ITC Section 337

Limited Exclusion Order (LEO)

Directs US Customs and Border Protection to exclude infringing articles of the named respondents from entry into the United States. The standard remedy — covers the respondents' products, including downstream products in defined circumstances.

General Exclusion Order (GEO)

Excludes ALL infringing articles regardless of source — including from companies that were never parties to the investigation. Available only on a heightened showing: a GEO must be necessary to prevent circumvention of a limited order, or there must be a pattern of violation plus difficulty identifying the source of infringing products. Powerful against fragmented, easily-renamed importers (e.g., commodity electronics).

Cease and Desist Order (CDO)

Prohibits named respondents from selling, marketing, or distributing infringing articles already imported and sitting in US inventory — closing the loophole an exclusion order alone would leave. Enforced by civil penalties up to the greater of $100,000 per day or twice the value of the goods.

What is a Section 337 investigation at the ITC?

A Section 337 investigation is a proceeding before the US International Trade Commission (ITC) under Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337), which declares unlawful 'unfair acts' in the importation of articles into the United States — most commonly, importing products that infringe a valid and enforceable US patent. (Section 337 also covers registered trademark and copyright infringement, and, less commonly, trade secret misappropriation and other unfair competition.) Key characteristics: (1) It is an in rem proceeding directed at the imported articles, not a damages suit against a defendant — meaning the ITC can reach foreign manufacturers that would be difficult to sue in district court for lack of personal jurisdiction; (2) The remedy is exclusionary, not monetary: an exclusion order directs US Customs and Border Protection to stop infringing goods at the border, and a cease and desist order prevents sale of already-imported inventory — the ITC cannot award damages; (3) It is fast: the statutory mandate is to complete investigations 'at the earliest practicable time,' with target dates typically set at 16–18 months and the evidentiary hearing around months 9–10 — far faster than the 2–3+ year district court track; (4) The complainant must prove a 'domestic industry' exists or is being established for products protected by the asserted patent; (5) The case is tried to an Administrative Law Judge with review by the full Commission, then a 60-day Presidential review period, then appeal to the Federal Circuit. Patent owners often file parallel ITC and district court actions: the ITC action for fast exclusionary relief and the district court action (typically stayed under 28 U.S.C. § 1659 at the respondent's request) preserved for damages.

What is the domestic industry requirement in Section 337 cases?

The domestic industry requirement is the gatekeeping element unique to ITC practice: the complainant must show that 'an industry in the United States, relating to the articles protected by the patent... exists or is in the process of being established' (19 U.S.C. § 1337(a)(2)). The requirement has two prongs: (1) Economic prong — significant investment in the United States, shown through any of the three statutory categories of § 1337(a)(3): (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in exploitation of the patent, including engineering, research and development, or licensing. (2) Technical prong — the complainant (or its licensee) must actually practice at least one claim of the asserted patent in the domestic-industry products; the analysis resembles an infringement comparison between the patent claims and the complainant's own products. Important nuances: the domestic industry products need not be manufactured in the US — US-based engineering, R&D, design, repair services, and customer support investments relating to the protected articles can satisfy the economic prong even for products manufactured abroad. Licensing-based domestic industry under subsection (C) allows non-manufacturing patent owners (including universities and some licensing entities) to use Section 337, but the investment must be substantial and tied to the asserted patents — pure litigation-driven licensing programs have faced increasing scrutiny. The domestic industry requirement is a frequent battleground: respondents attack both prongs, and complaints have been dismissed for failure to prove either one.

What is the difference between a limited and general exclusion order?

Both are orders directing US Customs and Border Protection to deny entry to infringing articles, but they differ in scope. A Limited Exclusion Order (LEO) excludes infringing products of the named respondents in the investigation — the companies that were actually parties. It is the default remedy when a violation is found. An LEO can cover downstream products that incorporate the infringing articles in appropriate circumstances, evaluated under the Commission's EPROMs factors. A General Exclusion Order (GEO) excludes ALL infringing articles from any source — including manufacturers and importers who were never respondents and never appeared in the investigation. Because a GEO binds non-parties, the statute (19 U.S.C. § 1337(d)(2)) restricts it to two situations: (A) a general exclusion is necessary to prevent circumvention of a limited exclusion order (e.g., infringers can trivially reincorporate under new names or shift products through new shell importers); or (B) there is a pattern of violation of Section 337 and it is difficult to identify the source of infringing products. GEOs are characteristic of cases involving commodity products from fragmented overseas supplier bases — consumer electronics accessories, vaping products, toner cartridges — where enforcing respondent-by-respondent is futile. Enforcement at the border: CBP administers exclusion orders; importers of redesigned products can seek rulings from CBP or the ITC that the redesign falls outside the order. Cease and desist orders complement exclusion orders by barring sales of inventory already inside the United States, enforceable by civil penalties up to the greater of $100,000 per day or twice the value of the goods.

Should a patent owner choose the ITC or district court?

The venues serve different goals, and sophisticated patentees often use both. Choose the ITC when: (1) the infringing products are imported (a statutory requirement — purely domestic infringement cannot be reached); (2) speed matters — a 16–18 month path to an enforceable border ban versus 2–3+ years in district court; (3) the defendants are foreign manufacturers that are hard to reach with personal jurisdiction in US courts — the ITC's in rem jurisdiction over the imported articles sidesteps that problem; (4) exclusion (market disruption) is more valuable than damages — an exclusion order can be devastating commercial leverage; (5) you want to avoid an IPR stay — district courts frequently stay cases pending inter partes review, but the ITC almost never does, so the ITC schedule usually outruns the PTAB. Choose district court when: (1) you need money damages — the ITC awards none; (2) the infringer manufactures domestically; (3) you cannot satisfy the domestic industry requirement; (4) you want a jury. Constraints to weigh: ITC litigation is extremely intense and compressed — the discovery and expert schedule demands large legal teams and budgets comparable to or exceeding district court despite the shorter calendar; the domestic industry requirement adds an element you must prove; and ITC determinations on patent validity have no preclusive effect in district court (the parallel damages case can relitigate everything). The dual-track strategy: file both actions simultaneously; the respondent will typically invoke 28 U.S.C. § 1659 to stay the district court case; the ITC action proceeds to a fast exclusion order; the district court case resumes afterward for damages, informed by the ITC record.

What is the Presidential review period for ITC exclusion orders?

After the ITC issues a final determination finding a Section 337 violation and orders a remedy, the order is transmitted to the President for a 60-day review period (19 U.S.C. § 1337(j)). The President — by delegation since 2005, the United States Trade Representative (USTR) — may disapprove the order 'for policy reasons,' which nullifies it. During the 60 days, the respondent may continue importing the accused products by posting a bond set by the Commission; if the order survives review, importation must stop. Disapprovals are extraordinarily rare. The most famous modern example: in August 2013, the USTR disapproved the ITC's exclusion order against certain Apple iPhones and iPads in Investigation No. 337-TA-794 (brought by Samsung), citing policy concerns about exclusion orders based on standard-essential patents subject to FRAND commitments — the first disapproval since 1987. The episode effectively signaled that exclusion orders on FRAND-committed SEPs face a policy headwind, pushing SEP disputes toward damages and rate-setting litigation instead. After the Presidential review period ends (or upon disapproval), the losing party can appeal the Commission's determination to the US Court of Appeals for the Federal Circuit. Note that the bond amount during Presidential review is set case-by-case — sometimes at 100% of entered value — and the complainant can recover against the bond for importation during the review period if the order stands.