Big Check: How much do you know?

　　For some Chinese enterprises, the "337 investigation" is no longer so strange and mysterious, but there are still many enterprises do not understand the "337 investigation" and its specific procedures。By sorting out the procedural rules of "337 investigation", this paper hopes to provide some reference and help for Chinese enterprises that have encountered or may encounter "337 investigation" when considering whether and how to respond to a lawsuit。

　　In the United States, a "337 investigation" is a quasi-judicial process whose competent agency is the United States International Trade Commission (ITC or USITC), an administrative agency。The procedure of a Section 337 investigation is very similar to the civil procedure in the United States, but it is also special。The main procedures of "337 investigation" include application, filing, evidence discovery, court hearing, preliminary ruling, final ruling, presidential review, appeal and so on。

　　01申请

　　For the type of intellectual property infringement "337 investigation" cases，The applicant must prove that: (1) the respondent has imported the products involved into the United States;(2) The applicant has a domestic industry in the United States related to the intellectual property rights involved;(3) The products imported by the respondent infringe the intellectual property rights acquired by the applicant in the United States。In practice, the application for "337 investigation" is mostly due to patent infringement。

　　"337 investigation" cases for other types of unfair conduct (such as infringement of trade secrets)，In addition to the applicant must prove that there is an import act, the existence of a domestic industry, and the respondent's conduct constitutes an unfair act，It must also prove "domestic industry injury."，That unfair practices hurt domestic industries，Or prevent the establishment of the industry，Or to restrict or monopolize trade or commerce in the United States，Or there are these threats。 A "337 investigation" can be filed with the ITC by the applicant or initiated by the ITC on its own initiative, but the latter rarely occurs。

　　Non-us enterprises (natural persons) can also apply for "337 investigation" as long as they can prove the above corresponding requirements.。For example, in 2016, Nanbo, an electric balance vehicle manufacturer in Tianjin, China, "turned against customers" and jointly filed two "337 investigation" applications (337-TA-1007, 1021) with Segway and its former parent company DEKA.。In 2018, Shenzhen Dao Tong Intelligence used its subsidiary in the United States to file a "337 investigation" application (337-TA-1133) against Shenzhen DJI, alleging that DJI's drones and components infringed its patent rights。The case has attracted much attention, and there is no shortage of comments on the Internet such as "cruel infighting" and "compatriots stabbing knives"。But from the perspective of "business is business"，The "337 survey" is essentially an important tool for enterprises to compete for the US market，Instead of being passively confronted with "337 investigation" and "blocking"，Take the initiative to use the "337 investigation" rules to participate in market competition，For the survival and development of Chinese enterprises，And that's a good thing?02

　　02立案

　　Upon receipt of the application for investigation, the ITC will appoint the Office of Unfair Import Investigations (OUII) to investigate the background of the application and determine whether the application complies with the ITC procedural requirements within 20 days of receipt of the application。The ITC usually decides whether to file a case within 30 days of receipt of the petition (35 days if interim relief is also requested).。

　　A named respondent may file a motion to dismiss with the ITC after learning that he or she has been charged, or may informally communicate directly with the OUII investigative counsel to request that the case be dismissed。In practice, the respondent usually takes the second approach。However, for the sake of caution, applicants will generally consult OUII before submitting their application, and if the application does not meet the formal requirements, it can be supplemented and amended。As a result, failure to file a case is rare。

　　Once a case is filed，The ITC will publish a notice of filing in the Federal Register，The application and the filing notice shall be sent to the respondent and the embassy of the respondent's country in the United States，An Administrative Law Judge was assigned to hear the case。In some cases, one of OUII's investigating attorneys will also participate as a separate party to the investigation。

　　The respondent shall give a written defense within 20 days from the date of service of the application, filing announcement and other documents, and the time limit for defense may be extended。If the respondent is outside the United States, it may be extended for 5-10 days。

