- Proposed Legislation Introduced In U.S. Congress Aimed At Limiting Use Of Section 337 Actions By Non-Practicing Entities
- June 13, 2014 | Authors: John F. Presper; Eric W. Schweibenz
- Law Firm: Oblon, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
On May 29, 2014, Reps. Blake Farenthold (R-TX) and Tony Cardenas (D-CA) introduced the “Trade Protection Not Troll Protection Act” in the U.S. House of Representatives. The bill targets non-practicing entities (“NPEs”) that file infringement complaints at the International Trade Commission (“the Commission”), and proposes to amend Section 337 to make it more difficult for NPEs to satisfy the domestic industry requirement.
Specifically, the bill provides that “the complainant may not rely upon activities by its licensees unless the license leads to the adoption and development of articles that incorporate the claimed patent, copyright, trademark, mask work, or design for sale in the United States.” Requiring complainants to demonstrate that their licensing activities result in the development of actual products would effectively codify the Commission’s holding in Certain Computers and Computer Peripheral Devices, and Components Thereof, and Products Containing the Same (Inv. No. 337-TA-841) (Comm’n Op. Jan. 9, 2014). The bill would also require the Commission to conduct “a preliminary investigation of whether it is likely that an industry in the United States exists or is in the process of being established” when a complainant relies on licensing activities in whole or in part. Further, the bill would require the presiding ALJ to make an early initial determination regarding domestic industry standing within 45 days after the Section 337 investigation commences.
The bill also provides that the Commission may make “public interest” determinations “during the course of the investigation” (as opposed to at the end of the proceedings), and “upon a finding ... that the articles should not be excluded, shall terminate the investigation, in whole or in part, without making any further determination.”
Finally, the bill would clarify that the Commission may hear all equitable defenses, “including equitable defenses and principles applied to any remedy considered in United States district courts.”