Context: The United States International Trade Commission’s (ITC’s) Section 337 investigations are an increasingly popular tool in tech and pharmaceutical patent disputes, particularly those seeking accelerated, affirmative decisions and access to injunctive relief. In June, Michelle Klancnik, Assistant General Counsel, ITC, announced that while the average number of complaints has dipped slightly since 2022, patent allegations consistently dominate all other types of unfair act allegations in the ITC, with an average of around 88% (June 19, 2025 ip fray article).
What’s new: The majority (70-90%) of complaints are filed by non-NPEs (non-practising entities), and those numbers are generally increasing, Ms. Klancnik has found after analyzing more ITC Section 337 investigation data (August 5, 2025 LinkedIn post by Michelle Klancnik). Meanwhile, there has been a shift towards innovation-focused NPEs (entities/inventors that don’t manufacture a product but engage in real R&D and engineering), due to the domestic industry requirement of section 337, which has proven challenging for other types of NPEs.
Direct impact and wider ramifications: Ms. Klancnik separates NPEs into two categories:
- Category 1 NPEs: inventors, universities, startups, and other innovators who don’t manufacture a product but engage in real R&D and engineering; and
- Category 2 NPEs: entities whose primary business model is acquiring and asserting patents.
Category 2 NPEs are not using the ITC a lot for several reasons, Andrew Kopsidas of Blank Rome LLP commented. One is the cost, and the other is that the ITC’s “speedy schedule” inhibits settlements. Only the really well-funded Category 2 NPEs seeking “big dollars” go to the ITC, while for the remaining 95% it doesn’t make business sense, he said.
These graphs illustrate the data for NPE v. non-NPE investigations between 2008 and 2024:
According to the ITC’s statistics page, the number of NPE investigations peaked in 2011 and 2012 (12 each year), and in 2022, when 19 investigations were brought (2025 ITC statistics page).
Category 1 NPEs filed an average of 3-7 complaints every year, spiking at 10 in 2023. Category 2 NPEs, meanwhile, brought the highest number of investigations in 2011 (9) and 2022 (11). The latter number was bolstered by litigation-funded Magentar Capital/Atlantic IP entities, according to Jonathan Stroud of Unified Patents.
While NPEs are evidently hesitant to file ITC Section 337 investigations, Mr. Stroud also noted that this can be reversed “if the money at play is large enough”. To earn an eight-figure settlement, he said, there needs to be:
- substantial downstream risk; and
- substantial upfront cost.
“If you can increase the latter – using ITC is an awful lot of leverage – it increases your cost, sure, but it also presents a very real and unavoidable cost to consider,” he added.
Last month, Ms. Klancnik also analyzed data on the number of respondents in Section 337 Investigations (LinkedIn post by Michelle Klancnik). Notably, she found that large investigations (with more than 20 respondents) are becoming more frequent. While small investigations (1-5 respondents) are still the most common, their dominance is shrinking, she noted, and mid-sized investigations (6–10 respondents) have nearly doubled in share since 2015 – peaking at 28% in 2024.