Definition of 'Domestic Industry' Shifting in ITC Practice

In recent years, actions before the U.S. International Trade Commission to exclude importation of allegedly unfairly competitive products have become the actions of choice. As a mission, the ITC is an independent federal agency that protects domestic industries from unfair trade practices. The ITC has been seen as an attractive alternative forum to federal courts due to it being perceived as a cheaper and faster option to traditional infringement litigation with the ability to quickly enforce equitable relief through importation bans. Basically, the ITC does not award damages, but it can close the borders to importation.

As a consequence of being subject to an exclusion order, many companies will look to license the asserted rights so they can continue to sell into the United States. This has the effect of giving the rights holder an opportunity to negotiate payments for past infringement and future royalties. At the same time, the rights holder has not had to demonstrate many of the economic factors that are considered in a district court action where monetary damages can be awarded. This feature of ITC actions has made them increasingly popular for use by nonpracticing entities and foreign rights holders who did not have a significant presence in the U.S. to sufficiently prove the factors considered under a traditional Georgia Pacific damages analysis. This advantage is gradually changing and it may result in a changed circumstance where an ITC action can involve large amounts of economic discovery for jurisdictional purposes without the potential benefit of collecting infringement damages.