- with readers working within the Law Firm industries
- Clarified Definition of Domestic Industry: Section 337 of the Tariff Act acknowledges that investments in sales, marketing, warehousing, quality control, and distribution can contribute to satisfying the domestic industry requirement, as held by the Federal Circuit in Lashify.
- Holistic and Context-Dependent Analysis: The Federal Circuit's decision emphasizes that the significance of investments for meeting the economic prong of Section 337 will be assessed holistically and contextually, without a rigid dollar threshold.
- Implications for Non-U.S. Companies: Non-U.S. companies with significant commercial and logistical operations in the United States, even without domestic manufacturing, may have viable grounds to pursue Section 337 cases under the clarified interpretation of domestic industry.
Introduction
For years, many Non-U.S. companies dismissed the International Trade Commission (ITC) as a forum for patent enforcement in the United States. The ITC's border remedies—including the exclusion of all infringing imports into the U.S.—were attractive, but the domestic industry requirement often felt out of reach to companies whose manufacturing or R&D occurred abroad. Earlier this year, the Federal Circuit's decision in Lashify, Inc. v. International Trade Commission clarified that calculus: the court held there is "no carve out" that excludes sales, marketing, warehousing, quality control, or distribution from the kinds of U.S. investments that can satisfy the economic prong of domestic industry under § 337(a)(3)(B). The panel vacated the Commission's contrary approach and remanded for a fact specific significance analysis.1
The Commission sought rehearing, but the Federal Circuit denied that request on June 25, 2025, and issued its mandate on July 2, 2025. Lashify is now the law.2
Section 337 In Brief—What it is and Why It's Different from Other Patent Venues
The statute and forum
Section 337 of the Tariff Act authorizes the ITC to investigate unfair acts in import trade, including the importation (or postimportation sale) of articles that infringe U.S. patents. See 19 U.S.C. § 1337. The ITC conducts formal, trial like investigations before ALJs; the Commission reviews the initial determination and issues final decisions.3
Remedies and timing
If a violation is found, the ITC may issue exclusion orders (enforced by U.S. Customs and Border Protection) and cease and desist orders reaching U.S. inventories; orders are effective when issued and become final after a 60-day presidential review (delegated to USTR) unless disapproved for policy reasons. The ITC also must set a target date within 45 days of institution, and many investigations reach a final decision roughly 12–16 months from the start.4
Domestic industry under § 337
A patent based complaint must prove (i) importation/infringement and (ii) a domestic industry that exists in the United States "with respect to the articles protected by the patent," which can be shown through:
(A) significant investment in plant and equipment,
(B) significant employment of labor or capital, or
(C) substantial investment in exploitation (engineering, R&D, or licensing). This domestic industry showing has an economic prong (the investments) and a technical prong (the industry's products practice the asserted patents).
This showing has an economic prong (the investments) and a technical prong (the industry's products practice the asserted patents).5
What Lashify Held—and Why It Matters
In Lashify, the Commission had "reasoned that 'it is well settled that sales and marketing activities alone cannot satisfy the domestic industry requirement,' and drew the same conclusion for warehousing, quality control, and distribution expenses."6On appeal, the Federal Circuit disagreed. It rejected the ITC's decision to discount commercial and logistics functions unless paired with domestic manufacturing or engineering. Reading § 337(a)(3)(B)'s text, the court held that:
"There is no carve out of employment of labor or capital for sales, marketing, warehousing, quality control, or distribution. Nor is there a suggestion that such uses, to count, must be accompanied by significant employment for other functions, such as manufacturing."7
The court vacated the Commission's contrary approach and remanded for a holistic, record specific significance assessment.8
In Lashify and pending cases, the Commission is already applying this framework. For example, in Certain Dermatological Treatment Devices & Components Thereof, the Commission concluded a domestic industry existed on preLashify facts but remarked that sales and marketing expenses "would only further support" its analysis.9
Why Lashify May Impact Non-U.S. Companies and Those Who Compete with Them
Before Lashify.
Foreign patent owners may have maintained U.S. sales, marketing, quality, returns, and warehousing/distribution operations but lacked U.S. manufacturing or R&D—the categories the Commission historically treated as the most straightforward ways to satisfy § 337(a)(3)'s economic prong. Non-U.S. owners thus faced skepticism when their U.S. investments were commercial or logistical.10
After Lashify.
