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 (ITCInternational Trade Commission) was created to be a trade court protecting American companies from unfair foreign competition. There are two constraints on the ITCInternational Trade Commission that are intended to make sure that’s the role it takes—the domestic industry requirement, where the ITCInternational Trade Commission can’t hear a patent case if there isn’t a domestic industry using the patent, and the public interest requirement, where the ITCInternational Trade Commission can’t exclude a product if it determines the public interest would be disserved by doing so.
But since its creation, the ITCInternational Trade Commission has shifted significantly from that role, taking on a role that protects patent owners, regardless of their origin. The prototypical ITCInternational Trade Commission 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 orderAn order issued by the U.S. ITC as a result of a 337 action, excluding from entry into the United States goods found to infringe a U.S. patent..
The AAIA’s Fixes
The AAIA would ban ex post licensingLicensing demanded after the technology has been independently developed and implemented, also known as stick licensing since it is entered under threat of patent litigation. Distinguished from ex ante or carrot licensing where the technology is knowingly and voluntarily licensed in advance. 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 ITCInternational Trade Commission to benefit the patent trollAn entity in the business of being infringed — by analogy to the mythological troll that exacted payments from the unwary. Cf. NPE, PAE, PME. See Reitzig and Henkel, Patent Trolls, the Sustainability of ‘Locking-in-to-Extort’ Strategies, and Implications for Innovating Firms. 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 ITCInternational Trade Commission 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 ITCInternational Trade Commission.
Just as importantly, the AAIA would return the public interest inquiry to the forefront of the ITC’s responsibilities. While the ITCInternational Trade Commission currently is obligated to consider the public interest before issuing an exclusion orderAn order issued by the U.S. ITC as a result of a 337 action, excluding from entry into the United States goods found to infringe a U.S. patent., that process is more or less pro forma—it almost never results in a denial of exclusion, with the ITCInternational Trade Commission 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 ITCInternational Trade Commission to find that the public interest justifies not excluding the product in order to not issue an exclusion orderAn order issued by the U.S. ITC as a result of a 337 action, excluding from entry into the United States goods found to infringe a U.S. patent., the AAIA would require that the ITCInternational Trade Commission affirmatively determine that the public interest justifies exclusion in order to issue an exclusion orderAn order issued by the U.S. ITC as a result of a 337 action, excluding from entry into the United States goods found to infringe a U.S. patent.. 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 ITCInternational Trade Commission 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.