　　After filing，The administrative judge will hold an initial Prehearing Conference 15-30 days after the case is assigned.，And ① set a target date for the end of the investigation，Usually 12-16 months;② Determine the trial process of the case，Set specific times for related matters;3. Set ground rules based on custom，There are clear provisions for motions, discovery procedures, expert reports and settlement conferences。0

　　03 Discovery of Evidence

　　A party may request the other party to discover all documents, objects, and information related to the person who has knowledge of the request and defense, as long as the information is not protected by the denial privilege。The discovery process usually lasts 5-10 months。The methods of discovery include questionnaires, documentation, on-site inspection, taking of witness testimony, expert witnesses, admission, electronic forensics, etc。If either party refuses to cooperate with the other party's request for discovery in the discovery proceedings, it may face adverse consequences such as fines, adverse fact finding, and prohibition of the use of relevant evidence in future proceedings。

　　The unique evidence discovery system in the United States differs greatly from that in our country。For Chinese enterprises, it is a huge burden and challenge to collect evidence that is favorable to their own side or to respond to the other side's evidence discovery requirements, and a small mistake in the process may lead to "all losses".。Discovery of evidence is also the most expensive and time-consuming phase of the "337 investigation"。4

　　04开庭

　　The hearing is a crucial step in the entire "337 investigation" process, where each side will present its position, refute the other side's position and provide supporting evidence before the presiding administrative judge。Trials are held by administrative judges in ITC courtrooms and can last for days or even weeks。In practice, because the 337 investigation usually involves trade secret information, most of the court hearings are held in private。5

　　05 Preliminary and final award

　　After the trial, the administrative judge usually requires the parties to submit a Post-hearing Brief within three to five weeks.。After receiving and reviewing the summary of the trial, the administrative judge will make an Initial Determination as to whether Section 337 has been violated.。In addition, the administrative judge also makes preliminary decisions on certain motions, such as the establishment of target dates, default judgments, forfeiture or return of the respondent's bond, and termination of the investigation。

　　If a violation of Section 337 is determined, the Administrative Judge shall, within 14 days of the filing of the preliminary determination, issue a recommended determination of the remedy or security deposit (including the amount of the confirmed security deposit) and submit it to the ITC along with the preliminary determination。

　　If the party is not satisfied with the preliminary ruling, it may apply to the ITC for review, and the ITC may also take the initiative to review。The content of the review may be all or part of the initial ruling。If the ITC decides not to review, the preliminary award automatically becomes final 45 days after it is filed with the ITC。If the ITC decides to review, it will specify which issues are subject to review, and the results of the review can be upheld, modified, rejected, etc。

　　06 Presidential review and appeal

　　If the ITC makes a final finding in violation of Section 337, it shall immediately send the final finding, the basis for the finding, and the opinion on the remedy to the President of the United States or his authorized person (meaning the United States Trade Representative).。The President may overrule the ITC's final decision on policy grounds within 60 days, without appeal。But vetoes are extremely rare。In the 2013 Samsung v. Apple Electronics case (337-TA-794), a U.S. president overruled the ITC for the first time。

　　If the President does not veto or indicate support for the ITC's final ruling, the ruling becomes final after the expiration of the 60th date or the date the President indicates his or her support, and appeals may be filed with the U.S. Court of Appeals for the Federal Circuit (CAFC) within 60 days thereafter。The ITC is the appellee, and the party prevailing in the ITC decision may participate in the appeal process。

　　During the presidential review period, the products involved can still enter the U.S. market, but the importer must post a deposit。

　　Do you know the following "337 investigation" procedures?

