ITC Cases Are Keeping Big Firms Busy

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With International Trade Commission cases at a new high for the decade, firms that have beefed up that practice area are reaping dividends.

With four months to go, more patent infringement complaints have been filed with the ITC this fiscal year than in any other since at least 2000.

"We are barely able to keep up with the demand in that area," said Marie Fiala, the managing director of Heller Ehrman's litigation department. The firm has between 60 and 70 staffers -- which includes paralegals -- working on ITC cases, she said. Heller has 12 litigators who focus on such cases full time, up from one in 2006, said Sturgis Sobin, who joined Heller's D.C. practice in 2006 to expand the firm's ITC capabilities.

Heller, Morrison & Foerster and Orrick, Herrington & Sutcliffe were among dozens of firms nationwide that handled the cases filed last year, according to tallies reported in this month's issue of IP Law & Business, a Recorder affiliate publication.

The ITC is a federal agency which, among other things, can take action on Section 337 complaints -- nearly all of which involve companies alleging that their U.S. patents are violated by imported goods. In the 2000 fiscal year, the organization handled 11 cases. In 2006, the number was 34. This fiscal year, which began Oct. 1, the Washington, D.C., agency has already taken on 36 new cases.

To help with the rising caseload, the ITC has hired a fifth judge who will start later this summer and has already begun looking for a sixth, said Lynn Levine, the director of the Office of Unfair Import Investigations, which participates in the ITC's Section 337 investigations as a party on behalf of the public interest.

"There's nothing occurring at the moment that would lead me to believe that we're going to see a significant drop-off from what we've experienced in the last few years," she said.

The parties in the ITC cases include California technology companies such as Western Digital Corp., Seagate Technology, Hewlett-Packard and SanDisk Corp.

Acer Inc., another California company, is being represented by Orrick in a pending case, said Gary Weiss, the firm's managing partner of North America and chairman of the intellectual property group. Like Heller, his firm keeps dozens of attorneys busy with such cases.

"I'd say more than 75 of our lawyers in our IP group, and actually outside of our IP group, even ... have been working on ITC cases," he said.

Until recently, Weiss said, "we have not had a dedicated ITC practice outside of the D.C. office."

In a sour economy, the rise in ITC work is particularly sweet. A multiparty case for Heller could involve eight to 12 attorneys working full time at 150 to 200 hours a month for just under a year, Sobin said. Of the 60 or so staffers working on ITC cases at Heller, about half are in California.

"I'd say there might be 10 or 12 here in Washington and probably 30 on the West Coast, and the rest sort of spread out in our other offices, including Shanghai," he said. The large percentage of California litigators working on such matters is the result of the need to have technically experienced lawyers on such cases, Sobin added.

The increase in cases is the result of a number of factors, lawyers said.

One is the 2006 U.S. Supreme Court ruling in eBay, Inc. v. MercExchange, 547 U.S. 388 (.pdf). The ruling made permanent injunctions no longer automatic in district court patent infringement cases, leading many companies seeking injunctions to turn to the ITC, which still enforces permanent injunctions, lawyers said.

An injunction is important for technology companies with "high-tech, short-life-cycle products," Sobin said. That "remedy is more valuable than the damages."

More importantly, given the relatively singular focus on patent issues among the judges trying such cases for the ITC, companies can expect fast and well handled trials, lawyers said.

"You pretty much know that you're going to get to trial and get a ruling within, certainly, less than two years," said Wayne Barsky, the national co-chairman of Gibson, Dunn & Crutcher's IP practice and a Century City partner.

The schedule on most cases is currently set to about 15 months, said the ITC's Levine, though she said the addition of judges will probably reduce that time. In district courts, cases can take 24 to 36 months or longer, lawyers said.

That rapidity translates to intense trials.

"If patent litigation in district courts is a heavyweight prize fight," Barsky said, "patent litigation in the ITC can sometimes resemble the ultimate fighting championships."