The discovery procedure governed by the Federal Rules of Civil Procedure (the Rules) is fully consistent with the obligations of Article 41.2. The discovery procedure enables each party to an action for enforcement of intellectual property rights to obtain information related to any claim or defence in that action. The Rules authorize the judge in any enforcement action to limit discovery requests which are unreasonably cumulative or duplicative; if the information is obtainable from some other source that is more convenient, less burdensome, or less expensive; if the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or if the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. See Rule 26. The judge in any enforcement action also is required to issue a scheduling order that, among other things, limits the time for completion of discovery. See Rule 16(b).

Section 337 is fully consistent with Article 41.2. By statute, Section 337 investigations must be completed at the earliest practicable time. Target dates for the completion of the investigation are set by the Administrative Law Judge early in the investigation. 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. These target dates typically call for completion of the investigation in one year, although complex investigations may take about eighteen months to complete. The Commission has the flexibility to ensure that the target date set is not unreasonable and does not allow unwarranted delays.

In 1995, 11 section 337 petitions were filed, 11 investigations were initiated, nine were given target dates by the US International Trade Commission (the other cases were subject to the old rules). Eight of the nine were to be completed within 12 months and one within 12 1/2 months. In 1996, 13 section 337 petitions were filed, 12 investigations were initiated, and all 12 were assigned target completion dates. The target completion dates varied from ten 1/2 months to 21 months. As of 1 December 1997, 11 section 337 petitions have been filed in 1997, 11 investigations were initiated, and all but three have been assigned target dates and target dates will be assigned those three shortly. Target completion dates ranged from 12 months to 15 months.

The amendments to Section 337 resolved the problem that the panel identified in its report. Namely, 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.

The amendments to section 337 provided the means to prevent infringement proceedings being brought against imported goods in two forums at the same time. 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 that involves 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 use its discretionary authority to stay any other claims in the case.

(a) The outline of the present regulations is found at the beginning of 19 C.F.R. § 133. (b) The amendments being prepared will expand and clarify the information that may be disclosed to interested parties, clarify Customs position regarding materially and physically different grey market goods and make the procedures that apply to trademarks and copyrights more uniform. (c) The amendments have been prepared for final publication and are being processed as expeditiously as possible.

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).

Decisions of the CAFC regarding § 337 can be appealed to the US Supreme Court.

A claim based on state law may be heard in a federal district court under the following statutory provisions: 28 U.S.C. § 1332, which provides for federal court jurisdiction in cases where the citizenship of the parties is diverse (i.e. they are citizens of different states or one is a foreign national) and the amount of the claim exceeds US$50 000; or 28 U.S.C. § 1367, which provides federal jurisdiction to hear state law claims that are related to and part of the same case or controversy as a separate federal claim. In addition, under 28 U.S.C. § 1441, a case bought in state court that satisfies federal jurisdictional requirements may in most cases be removed to federal court at the request of a party.

Federal districts courts have original jurisdiction over infringement actions involving industrial designs under 35 U.S.C. § 281 and 28 U.S.C. § 1338 and involving geographical indications registered as certification marks under 15 U.S.C. § 1114 and 28 U.S.C. § 1338.

The other instance is that an exclusive licensee in a mask work for an integrated circuit may institute an action for infringement of the mask work. See 17 U.S.C. § 910(2).

The US International Trade Commission and its administrative law judges have authority, under 5 U.S.C. § 557, to order personal appearances and to authorize written or videotaped depositions in appropriate circumstances.

