10.12.2 United States International Trade Commission patent investigation process
USITC enforcement arises through an administrative process. Unlike district court patent enforcement, complaints are vetted by an investigatory body – the Office of Unfair Import Investigations (OUII) – whose recommendations are reviewed by the USITC before an investigation is instituted and assigned to an ALJ. OUII often (but not always) continues to participate in the adjudicatory process along with the complainant and the respondent after an investigation is launched. As noted above, the USITC is required to conclude its investigations “at the earliest practicable time” after commencement of the investigation. In view of this expedited process, and to avoid importers from being subjected to defend two proceedings in parallel, Congress requires district courts to stay parallel proceedings upon the timely request of a respondent (see Section 10.3.3.2).
The procedural requirements of a Section 337 investigation differ somewhat from the procedural requirements in federal district court litigation. While Section 337 investigations are quasi-judicial in nature, they typically follow a much faster timeline and are governed by a distinctive set of rules (see Table 10.4).
|Filing of complaint|
|Within 30 days||Institution decision. The USITC decides whether to institute an investigation.|
|Target date||Target date is set, typically at 16 months or sooner measured from the Notice of Investigation, but it can be extended for good cause. Investigations must be completed “at the earliest practicable time.”|
|Within 45 days of Notice of Investigation||The presiding ALJ sets a target date for completion of the investigation. Target dates of 16 months or sooner are set by the ALJ’s order. If the ALJ seeks to establish a later target date, the ALJ must issue an ID that is subject to review by the six Commissioners.|
|Within 35 days of filing a motion for temporary relief||The USITC determines whether to institute temporary exclusion order proceedings. The parties will conduct several weeks of targeted discovery followed by an evidentiary hearing on the merits of the motion.|
|Within 70 days (120 days in more complicated cases) of instituting a temporary exclusion order proceeding||Temporary exclusion order ID. ALJ issues an ID on the merits.|
|Within 90 days of Notice of Institution (150 days in more complicated cases)||The USITC determines whether to accept the ALJ’s ID and whether to grant temporary relief.|
|At least 20 days after institution and 60 days prior to hearing||Summary Determination motions are filed.|
|Typically 3–4 months after institution||Claim construction determination (depends on the case and presiding ALJ).|
|Typically 2–3 months prior to the deadline for ID||Evidentiary hearing (trial).|
|Within 45 days of issuance of an ID||The USITC determines whether to review the ID. If the USITC decides not to review, the ID becomes a Final Determination.|
|Within 60 days of Final Determination finding of no violation||Filing of Federal Circuit appeal. In investigations where no violation is found, an appeal must be filed by the complainant within 60 days at the Federal Circuit.|
|60 days following USITC review||Presidential review period. During this 60-day period, exclusion orders go into effect immediately, but excluded goods can continue to be imported upon posting of the bond set by the USITC. The bond is set at a level “sufficient to protect the complainant from any injury” during the Presidential review period.|
|After Presidential review period||Exclusion orders bar imports of excluded goods.|
|Within 60 days following Presidential review period||Federal Circuit appeal must be filed.|
Note: USITC = United States International Trade Commission; ALJ = Administrative Law Judge; ID = initial determination; Federal Circuit = U.S. Court of Appeals for the Federal Circuit.
10.12.2.1 United States International Trade Commission personnel
The USITC staff comprises over 350 people, including international trade analysts (investigators and experts in particular industries), international economists, attorneys, and technical support personnel. Only a portion of the USITC staff, however, focuses on Section 337 investigations.
The USITC oversees all of the relevant staff and sets rules and policies governing Section 337 investigations. The USITC determines whether to institute an investigation based on complaints filed by private parties that allege violations of Section 337. Following the ID by the presiding ALJ, the USITC may review and adopt, modify, or reverse the ID, or it may decide not to review the ID. If the USITC declines to review an ID, it becomes the final determination of the USITC.
In the event that the USITC determines that Section 337 has been violated, the USITC may issue an exclusion order barring the products at issue from entry into the United States, as well as one or more cease and desist orders directing the violating parties to cease certain activities.
The USITC is headed by six Commissioners nominated by the President and confirmed by the U.S. Senate. No more than three Commissioners may be of any one political party. The Commissioners serve overlapping terms of nine years each, with a new term beginning every 18 months. The President designates the Chairman and Vice Chairman from among the current Commissioners for two-year terms. The Chairman and Vice Chairman must be from different political parties, and the Chairman cannot be from the same political party as the preceding Chairman.
10.12.2.1.2 Administrative law judges
After the USITC institutes an investigation under Section 337, the matter is referred to the Office of the Administrative Law Judges, where the Chief ALJ assigns an ALJ to the matter. USITC ALJs are selected from a pool of candidates with training and experience in administrative law. They are not required to have specific training in science, technology, or patent law, although some ALJs have such backgrounds. They typically will have served as ALJs in other administrative agencies, such as the Environmental Protection Agency, the Office of Medicare Hearings and Appeals, and the Social Security Administration. Once selected to serve at the USITC, the ALJs specialize in USITC investigations and typically handle approximately a dozen investigations at a time, far fewer matters than a typical district court judge.
