Section 337 Now Viable for “Mere Importers” After Federal Circuit’s Lashify Decision

For years, the U.S. International Trade Commission maintained that the potent remedies available under Section 337 were unavailable to intellectual property owners considered to be nothing more than “mere importers.” That precedent is no more. The Federal Circuit’s recent decision in Lashify v. ITC (Appeal No. 2023-1245) rejects this interpretation, holding instead that companies with significant domestic investments in labor or capital can satisfy Section 337’s domestic industry requirement by relying on activities such as sales, marketing, warehousing, quality control, and distribution—even without any ties to domestic manufacturing operations. This decision significantly broadens access to the ITC for intellectual property owners with global manufacturing footprints, provided they invest meaningfully in these traditionally excluded “mere importer” activities.

The ITC’s Determination

At issue on appeal, Lashify—a U.S. seller of eyelash extensions—challenged an ITC decision that it failed to meet the economic prong of the domestic industry requirement. This finding alone was sufficient to deny Lashify any relief under Section 337. Despite manufacturing its products abroad before shipping them to customers, Lashify conducted its research, design, and development in the U.S., along with providing other resources such as educational videos, online chats with customer advisers, and one-on-one video call sessions. In evaluating whether Lashify had established significant employment of labor or capital under 19 U.S.C. § 1337(a)(3)(B), the Commission agreed with the ALJ’s finding that the economic prong was not satisfied. In doing so, the Commission relied on its long-standing precedent that (1) sales and marketing investments alone are insufficient, and (2) warehousing, quality control, and distribution expenses are akin to those incurred by a “mere importer.” Absent other qualifying expenditures, the Commission found Lashify’s investments in these activities to be insufficient.

The Federal Circuit’s Reversal

Applying its independent judgment as required by Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 412 (2024), the Federal Circuit determined the ITC’s interpretation of Section 337(a)(3)(B) was incorrect. The Federal Circuit turned first to the statute itself and the ordinary meaning of the terms “labor” and “capital,” noting that subsection (B) covers the significant use of labor and capital “without any limitation on the use within an enterprise to which those items are put, i.e., the enterprise function they serve.” Notably, it determined there is no carveout for sales, marketing, warehousing, quality control, or distribution and there is likewise no suggestion that these activities must be accompanied by other functions (e.g., manufacturing) in order to count. The Federal Circuit determined that the statute allows a domestic industry to be established through significant employment of human activity or accumulated goods used to provide in-demand services. It also found the statutory text of Section 337 was clear, determining that the legislative history did not support the ITC’s restrictive interpretation. Based on its ruling, the Federal Circuit vacated the ITC’s finding with respect to the economic prong of the domestic industry requirement and remanded the issue back to the ITC.

Greater Opportunity for Companies with Foreign Manufacturing

The Federal Circuit’s Lashify decision provides greater opportunity for companies that manufacture their IP-protected goods abroad. As a result, U.S. intellectual property owners with significant domestic investments—regardless of their manufacturing footprint—are now eligible to obtain relief from the ITC against infringers. Qualifying investments may now pertain to the following activities:

• Sales
• Marketing
• Warehousing
• Distribution
• Quality Control
• Domestic Inventory
• Regulatory Approval

Companies that manufacture abroad but nonetheless maintain key domestic markets threatened by unfair import practices should strongly consider the ITC as a viable forum for protecting their investments.