Many businesses falsely perceive litigation only through the lens of whether they can “win or lose” and what is the cost/benefit. That is, how much will the litigation cost, and what is our potential “upside” in terms of monetary damages and whether we can collect? Under this narrow view, such businesses will avoid “close call” litigation, only pursue “clear win” cases and eschew cases where monetary damages cannot be recovered.
However, many other businesses understand that the process of litigation can itself be a legitimate business strategy for expanding and maintaining market share and preserving revenue. Of course, any such litigation must be based on actual evidence of statutory violations and/or violations of private rights (such as those that might be based on contracts). Under this broader view, the cost of litigation is weighed against the benefits to the profitability of the business, not just on the potential for recovering money damages.
As an example, consider the advantages of filing proceedings before the U.S. International Trade Commission (“ITC”) if your business is facing a foreign competitor that is importing foreign-made goods that are competing with your domestic-manufactured goods. The ITC is a federal agency that regulates and investigates “unfair trade practices” by foreign importers. Mostly, the ITC deals with claims related to IP infringement — that is, patent, trademark, and copyright infringement. Infringement and other types of unfair trade practices are prohibited by Section 337 of the US Tariff Act of 1930.
The ITC has a mechanism for filing claims against foreign manufacturers if there is evidence of infringement and/or other unfair trade practices. These are typically called “ITC proceedings” or “ITC investigations.” However, the ITC has no power or authority to issue an award of monetary damages. The ITC’s power is limited to certain types of injunctive relief like the exclusion of foreign-made products from entering the U.S., seizure of such goods and cease and desist Orders. If you are considering initiating an ITC proceeding, you will need the legal services of an experienced ITC Law Firm like Revision Legal. Call us at 231-714-0100 or 855-473-8474.
Under the narrow cost/benefit view of litigation, ITC proceedings have little value. But, from the broader cost/benefit view, an ITC proceeding can be immensely powerful. This is because one of the potential exclusion orders is a “temporary exclusion order” (“TEO”). This can be imposed at the beginning of an ITC investigation and will exist during the length of the proceedings. In other words, if a TEO is issued, the foreign competitor’s goods will remain at the port of entry until the ITC issues a final determination. ITC proceedings can last up to 16 months (or even longer under some rare circumstances). Typically, TEO orders are “easier” to obtain than temporary restraining orders that can be requested from a federal court.
Assuming that legitimate evidence supports its issuance, a TEO has obvious advantages for a business facing foreign competition. Since foreign-made products will remain at the port of entry, a TEO can be particularly advantageous for seasonal goods and goods that can become relatively obsolete due to technological advances and shifting consumer demand. Further, if the ITC proceedings are successful, then the TEO becomes permanent and the foreign-made goods will not be allowed to enter the U.S. and will, therefore, not subtract from a domestic company’s market share and/or revenues.
ITC proceedings are also advantageous in that they are relatively inexpensive compared to full litigation in federal courts. A positive outcome can also be reached more quickly and the collection of evidence and other legal work can be the foundation for other types of litigation against a foreign competitor that engaged in infringement and other types of unfair trade practices.
Contact ITC Attorneys At Revision Legal For more information, contact the trusted ITC Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.
Using the ITC to Protect Against Seasonal and Technology-Driven Markets
The temporary exclusion order (TEO) is uniquely powerful in industries where timing is everything. Consider a domestic manufacturer of a consumer electronics product that faces a foreign competitor flooding the U.S. market with infringing goods just before the holiday shopping season. A federal court injunction might take months or years to obtain. A TEO issued at the commencement of an ITC investigation can prevent those goods from entering U.S. ports almost immediately, preserving critical market share during the most commercially significant weeks of the year.
The same logic applies to pharmaceutical products, fashion goods, and technology hardware with short product cycles. By the time a federal district court enters an injunction, the infringing product may already have captured consumer loyalty and market share that is difficult or impossible to reclaim. The ITC’s speed gives domestic companies a tool that federal courts simply cannot match in terms of practical commercial impact.
ITC Proceedings as a Parallel Litigation Strategy
Many companies file ITC proceedings simultaneously with district court patent infringement litigation. This parallel strategy provides several advantages. First, the ITC proceeding applies pressure on the respondent’s ability to sell into the U.S. market, which often accelerates settlement negotiations. Second, the evidentiary record developed in the ITC — depositions, claim construction positions, expert reports — can be used to inform and support the parallel district court case. Third, a successful ITC exclusion order provides immediate and tangible relief while the district court case proceeds at a slower pace toward a potential damages award.
However, the parallel strategy requires careful coordination. The claim construction adopted in the ITC can have preclusive effect in the district court, making it important to advance positions consistently across both forums. An ITC lawyer who also handles district court patent litigation can manage this coordination, avoid inconsistent legal positions, and develop a unified strategy that maximizes the chance of success in both venues.
Cost Considerations and When ITC Makes Sense
While ITC proceedings are less expensive than full federal district court litigation on a per-year basis, they are still substantial undertakings. A contested ITC patent case typically costs between $3 million and $10 million for a complainant, depending on the complexity of the technology, the number of respondents, and the scope of discovery. For smaller companies, the ITC may be out of reach without outside financing, co-complainants, or a contingency fee arrangement with experienced ITC counsel.
That said, the cost calculus must consider the value of what is at stake. If the infringing foreign goods threaten tens of millions of dollars in annual revenue, the cost of an ITC proceeding may be justified and proportionate. Companies facing existential competitive threats from infringing imports should consult with an experienced ITC attorney to evaluate whether the potential exclusion of those goods would provide sufficient commercial benefit to warrant the investment. Revision Legal has represented clients in ITC matters and can provide an informed assessment of the strategic and economic merits of filing.
