Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape.
With a focus on innovation, collaboration and client service. We are committed to delivering exceptional value to our clients and to the communities we serve. And now our latest episode.
The International Trade Commission, or ITC, pronounced its judgment on its maiden case under the Interim Initial Determination, colloquially known as “Interim ID,” program. The ITC's Commission Opinions offer a glimpse into the workings of this nascent program and underlines the importance of carefully planning investments to substantiate a case of domestic industry at the ITC.
The case in question involved complaints lodged by car manufacturers Hyundai and Kia, who accused certain entities of importing infringing replacement automotive lamps that encroached upon their design patents. As Hyundai is the majority shareholder in Kia, the two investigations were merged.
In such patent infringement-based section 337 investigations, the complainants must substantiate the existence of a domestic industry in the U.S. related to the patents-protected articles. This domestic industry requirement is bifurcated into a technical prong, fulfilled by demonstrating that the complainant’s products are patented, and an economic prong substantiated by significant or substantial investment in the domestic industry product.
The case was advanced under the Interim ID program for the economic prong of the domestic industry requirement. The ALJ found the economic prong satisfied by investments in designated plant and equipment, and labor and capital.
However, upon review, the Commission vacated the ALJ's findings on the economic prong. It determined that improper aggregation of all investments had been conducted to meet the investment threshold. The Commission affirmed that the economic prong must be independently established for each patent, making 'padding' of the domestic industry numbers with unrelated patent investments inadmissible.
The Commission also noted that aggregation across investment subsections (A) and (B) and a general overemphasis on investments instead of their relevance to each product was an error. Consequently, the ITC concluded that the complainants did not successfully demonstrate the economic prong of the domestic industry requirement with respect to all the involved 21 patents.
This case underscores the importance of correctly allocating investments, especially in cases with non-overlapping patents. Complainants must meticulously present their total investments per patent to avoid any failure of proof. The ITC's future decisions will further clarify the domestic industry requirement in section 337 and the scope of its Interim ID program.
Thank you for listening to Womble Perspectives. If you want to learn more about the topics discussed in this episode, please visit The Show Notes, where you can find links to related resources mentioned today. The Show Notes also have more information about our attorneys who provided today's insights, including ways to reach out to them.
Don't forget to subscribe via your podcast player of choice so that you never miss an episode. Thank you again for listening.