The assigned ALJ conducts pre-hearing case management, resolves discovery matters, issues orders, considers summary determination motions, presides over a hearing, makes an ID regarding whether a violation has occurred, and recommends a remedy if appropriate. Section 337 investigations are conducted in accordance with procedural rules that are similar in many respects to the FRCP. These USITC procedural rules (found in 19 C.F.R. § 210) are always supplemented by a set of ground rules issued by the presiding ALJ, and a standard protective order (which the parties can supplement as needed).
The presiding ALJ conducts a formal evidentiary hearing on the merits of a Section 337 case in conformity with the adjudicative provisions of the APA.316 Hence, parties have a right to adequate notice, cross-examination, presentation of evidence, objection, motion, argument, and other rights essential to a fair hearing. Following a hearing on the merits of the case, the presiding ALJ issues an ID that is certified to the USITC along with the evidentiary record. The USITC may review and adopt, modify, or reverse the ID, or it may decline to review the ID. If the USITC declines to review an ID, the ID becomes the final determination of the USITC.
10.12.2.1.3 Office of Unfair Import Investigations
OUII employs investigative attorneys and support staff. In addition to legal training, many OUII attorneys have engineering or science degrees and are registered to practice before the USPTO.
OUII serves various roles through the phases of Section 337 investigations. Prior to the filing of a complaint, OUII staff are available to consult with prospective complainants regarding the process for pursuing a Section 337 complaint. Once a complaint is filed, OUII reviews the matter and advises the USITC as to its sufficiency with regard to Section 337’s procedural requirements and substantive elements.
If the USITC orders an investigation, the matter is assigned to an ALJ for discovery, hearing, and issuance of an ID on violation in accordance with the requirements of the APA. OUII will then staff an Investigative Attorney to the investigation, and OUII’s role is to represent the public interest as an independent party to the proceeding. OUII’s positions do not reflect the positions of the USITC, and OUII’s positions are not binding on the ALJs or the USITC. Under USITC rules, the OUII cannot communicate ex parte with the USITC, the USITC’s Office of the General Counsel, or the ALJs regarding pending investigations.
During the course of the investigation, the OUII Investigative Attorney formulates an independent assessment on the issues and may take an active role in discovery (including depositions), motions practice, and the trial. Ultimately, the OUII Investigative Attorney will take positions on an issue-by-issue basis in the investigation and hence may side with different parties on the range of issues. The OUII Investigative Attorney may facilitate the investigation by discussing procedural and substantive issues with the private parties. It can be involved in settlement negotiations and comments on whether settlements and proposed consent decrees are in the public interest.
Following the rendering of an ID by the ALJ, the OUII Investigative Attorney typically participates in the final review process before the USITC. In investigations where the ALJ finds a violation of Section 337, the OUII Investigative Attorney typically contacts the Intellectual Property Branch of U.S. Customs and Border Protection when preparing a proposed exclusion order for submission to the USITC. In its remedy submission, the OUII Investigative Attorney may advise the USITC of any special concerns raised by U.S. Customs and Border Protection.
OUII and its investigative attorneys do not handle appeals to the Federal Circuit – those are handled by the Office of the General Counsel. The Office of the General Counsel represents the USITC’s positions and, as discussed earlier, OUII’s positions may diverge from those of an ALJ or the USITC. Moreover, in investigations in which OUII is a party, OUII lacks standing to participate in an appeal.
10.12.2.2 Procedural rules
Part 200 of Title 19 of the Code of Federal Regulations contains the rules that govern the USITC generally, and Part 210 of Title 19 of the Code of Federal Regulations contains the rules that govern USITC unfair trade practices investigations. In addition, the USITC’s ALJs have their own “ground rules,” analogous to the standing rules that district courts may have in their proceedings. These ground rules differ in various respects from the FRCP and the PLRs adopted by many of the district courts with the most active patent dockets.
In contrast to the liberal notice-pleading requirements of the FRCP (see Section 10.6.5), the USITC requires that a Section 337 complaint allege sufficient pertinent facts to support the initiation of an investigation.317 Such fact-pleading must include specific allegations of importation of the accused product, the patent(s) at issue, infringement (including a claim chart presentation), and the effects on the domestic industry.318 In addition to identifying any patents at issue, the complaint must identify ownership, licensees, corresponding foreign patents and applications (with prosecution status), description of the patented invention(s), and designation of allegedly infringed claims.319
10.12.2.4 Mechanisms for early disposition of investigation issues
Over the past few years, the USITC has piloted programs to allow for early resolution of issues that may be case-dispositive, or where disposition of an issue may facilitate settlement. These programs are outlined below.
