In addition to filing a complaint at the US International Trade Commission (ITC), a complainant who seeks monetary damages often will also file suit against the same respondent in a federal district court. The parties thus face the challenges of handling discovery in both proceedings. Given that the asserted patents and accused products are often the same, much of the discovery and testimony will overlap. To simplify discovery efforts, parties often seek the cross-use of discovery between the ITC investigation and the district court action. Administrative Law Judges (ALJ) have found that good cause exists to amend ITC protective orders to permit such cross-use of discovery to avoid duplication of discovery. Such motions will not be granted, however, if the proposed amendments lack protection for third parties or the cross-use of discovery would create conflicts with the ITC’s procedural schedule.
For example, in Certain Two-Way Global Satellite Communication Devices, Systems and Components Thereof, Inv. No. 337-TA-854 (Enforcement Proceeding), in Order Nos. 12 and 15, ALJ Lord denied motions to permit cross-use of discovery from ITC proceedings in a parallel federal court action; in Order No. 23, she permitted such cross-use because renewed motions included adequate protections directed at third-party confidential information provided in the ITC proceedings.
While the ITC enforcement proceeding in Certain Two-Way Global Satellite Communication Devices was going forward, the respondents from the ITC case filed suit for a declaratory judgment of noninfringement and invalidity of the asserted patent in the Eastern District of Virginia. After fact discovery ended in the ITC enforcement proceeding, the complainant and respondents jointly moved to amend the ITC protective orders (issued in the original violation-phase investigation and the subsequent enforcement proceeding) to reuse the discovery from the two ITC proceedings in the district court action. Although respondents had obtained permission from the third parties to reuse the confidential materials, the ALJ denied the joint motion because the proposed amendments did not provide a notice provision for third parties or a mechanism for them to raise objections to the use of their confidential materials. Furthermore, the ALJ rejected the proposed provision which would have made the discovery from the ITC proceedings subject to the protective order in the district court action.
Addressing the concerns raised by the ALJ in Order Nos. 12 and 15, the complainant refiled motions to amend the ITC protective orders. In addition, the complainant sought to add a provision permitting the cross-use of discovery from the co-pending district court action in the ITC case.
ALJ Lord granted-in-part complainant’s renewed motions to amend the protective orders. Regarding the use of discovery from the ITC proceedings in the district court action, the ALJ allowed the revised proposed amendments because they provided adequate protection for third parties -- they specified a process by which third parties are notified and provided an opportunity to object to the cross-use of discovery. The revised proposed amendments also specified that discovery provided in the ITC proceedings may be used in the co-pending district court matter, but would remain subject to the terms and conditions of the ITC protective orders. The ALJ, however, rejected the proposed amendments that would have permitted cross-use of discovery from the district court matter in the ITC enforcement proceeding, reasoning that permitting such use without limitation would run afoul of the procedural schedule that had been entered in the ITC proceeding.
The ALJ’s Orders are available online.
- The fact that a party to an ITC case has obtained permission from a third party to reuse its confidential materials in district court may not be sufficient basis for establishing the requisite good cause to amend an ITC protective order to permit such cross-use. A mechanism needs to be put in place to provide third parties with prior notice and a means for raising objections to the use of their confidential information.
- Parties seeking the cross-use of discovery from an ITC investigation in a parallel district court litigation must make sure that the discovery from the ITC investigation shall remain subject to the terms and conditions of the ITC protective order.
- Parties seeking cross-use of discovery from a parallel district court litigation in an ITC investigation must make sure that the use of discovery from the district court action will not create conflicts with the ITC’s schedule.
- An attorney who has signed on to an ITC protective order should be very careful when involved in a parallel district court litigation. One should always seek to amend the ITC protective order before reuse or disclosure of any confidential materials received in the ITC investigation. The Commission has sanctioned attorneys because of unauthorized use of such materials in connection with a district court case. See Case 1 of the ITC’s summary regarding breach of ITC protective orders, available online.
FOR OTHER CASES ADDRESSING CROSS-USE OF DISCOVERY FROM SECTION 337 PROCEEDINGS:
- Inv. No. 337-TA-868, Certain Wireless Devices With 3G and/or 4G Capabilities and Components Thereof, Order No. 46– Complainants and respondents filed a joint motion to amend the protective order to permit the cross-use of discovery from the ITC investigation in four co-pending cases in Delaware District Court. The ALJ granted the joint motion to amend the protective order, holding that good cause existed because this would minimize the duplication of discovery in both the ITC and district court actions. The ALJ also ruled that the discovery produced in the co-pending district court actions could be used in the ITC investigation but would be subject to the discovery limitations imposed by the ALJ’s ground rules, the protective order, and the timeline imposed by the procedural schedule in the ITC investigation. The ALJ’s Order is available online.
- Inv. No. 337-TA-546, Certain Male Prophylactic Devices, Order No. 8– Complainants and respondents filed a joint motion to amend the ITC protective order so confidential documents and other discovery produced in the ITC proceeding could be used in a related district court case. The ALJ denied the motion because the requested amendment would allow for third party confidential business information produced in the ITC investigation to be used in the district court without the third party’s consent. The ALJ’s Order is available online.