Pedram Sameni
Feb 28, 2024

Patexia Insight 199: Section 337 ITC Investigations Drop for the First Time Since 2018

ITC Litigation

Tomorrow marks the release of the highly anticipated ITC Intelligence Report, offering invaluable insights into the landscape of Section 337 U.S. International Trade Commission (ITC) investigations. There we present an in-depth analysis focusing on the investigations initiated from January 1, 2018, to December 31, 2023, examining high-level statistics and the evaluation and ranking of all stakeholders, including companies, attorneys, law firms, and administrative law judges. Today's insight covers the recent decline in the number of investigations, following four consecutive years of growth. 

During the period of our study, a total of 396 investigations were initiated, with 87.37% of them focusing on patent infringement, involving a total of 973 unique patents. As shown above, yearly filing activity has fluctuated between 50 and 79 investigations in 2023 and 2022, respectively. An increase in the number of investigations is observed from 2019 onwards. Meanwhile, in 2023, there were 50 filings, marking a decline of 36.71% compared to the preceding year, which saw 79 complaints. Interestingly as covered in Patexia 197, distinct court patent litigation as well as PTAB proceedings also declined during 2023. Additionally, the number of patents implicated in these investigations has varied over the same period, reaching a peak of 248 patents in 2021 and a low of 134 in 2023. A total of 973 unique patents were involved in the 396 ITC investigations analyzed, resulting in an average of 2.5 patents per investigation.

The fluctuation in the number of patents implicated in ITC investigations can be attributed to several factors. Variations in the nature and complexity of investigations and strategic decisions by patent owners and complainants contribute to these fluctuations. Investigations involving products of more complex technologies or multiple patent portfolios may entail a higher number of patents. Additionally, changes in litigation strategies, including the decision to involve fewer patents and focus on specific claims, can also impact the number of patents involved in investigations.

On the other hand, the trend of investigations has multiple factors influencing it, and especially the recent decline needs a separate analysis. While ITC Section 337 Investigations have been an option for IP protection since their inception under the Tariff Act of 1930, their popularity has notably increased over the past few decades, particularly in recent years. This is often attributed to the forces of globalization. The expansion of global trade has led to a substantial increase in the volume of imported goods flooding into the United States annually. While this has fueled economic growth and consumer choice, it has also brought about a surge in patent infringement, counterfeit goods, and theft of trade secrets. The ITC Section 337 investigations offer significant advantages including expedited proceedings, authority over accused products, and exclusionary power, making them an attractive option for IP holders seeking effective enforcement mechanisms in an increasingly interconnected global marketplace.

Despite the recent decline, law firms have continued to position themselves to establish and grow their ITC practice. Notably, we have observed that 48 of the top 1,000 most active attorneys have changed firms since the previous report in February 2023. In recognition of this significant trend, we have dedicated a separate section in the report to shed light on these high-profile lateral moves within this legal domain and on the law firms growing and declining. Additionally, the report covers several statistics such as unfair acts, the status and conclusions of violations, activity by Non-Practicing Entities (NPEs), and the most frequent International Patent Classification (IPC) codes of patents involved. Furthermore, attention was dedicated to exploring the length of investigations, yearly trends in average duration, as well as the duration of investigations categorized by their outcome. 

Using the data of violations initiated and terminated during the period of our study, we have evaluated and ranked all stakeholders by activity and performance. Companies, law firms, and attorneys are categorized according to their side, whether complainant or respondent, as well as overall. The data analyzed is continuously updated on our website, and accessible on the corresponding Patexia profile page for every entity. This includes the rankings and other subscription-only content available for our Concierge subscribers, who also may download their copy of the ITC Intelligence 2024 Report for free.

Stay tuned as in the following weeks we will be publishing some of the top entities active in patent litigation as highlighted in our Patent Litigation Intelligence report released in January.