Size Matters before the ITC, But It’s Relative

In intellectual property-based investigations, the U.S. International Trade Commission considers whether a complainant’s domestic activities involve significant investment in plant and equipment, significant employment of labor or capital, or substantial investment in exploitation of the IP. The Commission has emphasized that there is no minimum monetary expenditure required to establish a domestic industry, but in the case of Kinesiotherapy Devices, it relied heavily on evidence of context to justify how arguably small financial amounts could be “significant.”

The lesson in the opinion lies in the contextual evidence the Commission cited to find significance. This is paramount because the Commission emphasizes that the domestic industry is not evaluated “according to any rigid formula.” Thus, proving significance hinges on presenting a comprehensive domestic industry story.

The Kinesiotherapy Devices opinion suggests a role for analytics in proving significance. The prudent Section 337 complainant can exploit existing data stores to enhance domestic industry evidence. The authors suggest some guidelines for how to proceed. Domestic industry fact collection typically starts with technical personnel in order to identify activities and products involving the asserted IP, and ends with financial personnel, to identify resources dedicated to those activities and products. Weave comprehensive data into a personal and compelling narrative.

Given the fact-specific nature of the domestic industry requirement, it is disadvantageous to simply research precedent, present analogous facts, and call it a day. The context that makes an investment significant may be unique and subjective.