Key Takeaway: In a recent decision with implications for parties involved in intellectual property disputes before the International Trade Commission, an Administrative Law Judge terminated an ITC investigation based on a forum selection clause.
Zync v. BMW: Background & Procedural History
On July 28, 2026, Administrative Law Judge (ALJ) Bryan F. Moore terminated a Section 337 investigation at the International Trade Commission that was filed by Zync against BMW. Judge Moore terminated the case based on a forum selection clause specifying Munich as the exclusive place of jurisdiction for disputes between the parties.
The forum selection clause was originally included in a Confidentiality Agreement between the parties. The clause specified Munich as the forum for disputes “unless a different place of jurisdiction is required by mandatory law.” The parties then incorporated that Confidentiality Agreement into a later Pilot Project Agreement.
The dispute began in California state court when Zync initiated litigation against BMW for misuse of confidential information. BMW obtained a dismissal of the California action based on the forum selection clause, which Zync then challenged on appeal.
Before dismissal of the California action, Zync filed an ITC complaint with similar allegations. BMW pointed to the forum selection as a basis for the ITC not to institute an investigation. The ITC initially denied that request, finding the forum selection issue “too complex” for resolution at the pre-institution stage. BMW then obtained a preliminary injunction in California federal court ordering Zync to request a stay of the ITC action while Zync’s state court appeal was pending. BMW also initiated a proceeding in Munich against Zync.
The ITC’s Ruling: Forum Selection Clause vs. “Mandatory Law”
The current decision arose when Zync complied with the California federal court’s injunction by moving to stay the ITC investigation pending a decision on its appeal of the California state court action. In response to that stay request, BMW argued the forum selection clause in the parties’ Confidentiality Agreement required termination of the ITC investigation.
The ALJ agreed with BMW and terminated the ITC investigation. First the ALJ found that the “mandatory law” language of the forum selection clause did not require the ITC case to go forward. Because the ITC has jurisdiction to investigate U.S. imports, ALJ evaluated whether the ITC may exercise its discretionary authority to terminate an investigation based on a negotiated forum selection clause. The ALJ further observed that filing a complaint at the ITC is not mandatory and that parties are not required to pursue Section 337 claims at the ITC. Accordingly, the ALJ concluded that Section 337 does not constitute “mandatory law” and therefore does not render the forum selection clause inapplicable. Second, the ALJ rejected Zync’s arguments that enforcement of the forum selection clause would contravene public policy.
What This Decision Means for Future ITC and Section 337 Strategy
The ALJ’s decision to terminate this ITC investigation based on a forum selection clause arose from a unique procedural situation in which one party was seeking to stay an ITC action pending appeal in another form, while the other party was seeking an avenue for termination. The ALJ noted that Zync’s requested stay could be lengthy and was at odds with the ITC’s objective to resolve Section 337 investigations expeditiously.
Notably, the rationale used to enforce the forum selection clause suggests that future Section 337 proceedings at the ITC could be subject to similar challenges. Litigants at the ITC should understand and be prepared to address existing contractual obligations in the context of ITC enforcement. These include provisions relating to forum selection, remedies, and dispute resolution procedures.
Co-author: Saba Zamani (Pending NY Bar Admission)
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