The U.S. International Trade Commission (ITC), a federal agency that deals with foreign trade, has issued an order against Comcast, a purely domestic company that engages in no foreign trade. That order, now on appeal, has the potential to greatly change the power of the ITC and could have far-reaching effects on many different American companies.
In a new policy paper, R Street senior fellow and associate director of tech and innovation policy, Charles Duan and associate fellow, Bill Watson review the nature of the ITC and its focus as a trade agency. They explain the erroneous legal precedents and theories that allowed the agency to issue compulsory orders against Comcast and consider how the ITC could potentially inject itself into other purely domestic disputes. Finally, the paper discusses reasons why—as a matter of policy—the ITC is ill equipped and poorly situated to become a general patent court.
This recent decision against Comcast, the authors argue, is an enormous expansion of the trade agency’s jurisdiction that will negatively affect purely-American companies that never even think about foreign trade. Hardware store retailers, bike-share services and American manufacturers are just three examples of industries that could now find themselves in the midst of a federal trade agency dispute.
The ITC is not equipped to be a court: It offers insufficient protections to defendants brought before it and the powers its wields are not properly tailored to the nuances of general dispute resolution. The authors add, “Should the decision be left intact, the ITC could decide a great swath of domestic patent disputes that incidentally and unremarkably involve the use of imported products. In effect, the agency’s power to block imports will serve as an extra-judicial remedy for domestic patent infringement.” Indeed, the result is simply bad policy.