IP Law & Business

WHICH LAW FIRMS WERE ACTIVE AT THE ITC IN 2006?
FIRM	Total Investigations	Claimant	Respondent
Adduci	12	4	8
McDermott Will	7	4	3
Finnegan, Henderson	5	2	3
Howrey	5	5	--
Kirkland & Ellis	4	2	2
Bingham McCutchen	4	2	2
Fish & Richardson	3	2	1
Jones Day	3	1	2
Miller & Chevalier	3	1	2
Morgan Finnegan	3	1	2
Weil, Gotshal	3	2	1
Wilson Sonsini	3	2	1

Methodology: To compile this list, we used the ITC's Web site, as well as conversations with attorneys. We have listed all counsel for claimants and respondents, even if a firm withdrew or was replaced during the investigation. We have not listed counsel for third parties. In the list of respondents, we consolidated subsidiary companies into their parent companies. The nation where foreign companies are headquartered is listed.

International Savoir Faire
Knowing the ropes at the ITC has boosted the practice of boutique Adduci, Mastriani & Schaumberg. Other firms also prosper.

By Ann Sherman
IP Law & Business/June 2007

Reprints & Permissions

One attorney describes an International Trade Commission exclusion order, which bars imported products that infringe U.S. patents from entering this country, as a "knife at the throat" of infringers. This helps explain why last year marked the fifth year in a row of jumps in the number of unfair import investigations opened by the ITC. Known as "337 claims"--after the section of the federal statute that authorized them--the investigations are almost always based on allegations of IP infringement. In 2006 the commission opened cases on 32 claims, one trademark and the rest U.S. patent violations--a rise of four cases from 2005, and more than double the number in 2002. The five-year upswing is explained by the increasing flight of manufacturing overseas, with the finished goods getting shipped back to the United States.

The ITC is valued as a forum not only for the possibility of winning an exclusion order--the only remedy available--but also for the speed with which the investigations are adjudicated, usually within 14 to 19 months. Many 337 practitioners expect the upward swing in cases not only to continue but to increase, due to the U.S. Supreme Court's May 2006 decision in eBay v MercExchange, which made it more difficult for a successful patent infringement plaintiff to get an injunction in federal district court.

Indeed, by the end of April, the number of claims filed in 2007 had hit nearly one per week.

So who represents all of these claimants and respondents? In the three years since we started this annual survey, there have been a rotating slew of firms representing litigants in one, two, or three investigations. Only about five or six firms pop up as counsel in four or more investigations, and the identity of those firms has varied from year to year. At the top of the list in 2006 is 23-attorney Adduci Mastriani & Schaumberg, with a hand in 12 cases, more than double the five it tackled during 2005.

The only independent boutique that specializes in trade litigation, Adduci is literally in a class by itself--all of its rivals were absorbed by larger general practice firms by 2001. Sometimes Adduci is the only firm representing a client, as it was for respondents in two investigations in 2006. But most of the time, the firm joins forces with large general practices or midsize IP specialists. The larger firm handles the issues related to IP infringement, and Adduci handles the issues of patent defenses (such as whether a patent is invalid or unenforceable), whether there is a domestic industry (a requirement that the claimant must meet in order to present a legitimate case), and what kind of exclusion order to seek. Adduci also acts as a liaison with the commission, the ITC staff attorneys, and the administrative law judges who oversee the proceedings.

The importance of Adduci's role should not be underestimated, according to Damian Porcari, the director of enforcement and licensing for Ford Global Technologies, the subsidiary of Ford Motor Company that holds the automaker's patents. In December 2005 Ford Global brought a claim against a slate of importers that it claims were illegally infringing several auto parts patents. Porcari hired IP boutique Brooks Kushman to handle the patent end, and Brooks brought in Adduci as ITC counsel. What Porcari learned from his 337 experience: "You will lose in a hundred different ways at the commission if you don't have a good ITC lawyer."

Porcari says that partner James Adduci and his team reviewed all documents, putting anything submitted to the court in a format that was most receptive to the ITC. Explaining Adduci's value, Porcari says: "His review made things more digestible to the judge and staff attorneys because it always focused back to the ITC's unique requirements and rules."

Adduci and his partners, Louis Mastriani and Tom Schaumberg, attribute their increasing success to the growing popularity of the ITC, the firm's cost efficiency--it doesn't have to reinvent the wheel for each litigation--and its good track record of wins. Since 2000, the firm has been involved in 38 investigations, and most of those were settled--favorably, say the partners. Of the 11 trials the firm fully litigated--six for complainants and five for respondents--it lost only three.

Two firms that were new to the top five last year were McDermott Will & Emery and Kirkland & Ellis. McDermott was involved in seven cases, compared to two in 2005; and Kirkland represented clients in four investigations, three more than in 2005. Both firms attribute the rise in business partly to the increase in the number of 337 filings and partly to timing--what's the right forum for your client, given the issues that it is facing at that time.

Three firms in the top group in 2005 were repeats in 2006: Finnegan Henderson and Howrey were each involved in five investigations last year, and Bingham McCutchen took on four. Hogan & Hartson, one of the top five firms in 2005, dropped off the list in 2006, representing no clients at the ITC. The firm did not respond when asked to comment on the dramatic change.

The one thing that could threaten the prosperity of ITC practitioners and the popularity of the forum is a shortage of judges. The number of judges hearing claims--until recently four--hasn't changed, even as volume has soared. The fear is that as the caseload for each judge grows, the average length of investigations will expand, and the ITC will lose its edge as the fastest patent infringement forum. Any unforeseen emergencies would only compound increases in the length of an investigation.

This is exactly what happened this year in March, when Judge Charles Bullock checked into the hospital for a kidney transplant. Bullock came back to work on the last day of April. But five of his eight investigations had their target dates extended because of his illness.

The ITC hired a new judge, Carl Charneski, in mid-April, who will replace retiring judge Sidney Harris. But then, in early May, another judge, Robert Barton, resigned. The commission says that it is currently looking to fill that spot and as well as one for a fifth judge, but the process isn't easy.

Candidates must be current administrative law judges (or have passed the administrative law judge test). Few of those individuals have experience with technology or IP law, so the commission looks for quick learners.