10.12.2.4.1 100-day proceedings
In June 2013, the USITC launched a pilot program to facilitate early resolution of dispositive issues, such as domestic industry, standing, and importation requirements, through proceedings commonly known as “100-day proceedings.” Under this program, the USITC is authorized to identify potentially dispositive issues at institution, and to direct the presiding ALJ to rule on those issues within 100 days of institution.320 The ALJ may expedite fact-finding on the designated issue(s), including holding an evidentiary hearing. The ALJ may also stay discovery on other issues in the investigation while the 100-day proceeding is pending. To date, 100-day proceedings have most commonly addressed the domestic industry issue.
100-day proceedings have been used less often than expected, due to the challenge of identifying potentially case-dispositive issues prior to institution, on a limited record. In addition, these proceedings can only be instituted by the USITC, not the ALJ, which decreases flexibility.
10.12.2.4.2 Pilot program: interim initial determinations
In May 2021, the USITC announced a new pilot program applying to all investigations instituted on or after May 12, 2021, allowing ALJs to issue interim IDs on fewer than all issues in an investigation. As with 100-day proceedings, the goal of this program is to facilitate the resolution of case-dispositive issues or significant issues that may facilitate settlement early in the investigation. This program improves upon the mechanism for 100-day proceedings in three important ways: (1) the presiding ALJ has discretion to designate an issue for accelerated determination after institution, and with the benefit of greater understanding of the issues in the investigation; (2) at the ALJ’s discretion, the parties can move to have an issue receive an interim ID; and (3) the USITC will accelerate its processes for review of the interim ID.
Under this program, an ALJ is permitted to hold an evidentiary hearing and receive briefing on one or more discrete issues prior to the main evidentiary hearing. The presiding ALJ may elect to stay discovery on other issues during the interim ID process, and may place the remaining procedural schedule of an investigation on hold while an interim ID is before the USITC. Like 100-day proceedings, the ALJ may stay discovery during the interim ID process.
10.12.2.5 Early investigation management
Prior to the filing of a complaint, OUII staff are available to discuss the process for pursuing a Section 337 complaint, the requirements for filing a complaint, and the nature of remedies available. OUII does not form any position regarding the merits of a possible complaint at this stage, nor does it assess the strength of patents or evaluate infringement allegations. OUII may review a proposed complaint and may seek clarification or supplementation from the complainant.
Once a complaint is filed, an attorney within OUII reviews the matter and advises the USITC and the USITC’s Office of the General Counsel as to its sufficiency with regard to Section 337’s procedural requirements and substantive elements: (1) sale for importation, importation, or sale after importation of goods; (2) unfair acts or methods of competition, such as infringement of a U.S. patent; (3) presence of a domestic industry; and (4) proof of substantial or threatened injury in the case of non-statutory intellectual property rights complaints. The Office of the General Counsel may advise the USITC to disagree with OUII’s recommendation. OUII does not assess the complainant’s likelihood of success on the merits at this stage of the Section 337 investigation.
If the USITC orders an investigation, the matter is assigned to an ALJ for discovery, hearing, and issuance of an ID on violation in accordance with the requirements of the APA.
10.12.2.5.1 Protective orders
Complaints and associated exhibits nearly always contain confidential information. A complaint can be filed either as confidential with a public version or as a public complaint with confidential exhibits. Public versions of confidential exhibits must be filed. Proposed respondents do not have access to any of the confidential materials until after (1) the investigation has been instituted, (2) it has been assigned to an ALJ, (3) the ALJ has issued a protective order, and (4) respondent’s counsel has subscribed to the protective order.321 Protective orders are automatically issued by the ALJ.
There is no set form for a protective order in a Section 337 investigation. The provisions of a protective order governing a specific investigation may differ depending on the investigation and on the presiding ALJ. In practice, though, the provisions are similar (and similarly applied) by the various ALJs.322
10.12.2.5.2 Public interest submission
In conjunction with filing a complaint, complainants must submit a separate statement not more than five pages in length addressing how the requested relief may impact the public interest.323 As a means of gathering further information on the public interest issues, the USITC publishes a Notice in the Federal Register inviting comments from the public and proposed respondents on any public interest issue raised by the complaint and requested relief.
Based upon an evaluation of the public interest submissions made by the complainant, the public, and the respondent(s), the USITC may elect to delegate consideration of the public interest factors to the presiding ALJ in the notice of institution of investigation. In fiscal year 2021, the USITC delegated the development of a factual record on the public interest factors to the presiding ALJ in about 16 percent of total new investigations.324 In this scenario, the ALJ will hear evidence on the public interest factors by evaluating the impact that an exclusion order would have on (1) public health and welfare, (2) competitive conditions in the U.S. economy, (3) the production of like or directly competitive articles in the United States, and (4) U.S. consumers. If delegated, the ALJ will include findings on the public interest in their ID.
