General Exclusion Orders under Section 337

Hnath, Gary M. | January 1, 2005

Your company, Widgets Unlimited, imports foreign-made widgets into the United States. One day, you’re informed that U.S. Customs & Border Protection (Customs) has detained your goods and is determining whether they infringe a patent owned by The American Widget Corporation, based on an exclusion order issued by the International Trade Commission (ITC) after a recent ITC investigation, titled Certain Widgets with Extra Shiny Surfaces. Since you were never a party to any proceeding at the ITC, and indeed, you never even knew American Widget had patents on its widgets, you conclude that there must be some mistake and wait for the goods to be released by Customs. The following week, however, you’re told that the goods infringe American Widget’s patent and, based on the exclusion order, your widgets will not be allowed to enter the United States. You’re told you can ship them back or, if you fail to do so, Customs will destroy them. What do you do now? How is it possible that you cannot import and sell your widgets in the United States, when there is no ruling by a court that your products infringe? Aren’t you entitled to some kind of due process? This article will explore general exclusion orders issued by the ITC, the legal basis for those orders, how a company can obtain a general exclusion order, and what options are available to a company faced with exclusion of its goods.