Patexia Insight 129: ITC Section 337 Trends (2022)

Tomorrow we will release our third annual ITC Intelligence Report. We estimate that the ITC Section 337 market is around $750M to $1B per year. This growing market has encouraged many law firms to compete for ITC attorneys. We identified 91 lateral moves among the top 1000 most active attorneys in the last 12 months. This means more than 9% of ITC attorneys moved recently. This is about 26% higher than what we reported last year.

We have reviewed 370 ITC section 337 investigations filed between January 1, 2016 and December 31, 2021. This popular report evaluates 367 law firms and 4,628 attorneys who represented 324 complainants and 1761 respondents. A total of 1,050 patents were at the center of these investigations.

As shown above, the ITC activity has fluctuated between a low of 52 ITC cases in 2018 and 2019 and a high of 71 cases in 2021. The recent upward trend started in 2020, where we saw a 28.8% increase in filing activity compared to 2019. The growth continued further in 2021. While filing went up 6 percent in 2021, the number of patents jumped 29%. The unique patent count is important as it impacts the workload. Considering that there will be an invalidity and non-infringement argument for each of the patents and an expert testimony should be prepared for each, the cost for each side increases as the patent count goes up.

We estimate that the ITC Section 337 investigation generates between $750M to $1B for law firms every year and that explains the excitement among the ITC lateral moves.

The mix of active Administrative Law Judges have also changed at the Commission. While during the 6-year period of our study, there were a total of 9 active ALJs, a number of them have retired or moved to private practice. The Commission currently has five active ALJ and that includes the recently appointed ALJ, Monica V. Bhattacharyya who joined in September of 2021.

The following chart summarizes the unfair acts for each of the ITC investigations during the period of our study (from January 1, 2016 to December 31, 2022). As shown, the majority (about 92%) were related to patent infringement while three percent were related to trade secrets. The rest were two percent or less than that for each of the remaining categories.

The ITC Section 337 is relatively fast and effective. That is one of the key reasons that corporations consider it and are willing to invest on this often in parallel with district courts. As of March 3, 2022, out of the 370 ITC investigations filed during the period of our study, we counted 284 with the “terminated” status, 44 were still pending before the administrative law judge (ALJ), while 27 were pending before the Commission and 13 were pre-institution. The following chart shows the status of all 370 investigations.

The full ITC Intelligence 2022 goes further and evaluates the terminated cases, especially the 255 violation investigations that had been terminated. These 255 cases were the source of performance measurement and we used them to calculate the performance rankings for all law firms and attorneys.

In the following weeks we will continue our coverage of top attorneys in patent litigation and ITC Section 337 investigation. Stay tuned!