Responding to a Complaint and Notice of Investigation in Section 337 Investigations before the United States International Tr

2010/09/19,By Ping Gu, Tony Pezzano, Kent Stevens and Jeffrey Liao,[Trade Secrets]

Any party which exports to the United States may potentially be the target of an Investigation in the United States International Trade Commission (“ITC”) under Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. Sect. 1337) (“337 Investigation”) on the grounds that the products imported infringe one or more claims of one or more United States patents owned by the party bringing suit (hereinafter referred to as the “Complainant”).  If the Complainant is successful in establishing a violation of Section 337, the ITC may issue an “exclusion order” and direct U.S. Customs and Border Protection to block the entry of the accused products into the United States.  Thus, once a party (hereinafter referred to as the “Respondent”) is served with a Complaint and Notice of Investigation from the ITC, it is advisable to promptly assess strategy for defending the suit to challenge the Complainant’s claim in order to preserve Respondent’s right to export its accused products to the United States market.  This article describes the first step in defending an ITC case -- preparing the required Response to the Complaint and Notice of Investigation.
The first step in defending a 337 Investigation is to prepare and file a formal written response to the Complaint and Notice of Investigation (“Response”).  The Response must be filed and served in the ITC proceeding within 20 days of service[1] of the Complaint and Notice of Investigation on the Respondent, unless another date is specified in the Notice of Investigation or otherwise ordered by the Administrative Law Judge.[2]  Filing of the Response can be done either through traditional paper filing or via electronic filing at in compliance with the Commission’s Handbook on Electronic Filing Procedures.[3]  The Response must adhere to the following formatting requirements:[4]
·    Response must be a clear black image on white paper;
·    Typed matter shall not exceed 6 ½ by 9 ½ inches using 11-point or larger type and shall be double-spaced between each line of text using the standard of 6 lines of type per inch;
·    Text and footnotes shall be in the same size type;
·    Quotations more than two lines long in the text or footnotes may be indented and single-spaced; and
·    Headings and footnotes may be single-spaced.
A table of contents is optional. The front page of the Response must present the following information:[5]
·    a caption setting forth the name of the Commission (i.e. the United States International Trade Commission);
·    the title of the investigation (e.g. In the Matter of Certain ...);
·    the investigation number, if any, assigned to the investigation (e.g. Investigation No. 337-TA-123); and
·    the name, address, and telephone number of the respondent and any officer, attorney, or agent thereof signing the response.[6]
The first section of the Response should have a heading such as “Specific Response to the Complaint.” This section must address every allegation in the Complaint, and typically uses subheadings and numbering to correspond with the headings and numbering of the paragraphs of the Complaint, with a footnote stating that the headings are for organizational purposes only and do not constitute an admission that the allegations of the headings are actually correct.  It is important to respond to the Complaint carefully, as “Allegations of a complaint and notice not thus answered may be deemed to have been admitted.”[7]  While it is common to admit facts such as Respondent’s place of incorporation and address, one should always specify what one is admitting to avoid making a general admission.  In response to allegations concerning ultimate legal questions, if one has a good faith basis to believe that there is no infringement, that an asserted patent claim is invalid or unenforceable, and/or that there is no unlawful importation, for example, one should also specifically deny such allegations. Furthermore, whether or not anything is specifically admitted and/or specifically denied in response to a given paragraph in the Complaint, one should always set forth a general denial in the Response except as to matters admitted.  If Respondent is without information as to whether an allegation is true (for example, whether Complainant has a domestic industry), one should state so, and then deny the assertion on that basis.  Here are some illustrative examples of language that could be used in response to a paragraph of the Complaint:
·    Respondent admits that it is a ________ corporation having a principal place of business at __________________.  Except as admitted, Respondent denies the allegations of Paragraph ___ of the Complaint.
·    Respondent denies that Respondent infringes any valid and enforceable claim of U.S. Patent Nos. ______________.  Respondent further denies any unlawful importation, sale for importation, and/or sale after importation by Respondent.  Except as admitted, Respondent denies the allegations of Paragraph ___ of the Complaint.
·    Respondent is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph ___ of the Complaint, and, therefore, denies each and every allegation.
Next, the Response should have a “Specific Response to the Notice of Investigation” section.  This section typically denies that there has been a violation of Section 337 using similar wording as the part of the Notice of Investigation which begins, “Ordered that, pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether ...” 
