On September 25, the USITC published in the Federal Register a notice of proposed rulemaking (“NOPR”) with respect to section 337 investigations. Under one of the proposed rules, the Commission would have explicit authority to institute multiple investigations on the basis of a single complaint.
Section 337 states that the Commission “shall investigate any alleged violation” of the statute. 19 U.S.C. § 1337(b)(1). In turn, Commission Rule 210.10(a) provides that the Commission will institute an investigation based on a properly filed complaint. While the Commission has general authority to manage its docket (19 U.S.C. § 1335), the rules do not explicitly provide that the Commission may institute multiple investigations on the basis of a single complaint.
In its NOPR, the Commission expressed a concern about section 337 complaints “that assert multiple unrelated patents and/or multiple technologies because the resulting investigation is often unwieldy and lengthy.” NOPR, 80 Fed. Reg. 57553, 57555. Proposed rule 210.10(a) would make express the Commission’s authority to institute more than one investigation as the result of a single complaint “where necessary to limit the number of technologies and/or unrelated patents asserted in a single investigation.” Id. In addition, proposed rule 210.14(h) would authorize the ALJ to sever an investigation into two or more investigations at any time prior to or upon the issuance of the procedural schedule. The judge would do so either in response to a motion, or sua sponte. The proposed rule states that the judge’s decision to sever an investigation would be done by way of initial determination, but the NOPR further states that the Commission is “seeking in particular” comments as to whether this decision should be by way of an initial determination or order.
The average number of patents at issue in a section 337 investigation is a fairly moderate. According to the Commission’s 337info database, patent-based section 337 investigations had an average of between three and four patents in 2014 and 2015. However, every year there are several investigations that have six or more patents asserted. While the Commission has a certain amount of inherent authority that arguably would support a decision to divide a large complaint into multiple investigations, this rule would set forth how that would occur.
It is clear from the NOPR that the Commission is interested in whether a judge’s decision to sever an investigation should be by way of order or initial determination. Use of an order would have the advantage of taking effect immediately thus minimizing any disruption to the parties. Use of an initial determination would give the Commission final say over any severance decision. However, because there would be a time lag between the issuance of an initial determination and it becoming the decision of the Commission, a severance by way of initial determination could leave a “gray period” during which it might not be clear how the severed portion of the investigation is to proceed. If the Commission decides that a severance order should be by way of initial determination, it should issue guidance on how the investigation would be conducted pending any Commission decision on the severance initial determination.