The Automotive Industry is international. That’s no secret. It crosses continents in its industry shows and its proud place in furious pop-culture films. More practically, many companies that operate within the industry have stakes in both domestic and foreign soil. This comes into play when considering the supply chain and FCPA compliance as well. Most recently, the international flavor of the industry has come into play when considering how companies can protect themselves from being harmed by imports. One tool to do so is filing a Section 337 proceeding at the International Trade Commission (ITC).
The number of Section 337 filings have risen sharply over the past several years with the expectation that they’ll continue to grow as an increasingly important part of international trade actions. Both foreign companies and U.S. companies that import products should audit their overseas operation to ensure they are in compliance with U.S. laws, the violation of which could form the basis of a Section 337 investigation.
Below are five measures international auto companies can take to avoid being named in an ITC complaint:
- Evaluate your imports to determine if those products infringe any U.S. patents. Such evaluations are commonly referred to as “field of use” studies.
- Ensure you are not importing unlicensed products that infringe U.S. trademarks or U.S. copyrights.
- Ensure your foreign operations have strong compliance and enforcement policies in non-IP areas. The most critical areas for heading off a potential Section 337 case include policies against:
- Economic espionage and theft of trade secrets.
- Computer hacking.
- Price-fixing and other antitrust violations.
- False advertising.
- Non-compliance with customs regulations, including country of origin designations.
- Take measures to protect the company from claims alleging trade secret violations, including by:
- Take all steps to identify trade secrets that belong to the company and preemptively document that they are appropriately the property of your company and not owned by another entity.
- Take steps to ensure that all new hires are properly vetted, where they are hired from competitors, ensure that they did not remove trade secrets with them and that no such information is stored at the company.
- Act quickly to assess the scope of any identified misappropriation of trade secrets and to stop its use. All steps taken should be documented and preserved.
- There are also potential claims alleging unfair acts that have not yet been tested at the ITC. Such claims might include claims brought by competitors against importers who commit unfair acts of bribery, who use child or forced labor, or any number of other unfair acts that cause injury to a domestic industry.
This list was generated as part of a Legal News: U.S. Regulation of Exports and International Conduct newsletter by David Hickerson and Greg Husisian titled, “Section 337 and the New Trump Administration: Your Top Ten Questions Answered.” Click here for the original publication.