ITC Best Practices: Introducing Redesigns in a Section 337 Investigation

June 26, 2018

The speed of a Section 337 investigation is widely known. Once sued, a respondent must immediately and simultaneously find effective lawyers, prepare for discovery, search for prior art, consider settlement options, interview experts and accomplish myriad other tasks. In addition, a respondent must also consider designing new products that do not even arguably infringe the relevant patents.

Typically, once a U.S. International Trade Commission (ITC) exclusion order issues, the burden shifts from the complainant’s having to prove infringement, to the respondent’s having to prove its products to be imported do not infringe. Thus, a savvy complainant will attempt to restrict the scope of the ITC investigation to the products existing when the ITC complaint was filed.

A respondent will want to ensure redesigns are dealt with before the ITC judge (where the burden on infringement is still borne by the complainant).

First, of course, a respondent must design a new product that can escape even the widest reading of the relevant patent claims. A U.S. patent attorney can help evaluate the design and ensure that the claims do not read on the new design. 

Once a new product has been designed and manufactured, it must either be sold for importation into the United States or actually be imported into the country. Otherwise, the ITC has no power to consider the product within the scope of the investigation.

After the product is imported, a respondent should consider serving on the complainant a physical sample of the product, all relevant design documents, and documents that show the product has been sold for importation or has been imported.  Such actions will help establish the new product as part of the investigation.

Shortly afterward, the respondent should consider serving interrogatories and requests for admission concerning the new product. Once useful responses are obtained from the complainant, the respondent may consider whether it should default from the investigation, enter a consent order on the old products (noting the significant penalties for any violation of such an order), or seek a summary ruling from the ITC judge that the new products do not infringe. In fact, this approach has been used effectively in several ITC investigations. See, for example, Certain Multiple Mode Outdoor Grills and Parts Thereof, Inv. No. 337-TA-895, Comm’n Op. (Jul. 23, 2014).

Assuming that no summary ruling is sought (perhaps to avoid the expense, delay and uncertainty of such an approach) and no consent decree is reached, the respondent may consider waiting until the ITC seeks public comment on the remedy  to submit a paper indicating that any exclusion order that may issue should not cover the new products. Such a submission should cite to and include the useful discovery responses obtained earlier from the complainant. 

Takeaway: A cost-effective way of dealing with an ITC investigation is to begin immediately designing new products that avoid the asserted patent claims. Once such a new product is included in the scope of the investigation, a respondent can consider whether to stop fighting on the old products and focus only on the new, plainly non-infringing products. This allows continued access to the U.S. market and can greatly reduce the legal costs associated with such investigations.