Is Patent Licensing a Domestic Industry?

One powerful tool for domestic industries is a complaint at the International Trade Commission (ITC) under Section 337. The ITC does not award money damages, but can stop importation in the United States, and patent infringement by a foreign competitor is one basis for obtaining such relief. However, another requirement is that the complainant must show economic damage to a domestic industry caused by the patent infringement. A recent case found that the economic damages can be proven by showing loss of patent licensing revenue. That such activity can be considered a domestic industry is a significant issue as enabling non-practicing patent owners access to the ITC has a significant effect on the relative leverage among such patent owners and their targeted potential licensees.

The case before the US ITC is in the Matter of CERTAIN SILICON-ON-INSULATOR WAFERS (337-TA-1025). The initial determination was summarized by the Administrative Law Judge as follows:

While this case is ongoing and may certainly be modified at a later date, many are watching as it could open the door for NPEs to have greater leverage in asserting patents against foreign industrials.