The United States amended section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, as part of US implementation of the Uruguay Round results. As stated in the "Statement of Administrative Action" accompanying the Uruguay Round Agreements Act, the amendments to § 337 bring US procedures into conformity with national treatment obligations under GATT 1994, while providing for effective enforcement of intellectual property rights at the border.
The TRIPS Agreement, which was negotiated after the GATT panel report finding that certain aspects of section 337 were inconsistent with Article III of GATT 1947, recognizes that it may be necessary to treat domestic and imported products differently to enforce intellectual property rights effectively in respect of imported goods. The procedures applied under section 337 comply fully with Article 49 of TRIPS in that they "conform to principles equivalent in substance to those set forth" in Section 2 of the TRIPS Agreement. For example, each element of Articles 41 and 42 of the TRIPS Agreement are met in the context of a section 337 proceeding.
The 1994 amendments to section 337 made the following changes to USITC procedures to implement the panel's recommendations.
- Eliminated the requirement that the USITC issue a final determination within a fixed period of time. Instead, the amendment provides that the ITC must complete its investigation "at the earliest practicable time". To promote rapid adjudication, the USITC must, within 45 days of initiating an investigation, establish a "target date" for its completion. See 19 U.S.C. § 1337(b)(1). These requirements parallel the procedures set out in recently revised Rule 16 of the Federal Rules of Civil Procedure providing district courts with various mechanisms for expediting litigation. They are also consistent with district court efforts to avoid delay, such as by establishing a schedule for the completion of various stages of litigation.
- Provide a means to prevent infringement proceedings being brought against imported goods in two fora simultaneously. A district court hearing an infringement case is required to stay its proceedings, at the request of a respondent in a section 337 proceeding, in respect of any claim involving the same issues as those pending before the ITC. Such issues would include questions of patent validity, infringement, and any defences that might be raised in both proceedings. The district court may, in its discretion, stay any other claims in the case.
- Resolved the problem regarding counterclaims that the GATT panel identified in its report. A respondent in a section 337 action may file with the USITC any counterclaim that may be filed with a federal court. If the claim is of the form of a defence to the alleged violation of section 337, the USITC will consider the matter. If the party raising the counterclaim seeks a remedy such as damages, the amendments now make that remedy available. Moreover, the amendments ensure that the party raising the counterclaim is not prejudiced by any delay or payment of fees. See 19 U.S.C. § 1337(c).
