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© 2013 Kilpatrick Townsend 11/13/13 Trademark Cases in the ITC Greg Gilchrist & Ryan Bricker
2013 Kilpatrick Townsend 11/13/13
Trademark Cases in the ITC Greg Gilchrist & Ryan Bricker
Independent administrative law court with in rem jurisdiction over all goods imported into the United States
Relatively small (~350 employees); Section 337 is between 15 and 20% of its activity
6 Commissioners appointed by the President, approved by Senate Section 337 gives the ITC jurisdiction to address unfair competition
related to products imported into the United States, including patent, copyright, and trademark infringements
Section 337 was amended in 1974 to require the ITC to make final decisions in 337 investigations within 12 months (18 in special cases) amended further in 1994 to remove time restraints but preserve expediency
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Background on the ITC
Following the 1974 amendments to Section 337 (significantly changing process at the ITC and increasing the venues attractiveness among IP owners), the first trademark infringement action was filed in January 1976.
Q1: What did the first post-74 trademark case at the ITC involve? Arrow staple guns Coin-operated video games Rubiks Cube puzzles Plastic bags Parliament Cigarettes
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Background on the ITC
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Plastic Bags
In re Certain Reclosable Plastic Bags, 337-TA-022 (1976)
Counterfeits originated in Taiwan General exclusion order issued
precluding import
New section 337 investigations instituted: 69 in 2011, 40 in 2012
Total active section 337 investigations and related (ancillary) proceedings at the end of 2012: 129 Solely patent-based: 119 Solely trademark-based: 3 Solely based on trade secret misappropriation: 1 Based on allegations of patent infringement, as well as trademark
infringement and/or, trade secret misappropriation: 4 Based on allegations of copyright infringement, misappropriation of
trade secrets, tortious interference with contract, unfair competition, and/or breach of contract: 2
Results in FY 2012: 7 general exclusion orders issued 4 limited exclusion orders issued 22 cease and desist orders issued 5
Some Statistics from the ITC
Volume of trademark cases: Over the past ~35 years, 95 ITC investigations have been instituted
at the ITC alleging trademark infringement.
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Trademark Case Statistics
Service The ITC has in rem jurisdiction over imports, so complainant need
not establish personal jurisdiction over defendant(s) ITC facilitates service of foreign defendants Consider: Approximately 81 percent of the value of the counterfeits
seized by American customs in 2010 originated in China. Intellectual Property Rights, Seizure Statistics: FY 2010, U.S. Customs and Border Protection
and U.S. Immigration and Customs Enforcement (January 2011). In this report, China includes Mainland (66 percent), Taiwan (less than 1 percent) and Hong
Kong (14 percent).
Speed Investigation commenced within 30 days after Complaint filed Most 12(b) issues resolved by ITCs 30-day preliminary
investigation ITC serves Complaint and Notice of Investigation Discovery commences immediately Average time to trial is ~10 months
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Why the ITC?
Broad Injunctive Remedies Limited and general exclusion orders; cease and desist orders
Federal Rules of Civil Procedure and Federal Rules of Evidence do not apply
Other Benefits (e.g., no counterclaims, nationwide subpoena power) Exclusion of counterclaims often leads to parallel district court
proceedings
IP Expertise
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Why the ITC?
ITC exclusion orders direct US Customs Service to deny entry of a product at U.S. ports, and creates a framework for seizures.
The orders are In Rem, and function irrespective of personal jurisdiction Limited Exclusion Orders
Typically issued in one-on-one cases Bar importation of the products by the particular Respondent in the ITC
case General Exclusion Orders
Bar importation of infringing products from all sources (even sources that were not parties to the case)
Have a higher statutory standard for issuance, typically requiring proof of widespread infringement, low barriers to entry into the field, and difficulty identifying infringement sources (all classic aspects of an off-shore counterfeiting problem); these are called the Spray Pump factors
Expedited relief in the form of temporary exclusion orders and temporary cease and desist orders are available in exceptional circumstances
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More on Injunctive Relief
Complainant need only: Allege ownership of a trademark (satisfied by a
federal registration) and infringement of that mark; Showing harm flowing from the infringement is
not always necessary Show that infringing articles have been imported
into the U.S. (a single case of importation can be sufficient); and
Satisfy the domestic industry requirement
Trademark Claims at the ITC
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Complainant must allege and prove that a "domestic industry" relating to infringing articles exists or is in the process of being established
Two elements: 1. Economic prong: Asks, is there an industry in the
US to protect? 2. Technical prong: Asks, does the U.S. industry
use or relate to the intellectual property right at issue?