If the USITC does not delegate the public interest determination to the ALJ, the issue can be presented to the USITC as part of the briefing in the post-ID phase of the investigation.
10.12.2.5.3 Institution of investigation
Once the complaint is filed, the USITC has 30 days to review it for sufficiency relative to the requirements of the statute and regulations. The USITC has the authority to extend the 30-day deadline due to exceptional circumstances. Section 337 investigations are instituted by a majority or tie vote of the USITC.
Apart from evaluating the public interest issues raised in submissions, the USITC’s role in this phase of the investigation is to determine whether a sufficient case has been pled under the statute and rules, not to evaluate claims substantively or to weigh the evidence. For this reason, the USITC does not encourage submissions or communications from other potentially interested parties, including proposed respondents.
An investigation is officially commenced by the issuance of a Notice of Institution of the investigation and its publication in the Federal Register. The Notice defines the scope of the investigation, including the parties, articles subject to investigation, alleged unfair acts (asserted patents and claims in a patent-based investigation), and alleged domestic industry. In most instances, the scope mirrors the complaint regarding these elements. The Notice of Investigation is served on all of the named parties, with additional copies to the embassy of each country of foreign named respondents.
10.12.2.5.4 Assignment of administrative law judges and Office of Unfair Import Investigations
The USITC delegates assignments of investigations to the Chief ALJ. Pursuant to the APA, the Chief ALJ assigns investigations to ALJs on a rotational basis, taking into consideration caseload balance, familiarity with the underlying technology, concerns about the potential for “judge-shopping,” and the existence of related cases. OUII decides whether it will participate in each new investigation and, if so, with respect to what issues.
10.12.2.5.5 Response to the complaint
A respondent must file its response within 20 days of service.325 The USITC typically serves the complaint within a day or so of issuance of the notice of investigation by means of overnight delivery. Thus, respondents typically have only 21 days after the date of service to file a response. In many cases, respondents contend that the 21 days is not adequate time to compile the information and address the detailed allegations and, as a result, request an extension of this deadline. The complexities are even more substantial for foreign respondents, who may be unfamiliar with the U.S. legal process. Given both the practical realities facing respondents, who must hire counsel and begin a fast-track preparation for discovery and development of defenses, as well as the requirements for some specificity in pleading noted below, complainants rarely oppose requests for modest extensions of time to respond.
The USITC requires respondents to plead affirmative defenses with as much specificity as possible. Failure to comply with this rule may give rise to a motion, which can be styled in a variety of ways, seeking essentially to compel respondents to provide more detail regarding the alleged defense. Because of the speed of the litigation, it serves the interests of all litigants to identify as early as possible the issues expected to be litigated. In practice, a number of tools are available to assist in the elaboration of defenses as the discovery period progresses, including the discovery statement for the preliminary conference (see Section 10.12.2.5.7), contention interrogatories and other fact-based discovery (see Section 10.12.2.7), expert reports and the pre-hearing submissions (see Section 10.12.2.10.1). Given these additional tools, in most cases, the lack of extensive detail in a response can be addressed without a protracted adversarial process over the response itself. One exception to this approach is in the area of inequitable conduct. If a party asserts inequitable conduct, the USITC may well determine that pleading standards applicable in the district courts apply equally to the USITC.
Although USITC Rule 210.13(b)(1)326 “encourages” respondents to include noninfringement claim charts with their responses, in practice, many respondents do not do so because there has not been enough time to perform the analysis required to develop these detailed positions. Such claim charts would require respondents to construe claims as well as apply them to one or more products.
10.12.2.5.6 Setting the target date
Section 337 requires that the USITC complete investigations “at the earliest practicable time.” The USITC sets a fixed completion date, known as the “target date,” for each investigation pursuant to Rule 210.51(a).327 If the target date does not exceed 16 months from the date of institution of the investigation, the order of the ALJ is final and not subject to interlocutory review. If the target date exceeds 16 months, the order of the ALJ constitutes an ID. The USITC, however, typically does not review an ALJ’s ID to set target dates later than 16 months from the date of institution.
Once a target date has been set, it can be modified for good cause shown while the case is before the ALJ and by the USITC once the case has moved forward. Some intervening events that have provided a basis for modification include changes in parties, claims or defenses; problems in obtaining key discovery, including non-party discovery requiring enforcement of a USITC subpoena; and ancillary or related legal proceedings that directly affect the USITC’s investigation. At the USITC level, target dates can be extended for a variety of reasons, including complexity and number of issues reviewed, delays in the release of public versions of the ID enabling the public to provide comments on the proposed remedy and public interest issues, difficulty in reaching a decision by the USITC, and overall caseload.
