Increasing Foreign Complainants in Section 337 Actions
US companies will increasingly find themselves as respondents in Section 337 actions. Given the advantages to the complainant in such actions (fast docket, lower threshold for standing, and exclusion orders), the advice we previously gave foreign companies now also applies to US companies. React quickly when you receive a complaint, and ideally, have a short list of counsel familiar with your industry and market. Given the fast docket, you want to minimize the amount of time spent obtaining counsel and getting counsel up to speed.
Foreign companies are increasingly initiating Section 337 actions to protect their US market share and intellectual property. Over one-third of the Section 337 cases instituted in 2009 to-date named foreign complainants. In part, this can be attributed to the importance of the US market in the global economy and the growing patent portfolios held by foreign companies.
Section 337 actions were originally intended to protect American industry from foreign competition by allowing US manufacturers to bar imports infringing US patents. Previously, Section 337 required a complainant's product to be made in whole or significant part within the US to satisfy the domestic industry requirement. The domestic industry requirement was later changed to include "sufficient investments" in US activities related to the asserted patents. With the lower threshold for standing, foreign companies are finding it easier to pursue Section 337 actions, against both foreign and domestic competitors in the US market.
