The Federal Circuit has ruled that US companies can utilize the Section 337 of the Tariff Act of 1930 (19 USC 1337) to prevent foreign “thieves” of US companies’ trade secrets from importing goods based on stolen intellectual property into the United States. TianRui Group Co. et al. v. ITC et al., No. 2010-1395 (Fed. Cir. Oct. 11, 2011).
Previously, Section 337 has been used to prevent goods which infringe on United States trademark, copyright or patent registrations from being imported into the country. The language of Section 337 specifically declares unlawful:
the “importation into the Untied States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that – (i) infringe a valid and enforceable United States patent . . . or (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.”
Prior to TianRui, Section 337 has never been used to prevent the importation of anything other than what infringed with a valid US intellectual property registration (e.g., copyright, trademark, or patent). In TianRui, “Complainant Amsted is an American company that uses a secret process to make cast steel railway wheels. Defendant TianRui, a Chinese company, … hired former employees of an Amsted licensee to manufacture wheels using Amsted’s confidential process in China.”
The court held that “the general provision in the statute relating to ‘unfair methods of competition and unfair acts in the importation of articles’ only requires that the unfair practices threaten to ‘destroy or substantially injure’ a domestic industry.” In other words, Section 337 not only protects against infringement of express US intellectual property protections, but against any sort of unfair competition, thus Federal trade secrets law can be used to block importation of products manufactured using pilfered trade secrets.
This case highlights how US companies can now use the International Trade Commission and Section 337 to further buttress existing intellectual property protections against unfair competition and trade secrets misappropriation.
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