Abstract

The U.S. International Trade Commission’s enforcement of Section 337 of the Tariff Act protects domestic industries from the consequences of unfair competitive acts in the importation of goods into the U.S. that infringe on U.S. IP rights. The power of the Commission is limited primarily to issuing exclusion orders against infringing imports into the U.S. Because upon finding of a violation, an exclusion order is presumed to serve the public interest, the alleged infringing importer (respondent) must bear the burden of proving by the preponderance of evidence that statutorily-specified public interest factors justify an exception from issuance of the order. This paper analyzes the statute, regulations, case law, and administrative precedents that allocate the burden of persuasion for these factors onto the respondent. This burden of proof is substantive, including the burden of showing patent holder’s market power, higher prices, lack of alternatives to consumers, infeasibility of design-around the patent holder’s claims, national security imperatives, showing essentiality for standard implementation of patent claims subject to Fair, Reasonable and Non-Discriminatory commitments, and showing that refusal to license such essential patent claims caused a patent “holdup.” It is shown that these exceptions are rare and narrowly applied. Through more than a thousand investigations, the Commission applied the exception only four times.

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