10.12.2.5.7 Preliminary conference
ALJs have the discretion to, and normally do, schedule a preliminary conference within the first 30–60 days following institution of the investigation (typically by telephone). The agenda for these conferences usually includes a discussion of issues raised in discovery statements, the target date (if it has not already been set), procedural schedule, proposed modifications to the ground rules or protective order, prospects for settlement, and any significant issues raised with respect to discovery at that stage. In some cases, the conference is also used to explore in more detail the claims and defenses set out in the complaint and responses thereto. As a general proposition, the conference affords the ALJ an opportunity to provide some guidance that may facilitate expeditious adjudication. Although not required by USITC rules, ALJs generally establish a procedural schedule for each investigation.
USITC Rule 210.19328 permits intervention by third parties in some situations, and the USITC looks to FCRP 24 for guidance. Intervention can arise where a complaint only names the downstream product manufacturer but not the manufacturer of the component that is critical to the infringement claims. In some cases, the downstream respondent may simply seek the cooperation of the component supplier in developing defenses, while in others, the component supplier may feel it necessary to intervene in the case to protect its rights.
10.12.2.6 Temporary exclusion order
The USITC has authority to issue expedited relief in the form of temporary exclusion orders, cease and desist orders, or both.329 A complainant can file a motion for a temporary exclusion order simultaneously with a Section 337 complaint. The motion must contain a detailed statement of facts bearing on “whether the complainant should be required to post a bond” and “the appropriate amount of the bond.”330 If the USITC later determines that the respondent has not violated the provisions of Section 337, the bond may be forfeited to the respondent. The USITC also requires a detailed memorandum of facts and affidavits in support of the motion.331
In deciding whether to grant temporary relief, “the [USITC] will apply the standards the [Federal Circuit] uses in determining to affirm lower court decisions granting preliminary injunctions.”332 Therefore, in concert with Federal Circuit practice under 35 U.S.C. § 283, a complainant seeking temporary relief under Section 337 must establish (1) a reasonable likelihood of success on the merits, (2) irreparable harm if temporary relief is not granted, (3) a balance of hardships tipping in its favor, and (4) the temporary relief’s favorable impact on the public interest.
Motions for preliminary relief in Section 337 cases are rare because the expedited scheduling at the USITC already provides for a rapid resolution and the burden on the complainant is high. “As a general rule […] such relief is an extraordinary remedy to be granted only where the right to relief is clear and unequivocal.”333
Discovery in Section 337 investigations is often more challenging and onerous than discovery in district court cases due to the compressed time schedule and the addition of importation, domestic industry, and foreign discovery issues. That said, Section 337 investigations do not involve monetary damages, which reduces the scope of discovery to that extent. The most significant advantage of discovery in Section 337 investigations is the greater availability of the ALJ to resolve discovery disputes. ALJs at the USITC handle far fewer cases than do district judges, which affords them greater capacity to manage the USITC discovery process.
Discovery in a Section 337 investigation is governed by the USITC’s rules, particularly Rules 210.27–210.34,334 and by the ALJ’s ground rules. Although the USITC rules are similar in many ways to the FRCP, there are important differences. The FRCP serve as guidelines for the interpretation and application of parallel USITC rules. In consulting interpretation of the Federal Rules for guidance, where issues of patent law control disposition of a discovery dispute, Federal Circuit law applies.335
10.12.2.7.1 Protective order
Upon commencement of an investigation, the ALJ will typically begin the investigative process by issuing an administrative protective order governing the disclosure of confidential information over the course of the investigation. Such protective orders parallel those in district court litigation, including a prosecution bar that prohibits any attorney prosecuting patents for a party from viewing the confidential information of the party’s opponents (see Section 10.12.2.5.1).
The scope of discovery before the USITC is generally broader than that before district courts. The USITC rules provide that parties may obtain discovery regarding any matter, not privileged, that is reasonably calculated to lead to admissible evidence.336 Likewise, Section 337 investigations typically permit not only more discovery requests but also more and longer depositions.
As with district court litigation, discovery in USITC investigations extends to document production (including electronic records), interrogatories, contention interrogatories, depositions, requests for admission, third-party subpoenas, and the on-site inspection of documents and property. The USITC rules have higher default limits for fact depositions and interrogatories as compared to the FRCP. ALJs can adjust these limits.
10.12.2.7.3 Management of discovery disputes
Like district court litigation, parties in the high stakes of Section 337 investigations are frequently mired in contentious discovery battles. As with district court dispute resolution, ALJs begin by encouraging the resolution of disputes through the meet and confer process. A common procedure is to require the parties to have weekly calls to confer about discovery disputes. The ALJ can also require the participation of OUII staff attorneys as a way of encouraging participation of the principal attorneys; it also provides immediate feedback to the parties on the apparent reasonableness of their positions in disputes. Many ALJs require the parties and OUII attorneys to form a discovery committee to resolve disputes during the discovery phase. ALJs have wide discretion to impose sanctions, ranging up to issue and evidence preclusion or default, as a means of controlling discovery abuses.
