The International Trade Commission ("ITC") is an increasingly popular forum for patent and trademark litigation, with a record number of 70 unfair competition cases filed in 2011 alone. There are currently 73 cases pending in the ITC, and the statutory vehicle for this growing litigation is 19 U.S.C. § 1337, which prohibits "unfair methods of competition and unfair acts in the importation of articles. . . in the United States." (U.S. ITC, FY 2011 Press Release: Highlights: USITC Sees Record Number of Intellectual Property Infringement Cases Filed at http://1.usa.gov/Jicc9z U.S. ITC, Pending 337 Investigations, at http://1.usa.gov/Jicc9z OpenView (both visited Feb. 28, 2012).

Given the forum's growing popularity, attorneys representing commercial clients should have a basic understanding of this forum, its procedural particularities and its advantages. For patent and trademark holders faced with unfair competition from abroad, it may be a desirable alternative to federal district court. On the other side, businesses who import their products may find themselves brought before the ITC in a section 337 case, and they may turn to their general commercial litigators for advice about litigating in this forum.

Basic Overview of the ITC

After a complaint is filed with the ITC, the Commission decides whether to institute an investigation. The notice of the investigation is published in the Federal Register, which starts the clock ticking for the named respondents to file their response. The case will be assigned to one of six Administrative Law Judges ("ALJ") who will set his procedural schedule for case milestones.

Each ALJ also has his own Ground Rules, which supplement the procedural regulations set forth in 19 C.F.R. § 210. These regulations are similar, although by no means identical, to the Federal Rules of Civil Procedure. The ALJ also will issue a standard protective order governing confidential information. Attorneys for parties entering an appearance in an ITC case must agree to abide by the protective order, and confidential business information designations are treated very seriously.

The ITC's jurisdiction is directed at the imported goods at issue in the case, and is, therefore, in rem rather than in personam. Limited remedies are available in the ITC. Its primary mechanism of enforcement is the issuance of exclusion orders, either general or specific in nature. A general exclusion order bars any infringing products from entry into the United States, regardless of its source. A limited exclusion order bars importation of infringing products by a named respondent to the investigation. Exclusion orders are enforced by the U.S. Customs & Border Patrol. The ITC also can issue cease and desist orders enjoining the distribution or sale of imported, infringing products already in U.S. warehouses of an infringing party. Cease and desist orders are enforced by the ITC.

After trial, the ALJ issues an Initial Determination, which is then presented to the Commission. If the Commission declines to rule on the Initial Determination, it becomes final. The Commission also can issue its own ruling or can remand the case for further consideration. Appeal from the Commission is directly to the Federal Circuit.

Procedural Considerations

Litigation in the ITC is governed by ITC regulation and specific rules set forth by the ALJ. Because these regulations differ from the federal rules, they should be carefully reviewed. The ALJ's Ground Rules also can be very specific, and litigants should adhere closely to them. Beyond this different procedural framework, several other key differences from typical federal court IP cases are worth understanding at the outset.

