CBP Enforcement of ITC Import Bans is Opaque and Confusing, Commenters Say
Companies and trade associations overwhelmingly called on CBP to create a more transparent enforcement process for International Trade Commission exclusion orders, in comments requested as part of an interagency review led by the Intellectual Property Enforcement Coordinator (here). IPEC asked for input on June 20 regarding CBP implementation of the ITC import bans, which normally relate to a finding of intellectual property infringement. Comments touched on a wide range of issues, including a lack of guidance on the CBP enforcement process and the role of the Centers for Excellence and Expertise (CEEs). But they invariably addressed CBP’s reluctance to share information provided by patent-holders with respondents, and vice versa.
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When questions arise regarding enforcement of ITC exclusion orders, including about application to particular products and whether modifications remove a covered product from the scope of an import ban, CBP meets separately with affected parties without disclosing what happens in the meetings. In these “ex parte” meetings, “CBP will typically not disclose anything regarding what information the opposing party is providing or what positions it is taking,” said the American Bar Association-Intellectual Property Law Section. “The problem created by this lack of transparency is there is no ability to correct or respond to possibly incorrect, incomplete or misleading information.”
Other commenters agreed, including trade associations like the Intellectual Property Owners Association (IPO) and the International Trade Commission Trial Lawyers Association (ITCTLA) and companies like Motorola, Samsung, and PPC Broadband. “Instead of creating an "inter partes" process that guarantees due process to both the importer and the rights holder, CBP has followed ex parte processes that do not share information submitted by either the rights holder or the import with the other interested party,” said PPC Broadband in comments prepared by law firm Rode & Qualey. “Therefore neither interested party has the opportunity to even review, much less to question or respond to the information CBP is receiving from the other interested party. This process is completely non-transparent and completely inefficient,” it said.
Microsoft said the ex parte process leads to errors and omissions. “A process predicated on one-sided, ex parte discussions and complex records developed before a different agency is prone to result in unnecessary, erroneous rulings,” it said. “Relevant portions of the ITC record may be overlooked or taken out of context,” Microsoft said, and arguments can’t fully form to allow for proper resolution of issues.
Guidance, Consistency Lacking, Commenters Say
Another problem is that CBP’s procedures for determinations on exclusion order enforcement are unclear and informal, said the IPO in comments echoed by Adduci, Mastriani & Schaumberg, Tessera, and PPC Broadband. The CBP regulation on exclusion orders, 19 CFR 12.39, doesn’t address CBP procedures. And the last customs directive to address the issue, 2310-006A, is over 13 years old and doesn’t add much clarity, IPO said.
The confusion is compounded by the fluidity of CBP’s enforcement processes. “The procedures used by CBP to enforce exclusion orders have changed multiple times in recent years, making it difficult to understand how CBP will determine whether a product should be excluded,” the IPO said. In the past, CBP relied on protest and ruling processes to explain its determinations related to the scope of ITC exclusion orders. “Today, CBP appears to rely on unwritten informal determinations and self-certification by importers that the importers are in compliance with ITC exclusion orders, using Centers of Excellence and Expertise to make its determinations,” it said. These changes haven’t been reflected in changes to regulations, which has led to “confusion and uncertainty” for interested parties trying to determine how exclusion orders will be enforced, IPO said.
CBP’s newfound reliance on the CEEs has caused confusion on exclusion order enforcement as well, said the ITCTLA. Although the CEEs were created to centralize decision-making authority and achieve uniformity at ports of entry, it isn’t clear whether the CEEs or CBP’s Intellectual Property Rights Branch at headquarters will oversee enforcement of exclusion orders, the ITCTLA said. And it isn’t clear either whether the CEEs or the IPR Branch will be responsible for issuing ruling letters on whether redesigns pull products out of the scope of exclusion orders, it said.
Change From ITC Also Necessary
But according to Samsung, which has “participated in more than forty Section 337 investigations, predominantly as a respondent,” the effort to improve enforcement of exclusion orders must look beyond CBP. “The difficult burden shouldered by CBP to interpret and administer exclusion orders is caused largely by the lack of clear instructions and guidance from the ITC,” Samsung said. “While CBP’s budgets have shrunk and its missions have multiplied, Section 337 investigations have become larger, more numerous, and more complex.” And the ITC gives “little practical guidance” to CBP on enforcement of exclusion orders, it said.