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ITC Provides Clarity on the Meaning of a Section 337(a)(2) “Article”

A recent decision by the International Trade Commission (“ITC” or the “Commission”) held that pre-commercial or non-commercial items qualify as “articles” for purposes of section 337 investigations.[1] The decision opens up the ITC to complainants who are in an earlier phase of product development. Under section 337(a)(2), a Complainant bears the burden to show that the “domestic industry requirement” is satisfied by showing that an industry in “articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established.”[2] The question that remained was whether the protected article had to be in production. In its 1046 Investigation opinion, the Commission has provided some much-needed clarity.[3] In reversing the Initial Determination, the Commission held that Section 337(a)(2) “does not require commercial production for a domestic industry in the process of being established.”[4]

In the 1046 Investigation, Complainant Macronix asserted that a domestic industry in the process of being established existed based on its research and development on an experimental semiconductor wafer as its “article.”[5] While the Macronix product was not a commercial product at the time of filing the complaint, or the hearing, Macronix argued that the domestic industry requirement does not require showing that the domestic industry article is a mass-produced or commercialized product.[6] The Macronix product was not ready for the marketplace, but a small quantity of precursors were made for the purpose of further research and development, and, Macronix argued, the product practices the asserted patents.[7]

In the Initial Determination, ALJ Lord agreed with Respondent Toshiba, and held that while Section 337 allows for complainants seeking to protect “nascent industries” to prevail by showing a domestic industry “in the process of being established,” the statute nevertheless requires a showing of an “article of commerce, i.e., a product for sale in the marketplace” to satisfy the “article” requirement of the Section 337(a)(2) domestic industry requirement.[8] Thus, ALJ Lord held that within the provisions and purpose of Section 337(a)(2), “article” refers to “products or other commodities that are sold in the marketplace.”[9] According to the ID, Macronix’s product was not “commercially viable” and, therefore, Macronix did not satisfy the domestic industry requirement, and no exclusion order should issue.

After both sides and the OUII Commission Staff appealed to the Commission, the Commission reversed the ID and issued a limited exclusion order against Respondent Toshiba.[10] The Commission disagreed with the ALJ’s interpretation of “article” under section 337(a)(2), and stated that commercialization is not a prerequisite for proving a domestic industry based on an industry in the process of being established, and that a domestic industry may be based on a product still in the pre-commercial or non-commercial stage.[11]

The Commission explained that the term “article” is “sufficiently capacious to embrace pre-commercial or non-commercial items.”[12] The holding cites a previous Commission opinion which cautioned against an interpretation of “article” that “would offer no relief to an inventor-complainant … before the complainant has had an opportunity to engage in production-oriented efforts.”[13] The Commission also relied on the legislative history of Section 337 to support its holding that an “article” need not be commercialized. Using Section 337(a)(3)(C) as an example that permits a domestic industry based on licensing activities, the Commission stated that Congress clearly intended to provide a remedy to nascent industries such as universities, inventors, and start-ups in the absence of a commercialized product where those industries would use licensing to raise the funds needed to manufacture a product.[14]

While the two-part test[15] for proving a domestic industry in the process of being established remains a difficult evidentiary threshold, this Commission opinion affords complainants security in initiating an investigation to thwart a “speedy infringer” where a complainant does not yet have a commercially ready product. In other words, it is now possible for complainants to go to the ITC earlier in their development cycle. Under this Commission opinion, the ITC is now an even more favorable venue for complainants in industries with lengthy research and development timelines, such as the medical device and pharmaceutical industries; or industries with rapid product updates, such as consumer electronics.



[1] Certain Non-Volatile Memory Devices and Products Containing Same, Inv. No. 337-TA-1046, Comm’n Op. at 41 (Oct. 26, 2018).

[2] 19 U.S. Code § 1337(a)(2).

[3] Certain Non-Volatile Memory Devices and Products Containing Same, Inv. No. 337-TA-1046, Comm’n Op. at 39-44 (Oct. 26, 2018).

[4] Id. at 41.

[5] Certain Non-Volatile Memory Devices and Products Containing Same, Inv. No. 337-TA-1046, ID at 142-44 (Apr. 27, 2018).

[6] Id.

[7] Id. at 150-54.

[8] Id. at 144-50.

[9] Id.

[10] Certain Non-Volatile Memory Devices and Products Containing Same, Inv. No. 337-TA-1046, Comm’n Op. at 71 (Oct. 26, 2018).

[11] Id. at 41.

[12] Id.

[13] Id. at 41-42 (citing Certain Computers and Computer Peripheral Devices, and Components Thereof and Products Containing Same, Inv. No. 337-TA-841, Comm'n Op. at 37 (Jan. 9, 2014) (rejecting the notion that the “article protected by the patent” “must be a product that came to market, or is expected to come to market, under the protective umbrella of the asserted patent that the product commercializes.”)

[14] Id. at 42-43 (citing 133 Cong. Rec. S. 1794 (Feb. 4, 1987)).

[15] The two-part test for proving a domestic industry in the process of being established requires showing (1) “the necessary tangible steps to establish an industry in the United States” and (2) whether there is a “significant likelihood that the industry requirement will be satisfied in the future.” See Stringed Instruments, Inv. No. 337-TA-586, Comm'n Op. at 13).

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Michael T. Renaud

Member / Chair, Intellectual Property Division

Michael T. Renaud is an intellectual property litigator and patent strategist who helps Mintz clients protect and generate revenue from their patent holdings. Clients rely on Mike's counsel on complex and sensitive licensing agreement negotiations, acquisitions, and other technology transactions.
James Wodarski is a Mintz trial attorney who concentrates his practice on intellectual property litigation. Jim represents clients in federal district and appellate courts. He handles disputes involving smartphones, core processor circuits, digital imaging software, and other technologies.
Marguerite McConihe is a litigator and intellectual property transactional attorney at Mintz. She counsels clients on maximizing the value of their IP and technology assets, including trade secrets, patents, copyrights, and trademarks. Marguerite's clients are in various technology fields.

Serge Subach