Copyright Law Basics – the ITC 337 proceedings
Copyright Infringement, the ITC, and Section 337: What You Need to Know
From the moment your creative expression materializes into a fixed, tangible form, copyright protection attaches. There is actually no need to formally register your creative works, although federal registration certainly has its advantages (such as allowing the copyright holder to file a federal lawsuit alleging infringement). This blog discusses how these type of IP rights (intellectual property) might be enforced through the International Trade Commission (“ITC”) . We can help companies prosecute and defend federal and international copyright law cases.
What is the ITC?
The United States International Trade Commission (“ITC”) is a Federal agency with broad investigative responsibilities on matters of trade. For example, the ITC investigates the effects of dumped and subsidized imports on domestic industries, conducts global safeguard investigations, and hears cases involving imports that are alleged to infringe various intellectual property rights. The ITC offers an alternative forum to litigating intellectual property disputes, including copyright infringement cases. Because the ITC differs in its' available remedies and procedure, it may be an attractive option aside from litigating copyright disputes in District Courts across the United States.
Where is The ITC located?
The ITC is located at:
500 E. Street, SW, Washington, D.C. 20436. However, when filing a Section 337 Complaint, alleging infringement of intellectual property rights, documents to be submitted to the ITC must be filed with Docket Services, 500 E Street, S.W., Room 112-A, Washington, D.C. 20436. The ITC also allows electronic filing in certain situations.
What is Section 337?
Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337) authorities the ITC to investigate allegations of unfair practices in import trade by hearing complaints brought by U.S. intellectual property owners against alleged infringing imports. The ITC can also conduct Section 337 investigations into complaints regarding unfair trade practices on its own initiative. In order for the ITC to have jurisdiction to hear a complaint of an alleged violation, the individual or company bringing the claim must show that the accused's products are imported into the U.S. This is called in rem jurisdiction, and because the ITC asserts in rem jurisdiction over the accused products, (not personal jurisdiction over the defendants,) the product itself is the concern. If the product(s) are not imported into the U.S., the ITC does not have jurisdiction. So there needs to be an element of international copyright infringement at issue (such as importing illegal or counterfeited software, videos, computer games, books, comics, songs, art work, photography, or other creative items).
What types of cases does the ITC hear?
Section 337 investigations most often involve claims regarding intellectual property rights. As such, the ITC is authorized to hear a wide variety of intellectual property infringement cases, including:
- patent infringement of imported goods;
- trademark infringement by imported goods;
- utility and design patents;
- registered and common law trademarks;
- infringement of registered copyrights;
- mask works or boat hull design;
- misappropriation of trade secrets or trade dress;
- passing off and false advertising;
- antitrust claims relating to imported goods.
Is this a court of law (with right to a jury trial) or an administrative procedure?
Section 337 investigations are administrative procedures. Accordingly, there are a number of significant differences between a Section 337 investigation or subsequent hearing and intellectual property litigation in a U.S. District Court. Click here to see our federal court experience. Section 337 investigations are heard by an Administrative Law Judge (“ALJ”) via the Administrative Procedures Act (19 U.S.C. § 1337). The ALJ presides over all aspects of the case — from when the ITC institutes the investigation, through the evidentiary hearing, and post-hearing briefing. After the hearing, the ALJ prepares a written decision called an Initial Determination (“ID”). The ID is subject to review by the ITC, which then issues a final decision on the investigation called a Final Determination (“FD”). A jury is not involved in Section 337 investigations or hearings.
What remedies are available in an infringement action?
The primary remedies available through a Section 337 investigation are either an exclusion order or a cease and desist order. An exclusion order directs U.S. Customs and Border Protection (“Customs”) to stop the infringing imports at the border and this order is issued directly by the ITC. The ITC may also issue cease and desist orders against the importers who were named in the complaint (and other persons engaged in acts that violate Section 337 )to prevent them from selling products that may already be in the U.S. Contrast this with remedies available if the infringement claim were litigated in a U.S. District Court, (ex. Northern or Central District of California) the possible remedies could include monetary damages (up to $150,000 per “willful infringed work“), attorney fees, injunctions and other remedies.
