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When weighing whether to issue its injunctive-type remedies—exclusion and cease-and-desist orders—the United States International Trade Commission (“Commission”) is not required to apply the eBay four-factor test used by district courts when deciding whether to issue permanent injunctions.

Public Interest at the ITC

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When weighing whether to issue its injunctive-type remedies—exclusion and cease-and-desist orders—the United States International Trade Commission (“Commission”) is not required to apply the eBay four-factor test used by district courts for permanent injunctions.<a href="#_ftnref1" id="_ftn1">[1]</a>, <a href="#_ftnref2" id="_ftn2">[2]</a> Instead, the Commission must assess the effects its remedial orders would have on the statutory public interest factors:<ol><li>the public health and welfare;</li><li>competitive conditions in the U.S. economy;</li><li>the production of like or directly competitive articles in the U.S.; and</li><li>U.S. consumers.</li></ol>19 U.S.C. § 1337(d)(1), (f)(1). The Commission must evaluate these factors in every case and typically does so at the end of an investigation.Complainants are required to submit a public interest statement with the filing of a complaint. The information in that statement, along with responsive statements, is used by the Commission to determine if the issue of public interest should be delegated to the administrative law judge ("ALJ") for fact-finding during the course of the investigation. In approximately 20% of cases, the Commission delegates public interest to the ALJ to take evidence during the course of the investigation for fact finding and a recommended determination.Denial of Relief Based on Public InterestCongress intended for the public interest factors to be overriding considerations and paramount in Section 337 investigations.<a href="#_ftnref3" id="_ftn3">[3]</a> The Commission, however, rarely denies remedies based on the public interest factors, and has only done so on three occasions, and not since 1984:<ul><li>In Crankpin Grinders, the Commission found that it was not in the public interest to exclude crankpin grinders used in the manufacture of automobile engines because of an overriding national interest in the supply of fuel-efficient automobiles, where the domestic industry was unable to supply domestic demand within a commercially reasonable length of time.<a href="#_ftnref4" id="_ftn4">[4]</a></li><li>In Inclined-Field Acceleration Tubes, the Commission denied remedies due to an overriding public interest in continuing basic atomic research using the high-quality accused products essential to nuclear research programs.<a href="#_ftnref5" id="_ftn5">[5]</a> </li></ul><ul><li>In Fluidized Supporting Apparatus, the Commission denied remedies because it was not in the public interest to exclude specialized hospital beds for burn patients where the domestic producer could not supply beds within a commercially reasonable time and where no therapeutically comparable substitute was available.<a href="#_ftnref6" id="_ftn6">[6]</a></li></ul>In all three of these investigations, the Commission found that there was no way to tailor the remedies without serious harm to at least one of the public interest factors.Tailoring Relief Based on Public InterestIn other investigations in which the public interest factors were implicated, the Commission has tailored its remedial orders to alleviate harm to the public interest. The two most common tailored remedies are (1) grandfathering exceptions, and (2) delayed implementation.A grandfathering exception is when products already in the market are exempted from exclusion orders to address consumer interests, such as product availability, price, and choices. For example, a grandfathering exception was granted to ensure that consumers were not deprived of access to 3G capable cellular devices and services.<a href="#_ftnref7" id="_ftn7">[7]</a> Exemptions for spare parts, warranty, and service are also possible.<a href="#_ftnref8" id="_ftn8">[8]</a>Delayed implementation has also been granted to minimize disruption to major industries which would affect competitive conditions in the U.S. economy. Remedial order delays can vary in length and scope, as seen in Personal Data, where the Commission issued a four-month general delay for new HTC phones with 4G capabilities, and a separate twelve-month delay for existing products, namely refurbished handsets that are used as replacements for products under warranty.<a href="#_ftnref9" id="_ftn9">[9]</a> The Commission reasoned that the four-month general delay would allow the market for smartphones to stabilize, while the twelve-month delay would mitigate harm to consumers who would otherwise be forced to accept less desirable replacement products. More recently, the Commission has delayed implementation of its remedial orders for microfluidic devices on the basis that they were needed for a variety of research products that could have positive public health implications.<a href="#_ftnref10" id="_ftn10">[10]</a> This is consistent with other decisions involving research products, such as a case in which the ALJ found that access to 5G services is a matter of national security and relief that reduced innovation in 5G services would harm the public health and welfare.