The International Trade Commission has become a magnet for high-stakes patent litigation. The average number of ITC complaints filed each year during the past decade is nearly triple the average for the previous decade. The ITC’s recent popularity as a venue for patent litigation is remarkable, particularly when one considers that the ITC cannot award monetary damages. It is due, in large part, to three factors. First, the ITC offers a powerful remedy: an “exclusion order” that bars the importation of infringing products into the United States, effectively locking infringers out of the U.S. market. Second, the ITC is a true “rocket docket,” typically deciding its cases (called “investigations”) within 16 months from their institution, which is far faster than most district courts. Third, the ITC’s unique jurisdictional requirements give the ITC power over companies that manufacture, package or test their products overseas. These factors have made the ITC extremely attractive to patent holders.
The Exclusion Order: Exception to ‘eBay’
The ITC offers patent holders a unique and powerful remedy: an exclusion order, which is enforced by U.S. Customs, to stop infringing products at the border. The exclusion order differs from the injunction available from a district court in several important ways. First and foremost, the ITC grants exclusion orders as a matter of course. In the past, this was equally true of district court injunctions: If the patent was valid and infringed, the district court would routinely grant a permanent injunction. The threat of an injunction obviously gave patent owners very significant leverage in settlement negotiations.
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