Lou Mastriani is a founding partner of Adduci Mastriani & Schaumberg, LLP, an international trade law firm based in Washington, DC with one of the largest and top-ranked Section 337 practices in the United States.  For nearly thirty years, Lou has been in private practice representing both U.S. and foreign-based companies in connection with international trade regulation issues.  Lou has participated in nearly 80 Section 337 cases before the ITC.

In addition to litigating Section 337 investigations and disputes in federal district court, Lou has handled a number of antidumping and countervailing duty cases and has argued cases before the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit.  He also was appointed by the U.S. Trade Representative to serve as both a panelist and chairman on bi-national panels convened pursuant to the North American Free Trade Agreement.

Prior to entering private practice in 1981, Lou served as legal counsel to an ITC Commissioner before becoming an investigative attorney in the Office of Legal Services (currently known as the Office of Unfair Import Investigations).  As an ITC investigative attorney, Lou also assisted in revising and drafting the Commission’s Rules of Practice and Procedure with respect to Section 337 investigations.

Lou spoke recently to ITC 337 Law Blog.

What types of companies typically bring Section 337 complaints at the ITC?

There have been over 700 cases that have been filed in recent years under this statute by companies that span the spectrum from high tech to industrial products to consumer products.  These also include foreign companies that own U.S. intellectual property which have operations in the U.S. and are therefore eligible to use the statute.  The products involved in these cases run the gamut from Rubik's Cube, the X-Box, and Post-it Notes, to Viagra, other pharmaceuticals and every type of semiconductor device.  What these companies share in common is the recognition that the ITC has become the most effective and efficient forum that is available to owners of U.S. intellectual property to resolve violations of these rights.  Many sophisticated companies such as Intel, 3M, Microsoft and others frequently seek relief at the ITC against these imported infringing products in large part because of the agency's expertise with intellectual property disputes, and the fast track set for these cases.  Individual inventors and entrepreneurs have also availed themselves of the ITC.  Within the past several years, and especially after the eBay decision by the Supreme Court, there has been a significant increase in the number of licensing companies, so called non-practicing entities, that have filed complaints at the ITC.

Do you envision more foreign-based companies bringing Section 337 complaints in the future?

The amendments to the statute in 1988 that removed the injury requirement for federally recognized intellectual property rights violations, and, furthermore, substantially relaxed the domestic industry requirement for such cases made it easier for non-U.S.-based entities to take advantage of the Section 337.  Statistically speaking, there has been a dramatic increase in the number of non-U.S.-based complainants filed in recent years.  During the period 2000-2009, non-U.S.-based complainants increased their share from zero to a high of 35%.  This trend will certainly continue.

Are Section 337 investigations more or less expensive to litigate than district court actions?

In my experience, Section 337 cases are less expensive overall than a district court to litigate an intellectual property infringement claim.  There are no Hague Convention requirements for service of the complaint and taking of evidence in foreign countries, and the ITC has nationwide subpoena power.  Likewise, motions practice is more reduced and controlled than in district court actions.  One very significant advantage is that Section 337 investigations are completed in far less time than a district court action, which are frequently interminably long with respect to resolutions of dispositive motions, getting to trial, and resolving post-trial motions.  However, the rapidity of ITC cases translates into the costs of prosecuting or defending the case being incurred in this highly compressed schedule.  Nonetheless, the swift resolution of the dispute results in significant benefits to the business and positions of the winning parties.

How long does it take to complete a typical Section 337 investigation?

From institution of the complaint to issuance of the exclusion order, Section 337 investigations usually run about 18 months, which is half the time of the typical district court litigation.  The parties are in trial within 8-9 months, with an Initial Determination issued by the Administrative Law Judge within 11-12 months, and a Final Determination by the Commission within 15-16 months.

What is the Office of Unfair Import Investigations (OUII) and how does the role of this office change as a Section 337 investigation proceeds?

