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ITC Reports on Violations of Administrative Protective Orders in IPR Investigations

Tuesday, January 13, 2015
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission has issued its annual report on the status of its practice with respect to violations of administrative protective orders in certain investigations. This report is intended to inform representatives of parties to ITC proceedings as to some specific types of APO breaches encountered in 2013 and the corresponding types of actions that were taken. This year’s report addresses four proceedings under Section 337 of the 1930 Tariff Act, as there were no breach investigations in antidumping or countervailing injury proceedings or rules violation investigations completed in 2013.

Those involved in ITC investigations or other proceedings under Title VII of the 1930 Tariff Act (AD and CV injury), safeguard-related provisions such as section 202 of the 1974 Trade Act, section 337 of the 1930 Tariff Act (intellectual property rights) and NAFTA article 1904.13 may enter into APOs that permit them, under strict conditions, to obtain access to the business proprietary information (Title VII) or confidential business information (all others) of other parties. The two types of breaches most frequently investigated involve the APO’s prohibition on the dissemination of BPI or CBI to unauthorized persons and the APO’s requirement that the materials received under the APO be returned or destroyed and that a certificate be filed within a specified period indicating which action was taken. Other breaches have included the failure to properly bracket BPI/CBI in proprietary documents filed with the ITC, the failure to immediately report known violations of an APO and the failure to adequately supervise non-lawyers in the handling of BPI/CBI.

In AD/CV injury proceedings, any breach of an APO may subject an applicant to various sanctions, including the following.

- disbarment from practice in any capacity before the ITC, along with the person’s partners, associates, employer and employees, for up to seven years

- referral to the U.S. attorney

- in the case of an attorney, accountant or other professional, referral to the ethics panel of the appropriate professional association

- such other administrative sanctions as the ITC determines to be appropriate, including public release of or striking from the record any information or briefs submitted by or on behalf of such person or the party he represents, denial of further access to BPI in the current or any future investigations before the ITC, and issuance of a public or private letter of reprimand

- such other actions, such as a warning letter, as the ITC determines to be appropriate

APOs in safeguard investigations contain similar, though not identical, provisions.

Possible sanctions for violating an APO in a Section 337 investigation include the following.

- an official ITC reprimand

- disqualification from or limitation of further participation in a pending investigation

- temporary or permanent disqualification from practicing in any capacity before the ITC

- referral of the facts underlying the violation to the appropriate licensing authority in the jurisdiction in which the individual is licensed to practice

- making adverse inferences and rulings against a party involved in the violation of the APO or such other action that may be appropriate. 19 CFR 210.34(c)(3)

In determining the appropriate response to an APO breach, the ITC generally considers mitigating factors such as the unintentional nature of the breach, the lack of prior breaches committed by the breaching party, the corrective measures taken by the breaching party and the promptness with which the breaching party reported the violation. The ITC also considers aggravating circumstances, especially whether persons not under the APO actually read the BPI/CBI. The ITC also considers whether there are prior breaches by the same person in other investigations and multiple breaches by the same person in the same investigation.

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