The International Trade Commission Increases Its Focus on the Public Interest in Section 337 Cases

The U.S. International Trade Commission (“ITC”) will issue an exclusion order against articles found to violate Section 337 unless it finds that these articles should not be excluded from entry into the United States because of the effect of such exclusion on: (1) the public health and welfare; (2) competitive conditions in the United States economy; (3) the production of like or directly competitive articles in the United States; or (4) United States consumers. See 19 U.S.C. § 1337(d)(1). These are commonly referred to as “public interest” factors. A public interest analysis is important because the ITC may choose not to issue an exclusion or cease and desist order against a violating article if the agency finds that such an order would negatively affect the public interest.

The ITC is increasingly emphasizing its focus on the public interest. It is now routinely issuing notices in the Federal Register soliciting comments from interested parties and members of the public on whether cease and desist or exclusion orders issued in particular cases would negatively affect the public interest. In the course of approximately three weeks, the ITC issued at least three such notices.

For example, on August 11, 2010, the ITC published a notice soliciting comments relating to the public interest in Certain Adjustable-Height Beds and Components Thereof; Docket Number 2747 (see Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest, 75 Fed. Reg. 48,724 (August 11, 2010)). On September 1, 2010, the agency published a similar notice in Certain Components for Installation of Marine Autopilots with GPS or IMU, Docket Number 2752 (see Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest, 75 Fed. Reg. 53,710 (Sept. 1, 2010)). One day later, the ITC published a similar notice for comments in Certain Liquid Crystal Display Devices, Including Monitors, Televisions, and Modules, and Components Thereof, Docket Number 2753(see Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest, 75 Fed. Reg. 53,981 (Sept. 2, 2010)).

In these notices, the ITC has invited the complainant, proposed respondents, other interested parties, and members of the public, to comment on whether any of the statutory public interest issues are raised by the complaint. Specifically, the ITC has asked commenters to explain how the articles that are the subject of the complaint are used in the United States; whether an exclusion or cease and desist order against the article would harm the public health, safety or welfare; the extent to which competitive articles are available or produced in the United States; and whether the complainant, its licensees or third party suppliers can replace the articles within a commercially reasonable time.

Interested parties have provided comments in many of these areas. Commenting in Certain Components for Installation of Marine Autopilots with GPS or IMU, proposed respondents argued that issuing an order against marine electronics and devices would negatively affect the public health. One company noted that it sells marine autopilot devices with GPS and other safety features to U.S. government agencies such as the U.S. Coast Guard, and to other organizations that use the devices in emergency situations at sea. Moreover, noted the company, the proposed respondents in the case represent as much as 90% of the marine autopilot device market in the United States.

Regarding Certain Adjustable-Height Beds and Components Thereof, the complainant argued that an exclusion or cease and desist order against such articles would not affect public health, safety or welfare in the United States because such an order would not cause a shortage of adjustable-height beds or affect competitive pricing. The complainant explained that it manufactures and distributes such beds in the United States which compete with the proposed respondents’ articles, and that it would be able to replace the potentially infringing articles within a commercially reasonable time. The complainant further noted that an exclusion or cease and desist order would protect the intellectual property rights of the patent holder.

Another interested party in the same case submitted comments arguing that the ITC should give heightened scrutiny to the public interest analysis when an order may deny the public access to important medical equipment such as hospital beds. The company commented that such hospital beds are an important tool for patients requiring long-term care. Citing Certain Fluidized Apparatus and Components Thereof, Inv. No. 337-TA-182/188, USITC Pub. 1667 (Oct. 1984), the commenter highlighted that the ITC has decided that a denial of relief could be warranted where the public interest of access to medical equipment is involved.

Proposed respondents inCertain Wind and Solar-Powered Light Posts and Street Lamps, Inv. No. 337-TA-748, noted that because the U.S. government has prioritized energy efficiency, the exclusion of proposed respondents’ environmentally-friendly hybrid streetlights would negatively affect the public health, welfare and safety in the United States. The commenter stated that very few such hybrid streetlights, which use wind and solar power, are produced or available in the United States, and that, furthermore, the complainant lacked the capacity to replace such streetlights in a commercially reasonable time.