Other benefits of ITC proceeding over a federal copyright lawsuit
One other important benefit is that Section 337 investigations are favored by claimants due to the very fast turnaround from initial filing to decision. In U.S. District Court, it could take up to three years to reach a resolution (not counting any time it may take for an appeal). In Section 337 investigations, a FD can be issued in as early as 15 months.
What types of copyright cases may come before the commission?
From 2006 – 2015, the ITC received, investigated, and held proceedings an average of 50 new investigations per year, in all varieties of intellectual property infringement allegations. The most frequent allegation is Patent Infringement (basically “inventions”). Of the total number of Active Investigations, Patent Infringement has represented the largest percentage of types of unfair acts alleged from 2006 – 2015. Yet, it is important to note that the ITC has heard nine copyright infringement cases from 2009 – 2015. Copyright infringement cases concern matters such as:
- Toy Figurines and Toy Sets
- Personal Transporters, Components, and Manuals
- TV Programs, Literary Works for TV Production and Episode Guides
- Electric Fireplaces, Components, Manuals, Manufacturing Processes
- Radio Control Hobby Transmitters and Receivers
- Lighting Products
- Restraining Systems for Transport Containers, Components and Methods
- Energy Drink Products
Software publishers like Microsoft have also utilized Section 337 to protect their intellectual property, yet, nearly all of their allegations pertain to cases involving patent infringement. More information is available here. It is important to note that software code can be protected by many different forms of intellectual property such as patents, trade secrets and copyright law.
What is the process for initiating a Section 337 investigation?
While Section 337 offers many benefits that litigating in U.S. District Court does not provide, a complainant has significant hurdles to overcome while preparing to file and compiling necessary documentation to support the complaint, if the complaint involves an alleged patent infringement. Because the ITC is a fact pleading venue, a detailed analysis of importation, potential remedy issues, and detailed claim charts for all patent claims asserted are necessary. Although alleging a copyright infringement will not require a compilation as detailed as patent infringement, it is important to seek the advice of a law firm that has the experience to guide you through this process. Here are some other things to keep in mind:
(2) The pre-filing investigation should also include a meeting with the Staff, who can help vet the case and provide feedback on the sufficiency of the allegations contained in a draft complaint. This is also helpful to ensure the Importation requirement, domestic industry requirement, and to ensure the proposed remedies are satisfied.
(3) Next, if the ITC initiates an investigation, it will serve the complaint and notice of investigation on respondents. Unlike District Court, the ITC does not require complainants to serve respondents (unless the complaint requests temporary relief).
(4) Each respondent must file its response to the complaint within 20 days of service of the Notice of Investigation. Foreign companies are allowed ten additional days. This response time is similar to response times in federal courts across the USA.
(5) After the answer is filed, an initial scheduling conference will set forth the next steps in the case.
(6) A claim construction hearing generally occurs next as part of the final evidentiary hearing. After an exchange of discovery, expert reports, and depositions, the ALJ prepares a written decision called an Initial Determination (“ID”). The ID is subject to review by the ITC, which then issues a final decision on the investigation called a Final Determination (“FD”). As noted above, a jury is not involved in Section 337 investigations or hearings.
Do I need to hire a intellectual property law firm to handle my case?
As with many types of legal cases from unfair competition to financial elder abuse or invasion of privacy claims you can always try to handle the case yourself. However, sticking to what you do best (i.e. running your business and making money at that) is usually why most companies prefer to hire counsel to represent them. Our firm provides business and intellectual property services for creative entrepreneurs and innovative business organizations in both California and Arizona and we handle federal copyright and software infringement cases across the county. We can help protect and enforce your company's intellectual property including copyrights, trademarks, trade dress and trade secrets. We also are a leader in the area of software audits and compliance handling cases involving Microsoft, BSA (business software alliance), SIIA and Autodesk licensing audits. Click here for more information about our software audit practice.
Contact us for more information
If you need help filing or defending an ITC infringement claim, contact us at (877) 276-5084. We offer a free initial consultation. Attorney Steve Vondran is a former elected executive counsel member to the Arizona State Bar Intellectual Property Section and a member of the Arizona Technology Council. Also a member of the Copyright Society of the U.S.A. and a member of the International Trademark Association (“TTA”), American Intellectual Property Law Association (“AIPLA”) and a former member of the Sports Lawyers Association. He is a former privacy consultant for Experian, and legislative analyst for the Identity Theft Resource Center in San Diego.