• The Office of Unfair Import Investigations: The United States is a party to active ITC investigations, and its interests are represented by the Office of Unfair Import Investigations ("OUII"). Until mid-2011, each case brought before the ITC was automatically staffed with an OUII attorney. This is no longer true with new cases. Instead, the OUII staffs cases in which its specific expertise is required. Whether representing a complainant or a respondent in an ITC action, if your case is staffed with an OUII attorney, consider yourself lucky. The OUII brings a wealth of experience with the forum and can help you navigate its particularities.
• The Domestic Industry Requirement: To bring a case in the ITC, a complainant must demonstrate that "an industry in the United States, relating to the articles protected by the patent . . . exists or is in the process of being established." (19 U.S.C. § 1337(a)(2)). There are two prongs of the domestic industry requirement: the technical prong and the economic prong. (In the Matter of Certain Display Controllers and Products Containing Same, Inv. No. 337-TA-491/481, 2005 WL 996252, Commission Op. (Feb. 4, 2005)). To establish the technical prong (in a patent case), the complainant must demonstrate that at least one of its products practice the patent in suit. Id. To establish the economic prong, the complainant must show that it has made a significant investment in plant or equipment in the United States, a significant employment of U.S. labor or capital, or a substantial investment in exploitation of the patent, such as by engineering, research and development or licensing. (19 U.S.C. § 1337(a)(3)). The domestic industry requirement is in constant refinement as ALJs and the Commission issue new interpretative rulings that provide further guidance about the interplay of the factors and the level of proof necessary to show a domestic industry.
• Parallel Federal Court Proceedings: Where parallel proceedings exist before the ITC and a federal district court, a respondent in the ITC proceeding may seek a stay of the federal district court action until the determination of the ITC becomes final. (28 U.S.C. § 1659(a)). A stay under this statutory provision is mandatory. A final decision by the ITC may be persuasive authority to a federal district court; however, it is not binding. Thus, parties to parallel ITC and federal court litigation may potentially litigate the same intellectual property dispute twice. Practically, however, even if a federal court judge does not defer to the ITC's findings, the ITC proceeding likely will simplify or narrow the federal case. The parties already will have conducted relevant discovery, honed their positions, and filed expert reports.

Key Advantages of Litigating in the ITC

Should you counsel your client to file a complaint in the ITC rather than in federal court? There are a few commonly cited advantages to the ITC.

• Speed: For better or worse, your client will have an answer from the ITC in well under two years. Once a complaint is filed and an investigation initiated by the Commission, the ALJ will set a procedural schedule for the case. The typical target date for completion of the investigation is approximately 16-18 months. Last year, the average time from institution to a finding of violation or no violation was 13.7 months. (U.S. ITC, FY 2011 Press Release: Highlights: USITC Sees Record Number of Intellectual Property Infringement Cases Filed, at http://www.usitc.gov/press_room/documents/featured_news/337_timeframes_article.htm (visited Feb. 28, 2012)). Trial is typically scheduled within the same calendar year that the case is filed. The discovery period is usually around six months. By regulation, the time period for responding to discovery requests is 10 days, as is the time for answering most motions. (See, e.g., 19 C.F.R. §§ 210.15(c), 210.30(b)(2)).
• Experience: From the Commission members to the ALJs to the OUII staff, the ITC personnel have a wealth of experience with intellectual property matters. While the federal courts are certainly accustomed to intellectual property disputes, these legal challenges are the ITC's focus and specialty. For very complicated technology, complex patents, or multi-party disputes, this sophistication may be extremely beneficial. The ITC also offers free mediation sessions, staffed by experienced intellectual property mediators. If the parties choose to engage in mediation, dispute resolution also will be enhanced by the level of experience of the forum.
• Streamlining: The ITC has eliminated some of the inconveniences or uncertainties associated with litigation in the federal court system. For example, the ITC has nationwide service authority, facilitating service of subpoenas for testimony at depositions and trial. The evidence for trial is presented largely by written testimony submitted in advance, significantly streamlining the actual in-court hearing. The hearing itself is before an ALJ, eliminating the uncertainties associated with a jury trial. Especially for foreign litigants unaccustomed to U.S. trial procedure, this can be an advantage.

Practical Tips for Surviving an ITC Investigation

How should you advise a client considering an ITC complaint or finding itself brought before the ITC as a respondent? How should you prepare yourself? Below are some basic tips for surviving in this forum.

• Staff the case early, and stay organized. Depending on the amount of early discovery, an ITC case may begin deceptively slowly. Trust that it will speed up very soon. When it does, you will need an informed team staffed at all levels of experience. Assemble that team early and begin taking the organizational steps necessary to ensure that the team is communicating well and often.