10.12.2.8 Claim construction
Although Markman v. Westview Instruments337 had a profound effect on the role of judge and jury in district court patent litigation, it did not directly affect the USITC, where matters of fact and law are both decided by an ALJ. ALJs are not required to conduct claim construction hearings, but it has become standard practice for most ALJs to hold a Markman hearing, which may include a tutorial or live testimony. All ALJs have ground rules relating to claim construction, including requirements for identification of claim terms and the submission of claim construction briefing.
Some ALJs have adopted claim construction procedures commonly used by federal district judges, although on an accelerated schedule in line with the investigation target date. This entails a process by which the parties identify all claim terms requiring construction; exchange their constructions of terms identified along with supporting intrinsic and extrinsic evidence; meet and confer to discuss constructions and identify terms as to which there is a real dispute; and produce a joint statement of constructions, including terms as to which there is agreement and dispute. To ensure that the investigation stays on schedule, this process needs to be conducted in a period of two to three weeks and should be completed well before expert reports are completed to allow the experts to address and apply the respective positions. At a minimum, this process should occur at least three weeks prior to the initial expert reports.
10.12.2.9 Summary determination and interlocutory USITC review
As used in USITC parlance and the USITC’s rules, the “summary judgment” standard is referred to as “summary determination” and is essentially viewed and defined in the same manner as the summary judgment standard used in district court:
The determination sought by the moving party shall be rendered if pleadings and any depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to summary determination as a matter of law.338
Summary determination under this rule is analogous to summary judgment and citation to both kinds of precedent is appropriate.339
As with summary judgment in district court litigation, summary determination at the USITC offers a path for early treatment of issues on which there is no genuine dispute as to the material facts and in which the party seeking relief is entitled to it as a matter of law. Tactically, some movants use summary determination as a lever to either “flush out” or defeat their opponents’ arguments in advance of the hearing, or to provide the court with a preview of the arguments the movant believes are its most compelling. Unlike the judge in a jury trial, the ALJ is both the fact-finder and legal arbiter in the USITC’s administrative proceedings. As a result, if the ALJ does not find a movant’s summary determination briefing compelling, the ALJ can require the parties to proceed to an evidentiary hearing without worrying about the impact on a lay jury. The OUII Investigative Attorney, upon occasion submits its own motion for summary determination.
As with district court litigation, the resolution of claim construction helps provide a foundation for addressing summary determination. In investigations featuring a separate claim construction phase, there has been a general willingness to permit summary determination practice following the claim construction order. Irrespective of these patent issues, it is common to have motions for summary determination on other issues, such as importation or on the economic prong of the domestic industry requirement.
10.12.2.10 Pre-hearing case management
As with district court litigation, the pre-hearing phase is an extremely important period in the life of a Section 337 case. The work in this period not only sets the stage for a successful hearing, but can also have a significant impact on the overall scope and outcome of the resulting case – for example, from potential issue waiver and preclusion of evidence.
10.12.2.10.1 Pre-hearing submissions
Prior to the evidentiary hearing, the parties submit both pre-hearing statements and pre-hearing briefs to the ALJ. These submissions are some of the most important filed in a Section 337 investigation, as they not only serve a pre-trial notice function regarding the arguments and evidence to be presented at trial, but also provide the final opportunity to raise issues to be considered in the investigation. Pursuant to each ALJ’s ground rules, arguments not raised in the pre-hearing briefs are ordinarily deemed by rule to be abandoned or waived for purposes of the investigation and any appeal.
10.12.2.10.1.1 Contents of pre-hearing statements and briefs
Although ALJs vary in their rules governing the pre-hearing statement and brief, pre-hearing statements typically will include:
- the names of the witnesses, along with a brief outline of the proposed testimony and an estimated length for the testimony;
- a list of exhibits;
- a list of any stipulations to which the parties have agreed; and
- a proposed agenda for the pre-hearing conference, including any high-priority objections that the parties wish to resolve at the pre-hearing conference, as well as potential motions in limine that may be argued at the pre-hearing conference.
The pre-hearing brief lays out a party’s contentions on the issues remaining to be litigated (and whether the party has the burden of proof on the issue). Each ALJ has detailed rules on the pre-hearing brief. Usually, the rules require the parties to agree to an outline for the brief and limit the length of the brief (or require a single brief from all complainants or all respondents in a multi-party case). All issues and contentions not addressed in the pre-hearing brief are waived.
Pre-hearing submissions are typically filed a few weeks before the hearing. The precise timing can depend on the overall length of the pre-hearing phase (i.e., the time between the close of discovery and the hearing). Further, there is usually a separate and later time set for the filing of OUII staff attorneys’ pre-hearing statement. This allows OUII staff to have the benefit of reviewing the parties’ briefs before filing their own. Although most ground rules make clear that all parties are expected to state a position on contested issues, in some cases, OUII staff have sought to “reserve” a final decision on an issue until after the hearing.
