August 05, 2019 Feature

Economists Must Be Careful in Their Use of IMPLAN to Analyze Public Interest Issues in Section 337 Cases

Robert Rogowsky and Jeffrey Klenk

©2019. Published in Landslide, Vol. 11, No. 6, July/August 2019, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Some recent cases before the U.S. International Trade Commission (USITC) have made use of an economic model known as IMPLAN to estimate the possible effects of an exclusion order prohibiting the importation and subsequent sale of a product found to infringe a valid and enforceable U.S. patent. These cases arise under Section 337 of the Tariff Act of 1930, which empowers the USITC to issue such an exclusion order.1 Before issuing an exclusion order, the USITC must weigh the importance of protecting intellectual property rights against any potential adverse effects of that exclusion order.2 As part of this process, economists are often retained to analyze how the domestic economy might respond if an infringing product were removed from the marketplace or if domestic production of the infringing product was curtailed. Although IMPLAN may have valid uses for certain types of policy analysis, its use in assessing the potential effects of an exclusion order can yield misleading results.

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