To obtain a preliminary injunction, courts have generally required that the moving party demonstrate some or all of the following: a substantial likelihood that it will prevail on the merits of its case; that it will suffer irreparable injury if preliminary relief is not granted; that the threatened injury to it outweighs the harm an injunction might cause the defendant; and that the preliminary injunction will not have a serious adverse effect on the public interest. A temporary restraining order (TRO) may be granted by a court where it clearly appears from specific facts shown by an affidavit or by a verified complaint that immediate and irreparable injury will result before the adverse party or his attorney can be heard in opposition, and the complainant’s attorney has certified to the court, in writing, the efforts which have been made to give notice and the reasons supporting his claim that notice should not be required. Security is required as a condition for obtaining a TRO or a preliminary injunction in an amount sufficient to cover costs and damages to the party wrongfully enjoined or restrained. TROs expire within ten days unless extended for good cause shown or if the adverse party consents to a longer period. A motion for preliminary injunction must be scheduled for a hearing at the earliest possible time and, the party obtaining the TRO does not proceed with the request for preliminary injunctions, the TRO will be dissolved. See Rule 65, Federal Rules of Civil Procedure. Rule 70 of the Federal Rules of Civil Procedure authorizes Federal judges to direct that a conveyance of land, delivery of deeds or documents, or performance of any other specific act provided for in a judgment be done at the cost of a disobedient party by some other person appointed by the court. A party entitled to performance would apply to the court for a writ of attachment or sequestration against the property of the disobedient party to compel compliance with the judgment. The court may also adjudge a non performing party in contempt. Section 566(a) of title 28, United States Code, states that the primary role and mission of the United States Marshals Service is to provide for the security and to obey, execute, and enforce all orders of the United States District Courts, the United States Courts of Appeals and the Court of International Trade. Subsection 566(c) states that: "Except as otherwise provided by law or Rule of Procedure, the United States Marshals Service shall execute all lawful writs, process, and orders issued under the authority of the United States, and shall command all necessary assistance to execute its duties".

The US International Trade Commission is authorized to require that a bond be posted as a prerequisite to the issuance of a temporary exclusion order and, if the respondent prevails in the final determination, the bond may be forfeited to the respondent. See 19 U.S.C. § 1337(e)(2).

With respect to fees charged for judicial proceedings, see 28 U.S.C. §§ 1913 and 1914. Under Rule 54(d) of the Federal Rules of Civil Procedure and 17 U.S.C. § 505; 15 U.S.C. § 117(a); 17 U.S.C. § 911(f), these fees, witness fees and the like, are generally awarded to the prevailing party, unless the court orders otherwise because of the equities in the case. The text of the latest fee schedules established by the Judicial Conference of the United States is set out in Annex 3. Administrative fees vary depending upon the procedure in question. The United States Government would be happy to provide fee schedules for procedures in which the Government of Switzerland indicates an interest.

Federal judges in any enforcement action are required to issue a scheduling order that, among other things, limits the time for completion of discovery. See Rule 16(b), Federal Rules of Civil Procedure. In connection with discovery, courts, under Rule 37, require any party or deponent whose conduct necessitated the filing of a motion to compel to pay the reasonable expenses incurred by the other party in obtaining the order, including attorneys fees, unless opposition to the motion was substantially justified or other circumstances make such an award unjust. Similar sanctions are imposed under Rule 37 on parties that fail to comply with orders; that fail to attest to the genuineness of a document or the truth of any matter as requested under Rule 26; that fail to attend a deposition, serve answers to interrogatories, or respond to a request for inspection; or that fail to participate in framing a discovery plan. In addition, courts may impose similar sanctions on parties or on their attorneys for failure to obey a scheduling or pretrial order, if the attorney is unprepared or fails to participate in good faith. See Rule 16(f). The US International Trade Commission has similar authority in connection with § 337 cases. See 19 U.S.C. § 1337(h).

The US system is TRIPS-compliant and does allow for the time limit to be extended in appropriate cases, as expressly provided by the TRIPS Agreement. Please see 19 C.F.R. Part 133.

It is not clear to what "publicly available data" the European Communities refer in asserting that enforcement actions in Federal courts "typically" require several years to reach a final judgment and that costs, including attorneys' fees, "often" reach US$1 million or more. By not providing citations to or copies of the "publicly available data" referred to, the European Communities preclude the United States Government from considering the source and the material and responding. With regard to information on average costs and duration of legal actions, it should be noted that, under the United States judicial system, US district courts have original jurisdiction over enforcement actions regarding copyrights, patents, plant variety protection, trademarks and integrated circuit layout designs. Jurisdiction over enforcement actions involving geographical indications and trade secrets is shared between the Federal district courts and the state courts depending on a variety of factors. The Administrative Office of the United States Courts (the Administrative Office), which compiles statistics on activities of Federal courts, provides statistical information only on the number of cases filed annually involving patents, copyrights and trademarks (see table 1 below) and the number of cases terminated in a given year involving those same topics (see table 2 below), indicating at what stage of the process the case was terminated. The figures in table 1 below indicate, however, that right holders make frequent use of temporary restraining orders, preliminary injunctions, ex parte seizures and other provisional remedies in cases enforcing intellectual property rights, so that only a small percentage of cases filed proceeds to final judgment. Tracking individual intellectual property cases from filing to termination in order to determine the average time required to reach final judgment would be very costly. In addition, the duration of cases is affected significantly by the parties themselves and there would be no means for determining what periods were attributable to the courts and what periods were the fault of the parties. The Administrative Office does not keep a record of the cost of litigation. Parties do not provide information on attorneys' fees, cost of experts, etc. to the Administrative Office, and would not likely do so if asked, because such information is generally regarded as confidential, except when costs are being claimed. Fees charged by attorneys are not set by government nor does the government place any arbitrary limits on the number of practising attorneys. Fees vary from location to location, firm to firm, attorney to attorney, and task to task and are often subject to negotiation. Under these circumstances, even estimates of the costs of litigation would be unreliable. For all of these reasons, it is not possible to provide data on the average duration or cost of proceedings concerned with the enforcement of intellectual property rights in the United States. The data regarding termination of cases for the year ending 30 June 1997, however, would indicate that a majority of cases are resolved during the discovery phase (before pre-trial), since discovery provides each side with information allowing it to evaluate its position and the likelihood of success on the merits of the case. Many others are resolved before action begins as a result of negotiations. Table 1 [Part of the response is in Table format ] Table 2 [Part of the response is in Table format ]

