In the first ruling under a new pilot program instituted to resolve key issues early in U.S. International Trade Commission investigations (ITC), an administrative law judge (ALJ) ruled that Lamina Packaging Innovations (Lamina) failed to meet the domestic industry requirement in a suit against Hasbro and others.  Certain Products Having Laminated Packaging and Components Thereof, Inv. No. 337-TA-874 (U.S. ITC, Jul. 5, 2013) (Essex, ALJ).

The 100-day domestic industry pilot program was launched by the ITC to test whether earlier rulings on certain dispositive issues in some § 337 investigations could limit unnecessary litigation, saving time and costs for all parties involved.  Under the pilot program, the ITC will identify, at institution, investigations that are likely to present a potentially dispositive issue (such as domestic industry) and direct the assigned ALJ to rule on that issue early in the investigation through expedited fact finding and an abbreviated hearing limited to the identified issue.  

In its complaint filed at the ITC, Lamina accused at least 15 companies of using packaging that infringe its patents.  When the ITC voted to institute the investigation, it ordered the ALJ to conduct an expedited review of whether the Lamina satisfied the domestic industry requirement of § 337 and issue a ruling on the issue within 100 days. The case was the initial test of the ITC’s new pilot program. 

Consistent with the ITC’s order, the ALJ assigned to the investigation issued an initial determination (ID), in which he found “that complainant has failed to satisfy the economic prong of the domestic industry requirement and has failed to show that a domestic industry is in the process of being established.” 

Practice Note:  As of this publication, the precise basis and rational for the ALJ’s ruling in Lamina is still unknown, as the initial determination is not yet publicly available.  However, if the ALJ’s decision against Lumina is affirmed by the ITC, the ALJ’s ruling will effectively terminate the investigation.

As the ITC understands its mandate under § 337 is to institute an investigation on any complaint that meets all of the statutory and regulatory requirements, the pilot program is a tool primarily to address filings made by non-practicing entities (NPEs) who may present fully compliant complaints but whose goal is not to protect a domestic industry, but to use expensive ITC litigation to force named respondents into less-favorable settlement positions.  Many practitioners and potential NPE target respondents will carefully follow the extent to which the ITC uses its new program and how it will affect filings at the ITC.