30
Jun
By Gregory Redmann
Respondents involved in patent infringement investigations at the ITC typically raise affirmative defenses in response to a Section 337 complaint.  Similar to district court practice, respondents may also assert counterclaims.  In Section 337 actions, however, counterclaims are automatically removed to a U.S. District Court of appropriate venue so as not to delay the ITC investigation.

By way of background, a counterclaim is a claim that “(1) arises out of the transaction of occurrence that is the subject matter of the opposing party’s claim and (2) does not require adding another party over whom the court cannot acquire jurisdiction.”  Fed. R. Civ. P. 13.

In a Section 337 investigation, under Commission Rule 210.14(e), the filing of any counterclaim must occur 10 days prior to the commencement of the evidentiary hearing.  In conjunction with the ITC filing, the respondent must file a notice of removal with the U.S. district court in which venue exists under 28 U.S.C. § 1391.  Section 337(c) addresses this in the same manner -- “immediately after a counterclaim is received by the Commission, the respondent raising such counterclaim shall file a notice of removal with a United States district court in which venue for any of the counterclaims raised by the party would exist under section 1391 of title 28.”  Section 1391 addresses the venue requirements that must be satisfied in order for a civil action.  Furthermore, Title 28 addresses section 337 claims in Section 1368 and 1446(f).  Section 1368 provides that the district courts have original jurisdiction of any civil action based on a counterclaim raised under Section 337(c).  28 U.S.C. § 1368. Section 1446(f) explains that the district court shall resolve a counterclaim in the same manner as an original complaint and that the date of the counterclaim relates back to the date of the original ITC complaint.  28 U.S.C. § 1446(f).

By way of example, in Certain Nitrile Gloves (Inv. No. 337-TA-608), respondent Ansell Healthcare Products LLC filed a notice of counterclaim with the ITC under 210.14(e) and filed a notice of removal with the United States District Court for the District of Columbia.  Upon removal to the district court, counterclaim-defendant Tillotson Corporation then filed a Motion to Dismiss for Improper Venue or in the Alternative to Transfer.  Ansell Healthcare Products LLC v. Tillotson Corp., 567 F. Supp. 2d. 196, 201 (D.D.C. 2008).  The District of Columbia district court found that it was not the appropriate venue and transferred the counterclaims filed in its court to the District Court in Delaware where Ansell had previously field suit against Tillotson seeking declaratory judgment. “Venue in that District [of Delaware] is proper under 28 U.S.C. § 1391(a)(2), which allows in a case based on diversity of citizenship, venue in any judicial district where a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.”  Id. at 201.

Due to the complex nature of Section 337 cases, prospective complainants should anticipate that counterclaims may be raised by respondents but, if so, litigants should be ready and prepared to litigate such counterclaims in the appropriate district court and not at the ITC.

* Gregory Redmann is a summer associate at Oblon Spivak
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