• Make sure the client goes into ITC litigation with eyes wide open. It is not enough to simply tell the client that an ITC investigation will be finished in just over a year. For many clients, especially if your primary point of contact is a business person (rather than general counsel), this still will seem like a long time. Unless educated early, the client will not be able to anticipate and fully understand the rigors of litigation at this pace. Make sure you have the full commitment of all leadership who will be necessary for you to do your job. Make sure that any employees with relevant information are briefed about the tight deadlines for production of discovery. Give your client realistic estimates of costs. As the case gets moving, you will have some large bills, and you will thank yourself for preparing the client in advance.
• Take a proactive approach. A common pitfall for any busy litigator is to allow the procedural schedule to drive your case strategy, e.g., taking depositions the week before the discovery period ends, or thinking about summary judgment once the deadline begins approaching. This is simply not an option in the ITC. Treat the procedural schedule like it is sacrosanct, and try to stay several steps ahead of its deadlines. You also need to strategize early with your client about the desired result, keeping that in sharp focus as you tend to the details of litigation.
• Don't pay short shrift to the domestic industry requirement. Because the domestic industry is a threshold issue the complainant has to prove, it is a natural area for attack by respondents. As the complainant, make sure you support your complaint with robust evidence of your domestic industry and that you have gathered the supportive evidence on the front end. You will be asked to support your client's domestic industry in discovery, and early preparation will avoid scrambling for documentation on a tight timeframe. As a respondent, make sure you are asking for detailed support of the domestic industry. Look behind the company representative's statements to identify any potential vulnerabilities and weaknesses in documentation.
• Spend the time to find a strong expert. Expert witnesses are crucial to most intellectual property cases, and the ITC is no exception. However, Markman hearings are not automatic in the ITC, so you may find yourself making your expert arguments largely through reports and other paper filings. A strong expert will only make that process easier on you.
• Try to enjoy it. ITC investigations are rigorous and, at their busiest time, will take center stage in your life. But for intellectual property litigators, they can be a very rewarding and enriching career experience.

Eileen Hintz Rumfelt is an associate at Miller & Martin PLLC in the firm's Atlanta, Georgia, office. She focuses her practice on business litigation, including intellectual property litigation, and white collar crime. She is a member of the DRI Young laywers Steering Committee and currently serves as the Chair of the Young Lawyers Publication Subcommittee.

Until now, there has been a split of appellate authority in New York concerning what a prospective purchaser must show in seeking damages for a seller’s repudiation of a contract for the sale of real property. It is the general rule that a prospective purchaser seeking specific performance of a real estate contract must demonstrate that it is “ready, willing and able to close.” However, there has been a split of authority concerning whether the purchaser must demonstrate that it is “ready, willing and able” to close in seeking damages for seller’s anticipatory breach of contract.

As mandated by Section 212 of the Consumer Product Safety Improvement Act of 2008, the Consumer Product Safety Commission created a publicly accessible and searchable database allowing consumers to submit reports about various products as of March 11, 201l.  This database, found at www.saferproducts.gov, supplements the Commission’s existing publicly accessible and searchable databases – the National Electronic Injury Surveillance System (NEISS) database, which collects data from hospitals on injuries associated with particular consumer products.

With recent amendments to Federal Rule of Civil Procedure 26 and a proliferation of Motions to Strike/Exclude Expert Testimony under the Court’s responsibility as a gatekeeper of information that is to be considered by a jury, keeping apprised of recent rulings on these issues is key to effectively using experts in defending mass tort claims. This presentation will discuss the changes to Rule 26, including how courts have handled discovery disputes involving experts, and will address recent Daubert and Frye decisions that may assist in having an opponent’s experts testimony stricken before presentation to a jury as well as other considerations as you work on expert preparation for mass tort cases. 

And, pretty soon they'll cost less than a burger.

I've sat mostly quiet over the last few years, wondering how something as American as the hamburger could so easily become the focus of so much attack?  What in the world happened?

