A little over a year ago, Reps. DelBene (D-WA) and Schweikert (R-AZ) introduced the Advancing America’s Interests Act (AAIA). Unfortunately, no action was taken on it in the previous Congress. But last week, Reps. DelBene and Schweikert reintroduced the legislation. Hopefully it receives more attention and support in the current Congress.
The Problem With The ITC
At its core, the International Trade Commission (ITC) was created to be a trade court protecting American companies from unfair foreign competition. There are two constraints on the ITC that are intended to make sure that’s the role it takes—the domestic industry requirement, where the ITC can’t hear a patent case if there isn’t a domestic industry using the patent, and the public interest requirement, where the ITC can’t exclude a product if it determines the public interest would be disserved by doing so.
But since its creation, the ITC has shifted significantly from that role, taking on a role that protects patent owners, regardless of their origin. The prototypical ITC case, with American complainants targeting foreign respondents, made up less than 5% of ITC cases in 2020. Part of that shift is the availability of domestic industry via licensing to unwilling licensees who created a product before they took a license. And the public interest provision has been so heavily cabined that it is effectively never applied to deny an exclusion order.
The AAIA’s Fixes
The AAIA would ban ex post licensing as a basis for domestic industry and would also ban domestic industry by subpoena, where an unwilling licensee is then hauled in front of the ITC to benefit the patent troll that forced them to take a license in the first place. That means that the avenues that have been exploited by patent assertion entities to put their cases in front of the ITC would be significantly narrower—a slim path, rather than the present broad boulevard.
As Rep. Schweikert said as part of the reintroduction, “[e]nsuring the International Trade Commission cannot be used as a venue for misuse by patent licensing entities is paramount for protecting consumers and promoting strong global market competition.” The fixes to domestic industry would significantly help with preventing misuse of the ITC.
Just as importantly, the AAIA would return the public interest inquiry to the forefront of the ITC’s responsibilities. While the ITC currently is obligated to consider the public interest before issuing an exclusion order, that process is more or less pro forma—it almost never results in a denial of exclusion, with the ITC allowing a patent owner’s rights in its patents to outweigh interests in competition, health and welfare, and other such factors. Instead of requiring the ITC to find that the public interest justifies not excluding the product in order to not issue an exclusion order, the AAIA would require that the ITC affirmatively determine that the public interest justifies exclusion in order to issue an exclusion order. This change of default would revitalize a public interest process that just doesn’t work the way it’s supposed to.As Rep. DelBene stated when reintroducing the bill, “[b]y modernizing the ITC with this bill, we can help ensure the public interest is always put first as the commission adjudicates.” For an agency intended to protect American companies and American consumers, that public interest ought to be a high priority—and these changes will help ensure that it is.