Planning for Success in Section 337 Investigations

Famously, section 337 investigations before the U.S. International Trade Commission (ITC) are fast. By statute, the ITC must conclude section 337 investigations “at the earliest practicable time . . .” 19 U.S.C. § 1337(b)(1). Investigations institute within 30 days after the Commission receives a complaint, evidentiary hearings (akin to trial) regularly occur within 8–9 months, and the ITC’s target dates for completing investigations routinely land at 14–16 months.

Because time is precious, section 337 litigants must prioritize developing their strategies at the outset of an investigation. Below, we discuss three key elements of a party’s litigation strategy: the target date, which determines the length of time for fact discovery and impacts the levers a party can pull; fact discovery planning, including tactics and scope; and storytelling, including the needs to identify witnesses and themes and early opportunities for educating the decision-makers. Developing strategies for these three elements early on is critical to success in the investigation.

Litigating the Target Date

Shortly after the ITC institutes a new investigation, the assigned administrative law judge (ALJ) asks the parties to brief the target date for the ITC to complete the investigation. The timing of the target date affects parties’ ability to obtain evidence and develop their positions, as an earlier target date leaves less time for discovery. The target date’s timing can also impact two battlefronts relating to the effectiveness of remedial orders.

First, the target date affects the efficacy of post-grant review by the Patent Trial and Appeal Board (PTAB). Unlike district courts, the ITC does not stay investigations pending inter partes review (IPR), so when an IPR petition challenges a patent asserted in a section 337 investigation, the investigation and the IPR proceed in parallel. The resulting horserace determines the impact of any PTAB unpatentability decision on the ITC investigation—the ITC generally will stay enforcement of any remedial orders only if the PTAB decision precedes the investigation’s target date. Compare Unmanned Aerial Vehicles & Components Thereof, Inv. No. 337-TA-1133, Comm’n Op. (Sept. 8, 2020) (staying enforcement of exclusion order based on earlier PTAB unpatentability decision) with Network Devices, Related Software & Components Thereof (II), Inv. No. 337-TA-945, Comm’n Op. (Aug. 16, 2017) (declining to rescind or modify exclusion orders based on PTAB unpatentability decision issuing less than one month after target date).

Second, the target date impacts a respondent’s ability to obtain a non-infringement determination from the ITC as to its design-around, carving it out from any remedial order. When deciding whether to adjudicate this issue, ITC considers whether the redesigned product has been imported, “sufficiently fixed in design,” and “subject to extensive discovery.” Certain Human Milk Oligosaccharides & Methods of Producing the Same, Inv. No. 337-TA-1120, Comm’n Op. at 14 (June 8, 2020). Satisfying each of these factors can require lead time, and a longer fact discovery period can improve a respondent’s chances of doing so.

These considerations thus incentivize respondents to push for a later target date and complainants, an earlier one. Where neither IPR nor design-around considerations exist, however, respondents can increase the pressure on complainants by seeking an earlier target date. After all, complainants bear the burden of proof, which a shorter discovery period can make it difficult to carry.

Preparing for Discovery

A new section 337 complaint requires parties to begin planning for discovery. Unlike civil litigation, in which discovery may follow months after the complaint, section 337 discovery begins the day after the Commission’s notice of institution publishes in the Federal Register. Consequently, shortly after the complaint is filed, parties should begin identifying sources of documents and information, contacting key witnesses, engaging experts, ensuring evidence is being preserved, and developing discovery strategies.

In developing discovery strategies, parties must decide whether to go broad or to go deep. Historically, parties often chose the former based on the shibboleth that in section 337 investigations, “the scope of discovery is broad.” Certain Computer Sys., Printers and Scanners, Inv. No. 337-TA-618, Order No. 9 at 3 (June 23, 2008). Scorched-earth approaches to discovery can force the other side to defend more turf and incur higher litigation costs, increasing leverage.

But going broad may be suboptimal. Many section 337 litigants are no stranger to expansive discovery, and opponents often respond to overly broad requests by stalling production and obfuscating important information. The speed of section 337 investigations can make such tactics particularly damaging, as they can prevent a party from timely obtaining evidence needed to support its claims and to develop contentions, increasing the risk that important evidence will be precluded. And parties cannot count on ALJs to enforce overly broad discovery requests. The Commission has trended toward a more proportional approach to discovery over the last few years, and ALJs have been reticent to intervene in discovery disputes early in the investigation so long as the parties have agreed to provide requested evidence and only disagree as to when they will do so.

