A: Section 337 of the Tariff Act of 1930, recently amended by the Uruguay Round Agreements Act (URAA), is an important means for combating unfair practices in the import trade and especially for enforcing U.S. intellectual property rights at the border. If imports are found to violate Section 337, an exclusion order will be issued to the U.S. Customs Service excluding these products from the United States.

Q: How is a Section 337 investigation initiated?

A: A complaint requesting a Section 337 investigation is filed with the U.S. International Trade Commission (I.T.C.). The I.T.C. is an independent federal agency consisting of six Commissioners appointed by the President and confirmed by the Senate. Once a complaint is filed, the I.T.C. has 30 days to determine whether an investigation should be instituted on the basis of the complaint. Only in extremely rare circumstances has the I.T.C. decided not to institute an investigation.

Q: How is a Section 337 investigation conducted?

A: Once a Section 337 investigation is instituted, it is assigned to an administrative law judge (ALJ). The ALJ conducts an on-the-record hearing, which is very similar to a trial, under the Administrative Procedure Act and issues an initial determination subject to full I.T.C. review. The complaining party ("the complainant"), the defending parties ("the respondents"), and the Commission Investigative Attorney may all present evidence at the hearing.

Q: What is the role of the Commission Investigative Attorney in a Section 337 investigation?

A: One of the more unique aspects of a Section 337 investigation is the participation of the Commission Investigative attorney, sometimes referred to as the Staff Attorney. The Staff Attorney, employed by the I.T.C.'s Office of Unfair Import Investigations, serves as an independent trial attorney whose primary function is to protect the public interest by ensuring that all issues are fully explored and that a complete factual and legal record is developed. The Staff Attorney fully participates in discovery and may present witnesses at the hearing.

Q: What constitutes a violation of Section 337?

A: To prove a violation of Section 337, a complainant must establish (1) unfair competition or an unfair act, e.g., patent infringement, (2) importation, sale for importation, or sale after importation into the United States of the accused products, and (3) the existence of a domestic industry relating to the product in question. In an investigation in which the alleged unfair act is not the infringement of a U.S. patent, registered trademark, registered copyright, or registered mask work, a complainant also must prove injury from the alleged unfair act.

Q: What constitutes unfair competition or an unfair act under Section 337?

A: The most common forms of unfair acts brought before the I.T.C. are patent infringement and trademark infringement, however, activities such as copyright infringement, infringement of a registered mask work, misappropriation of trade secrets, common law trademark infringement, trade dress infringement, or other business torts may also constitute an unfair act under Section 337.

Q: What constitutes a domestic industry?

A: In general, Section 337 requires that there be an industry in the United States relating in some manner to the products at issue. The proof required to establish a domestic industry involves an "economic" prong and a "technical" prong. The economic prong can be satisfied by demonstrating that there exists in the United States with respect to the products protected by the intellectual property right being asserted: significant investment in plant and equipment; significant employment of labor or capital; or substantial investment in its exploitation, including engineering, research and development, or licensing. To satisfy the technical prong, a complainant must be practicing the asserted intellectual property right. For example, in a patent-based Section 337 investigation, a complainant must prove that it or its licensee is practicing at least one claim of the asserted patent.

Q: How long does it take to complete a Section 337 investigation?

A: Although the URAA eliminated the strict time limits for Section 337 investigation, the I.T.C. is required by statute to complete Section 337 investigations at the earliest practicable time. To this end, at the outset of each Section 337 investigation, the Administrative Law Judge sets a target date for completion of the investigation. The target date usually calls for completion of the investigation in one year, however, more complex investigations may take about eighteen months to complete.

Q: What type of relief is available under Section 337?

A: On finding a violation of Section 337, the I.T.C. may issue an exclusion order prohibiting importation of the involved articles or cease and desist orders or both. The exclusion order is usually limited to those products specifically challenged before the I.T.C., however, under certain circumstances, a general exclusion order may issued against all infringing articles whether or not they were included in the investigation. These orders are effective when issued and become final after 60 days unless disapproved by the President for policy reasons. There have been very few such disapprovals.

Q: Are money damages available?

A: No, the I.T.C. cannot award money damages. To obtain such damages a complainant would have to file a separate action in U.S. District Court.

Q: Is temporary relief available?

A: Yes. Following district court preliminary injunction practice, the I.T.C. may issue temporary relief in the form of temporary exclusion orders and/or temporary cease and desist orders. Temporary relief proceedings must be concluded in 90-150 days and the remedy remains in force during the pendency of the investigation.

Q: Is it possible to maintain a parallel action in U.S. District Court?

A: A complainant may file a parallel action in U.S. District Court, e.g., a suit for patent or trademark infringement, however, a respondent in the Section 337 investigation that is also a defendant in the district court litigation is entitled to a stay of the district court action pending the outcome of the Section 337 investigation. Once the investigation is completed, the I.T.C. record may be transmitted to the district court.

Q: Is an I.T.C. determination in a Section 337 investigation subject to appeal?

A: Yes. The I.T.C.'s determinations in Section 337 investigations may be appealed to the U.S. Court of Appeals for the Federal Circuit.

"Frequently Asked Questions Regarding Section 337" was prepared by Peter B. Martine of Martine & Penilla, L.L.P. and Michael L. Doane of Adduci, Mastriani & Schaumberg, L.L.P.

For additional information regarding Section 337, see USITC Publication 3027 entitled "Section 337 Investigations at the U.S. International Trade Commission: Answers to Frequently Asked Questions." This publication is available for downloading at the U.S. International Trade Commission website.