On March 5, 2025, the Federal Circuit rejected the ITC’s longstanding practice of excluding certain types of activities from qualifying as “domestic industry” activities under Section 337(a)(3)(B), finding the ITC’s approach to domestic industry “is counter to the statutory text.” Prior to the Lashify decision, the ITC had interpreted Section 337(a)(3)(B) to exclude certain types of activities, including:
- sales and marketing absent the existence of “other qualifying expenditures,” such as R&D or manufacturing; and
- activities of a “mere importer,” including quality control, warehousing, and distribution.
In Lashify, the Federal Circuit applied its “independent judgment” under Loper Bright and flatly rejected the ITC’s prior approach, eviscerating what has come to be known as the “mere importer” test for determining whether activities should count towards domestic industry. The Federal Circuit concluded that Section 337(a)(3)(B) does not exclude any “enterprise functions.”
The Federal Circuit remanded the decision back to the ITC, holding that the ITC “must count Lashify’s employment of labor and capital even when they are used in sales, marketing, warehousing, quality control, or distribution.”
What does this mean?
The Lashify decision marks a significant shift in the ITC’s domestic industry analysis by greatly expanding the types of activities a complainant can rely on to satisfy the domestic industry requirement. This change in the legal standard will make the ITC a viable forum for entities regardless of whether they conduct any research or manufacturing in the US, potentially opening the door to entities whose only presence in the US is sales, marketing, or warehousing, provided that they can establish that they meet the “significance” requirement.