10.12.2.10.2 Witnesses, deposition designations, and exhibits
Pre-hearing case management is a significant challenge for USITC litigants given the relatively large number of witnesses and exhibits involved and the normally limited trial time. The ground rules for witness testimony and examination vary by ALJ – in particular, there are distinctions between ALJs as to whether direct testimony is to be presented live or via witness statement, and whether fact witnesses are sequestered by default or only if requested.
As a further streamlining technique, when depositions are admissible as substantive evidence – either by USITC rule or agreement of the parties – they take the form of specific line and page designations, rather than the entire deposition transcript.
The process of preparing, submitting, and objecting to exhibits is an area in which unproductive behavior – particularly with respect to objections – can create inefficiencies and risks of gaps in the record at trial. The process of lodging and resolving objections to exhibits can result in a prisoner’s dilemma in which counsel on each side lodge often rote technical objections to opposing counsel’s exhibits in anticipation that the other side’s counsel will act in a similar manner. But, in recent years, it has become common for the parties to agree to waive all but the highest priority objections. ALJs often must play an active role in resolving disputes over exhibits.
10.12.2.10.3 Motions in limine
Orders in limine are an important tool for managing the scope of hearings in Section 337 investigations. While potentially applicable to a broad range of pre-trial evidentiary disputes, they are most frequently granted in disputes involving the scope of expert testimony, whether arguments not disclosed in the pre-hearing brief may be heard, whether late-disclosed information (notably prior art references) may be introduced into evidence, and whether information that was shielded from discovery by a party may be relied upon by that party at trial.
10.12.2.10.4 Daubert motions
Motions to wholly preclude the testimony of a particular expert are rarely made or granted in Section 337 investigations. Instead, such challenges may result in a narrowing of the scope of an expert’s permitted testimony. More commonly, they expressly or implicitly trigger a post-trial determination that an expert’s testimony will be afforded less weight given weaknesses in their credentials or methodology. Even in such situations, however, the APA does not require the USITC to accept the ALJ’s weighing of credibility. Indeed, the USITC has at times relied upon the testimony of an expert to support its conclusions even though the ALJ determined following trial that the expert’s testimony should not receive less weight.
As in district court litigation, technology tutorials can be especially helpful in educating the ALJ about the underlying technology. While tutorials will always be shaped by the issues the parties are litigating, the goal of the tutorial should be to give the ALJ neutral, useful background information about the technology – not attorney argument about the merits of the investigation. Cases vary widely in the need for technology tutorials: some cases need little more than a brief introduction by the lawyers at the hearing, while others may benefit from a lengthy, separate presentation with animations and live fact or expert witnesses. There are no USITC rules either requiring technology tutorials, or establishing procedures to be used in the event one is included in the procedural schedule. Rather, whether to hold a tutorial, when to hold it and procedures therefor are left entirely to the discretion of the ALJ.
10.12.2.10.6 Pre-hearing conference
The pre-hearing conference provides a formal opportunity to identify and resolve pre-hearing issues in an orderly fashion. Pre-hearing conferences typically occur just before the evidentiary hearing (often on the same day). These conferences provide a forum to consolidate and address any remaining open matters that require rulings or clarification by the ALJ prior to the commencement of testimony. The pre-hearing conference also typically focuses on stipulations the parties have agreed to regarding trial logistics. As a general matter, pre-hearing conferences permit the aggregation of issues and fast resolution through rulings from the bench. They also help ensure that litigants and the ALJ have common expectations about how the hearing itself will proceed.
Patent investigations often involve complex scientific and technological issues that color almost all aspects of the hearing (e.g., tutorials, exhibits, oral testimony, and attorney argument). This inherent complexity, especially when combined with misleading arguments, can result in unsupportable or inconsistent findings of fact by the ALJ. An inordinate amount of time and resources may be spent during the post-hearing or post-ID phases trying to unravel and remedy such findings.
Absent settlement, consent order, stipulated dismissal, or the grant of a dispositive motion, the USITC must provide the parties an opportunity for a hearing on the merits.340 At the violation hearing, the ALJ receives evidence and hears argument to make findings and recommendations for USITC action. Long before any hearing can begin, the ALJ must define the scope of the investigation and the ground rules governing its proceedings. These issues are of particular import in patent cases, which often involve numerous complex and technical claims and defenses.
10.12.2.11.1 Separate hearings (bifurcation)
USITC hearings are promptly “held at one place, continuing until completed” unless the ALJ orders otherwise in the procedural schedule or ground rules.341 A preliminary question in any patent investigation is whether all the issues involved in a case should be resolved in a single hearing or bifurcated hearings. Bifurcation in Section 337 investigations is invoked rarely, and is appropriate only if it will promote judicial economy without causing inconvenience or prejudice to the parties. In recent years, the USITC has allowed for the resolution of certain case-dispositive issues in proceedings (including hearings) early in investigations under its 100-day program or interim ID pilot program, in effect allowing for bifurcated hearings in investigations (see Section 10.12.2.4).
