Talkin’ Trade: Early Off-Ramps from ITC Section 337 Investigations?

August 17, 2023
18:25 minutes

Section 337 investigations at the U.S. International Trade Commission are known for their speed. But in recent years, the ITC has introduced multiple avenues designed to resolve some of these cases even more quickly—including just a few months after institution. On this episode of Ropes & Gray’s ITC-focused podcast series, Talkin’ Trade, IP litigators Matt Rizzolo, Matt Shapiro, and Brendan McLaughlin are joined by summer associate Ava Kamb to examine the development and history of the ITC’s so-called “100-day program,” as well as the more recent interim initial determination pilot program. They discuss the purpose and motivations behind these early disposition proceedings, the mechanics of how they are invoked and progress to a resolution, and consider whether these programs have lived up to expectations.


Matt Rizzolo: Welcome back to Talkin’ Trade, a podcast where we explore the ins and outs of Section 337 investigations at the U.S. International Trade Commission. I’m Matt Rizzolo, and with me today are my Ropes & Gray IP litigation colleagues Matt Shapiro and Brendan McLaughlin, and we’re also thrilled to be joined by one of our talented summer associates, Ava Kamb. It’s great to have everyone here today.

As we’ve mentioned in previous episodes, Section 337 investigations at the ITC are notorious for their speed—in fact, the statute requires that they must conclude “at the earliest practicable time.” To help the Commission reach this goal, it has introduced—over the past decade—two separate programs that are the subject of today’s episode: the so-called “100-day program” and the newer interim initial determination program. Over the next 20 minutes or so, we’ll talk about what these programs are, why they were created, and whether they may be working as intended or not. But first, Brendan, what’s been new at the Commission?

Brendan McLaughlin: Thanks, Matt. The ITC has been quiet recently—it has not received a single new complaint since mid-July, the Commission has issued two public opinions in the -1286 and -1323 investigations, and ALJs have issued public final initial determinations in the -1328 and -1318 investigations. The Commission’s opinion in -1286 is worth a read to learn more about determining when respondents are in default and how to secure remedial orders against defaulting parties. And in the -1323 investigation, the Commission weighed in on the hot-button issue of obviousness-type double patenting, affirming that a patent which has been granted extra life under a patent term adjustment may nonetheless be invalidated under the ODP doctrine.

While the Commission may have been quiet, several ITC-related issues are percolating at the Federal Circuit. First, the AliveCor v. ITC appeal is proceeding expeditiously and involves legal and factual challenges to the ITC’s domestic industry and public interest determinations. Second, the Federal Circuit will hear oral argument in early September in Roku v. ITC, a case that will address how the Commission evaluation of R&D and engineering-based domestic industry under Section 337(a)(3)(C). Both of these cases may have implications for current and future ITC proceedings.

Matt Rizzolo: Thanks, Brendan. And before we get into today’s main topic, there has been some concern over the past few years that the ITC hasn’t been living up to its reputation for speed. Ava, I understand you’ve taken a look at some of the ITC’s historical stats on the length of investigations—what can you tell us about this data?

Ava Kamb: Thanks, Matt. The Commission has published statistics on the number of investigations completed on the merits and the average length of those investigations since 2006. These show that the Commission generally completed investigations within about 16 and a half months (with a few exceptions) through 2018. But over the last few years, the average length of investigations has continued to rise, now typically averaging over 17.5 months. It’s worth noting that the Commission has set a performance goal of, on average, 15 months to completion of an investigation by Fiscal Year 2026—significantly below today’s average.

Matt Rizzolo: Yes, the length of investigations does seem to have been slowly creeping up over time. While previously unfathomable, it’s not uncommon now to see an ALJ set a 20-month target date for an investigation where issues might be sufficiently complicated or if there are a substantial number of respondents. Do we have a sense for why it’s now taking longer to issue determinations in these investigations?

Ava Kamb: It’s likely a combination of a few things. First, the Commission has seen an influx of complaints that has increased its workload. This has been due in part to an increase in non-practicing entity activity, which itself is likely a response to the Commission clarifying a decade ago that a complainant may rely upon a licensee’s activities to satisfy the domestic industry requirement. Second, in recent years, the Commission has been short staffed, with openings at both the Commission and ALJ levels. For example, last year, there was a time when there were only four active ALJs to manage all Section 337 cases. Fortunately, now the Commission is back at full force with six ALJs. Third, many recent investigations have introduced novel ITC-specific issues that have required more time and attention from the Commission. For example, the Commission recently issued a notice of its determination to review an FID in the -1288 investigation where it posed 14 distinct questions to the parties, some of which concern ordinary patent law issues, others concern the intersection of the ITC and the PTAB, and some involve intricate domestic industry economic prong issues. Fourth, it can’t be overlooked that the COVID pandemic definitely slowed things at the Commission for a couple of years.