Published articles regarding the cost and duration of legal proceedings in US Federal and state courts do exist, but they have not been prepared by the US Government and therefore, the US Government is not in a position to "confirm" that any "data on the actual duration or cost of proceedings concerned with the enforcement of intellectual property rights" contained in those articles are accurate or that the conclusions reached by the authors are valid. Regarding the tables attached to the EC’s follow up questions, the AIPLA's "Report of Economic Survey 1997", as its title indicates, is not a "study." Quoting from the introduction to the Report, "The survey reports on incomes and related characteristics of individual practitioners and addresses other economic aspects of intellectual property law practice. " In January 1997, the AIPLA mailed survey questionnaires to its 8,048 members and sent reminder post cards in February. Responses were received from 1,638 individual practitioners and 293 law firms. The first line of each portion of the tables attached to the follow up questions by the EC indicates the number of persons and firms supplying estimates from which the percentiles in that particular portion were compiled. The introduction notes that "percentiles based on fewer than 50 responses should be assumed to have relatively wide margins of error". The figures shown in the tables, as indicated in the table headings, reflect estimates provided by some AIPLA members responding to the questionnaire. They are not "data on the actual duration or cost of proceedings concerned with the enforcement of intellectual property rights". AIPLA members were instructed to consider, in making their estimates, "total cost" to be "All costs, including outside legal and paralegal services, local counsel, associates, paralegals, travel and living expenses, fees and costs for court reporters, photocopies, courier services, exhibit preparation, analytical testing, expert witnesses, translators, surveys, jury advisors, and similar expenses", incurred for discovery, motions, pre trial, trial, post trial and appeal.

The United States is in full compliance with Article 41.1. Enforcement procedures as specified in Part III of the TRIPS Agreement are available so as to permit effective action against any act of infringement. Article 45 requires that damages be authorized only in situations where the infringer knew, or had reasonable grounds to know, his activity was infringing. Judges in Federal courts have such authority (for copyright, see 17 U.S.C. § 504; for trademarks, including certification marks, see 15 U.S.C. § 1117; for patents and industrial designs, see 35 U.S.C. § 284; for integrated circuit layout designs, see 17 U.S.C. § 911; and for trade secrets, refer to the appropriate state laws). US judges have the authority, required by Article 44, to enjoin infringement for the life of the relevant intellectual property right (for copyright, see 17 U.S.C. § 502; for trademarks, see 15 U.S.C. § 1116; for patents and industrial designs, see 35 U.S.C. § 283; for integrated circuit layout designs, see 17 U.S.C. § 911; and for trade secrets, see relevant state laws), and, in all but very rare cases, do so when infringement is found to exist. Most intellectual property owners bring legal actions soon after they become aware of an infringement, not seeking primarily to obtain damages for infringement that has already occurred, but to enjoin further infringement. Finally, US judges have the authority to award costs, including attorneys' fees in appropriate circumstances, as required by Article 45.2. We note that the EC question, like others it has submitted, is based upon unsupported assertions first, that "in many cases, attorneys' fees can exceed the potential damages for infringement" and second, that the first unsupported assertion deters right holders from pursuing civil enforcement actions. The United States believes that the data provided in the tables in our response to question 1, giving the number of cases filed annually, indicate that right holders are not deterred from enforcing their rights.