Representatives Suzan DelBene (D-Wash.) and David Schweikert (R-Ariz.) have reintroduced the Advancing America's Interests Act, or H.R. 8037, which seeks to curb the ability of non-practicing entities ("NPEs") to obtain exclusion orders at the ITC. The bill was previously proposed last summer, but did not make it out of the House Committee on Ways and Means.
Among other things, the bill would amend section 337 to require that (1) third-party licensees relied on by NPEs to satisfy the domestic industry requirement join the complaint (but not compel third-party licensees to do so), (2) a license can only be used to establish a domestic industry if it "leads to the adoption and development of articles that incorporate that patent, copyright, trademark, mask work, or design," and (3) the Commission only issue exclusion orders if it affirmatively determines that doing so is in the public interest.
The bill has support from technology companies that are often targeted by NPEs at the ITC, including Samsung, Dell, and Oracle. Whether the bill's provisions that aim to tighten the requirements for filing a section 337 complaint will have the desired effect, however, may depend in part on how such requirements are actually implemented by the Commission and interpreted by the Federal Circuit. For example, the provision tying domestic industry to product development appears to preclude NPEs from relying on licenses obtained through prior settlements (because the product predated the litigation-induced license), but it may ultimately depend on what constitutes "adoption and development" in the view of the Commission. Likewise, the effect of the bill's language that appears to invert the public interest analysis so that exclusion orders can only be issued if the Commission affirmatively determines that such orders are in the public interest (in contrast to current law which provides that the Commission "shall" ban imported infringing articles unless it determines not to do so after considering the public interest factors) may depend on how the Commission interprets the new language and weighs the public interest factors accordingly.
It remains to be seen whether H.R. 8037 will gain traction and advance through Congress. We will provide updates with further developments regarding this important piece of proposed legislation.
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