“Lawfare” describes the weaponization of the legal process to achieve political or economic goals, rather than to resolve genuine disputes. To advance their predatory interests, Chinese companies and their affiliates use lawfare in U.S. forums—expanding beyond U.S. courts to the U.S. International Trade Commission (ITC). By exploiting dubious claims to patent portfolios and discovery, these actors seek to hobble their American competitors and access to sensitive technology under the guise of justice.
How the ITC Became a Strategic Battlefield
Created to protect American industries from unfair trade, the ITC has become a high–stakes venue for patent fights under Section 337 of the Tariff Act of 1930. The Commission can block imports that infringe U.S. patents, a remedy far more powerful—and faster—than what’s available in federal court for an entity that isn’t seeking to practice its own patent. This power has been manipulated beyond recognition by parties it was never intended to serve. Section 337 complaints are routinely used by Patent Assertion Entities (PAEs)—firms that acquire patents but have no intention of producing or fostering technology—to extort financial settlements with the threat of import bans.
Many foreign investors recognize this leverage. Sovereign funds, offshore hedge funds, and state–linked entities increasingly finance PAEs or set up shell companies to launch ITC cases against firms producing in the U.S. These arrangements conceal true ownership and intent, turning what was meant to protect domestic industry into a tool of foreign influence. Longitude Licensing, a Dublin–based firm with no U.S. manufacturing, exemplifies this misuse: it repeatedly files ITC complaints despite lacking the domestic presence the law was designed to safeguard.
Patent Trolls, Foreign Capital, and Strategic Litigation
Patent assertion is a booming business. PAEs file most new infringement suits, often with foreign financial backing. Major tech companies report that over half of the lawsuits they face involve outside financiers, many connected to China. For Beijing-aligned investors, ITC litigation is a strategic tool: it delays and distracts competitors, pries into sensitive technologies, and forces costly settlements—all without creating U.S. jobs or products.
Consider Netlist, which manufactures in Suzhou, China, yet is asking the ITC to block memory products that are critical to the development of American AI and directly affect data centers being built by Google and Super Micro Computer in the U.S. Netlist’s actions raise a fundamental question. Netlist’s actions raise a fundamental question: is the suit about protecting intellectual property or weaponizing U.S. trade law to obstruct rivals while operating from China?
When IP Meets National Security
The stakes go well beyond patent rights. Many ITC cases involve technologies with dual civilian/military-use potential—semiconductors, optics, AI hardware, and drones. When foreign–backed entities target these types of products in patent litigation, the ITC can inadvertently serve as a channel for influence or intelligence gathering. Opaque funding and aggressive discovery tactics can expose sensitive innovations, undermining both economic competitiveness and security.
The House Select Committee on the Chinese Communist Party has drawn attention to this threat. Through hearings and investigations, it has documented how Chinese firms and affiliates exploit the U.S. legal system to access proprietary technology and intimidate American companies. The Committee has urged legislation to require transparency in litigation funding and foreign ownership, helping close the legal, but unintended, loopholes that enable lawfare.
Restoring Integrity to the ITC
To realign the ITC with its original mission—protecting legitimate American industry from unfair trade practices—Congress and the Commission should adopt targeted reforms:
1. Curb parallel litigation abuse. Limit the filing of simultaneous ITC and district court cases designed to extract settlements rather than resolve genuine disputes.A regular court, not the ITC, should be the venue of first instance.
2. Mandate disclosure of foreign financing. Require transparency in litigation funding and beneficial ownership, following models such as the Committee on Foreign Investment in the United States (CFIUS) or foreign–agent rules.
3. Increase congressional oversight. Demand that the ITC implement litigation transparency and conduct robust public interest analyses in Section 337 investigations, and define the steps the ITC can take to limit PAE abuse of the Section 337 process.
4. Modernize the ITC’s unfair import competition enforcement authority. Passing the Advancing America’s Interests Act, a bill that has been considered by Congress for years, would offer a major step forward in bringing the ITC back to its innovation mission.
5. Strengthen the domestic industry test. Complainants should prove actual harm to U.S. manufacturing, R&D, or employment, not just paper ownership through a foreign–funded shell—and the domestic industry should want a 337 case.
6. Ensure that the ITC coordinates with national security agencies and includes national security concerns in ITC’s mandatory public interest analysis. In sensitive cases, the ITC should consult Commerce, Defense, and Treasury and incorporate national security concerns into a robust and thorough public-interest analysis before granting exclusion orders.
Conclusion
The ITC can and should protect U.S. jobs and manufacturing, yet it has become a venue for lawfare, exploited by PAEs and CCP-linked entities that weaponize the American legal process, disrupt competition, and threaten national security. Congress must restore the ITC’s mission by passing the Advancing America’s Interests Act, modernizing Section 337, and exercising robust oversight. The ITC should only handle cases within its jurisdiction and ensure full transparency around litigation financing. These reforms will return the ITC to its proper role: defending American inventors, workers, and industries from illicit and unfair foreign predation.
