Last month, the U.S. International Trade Commission (ITC) announced long-anticipated amendments to its Rules of Practice and Procedure, which are currently codified in 19 C.F.R. Chapter II. The new rules were published in the Federal Register on May 8, 2018—meaning that they will become effective for all ITC Section 337 investigations instituted on or after Friday, June 8, 2018. (The new rules will not be retroactively applied to ongoing investigations, however.)
The Commission’s original Notice of Proposed Rulemaking (NPRM) was published for public comment nearly three years ago, in September 2015. The ITC received comments from several law firms and interested organizations, and considered them before finally promulgating its revised rules amendments in May 2018.
Practitioners and litigants alike should be aware of these rules changes and the effects that they may have on Commission practice going forward. The amendments generally follow in the theme of recent ITC efforts to streamline investigations in the face of increased complexity, allowing the Commission to continue to resolve investigations at the statutorily mandated earliest practicable time. A summary of some of the more potentially impactful changes is below:
Early Disposition Proceedings—A “Pilot Program” No More
Several years ago, the ITC created an early disposition pilot program, whereby the Commission could determine whether certain potentially case-dispositive issues would be ripe for decision early in an investigation, and order that the administrative law judge (ALJ) find facts and issue an initial determination with 100 days of the institution of the investigation. Over the last few years, the ITC has utilized this program relatively sparingly (less than 10 times), but on a variety of issues—domestic industry, patentable subject matter, and standing, among others.
The amended rules essentially codify this 100-day program, providing that if the Commission orders an early initial determination on one or more dispositive issues, the ALJ must issue an early initial determination within 100 days of institution (with the potential for an extension of time if good cause is shown). Note that the Commission had proposed allowing ALJs themselves to identify potentially dispositive issues for 100-day initial determinations, but this proposal was dropped in the final rules.
It will be interesting to see if the codification of this program leads to increased use by the Commission.
Multiple Investigations from One Complaint
Another significant change that could affect Commission practice in a variety of investigations is the express provision for either the Commission or the presiding ALJ to create multiple investigations from a single complaint. The new rules provide that, where necessary to allow efficient adjudication, the Commission may decide to do so at the institution stage, while the ALJ has the discretion to sever an investigation into multiple proceedings within 30 days of institution. Notably, the ALJ can effect severance either upon a motion of a party or sua sponte.
These changes will likely help the Commission and the ALJs more effectively manage the ITC docket, and may give potential complainants pause before including large numbers of patents, claims, and/or respondents in a complaint.
The ITC also made several rule changes that may be lower profile, but will effect most (if not all) investigations. These include:
- Electronic Service. Electronic service has long been permitted in Commission proceedings. But the new rules provide that when electronic service is used for documents containing Confidential Business Information, the confidential document “must be securely stored and transmitted by the serving party in a manner . . . that prevents unauthorized access and/or receipt by individuals or organizations not authorized to view the specified confidential business information.” This may mean that to the extent they are not already used, password-protected documents or secure download links will become standard in ITC practice.
- No Pre-Institution Motions. In some cases, the parties engage in a preinstitution back and forth regarding whether an investigation should be instituted, or even file motions before the Commission has made an institution decision. The Commission has amended the rules to make clear that motions may not be filed with the Commission during preinstitution proceedings except for motions for temporary relief.
- Expert/Trial Preparation Privilege. The new rules expressly expand privilege and work product protection to drafts of expert reports and communications between attorneys and expert witnesses concerning trial preparation, similar to what is protected under Federal Rule of Civil Procedure 26. (Before this change, parties to Section 337 investigations commonly entered into stipulations effecting such protection.)
- Subpoenas. Similarly, other rule changes bring the ITC’s subpoena practice in line with the Federal Rules. The new rules provide that a party may serve subpoena objections or move to quash a subpoena within the later of 10 days after receipt of the subpoena or within such time as the ALJ may allow. (Previously, the rules did not provide for objections practices.) If an objection is made, the party who requested the subpoena may move for a request for judicial enforcement upon reasonable notice.
For parties who find themselves in the ITC on or after June 8, it will be important to keep these changes in mind and pay attention to any ALJ or Commission orders relating to these rules. If indeed these new rules allow the Commission and ALJs to streamline cases and expedite proceedings, they may make the ITC an even more inviting forum for commercial litigants seeking to bring all types of claims.