Assessing Bias in Patent Infringement Cases: A Review of International Trade Commission Decisions

Robert Hahn
Robert Hahn
Robert Hahn Director of Economics - Smith School of Enterprise and the Environment at the University of Oxford, Former Brookings Expert

February 1, 2007

Executive Summary

The International Trade Commission (ITC) has gained importance in recent years because of its increasingly powerful role in adjudicating patent disputes. That little-known independent agency has the authority to bar importation of articles found to infringe a valid U.S. patent by issuing exclusion orders. The Commission is now potentially the patent tribunal of first instance for electronic products and other products manufactured overseas. This paper examines possible biases in ITC decision making in favor of patent holders from both a positive and a normative perspective and offers suggestions for improving the efficiency of the ITC process for adjudicating complaints based on patent infringement. I provide the most comprehensive economic analysis to date of cases that arise under Section 337 of the Tariff Act of 1930. In particular, this is the first paper to compare the ITC decision-making process in patent disputes with the district courts in a systematic way. After empirically demonstrating a likely bias in decision making at the ITC, the paper provides specific remedies that could improve the efficiency of the patent dispute process.