Authored by Gordon Gray via RealClearMarkets,
President Donald Trump has long been vocal about his plans to implement tariffs on various imported goods, with proposed taxes of 10 percent or higher on imports from other countries. This decision has sparked controversy and dominated discussions on trade policy in recent times, given the significant impact such a policy shift would have. However, it’s essential to recognize that President Trump’s tariffs are just one aspect of trade policy that demands attention from the new administration. Looking ahead to the coming months, any trade reform initiatives put forth by President Trump and his team should also address necessary changes to the International Trade Commission (ITC), an agency responsible for executing the country’s trade agenda.
While Congress grants broad authority to the executive branch for setting trade policy, the role of the ITC is often overlooked. Through Section 337 of the Tariff Act of 1930, the ITC has the power to initiate “unfair import investigations” aimed at safeguarding American companies from intellectual property infringement by foreign competitors.
When an infringed product enters the U.S., the ITC can issue an Exclusion Order, effectively banning the product from the American market.
Unfortunately, in recent times, the ITC has become a favored venue for patent trolls – entities that acquire patent portfolios solely for litigation purposes. While federal courts have higher standards for injunctions, patent trolls exploit the ITC’s unique ability to grant relief through Exclusion Orders.
When issuing an Exclusion Order, the ITC is expected to assess whether removing the imported product would negatively impact the public. Stakeholders, ranging from Hispanic interest groups to rural community advocates, have urged the ITC to consider public interest exemptions to ensure continued access to essential products. Regrettably, the ITC seldom conducts thorough reviews of public interest before taking action, with the last exemption being granted nearly four decades ago.
Thankfully, bipartisan efforts are underway in Congress to address these shortcomings in the ITC’s approach to such cases. Representatives David Schweikert (AZ-01) and Don Beyer (VA-08) introduced the Advancing America’s Interests Act (AAIA) last year to combat patent abuse at the ITC and reinforce its public interest standard.
The AAIA also aims to enhance the “domestic industry” standard under the Tariff Act, ensuring that a U.S. company cannot serve as a plaintiff unless voluntarily joining a complaint seeking relief from the ITC. By closing loopholes that allow patent holders to claim compliance through licensing agreements, the AAIA seeks to prevent the exploitation of the system.
While tariffs and protectionism have been focal points in recent political discourse, trade policy extends beyond just tariff considerations. Congress should prioritize legislation that realigns the ITC with its original mission. The prevalence of patent troll litigation not only burdens U.S. companies but also detracts resources from innovation and economic growth.
As policymakers outline the priorities for a new administration’s trade agenda, addressing the issues within the ITC should be a top concern.
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