What Is The 337 Clause?

337: 　　

"337 investigations" and anti-dumping investigations all have import restrictions. In the "337 investigation", if the prosecution can prove infringing facts of the imported products, the relevant industry in the US can be convicted.

The 337 clause was named after its earliest appearance in the 337th tariff act of the United States in 1930. Since then, trade legislation in the United States has been revising and developing the clause. The greatest impact on determining the entity structure and procedure of the current "337 clause" is: the 1342nd articles of the Omnibus Trade and Competition Act (1988) and the 1995 Uruguay Round Agreement Act (Uruguay Round Agreement Act) revising the twenty-eighth edition of the US code.

The shipper or his agent (1) uses the unfair competition method and unfair act when importing goods into the United States or in the United States, and its threats or effects are enough to destroy or substantially damage the domestic industry of the United States, or to impede the establishment of such industries, or to restrict or monopolize the trade and Commerce of the United States; or (2) to import goods into the United States, or to sell them to the United States or to sell them after the United States, which infringe upon the patent rights, trademarks, copyrights or integrated circuit chip layout design rights which have been registered in the United States. And these unfair practices will be regarded as illegal when the four rights exist or have established domestic industries, and the United States should take appropriate measures to deal with them. The 1342nd article of the comprehensive trade and Competition Act 1988 is entitled "unfair practices in import trade" as stipulated in the title: the owner of goods, the importer, and the recipient.

Before that, the substantive aspects of the "337 clause" were basically the contents specified in point (1). Therefore, from the terms of the provision, it is a domestic industry protection law. The above point (2) is the newly added content of the comprehensive trade and Competition Act 1988, which is based on the theory that the real damage to intellectual property rights is the loss of exclusive rights under the statute law, which is made, sold or imported, and whether or not it is actually damaged. That is to say, the "337 clause" divides the unfair trade in the United States into two categories: General illegitimate trade and unfair trade in intellectual property rights.

Generally, unfair trade practices refer to the unfair competition methods and improper actions of importers or underwriters importing products into the United States or in the process of import sales. But the illicit composition of it must meet two conditions: one is that there are related industries in the United States or the industry is in the process of setting up; and the two is that its damage has reached a certain extent.

Unfair trade related to intellectual property refers to the act of importing, importing or selling to the United States, importing and selling products in the United States that infringe copyright, patent rights, trademark rights, integrated circuit layout and design rights, which are infringed by the laws of the United States. As long as there is an industry related to the industry in the United States or the industry is being established, improper trade practices related to intellectual property rights constitute an illegality rather than a damage to the US industry.

Judging from the practice of "337 clauses", the disputes in most cases are not related to intellectual property rights, such as patent infringement, or more broadly related information property rights or other rights related to intellectual property rights. The other major category of "unfair practices" is that there are few cases related to the trust act punished by Sherman law and Clayton law. This makes the clause highlight the purpose of protecting the domestic industry while protecting its intellectual property rights, although this protection is only passively limited to circulation.

ITC starts proceedings after receiving the complaint from the obligee. This procedure usually takes one year, and even complex cases must be completed within 18 months. The closure of court proceedings involving the same case may take two to three times.

Under normal circumstances, most of the US importers become the object of investigation by ITC because of a claim of a right holder. Sometimes ITC may issue an investigation order to the exporter. If the right holder of the lawsuit considers that if no immediate action is taken, it may cause irreparable damage to him, and he thinks he will win a bigger victory in the future procedure, then he can ask the ITC to issue a temporary injunction to stop the importation of the imported goods into the US market, but the corresponding guarantee must be provided. The decision on the provisional injunction must be made within 90 days.

If the ITC considers that the import products are infringing the property right after investigation, it may issue two orders according to the provisions of clause 337: one is called "stop order" and the other is called "prohibition order" or "exclusion order". The former is similar to the ban issued by the US District Court, which requires the accused to stop the alleged behavior immediately. If the accused insists on importing the goods into the United States and sells them in disregard of such orders, he may be fined heavily. The latter prohibited imports of such products from entering the United States.

"Prohibition order" is also divided into "limited exclusion order" or "limited prohibition order" and "universal exclusion order", or "general prohibition order". Among them, the "general exclusion order" prohibits all imported products of one category from entering the US market without distinguishing the origin or producer, and also includes producers and importers who are not yet in the market. The "limited exclusion order" only prohibits the infringing products produced by the investigated enterprises from entering the United States, but it can be applied to all types of products that are being infringed by the investigated enterprises now and in the future, not just the product types determined in the litigation.

In addition, the effectiveness of the "limited exclusion order" can be extended to include downstream or subordinate products of infringing goods, as well as upstream parts and components. Finally, when infringing products have large commercial stocks in the United States, ITC has the right to issue a prohibition order, which is generally prohibited by the defendants in the United States, not only in the United States, but also in the market development, distribution, advertising and employment of American agents and distributors.

The former only deals with alleged infringed products and producers, and does not allow the manufacturer to enter the United States. The latter is directed against all such infringing products, no matter what manufacturers are made by them. In practice, most of them are "limited prohibition orders".

ITC no matter the issue of "cease order" or "prohibition order" is not immediately effective after its release. According to the laws of the United States, the president of the United States has the right to examine the two orders within 60 days. After the examination, if the president of the United States believes that the execution of such orders will cause damage to the national policies of the United States, he can not approve the orders issued by ITC.

According to statistics, only 5 of the 100 orders issued by ITC have not been approved by the president.

It can be seen that "337 investigations" and anti-dumping investigations all have import restrictions. The determination of anti-dumping investigations is based on whether the imported products are sold at below normal prices, and the two is whether they cause damage to the US industry. In the "337 investigation", whether the damage to the US industry is not the basis for judging the violation, the prosecution can only convict if it can prove infringing facts of the imported products, and indeed there are related industries in the US. In this way, for American enterprises, the threshold of "337 investigations" is relatively low. Filing the case is easier and more restrictive for competitors. For the responding enterprises, the content of the investigation is technically more professional and more complex to deal with, so it is more difficult to sue than anti-dumping.