ITC: PUBLIC INTEREST
ITC is to issue a “limited exclusion order” upon finding a Section 337 violation, “unless, aſter considering the effect of such exclusion upon the public health and welfare, competitive conditions in the US economy, the production of like or directly competitive articles in the US, and US consumers, it finds that such articles should not be excluded from entry”.
A big step forward
So what is changing at the ITC relative to the public interest factors? Tey are becoming more important when the investigation is before the ITC on review. When the ITC is craſting a remedy, the public interest factors can play a huge role. Two ITC investigations that bear this out are discussed below. Tey illustrate the growing importance of the ITC’s public interest analysis with respect to remedy.
Te first investigation is Certain Variable Speed Wind Turbines and Components Tereof. It is noteworthy because of the high level of public interest that it generated at the ITC review stage. Tis matter concerned variable speed wind turbines and it pitted General Electric Company (GE) against Mitsubishi Heavy Industries, and Mitsubishi Power Systems. Te ALJ found a Section 337 violation and recommended a limited exclusion order.
Specifically, in response to the ITC’s request for public comment, no fewer than 10 US senators, nine congressmen, and one governor, as well as other interested non-parties, submitted correspondence to the ITC expressing their interest in (and the importance of) the wind turbines investigation. Some of the commentators took sides, with both GE and Mitsubishi having their champions.
For example, one commentator urged the ITC to uphold the finding that Mitsubishi infringed, noting that “South Carolina has a focused objective to become an international leader in attracting companies, such as GE, which will develop ways to use our vast domestic resources in a cleaner, more efficient manner”. Another commentator remarked that “GE’s facilities in Pensacola, Florida, and across the country employ more than 4,000 people involved in the renewable energy sector”. Tis was cited as proof that GE’s jobs and investments were needed for the US to compete in the global marketplace.
Other commentators went in the other direction, noting Mitsubishi Power Systems of America’s plan to construct a new wind turbine facility in Arkansas. Said one: “Tis investment will create hundreds of jobs in our state and help us achieve our objective of becoming an important
“IN CRAFTING THE REMEDY AS IT DID, THE ITC WAS MOVED BY ONE OF THE PUBLIC INTEREST FACTORS— IE, THE COMPETITIVE CONDITIONS IN THE US ECONOMY.”
In craſting the remedy as it did, the ITC was moved by one of the public interest factors—ie, the competitive conditions in the US economy. In that regard, the ITC acknowledged that the President had determined “that the build-out of high-speed wireless coverage is one of several vital infrastructure developments for the nation”. It also acknowledged that
the Department of
Justice had recently sought to block the proposed merger of AT&T and T-Mobile (a major distributor of HTC smartphones).
hub for wind power and other renewable energy innovation.” As did the GE supporter, Mitsubishi’s advocates focused on the public interest in terms of job creation and overall contribution to the economy.
What effect these comments would have had on the ITC’s remedy selection, if any, may never be known, because the ITC did not find a Section 337 violation. Nonetheless, these comments regarding the public interest show their enormous potential to affect the ITC’s choice of sanction. It is also noteworthy that non-party members of the public can make submissions to the ITC regarding the public interest, without regard to the rules of evidence under which the parties have toiled for the previous 12 months.
Smartphone wars
Te second ITC investigation deserving of comment is Certain Personal Data and Mobile Communications Devices and Related Soſtware. Tis investigation is a part of the ‘smartphone wars’ at the ITC. Here, Apple sought the issuance of a limited exclusion order against HTC. While the ITC did ultimately issue a limited exclusion order, the order was tailored in light of the public interest factors. It is this ‘tailoring’ that deserves a closer look.
First, the ITC determined that the limited exclusion order would not commence until April 12, 2012, a full four months aſter the issuance of its decision. Second, in the order the ITC provided for a “narrow exception”. It held that “HTC shall be permitted to import into the US until December 13, 2013, refurbished handsets to be provided to customers as replacements under warranty or an insurance contract (whether the warranty is offered by HTC, a carrier, or by a third party).”
38 World Intellectual Property Review September/October 2012
Terefore, in the spirit of preserving competition, the ITC observed: “T-Mobile itself has advised the Commission that a four-month transition period would likely be sufficient for it to replace its infringing HTC smartphones with Android smartphones produced by other manufacturers, ultimately offering consumers the same range of product and price point choices they have today.”
Finding T-Mobile’s suggestion to be “reasonable”, the ITC adopted a four-month transition period to apply equally to all infringing smartphones, not just those sold by T-Mobile.
In the past, the public interest factors at the remedy stage of an ITC investigation were an aſterthought. No more. As ITC jurisprudence evolves, public interest factors are emerging as an important consideration that have the ability to influence the scope of the ITC’s remedy when a Section 337 violation is found.
Carl Charneski is a counsel at Brinks Hofer Gilson & Lione. He
can be contacted at:
ccharneski@brinkshofer.com
Carl Charneski is a former administrative law judge at the ITC. His practice focuses on
international trade and litigation
matters, with an emphasis on Section 337 investigations before the ITC. He also advises on litigation strategies before the US district courts and the US Court of Appeal for the Federal Circuit.
www.worldipreview.com
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