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.