Whether all of the issues raised in a USITC patent investigation – sometimes involving different technologies, non-patent claims with overlapping facts, and various legal and equitable claims, defenses, and remedies – should be resolved in a single hearing depends upon the facts and circumstances of the particular investigation. Factors to be considered in the bifurcation decision include whether the issues and the evidence required for each issue are significantly different, whether discovery has been directed to a single hearing of all issues, whether a party would be prejudiced by a single hearing or separate hearings, and whether a single hearing would create the potential for confusion.
10.12.2.11.2 Hearing logistics
Section 337 hearings are conducted under the APA and follow the USITC Rules of Practice and Procedure, which are generally consistent with the FRCP. An ALJ’s inherent power to control investigations includes the broad authority to impose reasonable time limits during hearings. Time limits have been recognized as a technique that enhances the quality of justice and improves the administrative aspects of any civil hearing. Such limits force the parties to evaluate what is and is not important to their case and prevent the undue burdens a long patent hearing would impose on the tribunal.
USITC hearings are usually public and may range from a few days to a week or so, depending on the complexity of the investigation. What is considered a reasonable length for a hearing depends upon the number of patents at issue, the number of named respondents, the complexity of the technology, and the nature and number of any associated non-patent claims.
The burden of presenting evidence in patent cases usually falls equally on the parties. In USITC hearings, a portion of the hearing time is allotted to OUII staff attorneys, with the remaining hearing time split evenly between the complainant and respondent(s). The presumed equal allocation of time between the complainant and respondent can, however, be adjusted for any demonstrable difference in the complexity of issues.
The length of hearing times and other time limits do not significantly change for investigations that involve multiple, rather than single, respondents. There may be hearings, however, when the ALJ should consider the number of respondents and redistribute hearing time accordingly (e.g., where multiple respondents have different interests and may wish to examine a witness separately). ALJs in patent hearings most often start with the complainant’s case-in-chief, followed by the respondent’s case-in-chief, the investigative staff attorney’s case-in-chief, and then the complainant’s rebuttal. At their discretion, ALJs often allocate time for the respondent to present a rebuttal case as well.
10.12.2.11.3 Evidentiary issues
ALJs follow the USITC’s rules at the evidentiary hearing and will apply the FRE more liberally than district court judges on evidentiary issues (e.g., hearsay may be allowed, and FRE 403 objections to relevance generally do not apply).
10.12.2.11.3.1 Patent law experts
Parties sometimes propose the use of a patent attorney or former USPTO employee to present expert testimony regarding select patent law issues, USPTO procedures, or patent terminology. The use of patent law experts is strongly discouraged and, if allowed at all, should be limited to a non-biased explanation of USPTO procedures. Just as in any other field, it is exclusively for the ALJ – not a patent law expert – to interpret the underlying patent law and reach conclusions regarding the meaning and sufficiency of the evidence.
10.12.2.11.3.2 Inventor and other technical party employee testimony
The role of inventors and other technical employee witnesses in USITC evidentiary hearings is largely the same as in district court (see Section 10.6.10.3).
10.12.2.11.4 Post-hearing briefing and initial determination
After the hearing, the parties have the opportunity to submit post-hearing briefs and proposed findings of fact, as well as rebuttal briefs and rebuttal proposed findings of fact. The parties should begin preparing the initial briefs and proposed findings of fact before the conclusion of the hearing because the post-hearing briefing schedule is severely compressed in most investigations. All issues in dispute must be discussed in the post-hearing briefing, or these issues are abandoned. Based on the hearing and post-hearing briefing, the ALJ will issue an ID as to whether there has been a violation and a recommended determination as to the proper remedy.
The ALJ is required to issue an ID on whether there is a violation of Section 337 no later than four months before the target date.342 This ID is often referred to as a “final initial determination.” The final ID must contain “an opinion stating findings (with specific page references to principal supporting items of evidence in the record) and conclusions and the reasons or bases therefor necessary for the disposition of all material issues of fact, law, or discretion […].”343 Thus, the ALJ cannot limit the “final initial determination” to only to a single dispositive issue.
Within 14 days after issuing the final ID, the ALJ must issue a “[r]ecommended determination on issues concerning on issues concerning permanent relief and bonding.”344 Often, however, the ALJ issues recommendations on bonding and remedy in the same document as the final ID in a document entitled, “Final Initial and Recommended Determinations.” In the recommended determination, the ALJ will recommend the bond for the Presidential review period; whether an exclusion order, cease and desist order, or both should be entered; and the scope of any such orders.