H.R. 10218: Advancing American Innovation Act

This bill would change how the U.S. International Trade Commission (ITC) handles certain import-trade disputes under Section 337 of the Tariff Act of 1930. Section 337 cases are often used to ask the ITC to block imported products that allegedly infringe U.S. intellectual property rights or otherwise violate trade rules.

Changes to who can bring a case

The bill narrows and clarifies what counts as a qualifying “domestic industry” for some Section 337 cases. In general, a complainant would need to show that it has real U.S. business activity tied to the intellectual property at issue, such as:

• manufacturing in the United States,
• significant investment in plant or equipment,
• significant investment in engineering and research and development, or
• significant investment in licensing activities that leads to products incorporating the intellectual property being adopted and developed for sale in the United States.

The bill also says a complainant generally cannot rely on the activities of its licensees unless those licenses lead to the development of products incorporating the relevant patent, copyright, trademark, mask work, or design for sale in the United States. It further requires that, for a complaint under oath, any person being relied on to qualify as part of the domestic industry must join the complaint under oath, though they cannot be forced to do so.

Faster early review of some cases

The bill directs the ITC to identify, at the start of an investigation, whether the case includes a key issue that can be resolved quickly through expedited fact-finding and a short hearing. If so, the assigned administrative law judge would have to issue an initial decision on that issue within 100 days of the case being opened. While that early decision is pending, the broader investigation would be paused.

More emphasis on public interest

The bill changes how the ITC considers public interest factors before excluding imported goods or issuing cease-and-desist orders. It would require the ITC to look more explicitly at:

• public health and welfare,
• the U.S. economy, including competitive conditions,
• the production of similar products in the United States by the complainant and its licensees, and
• U.S. consumers.

It also gives the ITC more explicit authority to stop an investigation without finding a violation if it decides that excluding the goods would not be in the public interest. The bill says the ITC may consider terminating a case based on a consent order, an agreement between the parties, or public-interest concerns during the investigation.

Public-interest changes to exclusion orders

If the ITC finds a violation and also concludes that exclusion is in the public interest, it would direct exclusion of the imported goods. The bill keeps that basic structure but updates the factors the ITC must weigh. It also applies similar public-interest language to temporary exclusion orders and cease-and-desist orders.

New disclosure rules for litigation funding

The bill adds new transparency requirements for patent infringement proceedings at the ITC. A complainant would have to disclose:

• the identity and address of any third-party funder, and, for a company, its place of incorporation and principal place of business;
• any funding agreement with a third party that relates to the proceeding or the asserted patent, unless the ITC orders otherwise or all parties agree not to disclose it;
• the information within 10 days after the funding relationship is created or when the complaint is first served, whichever is later.

If the disclosure becomes incomplete or inaccurate, the complainant would have to update it. The bill also requires the ITC to impose appropriate sanctions if a complainant does not fully comply.

Who would be affected

The main effects would likely fall on companies and other parties that file or defend Section 337 cases before the ITC, especially those involved in patent, trademark, copyright, mask work, or design disputes involving imported goods. It could also affect third-party litigation funders that finance these cases, because they would become subject to mandatory disclosure.

Relevant Companies

• AAPL — Apple could be affected if it is involved in ITC disputes over imported electronics or IP enforcement, since the bill changes ITC case standards and disclosure rules.
• SONY — Sony could be affected through ITC cases involving consumer electronics, devices, or intellectual property claims tied to imported products.
• NVDA — NVIDIA could be affected indirectly if ITC proceedings involve imported chips or hardware that are subject to patent or trade complaints.
• TSM — TSMC could be affected indirectly by ITC cases involving semiconductors or other imported components used by U.S. firms.
• INTC — Intel could be affected in the same way as other semiconductor firms, through ITC disputes over chip technologies, licensing, or imported products.
• QCOM — Qualcomm could be affected by the bill’s changes to domestic-industry and licensing rules in patent-related ITC cases.