Innovation Alliance: Efforts to Weaken ITC Will Hamper Innovation and Export American Jobs

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September 27, 2012
Innovation Alliance

For decades, the International Trade Commission has ensured that our nation’s creators and innovators are treated fairly and honestly in an increasingly competitive global market. Now, as the U.S.’s greatest resource – its ability to develop powerful, world-changing intellectual property – faces unprecedented global challenges, some want to undermine the ITC’s ability to protect Intellectual property.

The Innovation Alliance has published a white paper on the issue titled, "The ITC and Patent Disputes: Efforts to Weaken the ITC’s Remedial Authority Will Hamper Innovation and Export American Jobs." The paper argues that the problem cited by those who want to weaken the ITC – namely that the ITC process is being overused by patent holders – is a false perception.

For example, critics claim that so-called non-practicing entities (NPEs) have been the most aggressive in using the ITC in recent years to avoid application of eBay’s equitable test. Data recently released by the ITC indicates otherwise. In a paper dated June 18, 2012, the ITC notes that since the eBay decision was issued, only 8% of investigations instituted have involved complaints that were filed by Category 2 NPEs--which the ITC defines as NPEs that do not manufacture products that practice the asserted patents, and whose business model primarily focuses on purchasing and asserting patents. Only one Category 2 NPE complainant was successful in obtaining an exclusion order. Category 1 NPEs—which include pre-commercial start-ups, universities and others--accounted for just 10% of the investigations since eBay and only two Category 1 NPEs were successful in obtaining an exclusion order.

Proposals to weaken the ITC’s ability to administer U.S. trade remedy laws would lead to absurd outcomes and incentivize perverse behavior, and would have a detrimental impact on American innovation and the American economy. At a time when the Obama Administration is seeking input on a comprehensive IP enforcement strategy for the country, don’t attempts to weaken the ITC send mixed signals to both U.S. companies and our foreign trading partners?

Brian Pomper
Executive Director, Innovation Alliance

 

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