Summary: After institution, the Commission cannot without opposition or appearance from respondents assert insufficient pleadings as a basis for denying relief under 19 U.S.C. § 1337(g)(1).
Laerdal filed a complaint at the U.S. International Trade Commission (the “Commission”) asserting violations of 19 U.S.C. § 1337 by respondents. Laerdal’s complaint alleged that the respondents were infringing Laerdal’s patent, trademark, trade dress, and copyrights by importing, selling for importation, or selling within the U.S. certain medical devices and accompanying product literature. The Commission instituted an investigation on some, but not all of Laerdal’s claims. Despite being served with the complaint and a notice of investigation, no respondent submitted any response, appeared, or otherwise participated in any way in any of the proceedings. The Administrative Law Judge (“ALJ”) thereby issued an initial determination finding all respondents in default, and the Commission did not review the ALJ’s initial determination finding all respondents in default. The Commission issued its final determination granting relief based on Laerdal’s patent and trademark infringement claims, but the Commission denied relief on Laerdal’s trade dress and copyright infringement claims because it found that Laerdal’s allegations in its complaint relating to those claims were inadequate. Specifically, the Commission held that if a complaint does not adequately plead a § 1337 violation, then no relief is warranted even if the allegations are unopposed. Laerdal appealed the ITC’s finding as to its trade dress infringement claims.
The Federal Circuit reversed the Commission’s determination that Laerdal failed to adequately plead its trade dress infringement claims and vacated and remanded for the Commission to determine the proper remedy. Reviewing the statutory language of § 1337(g), the Federal Circuit concluded that the statute “unambiguously requires the Commission to grant relief against defaulting respondents, subject only to public interest concerns, if all prerequisites of § 1337(g)(1) are satisfied.” The Federal Circuit noted that the inclusion of the word “shall” means “must,” and it imposes a nondiscretionary duty. Since it was undisputed that Laerdal had satisfied all of the prerequisites under § 1337(g)(1), the Commission was mandated to grant Laerdal’s requested relief. In addition, the Federal Circuit ruled that the adequacy of the pleadings is no longer a live issue after institution unless there is a challenge by a responding party. The Federal Circuit noted that, under the § 1337(g)(1), relief is only possible if the Commission has already determined, pre-institution, that the complaint was pleaded adequately and instituted an investigation thereof.