Over the last decade, we have heard story after story questioning the safety, efficacy and quality of this distinctly American product.  Whether you enjoy a burger on the grill, meatballs in the crock, hamburger (helper) on the stove, a quick burrito in the microwave or a family size helping of meatloaf in the oven, most Americans thoroughly enjoy -- if not cherish -- their ground beef.

But, we also have to pay for it.  In recent years, the cost of ground beef has increased substantially.  And, in the coming years, it now appears; the cost of this product will increase even more. This is because of the extraordinary amount of effort (and science) that is now required to process beef. 

From slaughter and processing to the kitchen table, billions of dollars have already been spent making ground beef as safe (and as perfect) as it can be. 

But perfect is relative, I suppose; and the onslaught of unfounded criticism continues. Set aside the occasional but continuing ramblings about whether ground beef is good for your heart (it is) or whether it increases your risk of cancer (it wont), additional heated debate persists regarding its overall safety and now -- it would appear -- its color.  And, thus, the industry is once again confronted with yet another unfortunate example of reactive sensationalism quickly outpacing reason and science. 

Will the madness ever stop?

Probably not.  So, I wont spend any time here repeating or expanding upon the expert explanations regarding what, exactly, LFTB really is.  It is beef.  And, that issue, I think, is settled.  What I will say, however, is that we should be careful not to expect ground beef to become something it is not. 

We are extremely lucky to have access to such a tasty, plentiful, safe and affordable product.  And, frankly, the health of our nation has in many ways been built on the same ground beef we now discount. 

So, back your burgers.  And, if you have any doubts, just ask your kids about how boring life would become without a virtually unlimited and affordable supply of burgers, meatballs, burritos and meatloaf. 

And, yes, we also need to think about those who struggle just to put food on the table.  We should be very careful, in the end, not to price ourselves out of our most basic needs -- like affordable protein.   As one of my readers aptly noted a few months back, if we don't get our act together soon,"maybe we'll all have to start grilling steaks on the barbecue instead of burgers [just] to save ourselves a few bucks."  

That'd be something.

Three law firms based in Austin, Texas recently filed suit on behalf of 13 people claiming that almost 20 apps, including Facebook, Foursquare, Yelp and Twitter, violate policies put in place by distributers such as Apple’s App Store, Amazon’s App Store and Google Play.  The American Statesmen reports that the violations are a result of mobile apps “stealing” address book data, such as names, phone numbers, email addresses and even birthdays.  The lawsuit seeks to stop app developers from harvesting data without permission.  The complaint cites an industry publication that claims the information collected could be worth 60 cents to several dollars per contact. 

A New York Times article investigating contact mining recently noted that “the address book in smartphones — where some of the user’s most personal data is carried — is free for app developers to take at will, often without the phone owner’s knowledge.”  The app developers use the data in an effort to expand the number of people using their program.  Developers use email addresses to target potential new customers and to target advertisements.  Several companies, including Path, a social networking site, have issued apologies regarding “how [their] application used your phone contacts.” 

Attorney Richard Newman, an Internet law attorney and managing partner of the Hinch Newman firm, with offices in both California and New York, thinks that the lawsuits are starting to have an impact.  Mr. Newman stated “the mobile communications industry is finding that failing to properly inform consumers of what is happening to their information is increasingly grabbing the attention of regulatory authorities, including the Federal Trade Commission.”  Until a regulatory framework is hammered out to govern emerging data privacy issues, litigation may be one of the only things keeping pace with technology development.  