The Office of Unfair Import Investigations plays a vital role both in the pre- and post-initiation stages of a Section 337 proceeding.  Before a complaint is filed with the Commission, it is typical for the prospective complainant to confer with OUII to ensure that the complaint will be properly filed.  Once a Section 337 investigation has been instituted, OUII becomes a neutral third party whose primary purpose is to protect the public interest throughout the proceedings.  OUII participates as a full and active party to the proceeding and can initiate discovery, file motions, respond to motions by the other parties, and examine witnesses at depositions and the hearing.  OUII will take a formal position on the merits of the case in its pre-hearing and post-hearing briefs.  It should be noted that the pre-institution reviewing OUII attorney is typically not assigned to the case after institution to avoid any appearance of prejudice.

What impact have you seen to Section 337 practice since the Federal Circuit’s 2008 Kyocera decision?

Post-Kyocera, we are seeing more respondents involved in each investigation since 337 complainants now are required to name all the producers and suppliers of downstream products whose products they might want to bar from importation.  These additional respondents are typically product manufacturers, service providers and retailers.  My partner, Tom Schaumberg is actively working with the ITC Trial Lawyers Association on post-Kyocera legislation.

Some of the recently appointed ALJs appear to favor Markman hearings.  Do you think this trend will continue, and, if so, how will it affect Section 337 practice?

Some of the recently appointed ALJs have held Markman hearings, and ALJ Bullock has also held them, as well.  These ALJs do not always hold Markman hearings, but generally do so when the parties agree that it would be beneficial to do so.  Chief ALJ Luckern has never held a Markman hearing, although he recently stated that he is not opposed to holding them if the circumstances warrant it.  For this reason, Markman hearings are the exception and not the norm.

Why do patent infringement cases comprise the vast majority of Section 337 investigations?

Patent suits have become part of the licensing negotiation process.   Many complainants litigate as a standard negotiating tool when seeking licensing arrangements with the defendant, and defendants often countersue for the same reason.  The extensive use of lawsuits as part of the negotiation process is particularly pronounced in patent law.   Section 337, because it is such a rapid process, can be a particularly useful and high-pressure tool for companies involved in such negotiations (district court actions, in contrast, proceed glacially and may exert less pressure on the parties to negotiate).  The fact that many patent-based 337 cases settle out with licensing agreements is testament to this aspect of 337 patent litigation.  Additionally, awareness of the statute outside of the patent bar is negligible.  Section 337 is known as a patent statute, even though its older provisions are much broader and encompass a broad array of unfair acts, such as trade secret misappropriation and antitrust violations.  Finally, the statute's patent provisions are equally useful to U.S.-based and non-U.S. based companies.  Complainants at the ITC in patent-based cases are almost as likely to be foreign-based as they are to be U.S.-based.  In a sense, the ITC has become a global forum for patent adjudication, due to the importance of the U.S. market for companies around the world.  It is not unusual for both the complainant and the respondent in ITC investigations to be foreign-based -- and sometimes even to be located in the same foreign country.

Do you envision Section 337 filings at the ITC increasing in the future?

Use of Section 337 has risen sharply in recent years for the following reasons.  1) The remedy that's available through the ITC is unique.  It authorizes the Commission to actually exclude all infringing products, all copies, from entering the United States market.  It also prohibits the sale of those products that have already come into the United States market.  2) The other factor that's important is the speed with which these cases move through the ITC.  Unlike a patent infringement case in Federal District Court, for instance, which can take several years, the average ITC case is completed within 18 months.

If there is one thing that you want our readers to know about the ITC and/or Section 337 practice, what is it?

The ITC exclusion order is the most effective weapon for protecting your intellectual property rights, and the corollary for resolving unfounded claims of intellectual property right infringement. 

I would also note for those who are interested that, the American Bar Association is now offering a book entitled, “A Lawyer’s Guide to Section 337 Investigations Before the U.S. International Trade Commission.”  Click here to view link.