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Refocusing the ITC to Protect the US Economy


Refocusing the ITC to Protect the US Economy

International trade is always transforming, often in exciting ways. However, a little-noticed trend in litigation at the United States International Trade Commission (ITC) portends serious market disruption and harm to US consumers and businesses.

Since 1916, the ITC has been tasked with protecting domestic industries from unfair imports. Under Section 337 of U.S. trade law, the ITC investigates imports claimed to be competing unfairly and affecting U.S. industries, including by infringing intellectual property (IP) rights. In these cases, the ITC can issue an exclusion order to ban all imports of the infringing product from the U.S. but is to refrain from a ban, if the public interest dictates it should not act.

During my tenure as ITC Chairman, the agency took great care to respect the balance of interests in the cases before us; our goal was to strengthen and support the US economy. Time and again, Congress made it clear that the mission of the ITC is to protect domestic industry – meaning US productive capacity and jobs. It is not simply an expedient alternative forum for enforcement of IP claims that could be heard by courts. Congress made it equally clear that focus on the broader public interest was paramount to striking the right balance. If the harm to consumers or healthy market competition outweighed any gains from protecting the patentholder, no import ban should issue.


Unfortunately, in subsequent years, the ITC in 337 cases has forgotten its history and the critical balance of interests that its decision-making requires. The ITC now elevates the protection of one claimant’s IP right over damage to the US economy writ large. It regularly dismisses evidence of future public harm as speculative – because the damage has not yet occurred. This is at odds with logic, law, and economics, including the ITC’s own expert analyses.

The whole point of an ITC exclusion order is to change which goods can enter the U.S. in the future, so of course, the ITC must consider how its actions will affect the public going forward. It requires the same kind of forward-looking analyses the ITC regularly does when, for example, it evaluates the projected impact of a planned trade agreement on the US economy.

The ITC’s analytic missteps have created a monster. We are seeing an increased 337 cases against complex products involving hundreds, if not thousands of patents, like cars and smartphones. Petitioners know that asserting even one minor patent for one minor component threatens the exclusion of an entire category of downstream products. That creates distorted incentives; even US companies steadfastly denying patent infringement pay outsize settlements to avoid the prospect of losing the U.S. market. Worse still, in many of these cases, petitioners are not U.S. companies and have threadbare connections to the domestic economy. They are instead patent-holding entities – often called patent trolls or “nonpracticing entities” (NPEs) – created and backed by financial firms with the sole purpose of litigating to extract big money.

A double case in point: A newly formed Ireland firm, Neodron Ltd., filed two ITC cases accusing the major smart device innovators, including Amazon, Apple, Dell, LG, Microsoft, Samsung, and Sony, of infringing patents related to touchscreens on smart devices. If the ITC determines even one claim of one patent was infringed, more than 90% of tablets, smartphones, and touchscreen computers could be prohibited from entering the country.

Exclusion would devastate American consumers and these companies. Americans rely more heavily than ever on their smart devices during the COVID-19 pandemic to work from home, learn remotely, consult with their doctors, and stay connected to family and friends.

It might be one thing if an import ban on these crucial devices would strengthen the US economy by protecting some domestic industries from unfair trade. But Neodron produces nothing, and the company it licenses its patents to does not make products that compete with (let alone replace) the smart devices that would be excluded. Neodron, and only Neodron, would benefit; the public and the U.S. economy would suffer. It is exactly the type of exclusion order Congress warned against.

Neodron and other NPEs can pursue their patent claims through the courts if they are legitimate. But claims like theirs do not belong in the ITC–an agency whose purpose is protecting trade. The ITC needs to focus on combatting the insidious and growing economic costs of letting NPEs press this kind of exploitive litigation. It should not conflate NPEs’ narrow interest in monetizing their patents with the actual public interest, which Congress has required it to analyze seriously before excluding products from the market. The ITC’s return to its mandate and mission is an urgent priority.


Supreme Court Declines Comcast’s Challenge to the ITC’s Jurisdiction, Thus Confirming the Broad Reach of Section 337

Entering October Term 2019, the U.S. Supreme Court had never reviewed a Section 337 investigation. However, some court-watchers thought that Comcast Corporation v. International Trade Commission might have the right ingredients to break that 90-year streak: a former U.S. Solicitor General representing the petitioners; allegations that Chevron deference had led to regulatory overreach; and a handful of sophisticated amici curiae supporting cert. But the Court denied the petition without even a relist, leaving intact the U.S. International Trade Commission’s assertion of broad authority over patent infringement that occurs wholly within the United States after importation.

Comcast’s cert petition arose out of ITC Investigation No. 337-TA-1001. The complainant, Rovi, argued that certain set-top boxes (“STBs”) used in Comcast’s cable-television system infringed two patents involving “an interactive television program guide system for remote access to television programs.” The Commission found that when Comcast customers use the STBs in a particular way, in conjunction with Comcast’s system, those customers infringe the asserted patents. The Commission further found that Comcast induced that infringement by instructing customers how to use the system. Thus, the Commission found that the STBs constitute infringing articles under Section 337 and issued a limited exclusion order and cease and desist order.