A prompt and thorough investigation of a fire scene is critical to any litigation arising therefrom.  Documenting the investigation plays an indispensable role to the defense of any fire case.  The National Fire Protection Association (NFPA) publishes guidelines to be followed in fire investigations to ensure effective documentation of a fire scene and to assist in determining its cause and origin.    The most recent edition, NFPA 921 - Guide for Fire and Explosion Investigations, can be used as an offensive weapon and defensive shield in all aspects of fire litigation. Some of the guidelines espoused are detailed as follows:

The U.S. Supreme Court has rejected the federal government’s argument that compliance orders issued by the U.S. Environmental Protection Agency (“EPA”) under the Clean Water Act, 33 U.S.C. §§ 1251 et seq. (the “CWA”), cannot be challenged in court.  In a unanimous opinion issued on March 21, 2012, the Court held that such orders constitute “final agency action” that can be challenged under the Administrative Procedure Act, 5 U.S.C. § 706(2)(a) (the “APA”).  Sackett v. United States Environmental Protection Agency, 566 U.S. ___, No. 10-1062 (Mar. 12, 2012).  In so doing, the Court has weakened one of the favored arrows in the EPA’s enforcement quiver. 

The case arose when Chantell and Mike Sackett bought two-thirds of an acre near Priest Lake, Idaho, intending to build their home there.  The vacant lot is zoned residential and is located in a platted subdivision, with sewer and water hookups.  The lot is separated from the lake by several lots where homes have already been built.  Sackett, slip op. at 3.  The Sacketts applied for and obtained the necessary building permits from the local authorities.  They began preparing the lot to build their home by filling in part of it with dirt and rock.  Id.  Not long after they did so, the EPA hit them with a compliance order. 

As the Court explained, the EPA’s compliance order contained a number of “Findings and Conclusions,” including: that the Sacketts’ property contains “wetlands”; that the property’s wetlands are adjacent to Priest Lake, a “navigable water” under the CWA; and that, by filling in about half an acre of the “wetlands” on their property, the Sacketts had discharged pollutants into waters of the United States in violation of 33 U.S.C. § 1311(a).  Slip op. at 3-4.  The order required the Sacketts to return the property to its prior condition and to seek a wetlands permit – costs that, according to the Sacketts, would add up to tens of thousands of dollars, many times the $23,000 they paid for the property.  Failure to comply with the order could result in fines of up to $75,000 per day – $37,500 for the statutory violation and up to $37,500 for violating the compliance order.  Id. at 2.

The Sacketts tried to challenge the wetlands finding – both before the EPA and in federal court under the APA – but their challenges were rejected.  The district court in Idaho concluded that the CWA precludes judicial review of compliance orders before the EPA has started an enforcement action in federal court, and granted the EPA’s motion to dismiss.  Sackett v. EPA, No. 08-CV-185-N-EJL, 2008 WL 3286801 (D. Idaho Aug. 7, 2008).  The Ninth Circuit affirmed.  Sackett v. EPA, 622 F.3d 1139 (9th Cir. 2010).  In other words, under the lower courts’ decisions, the only way in which the Sacketts could obtain judicial review of the compliance order would be to violate the order, wait for the EPA to sue them, and then raise their arguments in the enforcement action brought by the EPA, while potentially accruing up to $75,000 per day in civil penalties.

In his opinion for a unanimous Court, Justice Scalia set out to explain to the reader “what all the fuss is about.”  After describing the Sacketts’ situation and history – what Justice Scalia referred to as the “strong-arming of regulated parties” by government regulators – the Court held that the Sacketts were entitled to seek relief from the courts. 

The Court explained that the APA has a strong presumption in favor of allowing judicial review of final agency actions.  The Court rejected the EPA’s argument that the lack of an express provision allowing judicial review of administrative compliance orders in the CWA precluded such review, explaining:

[I]f the express provision of judicial review in one section of a long and complicated statute were alone enough to overcome the APA’s presumption of reviewability for all agency action, it would not be much of a presumption at all.

Slip op. at 8.

The Court held that the EPA’s compliance order against the Sacketts met all the requirements for APA judicial review.  First, the Court held that the compliance order was a “final agency action” because it imposed serious legal obligations on the Sacketts, including significant potential double penalties.  Even more importantly, the order represented the “‘consummation’ of the agency’s decisionmaking process” – because the terms of the compliance order were not subject to any further review, as the Sacketts discovered when they unsuccessfully sought a hearing before the EPA.  Slip op. at 5-6.  Second, the order clearly determined the Sacketts’ obligations by ordering them to restore their property to its prior condition.  Finally, the CWA does not expressly preclude review by the courts.  The Court therefore reversed the judgment of the Court of Appeals and remanded for further proceedings.  Id. at 10. 