The same U.S. commercial and logistics investments—if quantified and tied to the patented SKUs—may satisfy clause (B) without domestic manufacturing. That change may help Non-U.S. entities with foreign factories but meaningful U.S. commercial footprints.11In addressing what might meet the requirements under the law, the Federal Circuit opined that there is no fixed dollar threshold and that "significance" is holistic and context dependent12, while LELO still demands numbers, not adjectives.13
What Lashify Did Not Change—and the Tools That Remain for Respondents
First, the technical prong remains essential: a complainant's domestic industry products must practice the asserted patent claims. In Lashify, the court affirmed the Commission's finding that the complainant failed the technical prong for the asserted utility patent; the remand addressed only the economic prong.14
Second, the investments must have a nexus to "the articles protected by the patent." Pooling sales/marketing/warehouse spend across product lines that do not all practice the same asserted patent(s) remains improper.15
Finally, significance remains an evidentiary question. The broadened categories of cognizable spend do not eliminate the need to quantify and apportion amounts to the practicing SKUs and to demonstrate why those amounts are significant in the relevant market context.16
Bottom Line
For a Non-U.S. patent owner that manufactures abroad but sells into the U.S., Lashify may make a Section 337 case a realistic option. It may also create a realistic risk for those who compete with such companies. Lashify does not water down the domestic industry requirement, but it does clarify its scope. For Non-U.S. patent owners who historically lacked U.S. manufacturing or R&D, the decision recognizes that commercial and logistics investments in the U.S. count when they are quantified, properly attributed to the patented SKUs, and significant in context. The ITC is now an attainable forum for many foreign rightsholders—and a forum where the difference between success and failure lies not in labels, but in the numbers and the nexus that complainants put on the record.
Footnotes
1. See Lashify, Inc. v. Int'l Trade Comm'n, 130 F.4th 948, 958–61 (Fed. Cir. 2025).
2. See Certain Artificial Eyelash Extension Systems, Products, & Components Thereof, Inv. No. 337TA1226 (Remand), Notice of a Commission Request for Written Submissions Pursuant to a Court Remand at 2 (U.S. Int'l Trade Comm'n July 30, 2025) (noting rehearing denial and mandate).
3. See U.S. Int'l Trade Comm'n, Understanding Investigations of Intellectual Property Infringement and Other Unfair Practices in Import Trade (Section 337) (available at https://www.usitc.gov/press_room/us337.htm) (describing process).
4. See 19 C.F.R. § 210.51(a) ; U.S. Int'l Trade Comm'n, 337 Investigations: Frequently Asked Questions (available at https://www.usitc.gov/intellectual_property/documents/337_faqs.pdf).
5. See 19 U.S.C. § 1337(a)(2) –(3).
6. Lashify, 130 F.4th at 956-57 (summarizing Commission Opinion at *18, *30-35).
7. Lashify, 130 F.4th at 960.
8. Lashify, 130 F.4th at 958–61.
9. See Certain Dermatological Treatment Devices & Components Thereof, Inv. No. 337TA1356, Comm'n Op. at 18 (U.S. Int'l Trade Comm'n June 18, 2025).
10. See LELO Inc. v. Int'l Trade Comm'n, 786 F.3d 879, 883–85 (Fed. Cir. 2015) ("The plain text of § 337 requires a quantitative analysis in order to determine whether there is a 'significant' investment or employment of labor or capital."); Zircon Corp. v. Int'l Trade Comm'n, No. 221649, slip op. at 6–9 (Fed. Cir. May 8, 2024) (disallowing aggregation across disparate product groups).
11. See Lashify, 130 F.4th at 958–61.
12. Wuhan Healthgen Biotechnology Corp. v. Int'l Trade Comm'n, 127 F.4th 1334, 1339–41 (Fed. Cir. 2025) ("A finding of domestic industry cannot hinge on a threshold dollar value or require a rigid formula; rather, the analysis requires a holistic review of all relevant considerations that is very context dependent.").
13. LELO, 786 F.3d at 883–85.
14. Lashify, 130 F.4th at 952–55.
15. See Zircon, No. 221649, slip op. at 6–9 (Fed. Cir. May 8, 2024).
16. See Wuhan Healthgen, 127 F.4th at 1339–41; LELO, 786 F.3d at 883–85.
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