Small and medium sized business owners must often decide how much time and money should be devoted to protecting their goods from infringement and misappropriation. Obtaining patent and/or trademark protection in the United States can be very costly and these costs can rise steeply when filing for patent and trademark protection outside of the country. Because of the potential for high costs for such protection, many U.S. companies do not secure intellectual property protection for their goods outside of the U.S. and direct their main focus instead on the domestic market.
This lack of protection outside of the U.S. provides an opportunity for foreign manufactures and distributors to lawfully manufacture and distribute goods in those territories in which the U.S. business owner has not obtained intellectual property protection. There is little that can be done to prevent the manufacture and distribution of these goods in unprotected territories. However, U.S. business owners can prevent these goods from entering the country by recording registered trademarks and copyrights with the U.S. Customs Department and seeking relief through the International Trade Commission (ITC).
Section 337 of the Tariff Act of 1930 protects against importation of goods that infringe domestic intellectual property rights, including patents, copyrights, trademarks and semiconductor chip mask works. While the ITC cannot award monetary damages, it can issue general exclusion orders, limited orders and cease and desist orders all of which can prevent infringing articles from traveling through U.S. commerce. General exclusion orders prohibit any entity from importing infringing goods, limited exclusion orders are directed to specific named entities and cease and desist orders will prohibit certain named entities from distributing imported articles in U.S. commerce.
Filing a complaint against an infringer can be far more expeditious if such relief is sought through the ITC rather than through the federal courts. An ITC proceeding by statute must be completed "at the earliest practicable time but not later than one year (18 months for complicated cases) after the date of publication of notice of such an investigation." In contrast, a federal action may take years to complete. It should also be noted that the ITC may, in its sole discretion, accept or refuse to pursue a complaint.
Prior to filing a complaint with the ITC, the U.S. intellectual property holder should collect information relating to specific occurrences of its intellectual property violations so that such information can be included in the complaint. Customs allows a U.S. intellectual property holder to record registered trademarks and copyrights. Customs should then use this information to hold such identified infringing goods at the port and notify the U.S. intellectual property owner of any questionable articles before they enter the country.
Armed with this information, the U.S. intellectual property owner can file a complaint with the ITC setting forth, among other things, the violations and a description of the specific occurrences of unlawful importations. The elements of the complaint are governed by federal regulations and must contain far more information than that required for a typical complaint filed in a federal court.
Should the ITC make a determination to accept the complaint, it will proceed with a formal investigation. A formal hearing takes place which is conducted very similarly to a federal hearing. Should the ITC determine that an importer has committed unfair competition or infringement, it will issue an order excluding entry of infringing goods or a cease and desist order to preclude the dissemination of such goods in commerce.