Why the ITC's Bizarre Interpretation of Property Rights Matters

A recent ruling at the International Trade Commission (ITC) just put all American companies on notice: “We are all socialists today.”

Since our founding, the protection of intellectual property has been the bedrock of America’s freedom and the engine of our nation’s prosperity. It is the source of creativity, innovation, and ingenuity which has made America the envy of the free world. Unfortunately, we have taken too many actions in recent years to undermine intellectual property. Just this month, the actions of an administrative law judge at a little-known agency – the U.S. International Trade Commission – sent a harmful signal that big and powerful companies can willfully violate the property rights of others without consequence.

America became the world’s superpower due to its unsurpassed economic growth — fueled in no small part by strong intellectual property rights. Our success reflects a deep-rooted conviction that property rights drive competition, invention and ingenuity. The fact that patent rights appear in the U.S. Constitution (Article 1, Section 8, Clause 8) reflects the importance of this principle to our Founding Fathers. They understood the power of innovation.

One agency that has been tasked with protecting IP rights is the aforementioned U.S. International Trade Commission (ITC), which hears complaints over patent infringement for products that are being imported into the United States. The ITC offers recourse for companies whose property is being stolen.

Qualcomm, an American company that has been at the forefront of cellular technology, brought such a case against Apple. Apple, they argued, has infringed their patents by allowing the use of their technology in Apple phones powered by rival Intel chips. The case was brought to the ITC because Apple manufactures handsets overseas and imports them into the U.S.

An administrative law judge of the ITC recently agreed with Qualcomm and found that Apple has indeed infringed their patents. But in a shocking move, he refused to impose an exclusion order – the only available remedy for addressing such an infringement. The ITC’s bizarre ruling is virtually unheard of. How can a judge rule that a company has violated someone’s property right, but then refuse to grant relief to the aggrieved party? It makes no sense. Such an outrageous ruling only sends the message to Apple – and to other would be patent thieves – that they can willfully ignore the rights of innovators and creators. It also reverses the understanding of what the government’s role in society is supposed to be: to protect Life, Liberty, and Property.

The ITC’s bizarre and unprecedented ruling is a deterrent to innovation and to the investment necessary to bring that innovation to market. Without the ability to defend our patent rights, there will be less invention and fewer investors willing to risk capital on those inventions.

Patent theft must be aggressively discouraged with the tools available to those who are charged with protecting our property rights. Rulings such as this will only complicate the process for a fair and reasonable treatment when it comes to resolving patent disputes.

This ruling sends the message that Apple is too powerful to pay a price for violating the law and undermining property rights. The last thing we need to do is grant Apple or any other corporation the “too-big-to-fail” protection that politicians have given to other companies and industries in recent years only to see disastrous results for consumers and working families. If Apple takes property, they must pay for it – and they must stop stealing it, immediately.

Fortunately, this ruling is only one step in the process and the full Commission will now have the opportunity to review this case. Those of us who believe in property rights and innovation can only hope that the ITC sees how critical it is to ensure that all patent infringement be punished and that no company (no matter how big or powerful) be allowed to escape the consequences of outright property theft.