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Congressional Research Service
Informing the IegisI9tive debate since 1914
Updated January 8, 2024
An Introduction to Section 337 Intellectual Property Litigation
at the U.S. International Trade Commission
In recent decades, parties asserting patent infringement and
other intellectual property (IP) claims have increasingly
looked to the U.S. International Trade Commission (ITC) as
a fast-paced forum with authority to stop the importation of
infringing products. This In Focus provides an overview of
these Section 337 (or unfair import) investigations; the
special legal issues and remedies involved; the litigation
process; and changes proposed by some in Congress.
Background on the iTC and Section 337
Congress created the ITC as the U.S. Tariff Commission in
1916 and gave the agency its current name in 1974. The
ITC is an independent, nonpartisan agency led by six
commissioners who are appointed by the President and
confirmed by the Senate to nine-year terms. The President
appoints one commissioner each to serve as chair and vice
chair for a two-year term. No more than three
commissioners may be of the same political party, and the
chair cannot be of the same party as either the prior chair or
the vice chair. In addition to unfair import investigations,
the ITC conducts other trade-related investigations,
including import injury investigations involving
antidumping and countervailing duties. The ITC also
administers the U.S. tariff schedule and provides
information and analysis to the President and Congress.
The ITC's authority to investigate unfair imports is
governed by Section 337 of the Tariff Act of 1930 (19
U.S.C. § 1337). Section 337 expressly encompasses
infringement of patents, copyrights, trademarks, and certain
other statutory IP. It also extends generally to unfair
methods of competition and unfair acts, which include
trade-secret misappropriation and non-IP claims. The vast
majority of Section 337 claims allege patent infringement.
The ITC's Section 337 caseload increased in this century,
with 140 active investigations in FY2022 compared with 27
in 2000. These proceedings have drawn congressional
interest. One bill introduced in the 118th Congress-H.R.
3535, the Advancing America's Interests Act (AAIA)-
would amend Section 337 as described below.
Legal ssues in Section 337 Cases
Like plaintiffs in U.S. district court cases, complainants
asserting IP claims under Section 337 must prove
infringement or misappropriation of their IP rights. As a
trade statute, however, Section 337 requires the ITC to
consider special additional issues. The ITC also has
different remedies at its disposal than district courts.
Importation
For the ITC to find a violation of Section 337, the
infringing articles must be imported into the United States,
sold for importation into the United States, or sold within
the United States after importation. Although respondents
do not always contest importation, it can be challenging for
complainants to determine whether and how the infringing
articles are imported, especially if the articles are merely
components of other products.
Domestic Industry
A crucial and often litigated condition for the ITC to find a
violation of Section 337 is the so-called domestic industry
(DI) requirement. For claims involving patents or other
statutory IP, Section 337 essentially requires the
complainant to prove there are both (1) articles that practice
the IP (the technical prong) and (2) a U.S. industry
relating to those articles consisting of significant
investments in (a) plant and equipment; (b) labor or capital;
or (c) exploitation activities such as engineering, research
and development, or licensing (the economic prong).
By contrast, for claims involving other unfair acts,
including trade-secret misappropriation, complainants meet
the DI requirement by proving that the threat or effect of
the respondents' actions is (i) to destroy or substantially
injure an industry in the United States; (ii) to prevent the
establishment of such an industry; or (iii) to restrain or
monopolize trade and commerce in the United States.
Thus, unlike patent cases, complainants in trade secret cases
must prove real or threatened injury to their DI, although
the DI need not practice the asserted trade secrets.
It is often challenging to apply these tests to the facts of
specific cases. One controversy is the extent to which non-
practicing entities, which hold patents but do not practice
the patented technologies, should be able to satisfy the DI
requirement through patent licensing programs. The AAIA,
which aims to ensure that the resources of the [ITC] are
focused on protecting genuine domestic industries, would
amend Section 337 to limit the ability of complainants to
rely on licensing to satisfy the DI requirement.
Remedies
Unlike district courts, the ITC cannot order money damages
for IP infringement. Rather, the ITC may issue unique
injunctive remedies. If the ITC finds a violation, it typically
enters a limited exclusion order, preventing specific persons
from importing infringing articles into the United States. It
may also enter general exclusion orders, not limited to
specific persons, to prevent circumvention or address a
pattern of violation. U.S. Customs and Border Protection
enforces exclusion orders at U.S. ports of entry.
In addition, the ITC may enter cease-and-desist orders
(CDOs) enforceable by civil fines. CDOs are typically](ViewImageLocal?handle=hein.crs/govenxu0001&div=1&collection=&method=preview&ext=.png&size=3)
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