Effectively Sued But Not Named — General Exclusion Orders at the ITC

April 19, 2018

Section 337 investigations are in rem proceedings to determine whether imported articles infringe a valid intellectual property right. Personal jurisdiction over the manufacturer or importer of those articles is not required and, in certain circumstances, the U.S. International Trade Commission (ITC) can exclude articles even when neither the manufacturer nor the importer is named as a respondent.

Upon finding a violation of Section 337, the ITC can issue a limited exclusion order (LEO) or a general exclusion order (GEO). An LEO directs U.S. Customs and Border Protection (CBP) to exclude from entry only those articles imported by a named respondent in the investigation. However, a GEO directs CBP to exclude all infringing articles regardless of source. Because a GEO extends to articles that may be imported by a company who is not named as a respondent in an investigation, a complainant must prove that (1) a GEO is necessary to prevent circumvention of an LEO, or (2) there is a pattern of violation of Section 337 and it is difficult to identify the source of infringing products.

It is relatively easy for a company to recognize when its products could be subject to a GEO, because the ITC can issue a GEO only if a complainant requests a GEO in its complaint. For example, a recent complaint regarding certain modular LED display panels requested a GEO, alleging that a GEO is necessary due to the characteristics of the U.S. market for the accused products (e.g., high demand and a well-established and extensive distribution system), the large number of sources of accused products, and the difficulty in identifying those sources.

Takeaway:  When an ITC complaint is filed against a competitor’s product, a company should review the complaint to determine if the complaint requests a GEO. If so, and if the company’s products are implicated in the investigation, the company should consider intervening to defend against the allegations of infringement and to avoid potential exclusion of its products.