Before the Federal Circuit and in its cert petition, Comcast argued that the Commission had overstepped its jurisdiction. Comcast explained that all of the infringing conduct—both the customers’ direct infringement using the STBs, and also Comcast’s inducement by providing instructions to its customers—occurred within the United States. In Comcast’s view, then, the STBs were not “articles that . . . infringe” a patent at the time of importation and thus fall outside the scope of Section 337.

Siding with the Commission, the unanimous Federal Circuit panel rejected this argument. The court noted that Section 337 expressly defines unfair trade practices to include “sale within the United States after importation” of infringing articles. The court concluded that so long as the articles are imported and they infringe a patent, they fall within the scope of Section 337, regardless of whether the articles were infringing at the time they entered the United States.

The denial of cert in Comcast solidifies the Commission’s broad assertion of authority over all infringement by imported products, regardless of the nature of that infringement and regardless of when it occurs. Even before this development, the Commission had become a preferred forum for many patent holders given its powerful remedies, fast pace, and patent-savvy personnel. This trend is likely to accelerate now that the courts have passed on the opportunity to curtail the Commission’s broad view of its jurisdiction.


Beau Jackson is a Kansas City-based partner with the law firm Husch Blackwell LLP. He leads the firm’s Section 337 practice.

Michael Martinich-Sauter is an attorney in Husch Blackwell LLP’s St. Louis office.


Commerce Finds Dumping and Countervailable Subsidization of Imports of Carbon and Alloy Steel Threaded Rod from China and India

On February 10, 2020, the Department of Commerce (“Commerce”) announced its affirmative final determinations in the AD and CVD investigations of imports of carbon and alloy steel threaded rod from China and India. See the fact sheet for a summary of the final cash deposit rates and margins.

In the China AD investigation, Commerce calculated cash deposit rates of 4.26% and 14.16% to the mandatory respondents Zhejiang Junyue Standard Part Co., Ltd. and Ningbo Zhongjiang High Strength Bolts Co., Ltd., respectively. Chinese companies that are eligible for a separate rate received a rate of 11.47%. The antidumping cash deposit rate for all other Chinese companies is 59.45%.

In the China CVD investigation, Commerce calculated and assigned subsidy rates of 66.81% and 31.02% to the mandatory respondents Zhejiang Junyue Standard Part Co., Ltd. and Ningbo Zhongjiang High Strength Bolts Co., Ltd., respectively. The subsidy rate for all other Chinese exporters is 41.17%.

In the India AD investigation, Commerce assigned a cash deposit rate of 28.34% to mandatory respondent Daksh Fasteners and 2.47% for mandatory respondent Mangal Steel Enterprises Limited. The cash deposit rate for all other Indian exporters is 2.47%.

In the India CVD investigation, Commerce assigned a cash deposit rate of 211.72% to mandatory respondent Daksh Fasteners and a rate of 6.07% to mandatory respondent Mangal Steel Enterprises Limited. The cash deposit rate for all other Indian exporters is 6.07%.

The ITC is currently scheduled to make its final determinations on or about March 23, 2020. If the ITC makes affirmative final determinations of material injury to domestic industry, then Commerce will issue AD and CVD orders instructing Customs and Border Protection (“CBP”) to collect deposits based on the applicable duty rate. If the ITC makes negative determinations of injury, then the investigations will be terminated.


Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. Shee practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Camron Greer is an assistant trade analyst in Husch Blackwell LLP’s Washington, D.C. office.


International Diploma-cy

Higher education is one of the world’s leading “exports”

To compete in today’s knowledge-driven economy, college-bound students are increasingly going global in their pursuit of a top-notch degree. Since 2001, the number of students pursuing studies abroad has more than doubled, from 2.1 million to 5.0 million in 2018.

As one result, higher education is fast becoming one of the world’s leading “exports.” Many people may not think of education as an “export,” but when an international student comes to the United States, for example, the monies spent on tuition, fees and living expenses are considered “exports” of education services.

The current world leader in education exports is the United States, whose 7,021 two- and four-year colleges and universities attracted nearly a quarter of the world’s international students in 2018. According to the U.S. International Trade Commission (ITC), revenues from U.S. higher education accounted for about one-fourth of the $903 billion global education services industry in 2011.

Top host destinations for foreign students

International students are the consumers of higher education exports

On the other side of the equation, the world’s leading “consumers” of higher education are China and India, both of whom see enormous benefits in sending hundreds of thousands of their students abroad to take advantage of educational opportunities and to bring that knowledge home.

