Brief of the R Street Institute, the Innovation Defense Foundation, Lincoln Network, and the Electronic Frontier Foundation
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SUMMARY OF ARGUMENT
Can a federal trade agency that deals with the importation of patent-infringing goods assert jurisdiction over companies that import nothing and products that infringe no patents? This remarkable situation was the result of an expansive interpretation of regulatory authority by the respondent agency, the U.S. International Trade Commission. Such interpretation warrants reconsideration on a grant of certiorari, both because of the dramatic impact on American businesses that the ITC’s newfound power may have and because of the especially important constitutional and administrative law questions it raises.
I. By claiming jurisdiction over non-trade patent disputes, the ITC imposes large and duplicative costs of litigation on a wide swath of American businesses. The facts of the present case are instructive: Petitioner Comcast imports no products from abroad, and its supposedly patent-infringing technology is a computer network system run entirely within the United States. There was no reason for Comcast to find itself before an international trade agency, yet the ITC found jurisdiction over Com-
cast through convoluted interpretation of the agency’s statutory authority. That interpretation could equally apply to other communications services, Internet companies, domestic manufacturers, farmers, and small business enterprises.
All these enterprises would be subjected to litigation before the ITC that is costly, duplicative, and unfair. Because an American company that finds itself in the ITC can also be sued in federal district court, the company potentially must, and frequently does, pay the costs of two legal defenses. These companies are also subjected to an administrative forum that lacks the protections and independence of an Article III court, that applies different patent law that tends to favor patent holders, that disregards this Court’s precedents on patent injunctions, and that recreates the forum shopping problems that both Congress and this Court have sought to avoid. It is questionable whether businesses engaged in foreign importation should be subjected to these inequities in an administrative trade tribunal; it is astonishing that even companies not involved in trade will be subjected to them too.
II. In addition to their importance to American businesses and the structure of patent litigation, the questions presented implicate at least two especially pressing questions of the constitutional structure of the federal government. First, by adjudicating domestic patent infringement disputes in an independent agency, the ITC steps into a role that ought to be the exclusive province of the Article III judiciary. Patent infringement by domestic firms has always been remediable in district court, and it ignores separation of powers to have an administrative agency conduct such proceedings untethered to importation. Second, the ITC’s expansive interpretation of its jurisdictional statute, without any clear grant of rulemaking authority, does not merit the level of deference that the Federal Circuit has given the agency so far. The especially strained reading of the ITC’s jurisdictional limits in this case highlights the risks of leaving agencies to police the scope of their own authority.
Left uncorrected, the ITC’s expansion of authority-stretching beyond a statutory trade focus to reach domestic patent disputes hardly related to trade—will set a precedent for enlarged administrative power for not just the ITC itself but also the whole of the federal government. The present decision is just one step, albeit a large one, toward the ITC’s longstanding project of shedding its statutory trade role and becoming a general-purpose patent tribunal, and lawmakers are already looking to create new administrative courts to replace Article III adjudication. These rapid developments of administrative expansion demand this Court’s imminent attention. Certiorari should be granted.