In the ITC: ITC or district court? Look at the math

Intellectual Property and Technology News

When considering the optimal forum for bringing a patent infringement case in the US, litigators may find it useful to take into account not only client exposure and received wisdom, but also statistical information about the prospective forum. In this column, we examine the outcomes of infringement disputes in federal district court compared to the International Trade Commission (ITC).

Although the number of patent suits filed in the district courts far outpaces the number of §337 investigations, the ITC is growing in popularity for patentees. From 2000 to 2011, the number of §337 investigations increased by 530 percent. In contrast, the number of patent infringement suits has remained relatively unchanged in that same time period.

The outcomes in ITC proceedings differ in some significant respects from district court litigation. For example, ITC investigations are far less likely to result in settlement than suits in district court. Between 2008 to 2010, about 88 percent of all patents suits were resolved through settlement. During this period in the ITC, however, settlements were reached in only about 56 percent of all cases. When a case does survive to trial in district court, the patentee wins 75 percent of the time. In contrast, patentees win slightly less than half the time when an ITC investigation proceeds to the point of a final determination.

Of course, the risks presented by a §337 investigation are potentially greater for defendants than litigation. Since eBay, Inc. v. MercExchange L.L.C., injunctions have become much less common in patent cases, and many Non-Practicing Entities (NPEs or “patent trolls”) do not even request injunctions. The primary remedy of the ITC, however, is the exclusion order, which can have the same effect as an injunction. Thus, while an accused infringer may have better odds of success in the ITC, the consequences of a defeat may still make the ITC a riskier forum than district court.

That said, some accused infringers may still view §337 proceedings as being advantageous given the higher chances of success if the case reaches a final determination, but the risks should not be taken lightly.

Information for this article was obtained from www.patstats.org, www.usitc.gov and www.uspto.gov.

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