Why is the ITC a Great Venue for Protecting Trade Secrets? Speed and Extraterritorial Authority
To be a successful trade secret litigant at the ITC, it is critical to be mindful of unique substantive and procedural aspects of Section 337 litigation. These differences offer both promise and peril for complainants.
First and foremost, ITC investigations are fast. Very fast. Fact discovery typically lasts only four or five months. Trial will take place less than 12 months after the complaint is filed. It is critical to know what you're looking for at the outset, including discovery.
Second, it is also vital that the complainant at the outset know precisely the metes and bounds of its trade secrets, and how to show not only that the trade secrets exist but that the complainant owns them. ITC ALJs typically require the complainant to identify the asserted trade secrets with reasonable particularity within three weeks of the issuance of the procedural schedule order.[i] The complainant must begin the case having already prepared the proof elements necessary to establish the existence of protectable trade secrets.
The third unique aspect ITC litigation is the domestic industry requirement. The complainant is required to show that it has significant economic activities in the United States that are beyond those of a “mere importer.” Most ITC domestic industry cases that fail do so due to unsupported and excessively general assertions, not because the ITC found that the actual quantum of claimed U.S. activity was insufficient.
The fourth difference is the second of those unique proofs: injury. The complainant must demonstrate that the domestic industry it has identified competes directly with the accused products imported by the respondents, and that the complainant is suffering (or threatened with) substantial injury by reason of the unfairly traded imports. It is not necessary that that domestic industry practice the asserted trade secrets. It is vital that the complainant tell a coherent story as to why its domestic industry is suffering from substantial injury by reason of unfairly traded imports.
In short, trade secret litigation at the ITC is incredibly powerful and effective. Complainants can obtain powerful injunction-like relief. One of the largest trade secret litigation settlements ever – $1.8 billion – arose out of ITC trade secret litigation brought by LG Chem against SKI for acts of EV battery trade secret misappropriation that took place entirely in Korea.[1] But preparation is the key for the complainant to maximize its advantages.
[i] See e.g. Certain Bone Cements, Components Thereof and Products Containing Same, Inv. No. 337-TA-1153, Order No. 8 (May 9, 2019).
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Authors
Jonathan Engler
