Next month, Patexia plans to release its popular ITC Intelligence Report (2022 Edition). This marks the third consecutive year that we are publishing this report. ITC has become very popular lately and as we will cover in our annual report, last year we saw a large number of lateral moves in this practice area. This week, we are going to cover the US law firms that were recommended by the Ministry of Commerce of the People’s Republic of China (MOFCOM) for the ITC Section 337 Investigation matters.

Earlier we showed in Patexia Insight 122, that in 2021 the patent litigation continued its upward movement. The same trend was observed in ITC investigation. The full report will provide a complete overview of ITC investigations and high-level statistics, including the activity and performance rankings for all parties, their representatives and judges for a 6-year period from January 1, 2016, through December 31, 2021. During this period, a total of 370 investigations were filed, involving a total of more than 1979 companies (complainants and respondents), represented by 371 law firms and 4,773 ITC attorneys.

The following chart shows the ITC activity in the last 6 years. The case count includes violation and other types of investigations (e.g., enforcement,...).

Judging just by numbers, ITC investigations are not comparable with patent litigation in district courts, however, their fast pace and few other advantages has made them a popular tool for companies that want to protect their market share in the US and use it as a negotiation tool often times along their district court case.

When it comes to global trading, China is currently the largest partner to the United States, with its exports growing significantly in the last decades. The latest numbers supported even by Chinese Customs data show a further spike during 2021 despite the tariffs and the pandemic situation. A major concern for the US is the intellectual property in Chinese law and its weak protection and/or enforcement. Intellectual property rights have been protected in China since the 80’s, however these rights are violated often because of the difficulty to obtain evidence, bad perception of foreign firms, laws that favor the local enterprises as well as a history of proven infringement cases that ended up with very small damages paid. All of this has made Section 337 an important tool for the US companies that want to block the products imported from China which infringe their IP, especially patents and trademarks. From the Chinese perspective, a substantial amount of their exports are of a technical nature, consisting of broadcasting equipment, computers and integrated circuits while the US market is the largest consumer for them. Since a single ITC investigation (which can potentially conclude in a violation and cease-and-desist order) can affect the Chinese exports and economy, the Chinese government pays a lot of attention to the ITC Section 337 in the United States.

The significance of this is at a level that the Ministry of Commerce of the People’s Republic of China or MOFCOM for short, conducts a bidding process for U.S. law firms with the purpose of collecting, collating and translating the materials for Section 337 Investigations in the United States. The law firms which are selected by MOFCOM will provide different consulting services such as basic fact judgment, legal analysis and interest focus by issuing written legal opinions; making research and comment, etc.

The selection process is performed by a procurement agency called China International Tendering Co., Ltd which is entrusted by MOFCOM. They administer the bidding documents after publishing the qualifications a bidder should have, following the MOFCOM directions. One of the important aspects amongst different documents that need to be submitted, is the services price per hour for different categories of people inside the bidder’s team, including partner, associates and paralegals. Once the deadline comes, every offer is evaluated and the procurement agency determines every bidder's ability to perform the services predicted in the contract. This is done through a scoring system following a strict table where different factors are weighed and ultimately a list of winners is published which will be included on a recommended list for the next three years (1/1/2022 – 12/31/2024).

The following table summarizes the US law firms that succeeded in the selection process and therefore were recommended by MOFCOM for Section 337 practice.

Law Firm	Bidding Evaluation
Adduci Mastriani & Schaumberg LLP	Succeeded
Covington & Burling LLP	Succeeded
Mei & Mark LLP	Succeeded
Perkins Coie LLP	Succeeded
Crowell & Moring LLP	Succeeded
Steptoe & Johnson LLP	Succeeded
Orrick, Herrington & Sutcliffe LLP	Succeeded
Kilpatrick Townsend	Succeeded
Rimon P.C.	Succeeded
K&L Gates LLP	Succeeded
Akin Gump Strauss Hauer & Feld LLP	Succeeded

Interestingly, there were a few firms among the active ITC firms (based on our upcoming report) such as Finnegan, Fish & Richardson, Goodwin Procter and Pillsbury Winthrop that did not appear in the above list.

The possibility of a Section 337 investigation has existed since the 1930s. However, their popularity hasn't always been the same with only a handful of cases per decade until 1970. The United States International Trade Commission (born as U.S. Tariff Commission) is a federal agency created by the US Congress in order to deal with trade matters. Not only they report to various offices and provide them with information and analysis, but they also conduct investigations of different nature, always related to unfair competition.

Most of the ITC work is regulated by the Tariff Act of 1930, also known as the Smoot–Hawley Tariff with several updates throughout the past decades. The act updated the previous acts and implemented several protectionist trade policies in the United States. One of the most important novelties introduced, was the famous Section 337 which makes unlawful the unfair methods of competition and acts of importation of goods and services that infringe US patents or any other form of Intellectual Property.

Under Section 337, the USITC is authorized to carry out investigations and proceedings. Constitutionally speaking, the USITC is not concepted as a court covered by Article III of the US constitution, however their proceedings are very similar to court proceedings. The Section 337 proceedings aim to protect fair trade as well as intellectual property rights inside the United States, but its decisions have an impact on an international level as they affect trade with other countries. This impact is so deep that in 1989, a panel was created in order to receive various submissions by major powers and trade partners such as Canada, Japan, Republic of Korea and Switzerland. They presented different arguments and opinions over Section 337 and got a response from the USA about their inquiries. Coming to the last few years, many law firms are positioning themselves to benefit from the rise of popularity of ITC investigations and this is covered in the upcoming ITC Intelligence Report 2022 as we review all recent lateral moves in this practice area and firms that are adding or expanding this practice.

In the coming weeks we will cover some of the best performing and most active companies, law firms and attorneys in patent litigation. The ITC Report 2022 and it’s rankings are going to be available in late March.