And, of course, there will always be investigation-specific reasons for why the Commission takes a long time to render a decision in an investigation. For example, as discussed in the last episode, in the -1313 investigation, the ALJ had to repeatedly extend the target date because of foreign discovery-related issues.

Matt Rizzolo: Right—it’s tough to attribute lengthy target dates to just one particular issue, but I’ll also add that Section 337 investigations in general have become increasingly complex, not only with the technology involved or the number of patents asserted, but with how complainants are presenting their cases and accusing more and more respondents of violating Section 337 in one investigation.

All of this has helped lead the Commission to consider how it might shorten investigations and streamline its workload—which is where the 100-day program came in.

Matt Shapiro: That’s right, Matt. In 2013, the Commission launched a pilot program “to test whether earlier ruling on certain dispositive issues in some Section 337 investigations could limit unnecessary litigation, saving time and costs for the parties involved.” This program was created in an attempt by the Commission “to improve its Section 337 investigation procedures and meet its obligation to complete investigations expeditiously.”

When the Commission launched the 100-day pilot program, it noted that in typical investigations, rulings on some investigation-dispositive issues—such as domestic industry—are not issued until months after an investigation is instituted and the parties have invested heavily in the proceeding. The pilot program was meant to take issues such as domestic industry, importation, and standing that could be investigation dispositive and issue an initial ruling in 100 days—hence the informal “100-day program” nickname that has now become ubiquitous. The Commission recognized that issuing early determinations on these issues could significantly decrease the time taken to complete an investigation, and conserve party and Commission resources.

Matt Rizzolo: I’ll note that while it started as a pilot program, the 100-day program was officially codified in the ITC rules back in 2018. Matt, could you walk us through a typical situation where the Commission institutes a 100-day proceeding?

Matt Shapiro: Absolutely. Eight days after a complaint is filed with the Commission, a proposed respondent may file a five-page request for the Commission to invoke the 100-day program. These requests must identify the bases for entry into the program, and while entry is rare—as we’ll discuss in a little bit—these filings may still be helpful for flagging issues early on for both the Commission and ALJ presiding over the investigation. The complainant is then allowed to file a response to a 100-day request, stating why entry into the program is unwarranted—for example, why the issue identified in the request would be unlikely to resolve the investigation or the issue is too complex to be resolved through the program.

Before instituting, the Commission will consider these filings and specifically note in its institution notice whether it has designated the investigation for the 100-day program.

If your investigation is entered into the program—whether you’re the complainant or the respondent—buckle up and hold on. If you thought s typical ITC investigation moves quickly, you would be shocked at the pace of a 100-day investigation. For example, in the -1352 investigation—the most recent investigation entered into the 100-day program—the Chief ALJ set the end of discovery for issues covered by the 100-day proceeding for less than three weeks after the ALJ issued his procedural schedule, and the hearing on the 100-day issues were slightly over one month from the setting of the procedural schedule.

After the hearing, the parties then file post-hearing briefs on the 100-day issues, and the ALJ must issue an initial determination 100 days after institution, except for good cause shown.

And in the event that an investigation is not fully resolved in the 100-day initial determination, the remaining issues of the investigation will then proceed on a compressed timeline.

Matt Rizzolo: I could tell you from experience that these programs are seriously fast—but what happens on discovery on other issues during the 100-day proceeding?

Matt Shapiro: That’s entirely up to the ALJ’s discretion, Matt. In most cases, the ALJ will stay discovery on other issues so that the parties may devote their time and resources to the issues in the 100-day proceeding—but that’s not always the case.

Matt Rizzolo: I do not envy parties that need to keep developing other issues outside of those in the 100-day proceeding, which is certainly compressed and fast enough as it is. Because of this fast pace, some respondents can have a quick escape from an ITC investigation. How many times has the Commission used the 100-day program?

Matt Shapiro: Dozens and dozens of respondents have requested it, but few have gained entry into this exclusive program. In fact, since 2013, only 15 investigations have been entered into the 100-day program—but over that same timeframe, the Commission has instituted approximately 500 investigations.

Typically, the Commission does not give detailed reasons for why it denies a request for entrance into the program. Instead, it often just states that an issue raised by a proposed respondent is too complex to determine within 100 days or would not dispose of the entire proceeding.

Matt Rizzolo: Even though it’s rarely granted, it does seem like the majority of respondents in ITC proceedings still take a shot at it. And we should point out that the Commission may use the 100-day program sua sponte, as it did recently in the -1352 investigation, which we touched briefly upon last episode.

So, of those approximately 15 investigations that were entered into the program, Ava, can you tell us what types of issues were decided in the expediated proceedings?

Ava Kamb: The Commission has instituted a 100-day proceeding to resolve several different types of issues. The most common by far is the domestic industry requirement—specifically, satisfaction of the economic prong. The Commission entered eight investigations into the 100-day program to decide economic prong issues. Additionally, the Commission has used the 100-day program to decide dispositive issues such as injury to domestic industry, patentable subject matter under 35 U.S.C. Section 101, preclusion based on a previous determination, contract defense, and standing.

