Peter Roff/Contirbuting Writer
Recent and expected Supreme Court rulings regarding the authority of federal regulators have put the bureaucracy in the spotlight.
Too many of them have the power to make or break industries. Some, like the U.S. International Trade Commission, are begging to have their wings clipped. Its mission is to protect American companies from unfair business practices by foreign companies, but in recent years it has inserted itself into patent infringement cases, a problematic and exceedingly complex area.
The agency needs to be put back in its lane. Judges and juries should resolve patent disputes, not regulatory bodies – which, like the ITC, often have the power to impose a ban (called an exclusion order) on imports of all products a company alleges used their intellectual property without permission or compensation.
Exclusion orders can be devastating to U.S. innovators whose supply chains extend overseas. A single order can cause billions of dollars in damage to the U.S. economy. The ITC regularly grants them because it is its only enforcement mechanism.
Unlike the penalties that a judge can impose, these all-or-nothing orders are not scalable. Worse, the ITC has ignored its own rules for decades by issuing orders that harm the public interest. Shockingly, it has refused to deny the request for an order on those grounds for more than 35 years.
Many of these requests come attached to suits filed by shady entities known as “Patent Trolls” who are not producers or manufacturers but pursue patent infringement claims to make quick cash.
In other infringement cases, suits involve a legitimate dispute between competing manufacturers in the U.S. who could readily solve their problems through nuanced court decisions.
A prime example of all this is playing out now as Masimo Corporation, a U.S. medical technology company whose products include noninvasive patient monitoring devices, has dragged Apple before the ITC.
Masino alleges the Apple Watch Series 6 infringes on its patent on light sensors that gauge blood oxygen levels. In January, an ITC administrative law judge ruled in Masimo’s favor. Now the full commission must decide whether to issue an exclusion order.
If it did, Apple could no longer sell its Series 6 watch in the U.S. market.
Masimo didn’t just file with the ITC. It accused Apple in federal court of stealing trade secrets. Those pleas failed to persuade the judge, who declared a mistrial and gave Masimo no relief.
Masimo’s approach is a perfect example of how not to deal with intellectual property disputes. Filing multiple cases that make various claims in different legal venues is wasteful. Not only that, it’s particularly taxing on the system when the issues involve very complex high-tech patents and the devices they support.
The ITC’s willingness to encourage these disputes while ignoring the public interest imperative leads to chaos and drag on U.S. innovation. The commission is venturing far beyond its intended role of protecting U.S. businesses from unfair foreign competition.
Congress must step up. Reps. David Schweikert R-Ariz.) and Don Beyer (D-Va.) recently introduced the Advancing America’s Interests Act, bipartisan legislation to reorient the International Trade Commission back to its core mission of protecting American jobs and the U.S. economy.
Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at RoffColumns@gmail.com and follow him on Twitter @TheRoffDraft.