The ITC recently issued an unprecedented order that could reduce the number of intellectual property cases brought to it by non-practicing entities ("NPEs") under Section 337 of the Tariff Act of 1930. The March 22, 2013 order requires the Administrative Law Judge ("ALJ") to rule on whether complainant Lamina Packaging Innovations LLC satisfies the ITC's domestic industry requirement within 100 days of institution of the Section 337 investigation. Section 337 bans the importation of products proven to infringe valid U.S. intellectual property rights. The domestic industry requirement of Section 337 requires the complainant to exploit the patent either by manufacturing or through "substantial" investment in engineering, research and development, or licensing.
Prior to this order, domestic industry requirements were addressed by the ALJs in their initial determination on violation, which is typically issued after 10 to 12 months of costly litigation. By ordering the ALJ to make an early ruling on whether domestic industry requirements are established, the ITC diminishes NPEs' ability to use extended and costly litigation as leverage to extract settlements from respondents. ITC Chairman Williamson and ALJs Bullock, Essex, and Gildea have publicly indicated that they plan to continue the practice of early determinations. They also intend to make early rulings on other dispositive issues, particularly claim construction, which should further frustrate NPEs.