Matt Rizzolo: The Commission has certainly shown a willingness to consider a variety of issues for inclusion in the 100-day program, but to have the best chance, the issues typically must be relatively straightforward and require minimal discovery. For example, where third-party discovery may be necessary, the Commission has repeatedly shown an unwillingness to entertain a 100-day request.

So, how did complainants and respondents fare in the 100-day investigations that have taken place so far?

Ava Kamb: Investigations entered into the 100-day program have typically been resolved fairly quickly, just as the Commission intended. Of the 15 investigations in the 100-day program, only two proceedings resulted in issuance of an early initial determination that fully resolved the case. In eight others, the parties settled or the complaint was withdrawn before the ALJ issued a decision. And of the remaining five investigations, three ended with the parties settling shortly after the ALJ issued an early ruling, while in the final two proceedings, the investigation proceeded to a final initial determination on all issues.

These outcomes seem to indicate that the 100-day program, when used, has worked as intended.

Matt Rizzolo: Given the efficacy of the 100-day program when it is used, but the low rate of its actual usage, some say that it hasn’t lived up to expectations. But on the other hand, the existence of the program itself may serve as a barrier to entry to the ITC, causing some complainants to draft their complaints in a way to avoid being subject to the 100-day program—for example, some complainants may choose to raise multiple patents, discard weak claims, or present multiple different supportable domestic industry theories.

Either way, that doesn’t mean that the Commission has given up on implementing new procedures to speed up Section 337 investigations. In May 2021, the Commission introduced the second program we are discussing today: the interim initial determination pilot program. Matt—what can you tell us about the interim ID program?

Matt Shapiro: Matt, as with the 100-day program, the interim ID program was expressly established to improve ITC procedures to meet the Commission’s statutory obligation to complete investigations as expeditiously as possible. Under the program, the ALJ may accept briefing and evidence on certain key issues, hold an early evidentiary hearing, and issue an early initial determination—does that sound familiar? But there are a few important ways the interim ID program differs from the 100-day program.

First, the Commission does not enter the investigation into the interim ID program—the ALJ presiding over the investigation does so, and this can be either sua sponte or upon request of a party to the investigation.

Second, while the 100-day program requires an investigation-dispositive issue, it is not so for the interim ID program—although the Commission expects the interim ID to at least resolve significant issues in advance of the main evidentiary hearing.

Third, the timeline for the interim ID program is not as rigid as in the 100-day program, and there is no defined timeframe in which the ALJ must issue an order. Rather, the ALJ is only required to issue an ID within 45 days of the interim ID hearing.

Matt Rizzolo: Sounds like a really good option for ALJs mid-investigation or early in the case to quickly resolve an investigation after the parties conduct maybe some early discovery and flesh out some issues. So, with all this added flexibility, the interim ID program must be used more frequently than the 100-day program, right?

Matt Shapiro: It might come as a surprise, but unfortunately, no. In the more than two years since its roll out, the interim ID program has been used just once, and that was in the -1291 and -1292 proceedings, which are two related proceedings brought by Kia and Hyundai asserting numerous design patents. There, in early 2022, Chief Judge Cheney sua sponte entered the investigation into the interim ID program immediately after institution. He set an interim ID hearing on the economic prong about three months after institution, making his interim ID due approximately three and a half months after institution.

However, instead of finding no domestic industry and quickly resolving the investigation, the Chief ALJ found that the complainant had satisfied the economic prong of the domestic industry requirement. Chief ALJ therefore had to set a new procedural schedule and continue the investigation to decide all other issues. In January 2023, then-presiding ALJ found that a violation of Section 337 had occurred. The Commission has decided to review in part this decision, and the current target date for concluding the investigation is September 26, 2023—approximately 20 months after the investigation was instituted.

No other investigations have been entered into the interim ID program, and it seems likely that ALJs have looked to -1291 and -1292 investigations as a cautionary tale of what might happen if the interim ID issues are not ultimately dispositive or do not lead to settlement.

Matt Rizzolo: Agreed. Some parties have requested access to the program, but all such requests have been denied so far. Now that the interim ID program is two years old and has only been used unsuccessfully so one time, it seems unlikely that the Commission will officially write it into its rules the way that it did with the 100-day program, but we’ll see. And it’s not to say that the Commission will give up on trying new ways to speed up investigations, efficiently resolve issues, and fulfill its statutory mandate. As the Commission continues to roll out new ideas in the future, we will certainly keep you all posted.

That takes us to the end of today’s episode of Talkin’ Trade. You can find this podcast and other Ropes & Gray podcasts on Apple Podcasts, Spotify, or I’m Matt Rizzolo, and on behalf of Matt Shapiro, Brendan McLaughlin, and Ava Kamb, thank you all for listening.