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ITC Proposes Amendments to Rules for Conduct of IPR Infringement Investigations

Thursday, September 17, 2015
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission is proposing to amend its rules of practice and procedure concerning rules of general application, adjudication and enforcement to make certain technical corrections, clarify certain provisions, harmonize different parts of the rules and address concerns that have arisen in Commission practice. The ITC states that the intended effect of the proposed amendments, which include the following, is to facilitate compliance with the rules and improve the administration of agency proceedings involving allegations of intellectual property rights infringement.

Initiation and Conduct of Investigations. The ITC would be able to effect service of process by electronic means. In addition, parties serving documents by electronic means would have to ensure that any such document containing confidential business information subject to an administrative protective order is securely transmitted in addition to being securely stored.

Commencement of Investigations. The ITC would be able to institute multiple investigations based on a single complaint where necessary to limit the number of technologies and/or unrelated patents asserted in a single investigation.

The notice of institution would have to specify in plain language the accused products that will be within the scope of the investigation to avoid disputes between the parties at the outset.

Pleadings. Complaints alleging patent infringement would have to include the expiration date of each asserted patent.

The administrative law judge would be able to sever an investigation into two or more investigations at any time prior to or upon the issuance of the procedural schedule based on a motion or the ALJ’s judgment that severance is necessary to allow efficient adjudication. The ALJ could also issue an order designating a potentially dispositive issue for an early ruling and hold expedited hearings on such issues.

Motions. No motions other than those for temporary relief could be filed with the ITC prior to the institution of an investigation.

The ITC would not have to specifically notify certain agencies (e.g., U.S. Customs and Border Protection) regarding any initial determination to terminate an investigation due to settlement or consent order.

Parties would be able to file a motion within 30 days of institution of an investigation requesting the ALJ to issue an order designating a potentially dispositive issue for an early ruling.

A motion for sanctions could be filed for abuse of discovery.

Discovery and Compulsory Process. The rule would specify that privilege applies to communications between a party’s counsel and any expert witness retained on behalf of that party and to any draft reports or disclosures that the expert prepares at counsel’s behest.

An ALJ or the ITC could impose sanctions if, without substantial justification, a party certifies a discovery request, response or objection in violation of subsection 210.27(g)(2).

The ALJ would have the discretion to allow the use of agreed-upon designated deposition testimony in lieu of live witness testimony.

The rule would remove the mandatory provision requiring the ITC or the ALJ to allow the parties to make written submissions or present oral arguments bearing on the issue of violation of a protective order and the appropriate sanctions therefor. The ITC has decided that notification of all parties in an investigation regarding breach of an protective order may be inappropriate in many cases.

Determinations and Actions Taken. The ALJ could issue an initial determination on a potentially dispositive issue and would have to do so within 100 days of the issue being designated. These changes are intended to provide a procedure for the early disposition of potentially dispositive issues at the institution of an investigation or early in the procedural schedule but is not intended to affect summary determination practice.

Parties would be required to file a petition for review of an initial determination on a potentially dispositive issue within five calendar days after service of the initial determination and any response to the petitions within three business days after service of a petition. The ITC would have 30 days from service of the initial determination to determine whether to review it. The ITC would also have the ability to reconsider any of its determinations on its own initiative.

Enforcement Procedures and Advisory Opinions. Provisions providing for informal enforcement proceedings and temporary emergency action pending a formal enforcement proceeding would be removed.

The ITC would have 30 days after receiving the applicable request to determine whether to institute (a) an enforcement proceeding to investigate alleged violations of an exclusion order, cease and desist order or consent order, (b) a proceeding to modify or rescind an exclusion order, cease and desist order or consent order, and (c) an advisory opinion proceeding to determine whether a proposed course of action or conduct would violate an ITC remedial order.

The ITC would have explicit authority to issue cease and desist orders at the conclusion of a formal enforcement proceeding.

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