Rather than going broad, section 337 litigants should consider going deep by employing a targeted approach at the outset of discovery. Rather than serving hundreds of requests cutting across every conceivable issue, litigants can strengthen their positions by serving a limited number of focused requests, tailored to the critical issues, that prioritize the evidence needed to prove their claims. Litigants can also agree to limit discovery, such as by excluding email and other electronically stored information. See, e.g., Certain Filament Light-Emitting Diodes & Prods. Containing Same, Inv. No. 337-TA-1172, Order No. 17 at 5 (Feb. 21, 2020) (noting parties’ agreement not to search email without good cause shown). Targeted approaches make it harder for the other side to delay or obfuscate and can ease enforcement, and subsequent rounds of discovery remain available to develop promising leads.

Parties should also consider at the outset whether they can forgo contesting any issues, such that they can avoid discovery. Parties frequently stipulate that respondents’ accused products are imported and often stipulate to the amount and location of respondents’ domestic inventory. Harder decisions concern issues such as the domestic industry requirement, but where complainants’ positions appear strong, respondents can be wise to redirect resources away from contesting them towards more important issues.

Further, parties must ensure they preserve and collect potentially relevant documents at the outset of the investigation. Due to the speed of section 337 investigations, preservation issues can quickly spiral out of control. This is particularly true for document-intensive investigations, such as those concerning trade secret misappropriation. There, a respondent’s mismanagement of its e-discovery processes can drastically alter the trajectory of the investigation, including by leading to terminating sanctions for failing to preserve evidence. See Organik Kimya v. ITC, 848 F.3d 994 (Fed. Cir. 2017); Certain Lithium Ion Batteries, Battery Cells, Battery Modules, Battery Packs, Components Thereof, & Processes Therefor, Inv. No. 337-TA-1159, Comm’n Op. (Mar. 4, 2021); Certain Stainless Steel Prods., Certain Processes for Manufacturing or Relating to Same, & Certain Prods. Containing Same, Inv. No. 337-TA-933, Comm’n Op. (June 9, 2016). Similarly, in a current investigation, the ALJ concluded it an expedited proceeding related to the domestic industry requirement without issuing a decision due to the respondent’s failure to timely produce emails. See Certain Selective Thyroid Hormone Receptor-Beta Agonists, Processes for Manufacturing or Relating to Same, & Prods. Containing Same, Inv. No. 337-TA-1352, Order No. 22 (May 11, 2023).

Writing Your Story

An oft-neglected aspect of ITC practice is storytelling. The fact finders in section 337 investigations are savvy administrative law judges who are experts in the field and in many cases, are themselves veteran IP litigators, so litigants can present their cases at a level of complexity and detail that far exceeds what will work in a jury trial.

But “can” doesn’t mean “should.” After all, ALJs are human. Telling a compelling story remains an important part of a litigator’s toolkit even in section 337 investigations. ITC litigants should remember to use not only logos, but also ethos and pathos in building their cases. And just as a good trial lawyer begins thinking about the opening statement at the outset of a case, ITC litigants should develop their strategies with an eye toward their pre-hearing briefs—including the themes they will use, the evidence they will highlight, and the witnesses who will tell their story.

Identifying strong fact witnesses early on is particularly important. All but one of the ITC’s current ALJs require live direct witness testimony, and the chief ALJ has described lay witnesses as “really some of the most valuable witnesses that [he] hear[s] during the course of a trial.” USPTO, “Fireside Chat with C.J. C. Cheney of the ITC” (Jan. 19. 2023). For complainants, strong witnesses can include inventors who can describe their invention and its contribution to the art and business personnel who can explain the business operations and investments that form the domestic industry. For respondents, strong witnesses can include engineers who developed the accused products or prior art products. Due to the lead time required, ITC litigants should begin working to identify compelling fact witnesses early in the investigation.

Parties also can look for early opportunities in the investigation to tell their stories. Even before an investigation begins, litigants can use pre-institution submissions to advance their themes and to educate the Commission. Further, several of the ALJs hold preliminary conferences, which can feature discussions of the investigation’s merits. See, e.g., Certain Icemaking Mach. & Components Thereof, Inv. No. 337-TA-1369, Order No. 2 at 4–5 (Aug. 16, 2023) (listing topics for discussion during the preliminary conference). Parties that go into preliminary conferences prepared to explain their positions achieve a position of strength, as they will be well positioned to seed the investigation with their themes at the investigation’s outset.

Strategy + Story = Success

In section 337 investigations, slow and steady does not win the race. Instead, rapid response is the key, and a party can increase its odds of success by quickly thinking through the issues and formulating its strategy at the outset. Deciding on a strategy for the target date impacts the tactics that a party can use and the time it will have to use them. Developing a strategy for discovery affects a party’s ability to build its case for trial. And devising a party’s trial story early in the investigation, including the themes, witnesses, and evidence to highlight, will improve its persuasiveness before the ALJ and ultimately before the Commission.