There are a number of ways in which U.S. manufacturers that believe they are being harmed by imports can seek protection.
An increasingly popular tool to consider is filing a Section 337 proceeding at the International Trade Commission, which can be used to combat a wide variety of alleged unfair trade practices.
What is a Section 337?
Under Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, the International Trade Commission is authorized to issue an order to exclude articles from entry into the United States that have been found to violate U.S.-based intellectual property rights, or where the respondent has committed other unfair acts relating to imported products. The exclusion order is enforced by the U.S. Customs and Border Protection (CBP).
Most Section 337 investigations allege violations of intellectual property-based rights involving claims of patent, copyright or trademark infringement. In such cases, the complainant must establish that a valid and enforceable U.S. patent, copyright or trademark is being infringed by the importation into the U.S., the sale for importation, or the sale within the U.S. after importation of an accused article, and that a domestic industry exists or is in the process of being established.
Section 337 also provides remedies for other unlawful acts, such as theft of trade secrets and unfair competition under the Lanham Act. Recent investigations have also involved allegations of price-fixing, computer hacking, and customs circumvention. In these cases, the complainant is required to show that the respondent’s unfair practices threaten to destroy or substantially injure a domestic industry.
I’m a Domestic Manufacturer, Could I be the Target of a Section 337 Proceeding?
Yes. While Section 337 was initially enacted by Congress to protect domestic industries against unfair trade practices by foreign companies, any company that imports products can be named as a respondent. There are numerous investigations where a foreign company owns a U.S. patent, and is able to allege a domestic company imports components that infringe U.S. patents into the United States that are incorporated into downstream products. Similarly, U.S. companies with overseas operations could be the target of claims of other unfair acts in the importation of goods, such as using stolen trade secrets, or importing counterfeit products.
Steps Manufacturers Can Take to Avoid Being Named in an ITC Complaint
Both foreign companies and U.S. companies that import products should audit their overseas operations to ensure they are in compliance with U.S. laws, the violation of which could form the basis of a Section 337 investigation. Such measures should include:
This content was originally generated as part of a Legal News: U.S. Regulation of Exports and International Conduct newsletter by David Hickerson and Greg Husisian titled, “Section 337 and the New Trump Administration: Your Top Ten Questions Answered.” Click here for the original publication.