Federal Circuit reshapes foundational requirements for viability of a case in the ITC
Pharmaceutical and life sciences companies have historically been rare participants before the International Trade Commission (ITC) – in some cases, due to the stringent economic domestic industry requirements. However, recent landmark changes to these requirements may open the ITC as a new litigation venue for these industries.
In this alert, we discuss recent decisions that have broadened the criteria for domestic industry and the impact this might have on the potential for ITC litigation for pharmaceutical and life sciences companies.
ITC background and Section 1337(a)(3)(B)
Under the Tariff Act of 1930 (the Act), the ITC has the authority to exclude articles being imported into the United States, if those articles infringe valid patents. However, this authority is contingent upon the complainant meeting specific requirements, one of which is establishing a domestic industry based on the asserted patents. Section 337(a)(3) outlines three ways a complainant can satisfy this requirement: (1) with significant investment in plant and equipment; (2) significant employment of labor or capital; or (3) substantial investment in its exploitation, including engineering, research, and development, or licensing. 19 USC § 1337(a)(3).
Historically, the ITC’s application of Section 337(a)(3) has been restrictive, often disqualifying certain costs related to importation – such as warehousing, quality control, distribution, sales, and marketing – from the domestic industry analysis. This effectively required complainants to demonstrate manufacturing, development, or similar technical activities within the United States. Without such investments, complainants were often deemed “mere importers,” ineligible to bring a case before the ITC. By themselves, sales, marketing, and labor efforts were insufficient to meet the domestic industry requirement unless tied to domestic manufacturing activity.
The ITC’s restrictive application of Section 337 made it an unattractive venue for companies with insignificant non-technical or manufacturing expenditures. This disproportionately impacted life sciences and pharmaceutical companies, which often conduct substantial manufacturing abroad and incur significant marketing, regulatory, and labor expenses domestically.
Federal Circuit’s interpretation of 337(a)(3)(B)
In March 2025, the Federal Circuit fundamentally altered the ITC’s longstanding application of Section 337(a)(3)(B). In January 2025, Lashify challenged a Section 337 investigation decision regarding patent-infringing imports of artificial eyelash extensions and related accessories in Lashify, Inc. v. ITC, 130 F.4th 948 (Fed. Cir. 2025). Lashify, a US-based company with significant domestic labor investment in sales and marketing, but whose primary manufacturing is overseas, argued that the ITC's application of Section 337(a)(3) was contrary to the text of the statute. The ITC had determined that Lashify's domestic expenditures did not qualify for the Section 1337(a)(3) requirement, viewing Lashify as an importer and thus ineligible to assert its patent rights at the ITC.
The Federal Circuit disagreed, finding that the text of Section 337(a)(3)(B) specifically includes labor and capital investments related to the larger enterprise concerning the patent-practicing articles, without limitations. This decision provides clarity and stability to the contours of the ITC’s domestic industry requirement. Specifically, Section 337(a)(3)(B) permits complainants to satisfy the economic prong of the domestic industry requirement by demonstrating significant employment of labor or capital, including warehousing, marketing, sales, quality control, and distribution, as well as related labor costs. The Federal Circuit further clarified that the goods in question need not be manufactured domestically.
Additionally, in February 2025, the Federal Circuit in Wuhan Healthgen Biotech v. ITC, 127 F.4th 1334 (Fed. Cir. 2025) found that, if 100 percent of a complainant’s manufacturing is domestic, a lower dollar investment in domestic industry can suffice. This opens the door to the ITC for smaller biotech and life sciences companies where the total investment figure may not be large, but all manufacturing and development are domestic.
A new frontier: Life sciences at the ITC
The life sciences and pharmaceutical industry has historically avoided the ITC as a venue for protecting patent rights due to the stringent requirements for the economic domestic industry requirement. However, the Federal Circuit's decisions in Lashify and Wuhan have reshaped this landscape.
Smaller biotech companies with homegrown development may now be eligible to seek ITC protection. Larger companies with international footprints may also find the ITC more accessible, as their domestic expenditures on regulatory fees, quality assurance, logistics, marketing, promotion, trade shows, physician training, and sales activities will now be considered in the domestic industry analysis. This is in stark contrast to the ITC’s decisions in Certain Bone Cements, Components Thereof, and Products Containing the Same, Inv. No. 337-TA-1153 (Jan. 25, 2021) and Certain In Vitro Fertilization Products, Components Thereof, & Products, Inv. No. 337-TA-1196 (Oct. 28, 2021), where similar investments led to these complainants being dismissed as “mere importers” without a domestic industry. Under the new standard, these complainants would unlikely be classified as "mere importers" ineligible for ITC remedies.
The Federal Circuit's rulings make the ITC a more attractive venue for life sciences patent owners to seek relief, as sales and marketing expenditures, as well as other non-manufacturing activities, can now demonstrate the presence of a domestic industry. This is particularly beneficial for patent owners facing infringing imports from countries where patent enforcement is challenging or where infringers are difficult to identify or sue. The ITC offers a faster and more effective remedy to stop the importation of infringing products into the US.
Life science patent owners are encouraged to evaluate their patent portfolios, business strategies, and potential competitors when considering the advantages and disadvantages of pursuing patent protection and enforcement at the ITC. The Federal Circuit's decisions in Lashify and Wuhan will undoubtedly broaden the class of complainants who qualify as a domestic industry under Section 337, expanding access to this venue.
Respondents to ITC cases must now take additional steps when evaluating the context of a patent owner's expenditures in the United States. If investments are entirely domestic, a lower numerical threshold may be acceptable under Wuhan. Under Lashify, respondents must also assess the impacts of labor, marketing, and other non-manufacturing related expenses when crafting defenses. In particular, respondents may shift their focus to challenging claimed investments as insignificant or insubstantial, particularly, for example, in comparison to complainants’ foreign expenditures.
ITC Investigations extend beyond patent rights to trademarks, copyrights, trade secret misappropriation, and other forms of unfair competition. The Federal Circuit's Lashify and Wuhan expansions may influence other areas of intellectual property enforcement at the ITC.
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