certain Footware Products, which may result in the development of further commission precedent on those legal issues.16 This too may lead to an increase in the number of ITC complaints asserting trademark and trade dress infringement claims.
In addition to enforcing ITC exclusion orders, the US Customs and Border Patrol (CBP) also has the authority to seize goods that are clearly piratical (copyrights) or counterfeit (trademarks) with respect to a registered US copyright or are clearly a trademark.17 The importation of counterfeit goods in the US remains a significant problem. Over the past 10 years, the number of counterfeit goods seized by CBP has increased from around 15,000 in 2009 to nearly 35,000 in 2018.18
Counterfeit goods are widely available through e-commerce channels. However, artificial intelligence (AI) options for identifying online counterfeit goods are growing more prevalent and less expensive than ever before.19 The CBP Business Transformation and Innovation Division (BTID) is at least exploring “what other partner offices and agencies are doing in the realms of artificial intelligence (AI), machine learning (ML), and data analytics”.20 Moreover, CBP BTID has already completed a proof of concept for using blockchain technology for certain duties and issued a recommendation to proceed.21
As AI counterfeit-detection technology becomes better understood, it is possible and perhaps even likely that CBP will also adopt some form of AI or other advanced technical mechanism for policing the importation of counterfeit goods.
1. See, eg, C Charneski, A former ALJ’s view of witness statements at the ITC, Law360 (9 June 2016) (available athttps://bit.ly/2HSrpAj).
2. Judge Lord requires that expert testimony be submitted through written witness statements, but requires that fact witnesses be examined live at the hearing. See investigation 337-TA-1190, order no 2 (13 Jan 2020) (ground rule No 9.3). With limited exceptions, Judges McNamara, Cheney, and Elliot generally require oral testimony. Eg, Certain photovoltaic cells and products containing same, investigation 337-TA-1151, order no 2 (12 April 2019) (ALJ McNamara) (ground rule 8.2); Certain shaker screens for drilling fluids and components thereof, investigation 337-TA-1184, order no 2 (21 Nov 2019) (ALJ Cheney) (ground rule 13.7); Certain mobile devices with multifunction emulators, investigation 337-TA-1170, order no 2 (16 Aug 2019) (ALJ Elliot) (ground rule No 10.2). Chief ALJ Bullock and ALJ Shaw both require that all testimony be submitted through written witness statements.
3. Certain LTE- and 3G-compliant cellular communications devices, investigation 337-TA- 1138, order no 31 (6 May 2019).
4. See, eg, Certain pick-up truck folding bed cover systems, investigation no 337-TA-1188, order no 5 (30 Jan 2020); Certain Strontium-Rubidium Radioisotope Infusion Systems, investigation No 337-TA-1110, order no 30 (8 Mar 2019).
5. See eg investigation no 337-TA-1144, order no 36, FN (“[T]here are too many patents and claims even if an additional day is added. [Complainant] is urged to winnow its case by the end of this week.”).
6. Haebe v Dep’t of Justice, 288 F.3d 1288, 1298– 99 (Fed Cir 2002).
7. ALJ Lord requires that fact witnesses present testimony orally but allows expert testimony to be submitted via witness statement.
8. See, eg, Certain microfluidic devices, investigation 337-TA-1068, Comm’n Op, pps. 28-48 (10 Jan 2020) (exempting research articles from scope of remedial orders); Certain road milling machines, investigation 337-TA-1067, Comm’n op, pps 32- 33 (18 July 2019) (exempting service parts from scope of remedial orders).
9. See Certain microfluidic devices, investigation 337-TA-1068, Comm’n Op, pps. 28-48 (10 Jan 2020).
10. Id at 30.
11. See section 337 types of unfair acts alleged in active investigations by fiscal year, available at https://www.usitc.gov/intellectual_property/337_statistics_types_unfair_acts_alleged_active.htm.
12. Kim, Linton, and Semanik, US International Trade Commission’s trade secrets roundtable: discussion summary, Journal of International Commerce and Economics (November 2016) (available at https://www.usitc.gov/publications/332/journals/linton_semanik_trade_secrets_summary_0.pdf).
13. Manitowoc Cranes LLC v Sany America Inc, No 13-cv-00677, 2017 WL 6327551, *3 (ED Wis 11 Dec 2017).
14. Section 337 types of unfair acts alleged in active investigations by fiscal year, available at https://www.usitc.gov/intellectual_property/337_statistics_types_unfair_acts_alleged_active.htm.
15. Amarin Pharma, Inc v Int’l Trade Comm’n, 923 F.3d 959, 968 (Fed Cir 2019), cert denied, No 19-152, 2019 WL 6689664. (“We note that this limited holding is consistent with the commission’s arguments in its briefing, which indicated that Amarin’s claims are precluded at least until the FDA has provided guidance as to whether the products at issue are dietary supplements.”).
16. Certain footware products, investigation 337- TA-936, notice of commission determination to review in part remand initial determination (7 Feb 2020).
17. See 9 USC § 1595a(c)(2)(C); 19 CFR § 133.42; see also US Customs and Border Patrol, directive on detention and seizure authority for copyright and trademark violations, available at https://bit.ly/2TcDlCi. CBP also has the authority to temporarily detain goods that are “possibly” pirated or counterfeit.
19. Eg, D Dudley, Breaking the fakes: how a new york company is using AI to crack down on the multibillion-dollar trade in counterfeit goods, Forbes (8 Oct 2019).
20. https://www.cbp.gov/trade/ace/whats-newinnovation, Innovation Summit held in August of 2019.
21. See US Customs and Border Patrol, Publication no 0912-0619 (8 Oct 2019) (available at https://www.cbp.gov/sites/default/files/assets/documents/2019-Oct/Final-NAFTACAFTAReport.pdf)
This article was originally published in Intellectual Property Magazine.