The ITC recently denied a joint motion to terminate an investigation on the basis of settlement after the parties failed to meet the requisite conditions. See In re Certain Child Carriers and Components Thereof, Inv. No. 337-TA-1154, Order No. 11 (May 23, 2019). We previously covered LILLEbaby, LLC's ("LILLEbaby") complaint requesting the ITC to investigate twenty-seven domestic and foreign companies for allegedly infringing its patents related to child carriers ( here). During the investigation, LILLEbaby entered into a confidential settlement agreement with one of the respondents, Britax Child Safety, Inc. ("Britax"). The parties moved jointly to terminate the investigation as to Britax pursuant to 18 U.S.C. § 1337(c) and 19 C.F.R. § 210.21(b).
ALJ Cheney found that the parties failed to meet the requirements for termination. 19 C.F.R. § 210.21(a)(2) provides that "[a]ny party may move at any time for an order to terminate an investigation in whole or in part as to any or all respondents on the basis of settlement, a licensing or other agreement . . . ." LILLEbaby and Britax stated that their settlement agreement resolved "all pending legal disputes" between them and added, as required under 19 C.F.R. § 210.21(b)(1), that there were "no other agreements, written or oral, express or implied" concerning the subject matter of the investigation. ALJ Cheney determined that termination of the investigation based on the attached settlement agreement would not adversely affect the public interest pursuant to 19 C.F.R. § 210.50(b)(2).
However, ALJ Cheney held that the redactions to the attached public version of the settlement agreement far exceeded the permissible scope of confidential business information under 19 C.F.R. § 201.6(a). 19 C.F.R. § 210.21(b)(1) requires parties to file both an unredacted version and a public version of the settlement agreement that serves as the basis for termination. The public version may include redactions to any confidential business information within the meaning of 19 C.F.R. § 201.6(a). ALJ Cheney found that the parties exceeded this scope because many of their redactions, such as the names of LILLEbaby's CEO, Britax's President, and the declarant of the supporting declaration, did not pertain to confidential business information. Having determined that the parties failed to comply with the requirements of 19 C.F.R. § 210.21(b), ALJ Cheney denied the joint motion to terminate the investigation without prejudice. He instead directed the parties to renew their motion with a version of the settlement agreement that complies with the Commission's rules governing confidential business information.
Takeaway
This decision serves as a reminder that parties cannot terminate an ITC investigation without the approval of the ITC. Termination based on a settlement and a joint motion must still comply with the requirements of 19 C.F.R. § 210.21 and not adversely affect the public interest. ALJs are not obligated to grant joint motions to terminate investigations, so parties should take care to address each requirement of 19 C.F.R. § 210.21 with sufficient particularity before making their motion.
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