In Laerdal Medical Corp. v. International Trade Commission, [2017-2445] (December 7, 2018), the Federal Circuit reversed the ITC’s denial of remedies against defaulting respondents because Laerdal failed to properly plead its trade dress claim.

The Commission concluded that, even when the pleaded facts were presumed true, Laerdal failed to show that any of the defaulting respondents violated § 1337 with respect to the alleged trade dresses and copyrights.

Specifically, the Commission found that Laerdal failed to plead three things sufficiently:

1. that it suffered the requisite harm;
2. the specific elements that constitute its trade dresses; and
3. that its trade dresses were not functional.

Thus, despite approving the The Administrative Law Judge’s initial determination finding all respondents in default, and despite requesting supplemental briefing solely related to the appropriate remedy, the Commission issued Laerdal no relief on those claims or against any of the respondents named in those claims. Laerdal appealed the Commission’s termination of its trade dress claims, contending the Commission acted in violation of § 1337(g)(1) by terminating the investigation and issuing no relief for its trade dress claims against defaulting respondents.

19 U.S.C. § 1337(g)(1) provides that, in the event of a default, the Commission shall presume the facts alleged in the complaint to be true, and shall, upon request, issue an exclusion from entry or a cease and desist order, or both.

The Federal Circuit concluded that the statute, on its face, unambiguously requires the Commission to grant relief against defaulting respondents, subject only to public interest concerns, if all prerequisites of § 1337(g)(1) are satisfied. The statute’s plain text, surrounding context, purpose, and legislative history, as well as the Commission’s own prior decisions, supported this conclusion.