Justice Ginsburg and Justice Alito filed concurring opinions.  In her one-paragraph concurrence, Justice Ginsburg emphasized that the opinion does not address the question of whether the property owners “could challenge not only the EPA’s authority to regulate their land under the Clean Water Act, but also, at this pre-enforcement stage, the terms and conditions of the compliance order” – a question that is left for another case and another day.

Justice Alito, in contrast, issued a scathing rebuke of the EPA, the CWA, and Congress, stating that “[t]he position taken in this case by the Federal government – a position that the Court now squarely rejects – would have put the property rights of ordinary Americans entirely at the mercy of [EPA] employees.”  Alito, J., concurring op. at 1.  While the Court’s opinion “provides a modest measure of relief” by allowing property owners to challenge the EPA’s jurisdictional determination under the APA, Justice Alito stated that “[r]eal relief requires Congress to do what it should have done in the first place: provide a reasonably clear rule regarding the reach of the Clean Water Act.”  Id. at 2.  Specifically, Judge Alito criticized the EPA’s and Congress’s failure to define what is meant by “the waters of the United States,” leaving this crucial jurisdictional determination to be made “on a case-by-case basis by EPA field staff.”  Id. 

The decision does not reach the merits of the Sacketts’ challenges to the compliance order, nor does it address the Sacketts’ due process argument.  Nonetheless, the decision is significant, and the stakes are high.  While the media has consistently portrayed this case as a battle between property owners as David against the EPA’s Goliath, the opinion also represents a victory for all property owners, including businesses and corporations.  Indeed, General Electric Co. had sought similar relief in a case last year, and filed an amicus brief in support of the Sacketts.  Moreover, the Court’s decision could impact not only CWA enforcement authority, but possibly could also impact review of compliance orders issued under other federal environmental statutes which, like the CWA, do not contain express prohibitions to judicial review.  And, for cases arising out of orders issued pursuant to statutes that do contain an express prohibition against judicial review, the Court may yet decide to go beyond the terms of the statute and the APA and address the due process argument it did not reach in the Sacketts’ case.

Actually, it’s what’s happening in Vegas.   It’s spring, and we’re beginning to see a light at the end of the winter tunnel.  Grass is starting to grow, trees are beginning to bud, flowers are blooming, etc.  What better way to celebrate the annual coming of Spring than at DRI’s Product Liability Seminar in Las Vegas?  OK, I confess that Spring and Las Vegas are not “causally connected”, as we DRI-ers like to say.  You can actually go out to Vegas any time of year, and they will welcome you with open arms no matter what the season.  But, what you can’t do just any time of year is go out there and get both the camaraderie of your DRI friends AND the CLE education from leading product liability lawyers and experts from around the country.  So, if you’ll join us April 11-13 at the Venetian for the DRI Product Liability Seminar, you’ll get networking, friends, education, Vegas AND Spring, all at the same time.  You don’t want to be the one who has to hear about it after the fact,  so make plans to join us.  And if you want some really good Automotive CLE, come to the Automotive SLG Breakout session Wednesday afternoon where you’ll hear Neal Walters (the guy who puts the “class” in “class action”) Tracy Ferak (the component part liability guru) and Chris Massenburg (who will tell you all about where the Big Auto companies find themselves economically these days) present some seriously useful stuff.  I’ll see you there – I’ll be the tall guy in the suit.  

Jeff Curran is Of Counsel with Gable Gotwals in Oklahoma City. Jeff focuses his practice primarily in the areas of product liability, insurance matters, entertainment law and commercial litigation.