Editor’s Note: E. Eric Mills is a member of the Intellectual Property Practice Group of Ward and Smith, P.A.

RALEIGH – The United States court system provides mechanisms for intellectual property owners to enforce their rights against domestic infringing parties through civil court proceedings. Questions often arise, however, as to other possible approaches to protect a U.S. patent, trademark, or copyright owner from sale in the United States of infringing articles manufactured overseas.

More importantly, intellectual property owners are interested in how to stop infringing articles "at the dock" by forbidding entry into the United States prior to any economic or reputation injury. This article explores one such avenue for intellectual property protection – the prevention of unfair practices in import trade in the United States under Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337, hereafter "Section 337").

How Does an Import Come Under the Scrutiny of Section 337?

Under Section 337, the United States International Trade Commission ("ITC") considers the infringement of a U.S. patent, trademark, or copyright to be an unlawful practice in import trade and provides mechanisms by which infringing goods can be excluded from importation into the United States. Generally, a suit under Section 337 requires proof of two elements.

The first element relates to the importation, sale prior to later importation, or sale after importation of a good which allegedly infringes on a valid and enforceable U.S. patent, trademark, or copyright. The second element relates to the existence (or development) of a domestic industry which manufactures, sells, imports, or distributes the goods which allegedly infringe upon the protected intellectual property at issue. While a Complainant (i.e., party bringing an action before the ITC) must state a claim of infringement, no showing of actual injury due to the alleged infringement is necessary.

What Is the General Procedure?

The first step is for the U.S. intellectual property owner to file a complaint with the ITC alleging that infringing items are being imported. Upon receipt of such a complaint, the ITC has 30 days in which to decide whether to conduct a Section 337 investigation. This decision to conduct an investigation generally requires the Complainant to satisfy certain procedural rules and to present a valid cause of action.

Upon an initial decision that an investigation should be undertaken, the case is referred to an Administrative Law Judge ("ALJ") who sets a target date for completion of the investigation. The ALJ conducts discovery, presides at evidentiary hearings, and makes an initial determination concerning the Section 337 violation and the appropriate permanent remedy. Any full-scale investigation initiated under Section 337 must be completed and a final order issued by the ALJ no later than 12 months after the beginning of the investigation, unless the investigation is designated by the ITC as being "more complicated," in which case the final order must be issued no later than 18 months after the investigation was initiated.

The ITC reviews the initial determination made by the ALJ as to whether a Section 337 violation has occurred and, if so, the appropriate permanent remedy to be implemented. The ITC can adopt, modify, or reverse the ALJ’s decision and, in so doing, issues its final determination regarding the Section 337 violation and remedy.

Is it Possible to Obtain Relief Before Infringing Items are Imported?

If, at the time of the filing of the initial complaint, the Complainant requests the issuance of a temporary exclusion order ("TEO"), the ITC will conduct an expedited temporary relief proceeding and issue a determination within 90 days, or within 150 days for a "more complicated" matter. A TEO prevents importation of the allegedly infringing goods until completion of the full-scale investigation.

In determining whether to grant a TEO, the ITC uses the same test as federal courts use in determining whether to grant preliminary injunctions and temporary restraining orders. Therefore, the ITC must determine the strength of the evidence the Complainant has presented in establishing a Section 337 violation together with the evidence of immediate and substantial harm to the Complainant which would result if a TEO is not issued. These two items must be balanced against evidence of any adverse impact on the importing party if the TEO were issued and any adverse impact on the public interest.

After a TEO determination is made, the formal investigation continues.

What Remedies Are Available To the Complainant?

If the ITC determines that a Section 337 violation has occurred, there are several remedies available to the Complainant. The ITC first can grant a permanent exclusion order ("PEO"). This PEO can be a "general exclusion order" which prevents the importation of the infringing goods by any person, or a "limited exclusion order" which prevents importation of the infringing goods by the specific violators (called "Respondents") named in the Section 337 proceeding. General exclusion orders require the showing of a widespread pattern of unauthorized sales of the infringing goods and the existence of business conditions that lead to the inference that foreign manufacturers other than the Respondent or Respondents in the Complaint may attempt to enter infringing products into the U.S. market. This required showing makes general exclusion orders more difficult to obtain than limited exclusion orders.

In addition to, or in lieu of, granting an exclusion order, the ITC also can issue and serve on any person an order to cease and desist from engaging in the unfair acts which violate Section 337. This relief vehicle allows the ITC to prevent both the importation of infringing goods and the sale of such goods after importation.

Can the ITC Provide Monetary Compensation for the Infringement?

The ITC can assess civil penalties of up to $100,000 per day for violations of Section 337 exclusion or cease and desist orders, but it is not able to assess civil monetary damages. To seek such monetary relief, a Complainant must file a parallel action in U.S. District Court, such as for patent or trademark infringement. However, a Respondent in the Section 337 investigation that is also a defendant in the District Court action can request, and is entitled to, a stay of the District Court proceeding until the Section 337 investigation is completed. Once the Section 337 action is resolved, the record before the ITC can be conveyed to the District Court for consideration.

Are the ITC Orders Final and Binding?

Both general and limited PEOs are effective when issued and become final after 60 days unless disapproved by the President for policy reasons (a very unusual occurrence). While the remedy determined by the ITC is immediately put into effect, either party to the Section 337 proceeding can appeal the determination to the United States Court of Appeals for the Federal Circuit within 60 calendar days after the ITC’s decision became final.

An ITC order is not self-terminating and remains in effect until the ITC finds that the conditions leading to the grant of the order are no longer in existence, such as if a patent at issue expires.


A U.S. patent, trademark, or copyright owner can seek protection from the sale in the United States of infringing goods manufactured overseas under Section 337 of the Tariff Act of 1930. Under Section 337, goods that infringe a U.S. patent, trademark, copyright, or other intellectual property asset can be excluded from importation or the sale of previously imported infringing products can be prevented. An action under Section 337 is not seen as a replacement for infringement relief, including monetary damages, through the U.S. court system. However, a Section 337 proceeding can be used as an additional tool to enable the protection of intellectual property assets from infringement by prohibiting entry of infringing goods into the United States.

© 2007, Ward and Smith, P.A.

Ward and Smith, P.A. provides a multi-specialty approach to the representation of technology companies and their officers, directors, employees, and investors. E. Eric Mills is a registered patent attorney in the Intellectual Property Practice Group, where he concentrates his practice on patents, trademarks, copyrights, trade secrets, and related business matters. Comments or questions may be sent to eem@wardandsmith.com.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.