Next, a Response must include additional information under a heading such as “Statement Pursuant to Rule 210.13(b)” and include statistical data on the “quantity and value of imports” of the accused products into the United States, when available, and, for Respondents who are importers, “the Harmonized Tariff Schedule item number(s) for importations of the accused imports”.[8]  The Harmonized Tariff Schedule is a comprehensive system that assigns a 10-digit classification code to every type of good entering the United States and provides the current tariff rate that must be paid on that good, and can be found at  The ITC Rules further require that, “Each response shall also include a statement concerning the respondent’s capacity to produce the subject article and the relative significance of the United States market to its operations. Respondents who are not manufacturing their accused imports shall state the name and address of the supplier(s) of those imports.” [9] 
A Respondent may not assert any counterclaims as part of the 337 Investigation against it.  Instead, any counterclaims will be removed to a parallel U.S. district court action, unless they are asserted as part of a separate 337 Investigation against Complainant. However, a Respondent may set forth affirmative defenses under a heading such as “Affirmative Defenses”. Some examples of common affirmative defenses include:
(1) non-infringement - the accused products do not practice the asserted patent claim(s);
(2) obviousness – the asserted patent claim(s) is invalid because its subject matter would have been “obvious” to a “person skilled in the art” (i.e. the technical field of the invention) in light of the “prior art”, i.e. printed publications and what was otherwise already publicly known before the invention was made;
(3) anticipation - the asserted patent claim(s) is invalid because its subject matter was already disclosed in a single prior art reference, either expressly or inherently.  To be successful in establishing the obviousness or anticipation defenses, a party must show that the patent examiner erred in granting the patent in light of the prior art that was considered by the patent examiner and/or produce new prior art that was not considered by the patent examiner;
(4) lack of written description – the asserted patent claim(s) is invalid because the corresponding description in the patent is not sufficient to show that the inventors actually were in possession of the claimed invention at the time the patent application was filed;
(5) lack of enablement – the asserted patent claim(s) is invalid because the corresponding description in the patent is not sufficient to teach a person skilled in the art how to use the claimed invention;
(6) lack of best mode – the asserted patent claim(s) is invalid because the patent does not disclose the best way of using the invention possessed by the inventors;
(7) patent misuse – the patent should not be enforced because the patent owner has used the patent in a way which illegally suppresses competition;
(8) inequitable conduct – the patent should not be enforced because it was obtained through fraud on the Patent Office; for example, withholding experimental results or prior art references known to be material from the Patent Office during prosecution of the patent;
(9) license – Respondent’s use of the asserted patent claim(s) was authorized by the Complainant, for example, through a previous license or settlement agreement; and
(10) lack of domestic industry – the Complainant does not have an industry in the United States either practicing or licensing the asserted patent(s), and thus is not eligible to avail itself of the ITC Section 337 process.
These affirmative defenses must be pled with as much specificity as possible in the Response.  In other words, one must identify the specific facts giving rise to Respondent’s belief that any affirmative defense pled is justified. For example, when pleading non-infringement, Respondents are encouraged to, “when practicable”, present a “claim chart” comparing and contrasting the asserted patent claims with a representative accused product or the process by which it was made, as well as drawings or photographs of the accused product or process used to make such product clearly labeled so that they can be read in conjunction with the claim chart.[10]  In practice, however, Respondents do not always submit claim charts in Response to the Complaint (and the rule that requires the charts “when practicable”), perhaps because they do not have enough information to prepare a claim chart.  If not submitted with the Complaint, a claim chart will eventually be required during discovery in the investigation via responses to contention interrogatories.  As for pleading obviousness or anticipation, Respondents should provide a copy of any prior art relied upon and show how this prior art renders a claim invalid.[11]  Furthermore, the ITC Rules indicate that, “if practicable”, each Respondent is to submit the accused product imported or sold by that Respondent as an exhibit at the time the Response is filed, unless it has already been submitted by the Complainant. Large or toxic products do not have to be submitted, and, in practice, Respondents rarely submit exemplars of their accused products.[12]
