In a recent opinion, the International Trade Commission ("ITC") held that economic investments and activities related to patented pre-commercial and non-commercial articles can meet Section 337's domestic industry requirement. Certain Non-Volatile Memory Devices and Products Containing Same, Inv. No. 337-TA-1046, Commission Opinion. In an earlier post (here), we reported that ALJ Lord denied Complainant's motion for summary determination that the economic prong of domestic industry was met. This recent Commission Opinion overruled the Initial Determination's finding that Complainant Macronix failed to establish the economic prong of the domestic industry requirement because its experimental articles were allegedly used to conduct further research and not ready for the marketplace.
19 U.S.C. § 1337 makes unlawful the importation of patent infringing articles when "an industry in the United States, relating to the articles protected by the patent . . . exists or is in the process of being established." According to the Commission, the Initial Determination narrowly constructed the word "articles" to mean only "products or other commodities that are sold in the marketplace." Under this erroneous construction, Complainant did not meet the domestic industry requirement because Complainant's experimental PCM non-volatile memory technology was "at most a precursor of what may someday be a prototype," which was "not a product ready for the marketplace" or "likely ever to be sold as a commercial product."
The Commission reversed the ALJ and reasoned, from its own precedent and the legislative history of Section 337, that commercialization was not a prerequisite for domestic industry, and the term "article" was "sufficiently capacious to embrace pre-commercial or non-commercial items." Accordingly, because Complainant Macronix had made substantial investments in research, development, and engineering of the articles protected by patents, the Commission held that Complainant Macronix had "amply demonstrated its activities and investments . . . towards the establishment of a PCM manufacturing industry in the United States."
Takeaway
In this opinion the Commission appears to recognize that for some complainants, investments into new technologies, prototypes and other research-related items can embody significant value and can be relevant to establishing a domestic industry in the United States. For respondents it remains important to challenge these types of economic investments to show that the investments were not substantial and not related to articles protected by the relevant patents.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