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Domestic Industry
Economic Prong 19 U.S.C. 1337(a)(3) Must show one of the following:
significant investment in plants or equipment in the US that manufacture trademark owners products;
significant employment of labor or capitol in the US supporting trademark owners products; or
substantial investment in exploitation of the trademarks at issue in the case, including research and development or licensing.
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Domestic Industry
Technical Prong 1337(a)(2)
Basically requires that the trademark owner tie the evidence used to satisfy the economic prong back to the trademarks asserted in the complaint.
So, if relying on investment in labor, that labor must, e.g., be focused on developing products that will bear the particular mark at issue in the ITC proceeding.
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Domestic Industry
Certain Integrated Circuits, Processes for Making Same and Products Containing Same Inv. No. 337-TA-450 (2002)
Taiwanese complainant sought to satisfy domestic industry requirement based on the activities of its U.S. sales subsidiary.
Existence of domestic industry confirmed by complainants leasing office space, providing engineering support to customers and third party vendors, and employing engineers to perform that assistance in the U.S.
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Domestic Industry
The ITC evaluates acquired secondary meaning using the following factors: 1.degree and manner of use 2.exclusivity of use; 3.length of use; 4.degree and manner of sales, advertising and promotional activities; 5.effectiveness of the effort to create secondary meaning; 6.evidence of deliberate copying; and 7.evidence that actual purchasers associate the trade dress with a particular source.
In the Matter of Certain Digital Multimeters, 2010 ITC LEXIS 2867 (December 2010).
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Secondary Meaning
Q2: How many likelihood of confusion factors does the ITC apply? 12 4 7 11
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Likelihood of Confusion
Likelihood of Confusion Analysis The ITC uses the likelihood of confusion factors from the Restatement of Torts: 1. Similarity of the marks 2. Intent of the actor 3. Similarity of manner of marketing 4. Degree of consumer care See, e.g., In the Matter of Certain Hair Irons and Packaging Thereof, 2010 ITC LEXIS 2875 (December 2010). 17
4 Likelihood of Confusion Factors
Louis Vuitton petitioned the ITC to investigate 12+ companies and individuals manufacturing and selling knockoff versions of its bags and infringing its Toile mongoram trademarks.
Named two individuals as the orchestrators of the international counterfeiting enterprise, plus companies in California, Texas and China.
After settlements, consent order stipulations, and Louis Vuittons motions for summary determination, the ITC issued a general exclusion order prohibiting the importation of infringing handbags and luggage.
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Success Story
In the Matter of Certain Handbags, Luggage, Accessories, and Packaging Thereof, 2012 ITC LEXIS 818 (May 2012)
Q3: How many ITC Investigations have been filed since the order issued in Louis Vuitton (May 2012)? 5 3 1 8
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Has LV Changed the Game?
1 case filed alleging trademark infringement since the Louis Vuitton order (May 2012): In the Matter of Certain Laundry and Household Cleaning Products
and Related Packaging, 337-TA-891 In discovery
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Cases since LV
2 filed just before the LV order: In the Matter of Certain Food Containers, Cups, Plates, Cutlery,
and Related Items and Packaging Thereof, 337-TA-835 Alleged trademark infringement re: GREENWARE mark Filed ~April 2012, terminated in December following settlement
In the Matter of Certain Food Waste Disposers and Components and Packaging Thereof, 337-TA-838
Alleged trademark infringement re: INSINKERATOR mark, passing off, dilution, trade dress infringement, and design patent infringement
Filed ~April 2012, complaint withdrawn January 2013
Cases since LV
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ATLANTA AUGUSTA CHARLOTTE DENVER LOS ANGELES NEW YORK RALEIGH SAN DIEGO SAN FRANCISCO SEATTLE SHANGHAI SILICON VALLEY STOCKHOLM TOKYO WALNUT CREEK WASHINGTON D.C. WINSTON-SALEM www.kilpatricktownsend.com
Greg Gilchrist
Ryan Bricker [email protected]
Questions?
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