The Response must be signed by at least one attorney of record in the attorney’s individual name, or, if the Respondent is not represented by an attorney, by a duly authorized officer or agent of Respondent, and must state the signer’s address and telephone number, if any.[13]  It is important that the Response be accurate and truthful, as the ITC may impose sanctions on attorneys, law firms, or the Respondent itself otherwise (similar to Rule 11 of the U.S. Federal Rules of Civil Procedure).[14]  There are four required representations deemed to be made when the Response is filed, which are commonly set forth on a separate “Verification” page appended to the Response, to be signed by an officer of the Respondent, of the following form:
       I, [Name of Officer], declare, in accordance with 19 C.F.R. §§ 210.4(c) and 210.13(b), under penalty of perjury, that the following statements are true:
1.            I have read the foregoing Response to the Complaint and Notice of Investigation (“Response”);
2.            The Response is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of the investigation or related proceeding;
3.            To the best of my knowledge, information and belief, based on reasonable inquiry, the Response contains claims, defenses, and other legal contentions that are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
4.            The allegations and other factual contentions contained in the Response have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
5.            The denials of factual contentions contained in the Response are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
Dated:  ___________
                                                        [Name of Officer]
                                                        [Title of Officer]
                                                        [Name of Respondent]
A Certificate of Service must also be prepared for the Response, certifying the manner (e.g., Federal Express, 1st Class Mail, etc.) and date of service of the Response[15] on the Secretary of the ITC, the Administrative Law Judge assigned to the Investigation, the ITC Investigative Attorney assigned to the Investigation, and Complainant or Complainant’s counsel, along with their mailing addresses.  The details as to the permissible or required modes of service between the parties and the Administrative Law Judge for the Investigation are usually specified in the Ground Rules issued by the Administrative Law Judge for the conduct of the Investigation.
Sometimes, the Response may contain confidential business information (“CBI”), which is information of commercial value, the disclosure of which is likely to cause substantial harm to the competitive position of the organization from which the information was obtained (e.g. trade secrets, identification of customers, amount of income, profits, losses, or expenditures, etc.).[16]  For example, the information required by ITC Rule 210.13(b) discussed above may qualify as CBI.  Usually, the Administrative Law Judge will issue a “protective order” at the outset of an Investigation requiring that certain procedures be followed to maintain the confidentiality of CBI and defining who is eligible to have access to CBI.  In general, outside counsel and their agents are permitted to have access to CBI, but in-house counsel for the parties are not.  If no suitable protective order is yet in place at the time of filing the Response, a request for confidential treatment should be submitted to the ITC along with a copy of the Response clearly marked on the cover page as containing Confidential Business Information and identifying the information for which confidential treatment is requested using brackets, as well as a non-confidential version of the Response.[17]  The non-confidential version of the Response must be filed and served on other parties to the investigation within 10 calendar days after filing the confidential version.[18]
While preparing the Response to the Complaint and Notice of Investigation, as described above, is only the first step in defending a 337 Investigation, it is important to do so promptly and thoughtfully to challenge the Complainant’s claim, since the Response sets the stage for Respondent’s defense of the 337 Investigation. A carefully considered, legally sophisticated defense of a 337 Investigation, starting from the earliest stages of the case with the preparation of the Response, is critical to maximize the chances of avoiding the issuance of an “exclusion order” and preserve Respondent’s ability to export its accused products to the United States market. 

[1] Service of a Complaint and Notice of Investigation is effected by the ITC itself.  Accordingly, since Complaints and Notices of Investigation become publicly available shortly after they are filed, it is possible that a Respondent may actually obtain a copy of the Complaint and/or Notice of Investigation without having been formally served.  The 20-day time limit for filing and serving the Response in the ITC proceeding does not begin to run until Respondent has been formally served.
[2] ITC Rules § 210.13(a)
[3] ITC Rules § 201.8(f)
[4] ITC Rules § 210.4(f)
[5] ITC Rules § 210.4(a)
[6] ITC Rules § 210.13(b)
[7] ITC Rules § 210.13(b)
[8] ITC Rules § 210.13(b)
[9] ITC Rules § 210.13(b)
[10] ITC Rules § 210.13(b)(1)-(2)
[11] ITC Rules § 210.13(b)(3)
[12] ITC Rules § 210.13(c)
[13] ITC Rules § 210.4(b)
[14] ITC Rules § 210.4(d)
[15] ITC Rules § 201.16(c)
[16] ITC Rules § 201.6(a)
[17] ITC Rules § 201.6(b)
[18] ITC Rules § 210.4(f)(3)(ii)

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