　　01 100-day program

　　On June 24, 2013, the ITC announced a pilot program for a "100-day process" to improve the efficiency of investigations through early decisions on certain decisive issues。The pilot program was adopted as an official rule on April 26, 2018。The "100-day process" is a rapid evidence discovery, fact finding and adjudication mechanism provided by the ITC，It is intended to give priority to potentially dispositive issues such as whether there is a domestic industry, whether the applicant has the right to bring a lawsuit, and whether the patent in question is valid.。If the "100-day process" applies to a case, the ITC can identify a potentially decisive issue early in the investigation and direct an administrative judge to make a preliminary ruling on the issue within 100 days of filing。An ordinary "337 investigation" case usually takes 16 to 18 months to complete the whole process, and through the "100-day process", it can effectively reduce the time and money cost of responding to the "337 investigation", and can also compress the preparation time of the other party to obtain a favorable position or negotiating chips。In the taurine case in 2019, the Chinese company successfully launched the "100-day procedure", which forced the applicant to withdraw the lawsuit in less than a month。

　　02 Markman Hearing

　　Also known as a Claim Construction Hearing，It is an important procedure in the United States patent litigation，Named after the 1996 United States Supreme Court case Markman v. Westview Instruments，The case considers the interpretation of the claims，It's a legal question for a judge to deal with，Not a matter of fact to be decided by a jury。Since that case, it has become customary to hold Markman hearings before patent infringement lawsuits go to trial。The Markman hearing process also gradually became popular in the "337 investigation" process。

　　At a Markman hearing, an administrative judge will determine the interpretation of certain definitions of patents and patent claims based on the pleas of both parties。Markman hearings usually involve definitions of considerable importance, and the outcome often determines the success or failure of a lawsuit。This procedure facilitates the parties to reach a consensus on the terms of the claims that are still in dispute, may prompt the plaintiff to withdraw the application for investigation of unrelated claims, reduce the scope of discovery, and even lead to early closure of the case。

　　03 Protective Order

　　The "337 investigation" often involves a lot of sensitive commercial information, and the evidence discovery system requires the parties to disclose information, whether it is depth or breadth, far beyond the requirements of domestic civil proceedings familiar to Chinese enterprises。Chinese companies that do not know much about the US litigation system are inevitably worried about how to protect these trade secret information。

　　The protection of trade secrets in "337 investigation" mainly relies on the protection order system。Shortly after filing, the administrative judge will typically issue a protective order specifying how documents containing trade secrets can be marked, by whom and how confidential documents can be used。A protective order typically allows a client's outside counsel access to trade secrets in an investigation, but not internal counsel (such as legal) access to trade secrets。A protective order protects not only the trade secrets of a party, but also those of a non-party who provides information to the ITC in response to a subpoena。There are serious consequences for violating a protective order, such as revoking the violator's right to practice in an ITC case and a ban of up to seven years。

　　04 Default (Default)

　　According to the ITC Rules of Procedure, the respondent shall submit a written reply within 20 days from the date of receipt of the application and notice of filing。If the defendant is outside the United States, the above period may be extended by 5-10 days。Therefore, the Chinese accused enterprises should reply within 25-30 days after filing the case。If the applicant has also applied for interim relief measures, the respondent must also submit a reply to the interim relief measures within 10 days (or 20 days in more complex cases) from the date of receipt of the instrument。

　　If the respondent does not answer or fails to answer as required, the ITC may, on the applicant's motion, or on its own initiative, issue an order requiring the respondent to state why he or she should not be held in absentia。If the respondent is still unable to show a reason, the ITC will rule Default.。Once ruled by the ITC to be absent, you will lose the right to attend the investigation, be served with judicial documents, and defend yourself in the investigation proceedings。The ITC may, at the plaintiff's request, determine the facts of the allegation and issue an exclusion order and/or an injunction against the defendant。

　　In addition to the above circumstances, other non-responsive actions of the respondent, such as abuse of relevant procedures, failure to participate in disclosure proceedings, failure to respond to a motion for interim relief or summary judgment as required, may also result in a default finding。

　　(Source: China Council for the Promotion of International Trade Intellectual Property Service Center IPSC)(Lu Qian, Information Clerk)