The International Trade Commission: Reform or Abolition? A Comment on Colleen V. Chien & Mark A. Lemley, Patent Holdup, the ITC, and the Public Interest

1 Cornell Law Review Online (2013)

Minnesota Legal Studies Research Paper No. 13-07

11 Pages Posted: 12 Feb 2013 Last revised: 1 Jan 2015

See all articles by Thomas F. Cotter

Thomas F. Cotter

University of Minnesota Law School

Date Written: February 11, 2013

Abstract

This essay is a largely favorable response to Colleen Chien and Mark Lemley’s recent paper Patent Holdup, the ITC, and the Public Interest. Chien and Lemley propose three reforms to the International Trade Commission’s practice of awarding exclusion orders against the importation of patent-infringing goods: first, that the ITC should sometimes soften the impact of an exclusion order by “grandfathering in” existing products that contain an infringing component; second, that the Commission should sometimes delay entry of an exclusion order to enable defendants to design around the patent in suit; and third, that the Commission should sometimes stay its orders on condition that the defendant pay a “comparably higher bond” — in effect, “a payment of an ongoing royalty” during the period of the stay. I find no fault with any of these proposals, all of which appear to me to be both sensible and feasible; the ITC could simply adopt these measures without the need for any statutory amendment, and without the need for invoking the more radical step of denying exclusion orders altogether, on public interest grounds, in a wide swath of cases. Nevertheless, at the end of the day I remain unconvinced that mere reform measures are sufficient to alleviate the core problem: namely, that the ITC lacks any compelling justification for its continued existence. Today, ITC investigations are mostly brought against domestic firms and are duplicative of federal district court proceedings; they often pose a substantial risk of exacerbating patent holdup and trolling; and they have no close counterpart to any other patent regime’s system of “border measures” to exclude patent-infringing goods. Thus, while the adoption of Chien and Lemley’s proposals would, in my view, improve the current state of affairs, a more appropriate response (were it only politically feasible) would be to seriously consider the elimination, rather than merely the reform, of ITC investigations.

Keywords: patents, International Trade Commission, ITC

Suggested Citation

Cotter, Thomas F., The International Trade Commission: Reform or Abolition? A Comment on Colleen V. Chien & Mark A. Lemley, Patent Holdup, the ITC, and the Public Interest (February 11, 2013). 1 Cornell Law Review Online (2013); Minnesota Legal Studies Research Paper No. 13-07. Available at SSRN: https://ssrn.com/abstract=2215067

Thomas F. Cotter (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-624-7527 (Phone)

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