Chinese students, for example, make up 33 percent of all international students in the United States, according to a 2019 report by the Institute of International Education (IIE), while the share of students from India has also grown dramatically. In 2018, China sent 369,548 students to America, while India sent 202,014. For both groups of students, the most popular fields of study are science, technology, engineering and math (STEM), followed by business and management.

American schools also benefit from the presence of international students, which is one reason why their numbers are rising (although their share of total U.S. college enrollment is still only about five percent). In addition to the cultural and social diversity these students bring, they also pay “full freight” – out-of-state tuition in the case of public universities or sticker price in the case of private schools. At some schools, international students even pay extra. At the University of Illinois at Champaign-Urbana, for example, international students paid a $2,800 surcharge during the 2012-2013 school year.

These well-paying students have been a boon for schools facing rising costs or cash-strapped by cuts in state education budgets. But even elite institutions find these students attractive. For example, according to the ITC, foreign students made up at least 15 percent of the students entering Boston University, Columbia University and the University of Pennsylvania during the 2011-2012 school year and at least 10 percent of students at such flagship state schools as the University of California-Berkeley. Many schools also actively recruit foreign students and even hire “brokers” to find students abroad. The ITC also reports that a growing number of public colleges and universities are forming state-wide consortia, such as “Study New Jersey” and “Study Wisconsin,” to host recruiting fairs and conferences for foreign students.

US Colleges with Greatest Share of Foreign Students 2018

Global competition to provide higher education

American schools, however, are increasingly facing competition from other countries that see the same opportunities. India, for example, recently decided to raise by 10,000 the number of foreign students admitted to its engineering schools as a way to improve the prestige of its national universities. As a result, the U.S. share of the international student market is slipping. While the number of international students going to America continues to climb, its overall share of these students in 2016 was three percent lower than it was in 2001.

While the dominance of U.S. higher education will likely continue for quite some time, competition for the world’s “best and brightest” will only get more fierce.


This article was updated as of November 20, 2019.

Anne Kim


Anne Kim is a contributing editor to Washington Monthly and the author of Abandoned: America’s Lost Youth and the Crisis of Disconnection, forthcoming in 2020 from the New Press. Her writings on economic opportunity, social policy, and higher education have appeared in numerous national outlets, including the Washington Monthly, the Washington Post, Governing and, among others. She is a veteran of the think tanks the Progressive Policy Institute and Third Way as well as of Capitol Hill, where she worked for Rep. Jim Cooper (D-TN). Anne has a law degree from Duke University and a bachelor’s in journalism from the University of Missouri-Columbia.

This article originally appeared on Republished with permission.

India Trade Barriers ? New USITC Report Says “Yes”; India Says “No”

Washington, D.C. – The U.S. International Trade Commission (USITC) has released a new report slamming India’s trade, investment and industrial policies and detailing their impact on the U.S. economy.

According to the report, tariff and customs procedures as well as taxes and financial regulations “had the most significant effect on U.S. businesses while foreign direct investment caps and intellectual property policies also impacted companies across several sectors.”

If tariff and investment restrictions were fully eliminated and standards of intellectual property (IP) protection were made comparable to U.S. and Western European levels, US exports to India would rise by two-thirds and US investment in India would roughly double, the Trade, Investment, and Industrial Policies in India: Effects on the US Economy report said.

The USITC has been asked by the House Committee on Ways and Means and the Senate Committee on Finance to conduct a second investigation looking at policy changes under the new government. The agency expects to deliver the results to the Committees by September 24.

The report, prepared at the behest of the House Committee on Ways and Means and the Senate Committee on Finance, covers tariffs and customs procedures, foreign direct investment restrictions, local-content requirements, treatment of intellectual property, taxes and financial regulations, regulatory uncertainty, and other non-tariff measures such as unclear legal liability, price controls, and sanitary and phyto-sanitary standards.

India angrily responded to the USITC report, calling it a “unilateral action” that “has no validity.”

A senior official in the New Delhi government told the media that, “India was not party to the investigations and it is the U.S.’ internal decision. The U.S. government has not taken up the matter bilaterally or multilaterally with us. India’s position remains the same as it was last year.”

The USITC report is the second such report released over the past several years by the agency on the tariff and non-tariff trade barriers U.S. companies face while doing business with the Sub-Continent.

The Washington, D.C.-headquartered U.S.-India Business Council, the largest bilateral trade association in the U.S., took a somewhat conciliatory tone when responding to the USITC report.

“There is no doubt that U.S. companies face challenges in India, but many of these issues are institutional in nature and take time and a concerted effort by all stakeholders to resolve,” said Diane Farrell, acting president of the Washington, D.C.-headquartered U.S.-India Business Council.

“As this most recent report suggests, there is a lot of potential for both countries, and we are committed to working alongside our members and both governments to further develop and deepen the two-way commercial relationship,” she said.

President Barack Obama is scheduled to visit India later this month.