What interested you in becoming an ALJ at the ITC?

There were two factors that interested me in coming to the ITC, the first being geographical.  Having said that, when I saw the opening for a judge at the ITC, I studied the agency, reading its website, including the section on 337, the Commission rules, the CFR sections that applied to the ITC, and it was very clear that the work here was challenging at a number of levels.  I was impressed with the type of hearings that the ITC conducted, and with the length and complexity of the IDs that were produced.  I thought at the time that the work would be interesting and challenging, and so it has been.

How did your prior military experience prepare you for your current job as an ALJ at the ITC?

In my career with the USAF, I worked in a number of fields and areas of law that I believe were superb training for the ITC.  I spent many years as a trial attorney, as a defense and prosecuting attorney in criminal law, worked in international law, and finally tort law.  As a trial attorney, I learned to study cases and know them well, from complex medical issues, to detailed factual determinations.  I spent three years as the chief accident investigator for Air Education and Training Command, studying in detail the systems and human factors in aircraft mishaps.  In each investigation, there are a number of scientific details to study, broken down by systems.  In international law, I worked on the training for the INF Treaty and negotiated SOFA [Status of Forces Agreements] supplements, which involved complex and highly detailed reports and products.   So on a whole, my career involved learning complex and detailed subject areas, and working with evidence and witnesses to produce coherent reports.  I think it was great training for this job.

What is a typical work day like for you as an ALJ at the ITC?

Obviously the days are very different when we are in hearing, but when we are not, the bulk of the time is spent reading the information submitted by counsel, and trying to get orders out the door.  The attorneys that practice in the ITC are prolific, and there is no shortage of filings to get through.

Generally, do you have any practice pointers for attorneys who appear before you at the ITC?  More specifically, are there things you wish lawyers did differently, particularly with respect to presenting sometimes complex technological issues?

I hope I have been clear in getting practice pointers out in other forums, but I am happy to repeat the basics here.  Remember that you have only your reputation and integrity as an attorney to fall back on.  Treat everyone, including witnesses, with respect, unless and until you have proven they do not deserve it.  Be clear and honest in all you do.   One of the most important things that firms and attorneys can do in practicing before the ITC is remember the speed at which we function, and cooperate in getting things done, particularly in discovery.  While there are often legitimate issues that should be brought to the judge, it is frustrating when it appears the parties are unable to work out matters that ought to be worked out with cooperation.

The attorneys that appear in our court are doing a very good job, and I would not presume to tell them how to do things differently.  With regard to the complex technological matters, the attorneys and experts are doing fine, and I don’t know how they could do it differently in most cases.  I think long term we ought to look at a couple of factors.  First, I think we do spend a great deal of time on issues about which there is no real dispute.  Often I will see evidence on matters such as domestic industry, or importation where the actual crucial point of the case is elsewhere.  I would like to see if we can focus more on the disputed matters and do less on issues that will not impact the decision.

What do you enjoy most about being an ALJ at the ITC?

I think the fact that every case has new information, technology and challenges makes it fresh everyday.  I enjoy the people here, and the fact the companies and attorneys are on the cutting edge of industry and law.  I recall in one of my first cases listening to the experts, and thinking how much the education I was getting there would have cost if I had tried to go find it in the market.  I had some of the world’s leading professors and scientists in court to explain the technology to me, and to underline the disputes.  I find that exciting and enjoyable.  Finally, the ITC trial bar is a relatively small community, and I have enjoyed meeting the members at the functions very much.

Can you generally describe the professional interaction among the ALJs at the ITC?

When I arrived here the judges welcomed me warmly, and have helped me very much in finding my feet and learning what I needed to know.   While each judge maintains his independence in decision making, I have found all of them willing to discuss cases and law as questions arise, though we are all relatively active with our own case loads.

How does your current ALJ position at the ITC differ from your prior ALJ position at the Office of Medicare Hearings and Appeals?

Here at the ITC we have far fewer cases, but the complexity of the cases, and the volume of material in each is very high; often exhibits will number in the hundreds and pages in the hundreds of thousands or more.  All the litigants are represented by counsel of the highest caliber, and each side is well represented.  At OMHA, we usually had pro se appellants, and frequently there was only one party in the appeal.  While the cases were less complex, the volume of cases was much higher, and the appellant had a personal stake in the outcome.  Often the first individual that would actually sit in front of them and listen was the ALJ, and the hearing was important to them personally.

You have dedicated your legal career to public service.  For those lawyers who have not worked in the public sector, could you comment on how you see the role of attorneys who work for government entities?

I have been very fortunate in the career positions I have had.  In the military I had a great sense of purpose, as I was able to work with and help the service members who were dedicated to protecting the country and its allies.  I enjoyed working with the men and women in the armed forces very much, and some of the things we accomplished still impress me to this day.  In addition to the service I was able to give to the individuals, working in the government is a trust, and each public servant should try to conduct him or herself with an awareness of that.  I take great pride in some of the things we were able to do over the years for both the US and individuals.  Attorneys that work for the government have an opportunity to do work that impacts society as a whole, and to feel that they are doing something that will help others.

What is the most memorable moment that has occurred at an evidentiary hearing that you presided over (you can be generic if you want to protect identities of the parties involved!)?

