Press Releases

Statement of the Honorable John Conyers for the Hearing on the International Trade Commission Patent Litigation

Washington, DC, April 14, 2016

Today’s hearing gives us an opportunity to study how the International Trade Commission handles patent disputes and whether it sufficiently protects American innovation.

In particular, we should focus on whether the Commission produces fair results to litigants and, most importantly, whether these results are beneficial to the American consumer.           

Congress established the Commission as an independent, quasi-judicial federal agency to provide non-partisan counsel to the legislative and executive branches of the government. 

It is charged with protecting United States consumers and industry from unfair foreign trade practices and has the power to issue cease and desist and exclusion orders. 

For example, patent holders who believe that imported products infringe their patents may file a complaint with the Commission pursuant to Section 337 of the Tariff Act of 1930.

Some are concerned, however, that as a result of the Commission’s patent dispute resolutions, there have been adverse consequences to American consumers in the form of higher prices, for instance.

I am particularly concerned that some large, monopolistic players actively collect patents as a way to concentrate their market power and to eliminate competitors, under the watch of the Commission.           

It is imperative that our Nation’s patent system protect American innovation and foster enterprise, but not at the expense of allowing the system to be distorted to favor players with the largest litigation budgets.           

Second, we should continue to examine whether the increase in Section 337 investigations is due to abusive behavior by Non-Practicing Entities and Patent Assertion Entities.

There are concerns that these Entities acquire patents solely for the purpose of litigation before the Commission to threaten United States operating companies with exclusion orders that they otherwise may not obtain in federal court. 

In support of these concerns, some cite the fact that Commission filings spiked in 2011 and that a large percentage of those cases proceeded simultaneously in federal district court.

While a patent holder is not barred from pursuing a claim before the Commission and the federal courts simultaneously, some argue this presents the problem of inconsistent results.

At this point, however, we know that based on the Commission’s own statistics the number of investigations instituted has dropped and it appears the number of filings by Non-Practicing Entities is also lower.  The Commission appears to be taking effective steps to address the problem.

Finally, any legislative changes to Section 337 should avoid unintended consequences, particularly with respect to any adverse impact they may have on American innovators.

Any such changes should also be considered in light of the Supreme Court’s 2006 decision in eBay v. MercExchange, which made it more difficult for patent holders to receive injunctive relief in federal district court. 

The ramifications of that decision could be driving an increase in Commission filings, for instance.

Although I am skeptical of current proposals to curb abusive patent litigation by reforming the Commission legislatively, I look very much forward to hearing from today’s witnesses and I thank the Chairman for holding this hearing.