By Tom Fisher
When parties to a Section 337 investigation settle their dispute, whether through a license agreement or otherwise, the parties may terminate the investigation by filing a motion under Commission Rule 210.21(a)(2).  However, any motion to terminate the investigation based on a settlement agreement must include:  (1) copies of the licensing or other settlement agreements, (2) any supplemental agreements, and (3) a statement that there are no other agreements, written or oral between the parties concerning the subject matter of the investigation.

If the licensing or settlement agreements contain confidential information, such information can be removed from the public versions of these documents.  Indeed, if fewer than all parties settle the investigation, the settling parties might be able to maintain the confidentiality of the financial settlement terms from the non-settling parties.  See, e.g., Certain Machine Vision Software, Inv. No. 337-TA-680, Order 18 (October 29, 2009) (finding that the policy of encouraging settlement through maintaining financial terms secret trumps non-settling parties’ alleged need of such information for remedy issues).  However, keeping financial settlement terms from non-settling parties is not uniformly followed in all cases.  See, e.g., Certain Zero-Mercury-Added Alkaline Batteries, Inv. No. 337-TA-493, Order 35 (October 30, 2003) (while redacted financial information would be kept from non-settling respondents, ALJ denied complainant’s request to keep such information from outside counsel of non-settling respondents, because existing protective order was sufficient).

According to the Commission Rules, the Administrative Law Judge (“ALJ”) is directed to consider and make appropriate findings regarding the effect of the proposed settlement on the public health and welfare, competitive conditions in the U.S., the production of like or directly competitive articles in the U.S., and U.S. consumers.  See Commission Rule 210.50(b)(2).  Although the ALJ may conduct a hearing on these public interest factors, the ALJ’s findings on this issue are normally made solely on the information submitted by the parties.  If the ALJ grants the motion to terminate the investigation based upon settlement, the ALJ then certifies to the full Commission the motion papers and agreements, with an initial determination terminating the proceeding for the affected parties.  Again, if confidential information is contained within the initial determination, agreements, and motion papers, then confidential and public versions of these papers are forwarded to the Commission.

Under Commission Rule 210.42(e), notice of the initial determination based on settlement is provided to the U.S. Department of Health and Human Services, the U.S. Department of Justice, the Federal Trade Commission, the U.S. Customs Service, and any other departments or agencies that the Commission deems appropriate.  These institutions are permitted ten days after service of the notice to provide comments regarding the initial determination.

The Commission then has an opportunity to review the settlement agreements along with any other comments provided by the parties, Commission Investigative Attorney, ALJ, and any agencies or departments.  The Commission can then take action as it sees fit, or more commonly, it will decide not to review the initial determination, in which case it will issue a notice to the public and the parties of its decision, and the investigation will terminate as to the affected parties.