So many of the moments were memorable at the time, and have faded it is hard to say.  I recall in one case we had a Lexus with an anti-collision system that CARFAX had reported as having been in three collisions.  I thought the system wasn’t working very well.

If there is one thing that you want our readers to know about the ITC, what is it?

I think it is a terrific place to be right now.  We have been getting some of the most interesting cases in the country, we have great people and I think from the Commissioners to the Staff it is a wonderful place to work.  Right now we are on track for another record number of cases, and we are getting the resources to handle the case load.  I think this is as exciting a place to practice law as there is in the country right now.

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.

Dave practices in Miller & Chevalier’s International Trade Department.  From 1973 to 1977, Dave served in the General Counsel’s office and the Chairman’s office of the U.S. International Trade Commission (“ITC”).  From 1977-1981, he served as the International Trade Counsel for the U.S. Senate Finance Committee.  For the last twenty-eight years, Dave has been in private practice, principally representing both U.S. and foreign-based companies in Section 337 cases.  He was involved at the ITC with the rewriting of Section 337 into its current form in the Trade Act of 1974, chaired the ITC committee that prepared the initial implementing regulations, oversaw the statute while on the Finance Committee Staff, and has represented parties in over 60 Section 337 cases while in private practice.   Dave spoke recently to ITC 337 Law Blog.

What are some of the most significant changes to Section 337 practice since you started in private practice? 

In terms of the practice, the annual number of cases being litigated under Section 337 has tripled or quadrupled, and the number of lawyers and firms participating has risen even more substantially.  The type of case being litigated has also changed, from initially cases mostly involving low-tech products to now cases mostly involving advanced technology products.  The number of foreign-based firms bringing cases has also grown substantially, as the domestic industry requirement has become easier to satisfy.  The target of the cases in terms of the country of the respondents have also changed, progressing from Japan to Taiwan to China, with some upturn in Korean cases also over the last decade.  Finally, the commitment of the ITC to supporting the implementation of Section 337, which has always been there, in recent years has increased even more, particularly in terms of the number of ALJs and staff devoted to implementing the statute.

What are some of the advantages of commencing a Section 337 investigation versus a district court action?

The advantages of Section 337 over a district court action can be numerous.  First, there is speed to decision.  Section 337 offers the only consistently rapid IP docket in the United States, typically with a final decision in 13-16 months (and an initial determination (“ID”) by the ALJ in 9-12 months), as district court “rocket dockets” often have been a victim of their own success, e.g., the Eastern District of Texas.  Secondly, there are few jurisdictional issues in a Section 337 case; if there is an import, there is jurisdiction.  This avoids the often time consuming and expensive jurisdictional and venue issues encountered in district court.  Third, the usual, statutorily provided remedy under Section 337 is an exclusion order, enforced by the U.S. Customs and Border Protection Agency within DHS, so e-Bay considerations relating to issuance of injunctions, and the necessity of contempt proceedings to enforce an order, do not play a role in Section 337 cases.  Fourth, there are no effective counterclaims in Section 337 cases; while counterclaims are permitted, they are removed to a district court and typically will not be decided, if at all, until well after a Section 337 case is finished.  Indeed, in a Section 337 action, it is usually the case that the Complainant typically puts the respondents at risk of losing 3 times (the ALJ’s ID, the Commissions’ final determination, and CAFC review) before any district court action by a respondent will be decided that may put Complainant at risk.  There are other advantages, such as a judge’s corp second to none in the IP area, but the ones I just mentioned are plainly significant ones.

To what do you attribute the steady increase in Section 337 filings at the ITC?

The steady increase in my view has been driven by the few rocket dockets in district courts slowing down as previously noted; by foreign-based companies bringing more complaints, avoiding the issues raised by being in front of a U.S. jury and gaining the advantage of being in front of experienced IP judges, as well as benefiting from the other advantages mentioned earlier; the e-Bay decision, which makes Section 337 more attractive in terms of securing an exclusive order versus receiving injunctive relief in the district courts; the expansion of activities which satisfy the domestic industry requirement of Section 337 making it easier to satisfy that requirement; and in general, increasing awareness among companies and their counsel of the benefits of Section 337 compared to the district court.

Do you envision more foreign-based companies bringing Section 337 complaints over the coming years?

Yes, I do.  Interestingly, several foreign-based companies have actually told us that they are tired of being targets of Section 337, and want to take advantage of it as Complainants.  Especially with the satisfaction of the domestic industry requirement of the statute becoming easier, foreign-based companies are increasingly making consideration of a Section 337 action one of their routine tactical options for defending their U.S. intellectual property.

Do you envision more non-practicing patent owners (e.g., patent trolls) bringing Section 337 complaints over the coming years?

I think NPE’s will increase their use of Section 337.  The speed of Section 337 cases and hence the avoidance of protracted, expensive litigation which can strain resources, and the avoidance of juries and e-Bay make Section 337 particularly attractive to NPEs. 

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

Probably the aspect of Section 337 which gives practitioners the most problem is one of its principal advantages — speed to decision.  Because of the pace it is critical to know Section 337 practice and manage the case well from the start, which means putting together the best team you can from available resources, including firms other than your own, and preparing for trial from day one.  I cannot tell you how many times cases are affected, even to the point of losing, because time was not well-managed and decisions were made that reflected a lack of appreciation for the differences between Section 337 cases and district court cases, and the strategical and tactical differences resulting therefrom.