CBP Enforcement of ITC Import Bans is Opaque, Confusing, Commenters Say

Companies and trade associations overwhelmingly urged U.S. Customs and Border Protection to create a more transparent enforcement process for U.S. International Trade Commission exclusion orders, in comments for an interagency review led by the Intellectual Property Enforcement Coordinator. IPEC had asked for input on CBP implementation of the ITC import bans, which normally relate to a finding of intellectual property infringement. Comments addressed CBP’s reluctance to share information provided by patentholders with respondents, and vice versa.

When questions arise about 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 the Intellectual Property Owners Association (IPO), the International Trade Commission Trial Lawyers Association (ITCTLA), Motorola Mobility, 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. “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.”

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 arguments can’t fully form to allow for proper resolution of issues.

Samsung, which has “participated in more than forty Section 337 investigations, predominantly as a respondent” under that section of the Tariff Act, said 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.” The ITC gives “little practical guidance” to CBP on enforcement of exclusion orders, said Samsung.