<a href="#_ftnref11" id="_ftn11">[11]</a>The Commission has also exempted service parts from remedial orders when it found that the subject service parts were necessary to the production of secondary systems. For instance, the Commission delayed a remedial order pertaining to automated transmission systems used in medium to heavy duty trucks, because immediate implementation could have negatively impacted the entire automotive industry.<a href="#_ftnref12" id="_ftn12">[12]</a>Most recently, in the Batteries investigation, the Commission significantly tailored remedies in view of the prospective effect on non-party customers of the respondent.<a href="#_ftnref13" id="_ftn13">[13]</a> The Commission found the respondent in default for failure to comply with an ALJ’s order after it was discovered it engaged in spoliation of evidence. The Commission issued a ten-year limited exclusion order and cease-and-desist order pertaining to the accused batteries, but tailored the relief for non-party customers Ford and Volkswagen. These automobile manufacturers were using the accused batteries to develop electric vehicles. To provide time for the companies to find substitute batteries before the remedy took full effect, the Commission permitted Ford and Volkswagen to use the accused batteries for certain electric vehicles for four and two years, respectively.When considering whether to tailor remedial orders in view of the public interest, the Commission requires a strong showing of empirical evidence that such tailoring is warranted. Evidence that the accused products benefit public safety, incentivize the adoption of government-mandated policy, have a large market share, or have few suitable alternatives may provide strong support for tailoring remedial orders. On the other hand, the Commission has regularly rejected public interest arguments when it finds that alternative suppliers could provide comparable products or that the accused products were not critical to public health and welfare. If the patentee can supply all domestic demand, public interest concerns are reduced, even if the patentee charges a higher price. <a href="#_ftn1" id="_ftnref1">[1]</a> eBay v. MercExchange, LLC, 547 U.S. 388, 126 S. Ct. 1837 (2006).<a href="#_ftn2" id="_ftnref2">[2]</a> Spansion, Inc. v. Int'l Trade Comm'n, 629 F.3d 1331 (Fed. Cir. 2010).<a href="#_ftn3" id="_ftnref3">[3]</a> S. Rep. No. 93-1298, 1974 WL 11696 at *7330 (1974).<a href="#_ftn4" id="_ftnref4">[4]</a> Certain Automatic Crankpin Grinders, Inv. No. 337-TA-60, Comm'm Determination and Order (Dec. 17, 1979) ("Crankpin Grinders").<a href="#_ftn5" id="_ftnref5">[5]</a> Certain Inclined-Field Acceleration Tubes and Components Thereof, Inv. No. 337-TA-67, Comm'm Action and Order (Dec. 29, 1980) ("Inclined-Field Acceleration Tubes").<a href="#_ftn6" id="_ftnref6">[6]</a> Certain Fluidized Supporting Apparatus, Inv. No. 337-TA-182/188, Comm'n Memo. Op. (Oct. 5, 1984) ("Fluidized Supporting Apparatus").<a href="#_ftn7" id="_ftnref7">[7]</a> Certain Baseband Processors Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips and Products Containing Same, including Cellular Telephone Headsets, Inv. No. 337-TA-543, Comm'n. Op. at 152-54 (June 19, 2007).<a href="#_ftn8" id="_ftnref8">[8]</a> Certain Mobile Devices, Associated Software, and Components Thereof, Inv. No. 337-TA-744, Comm. Op. at 22 (May 18, 2012) (exemption warranted for components used in maintenance, service, repair, or replacement of existing devices to “prevent disruptions to the domestic business operations of innocent third parties and consumers”); Certain Sortation Systems, Parts Thereof, and Prods. Containing Same, Inv. No.337-TA-460, Notice of Violation of Section at 2 (Jan 27, 2003) (exemption warranted for importation of spare parts necessary to continue operation of sorting facility); Certain Automated Mechanical Transmission Systems for Medium-Duty and Heavy-Duty Trucks, and Components Thereof, Inv. No. 337-TA-503, Comm'n Orders, Termination of Investigation, Issuance of a Limited Exclusion Order and a Cease and Desist Order at 3 (Apr. 7, 2005) (“The limited exclusion order does not cover parts necessary to service infringing automated mechanical transmission systems installed on trucks prior to the issuance of the order”).<a href="#_ftn9" id="_ftnref9">[9]</a> Certain Personal Data and Mobile Communications Devices and Related Software, Inv. No. 337-TA-710, Notice of Final Determination (Dec. 19, 2011) ("Personal Data").<a href="#_ftn10" id="_ftnref10">[10]</a> Certain Microfluidic Devices, Inv. No. 337-TA-1068, Comm'n Op. (Jan. 10, 2020).<a href="#_ftn11" id="_ftnref11">[11]</a> Certain Mobile Electronic Devices and Radio Frequency and Processing Components Thereof, Inv. No. 337-TA-1065, Initial Determination and Recommended Determination at 198-200 (Sept. 28, 2018).<a href="#_ftn12" id="_ftnref12">[12]</a> Certain Automated Mechanical Transmission Systems for Medium-Duty and Heavy-Duty Trucks and Components Thereof, Inv. No. 337-TA-503, Comm'n Orders, at 3 (Apr. 7, 2005).<a href="#_ftn13" id="_ftnref13">[13]</a> Certain Lithium Ion Batteries, Battery Cells, Battery Modules, Battery Packs, Components Thereof, and Processes Therefor, Inv. No. 337-TA-1159, Commission Opinion (Mar. 4, 2021) ("Batteries").