Patent Trolls Game, Undermine International Trade Commission

The power to control the purse is more than a budgetary responsibility for Congress. It’s one of the most effective levers lawmakers have to steer and correct the behavior of federal agencies.

Appropriations shape priorities, insist on accountability, and can rein in agencies that stray from their mandates.

Right now, that power should be used to stop a growing abuse at the U.S. International Trade Commission (ITC) that threatens American innovation and jobs.

Congress created the ITC under Section 337 of the Tariff Act to address a narrow problem: when imported goods infringe on U.S. intellectual property and when the infringing actors are beyond the practical reach of our courts, the Commission can issue exclusion orders to keep those goods out of the U.S. market.

This trade-focused authority, an import ban backed by U.S. enforcement, is a powerful and appropriate tool to defend domestic industry from unfair foreign practices.

It was not intended to become a backdoor patent-enforcement forum for routine domestic disputes. Over time, that line has blurred. Patent Assertion Entities (PAEs), often called patent trolls, have discovered the leverage inherent in the ITC’s exclusion remedy. PAEs generally don’t make or sell products; they buy patents and sue companies that do.

Faced with the prospect of having key products barred from the U.S. market, defendants often find that settlement is the cheaper, faster option, even when the underlying claims are weak.

For PAEs, the threat of an exclusion order is bargaining power, not a step toward adjudicating a bona fide trade harm.

The scale of the problem is rising. The number of PAE-initiated matters at the ITC nearly doubled from 2021 to 2022, and in 2022 those cases represented more than 18 percent of the agency’s docket.

Estimates for 2025 vary, but put PAE cases between roughly 10% to more than 20% of all investigations, depending on definitions.

What was once an exceptional remedy for exceptional circumstances is increasingly being used as a pressure tactic against productive American companies that design, build, and maintain the technologies underpinning our economy.

Congressional oversight is an appropriate and necessary response.

Through FY2026, lawmakers have already begun pressing ITC for greater transparency about how it evaluates whether exclusion orders align with public interest considerations. This includes impacts on consumers, competition, public health, and economic welfare.

That scrutiny is well placed. An exclusion order can ripple through supply chains, raise prices for consumers, and disrupt critical services.

Yet the statutory “public interest” inquiry often reads like a formality rather than a robust, evidence-based analysis.

Of equal importance is transparency about who is driving these cases.

Policymakers and the public deserve clarity on the real parties in interest, including litigation funders and foreign backers.

When disputes that could affect major U.S. industries are bankrolled by opaque investors, especially foreign capital, national-security and economic-resilience concerns arise.

The commission needs this information not only for transparency but to perform the thoughtful public interest weighing the statute demands.

The ITC has proposed rules to require parties to disclose entities that fund or have a stake in investigations; the public comment period runs through June 29, 2026.

That’s a welcome step, but rulemaking must produce meaningful disclosure, not a paper trail of evasive boilerplate.

If the commission’s final rules fall short, Congress should be prepared to follow up with oversight hearings, tighter appropriations conditions, or legislative fixes that clarify who may use Section 337 and on what terms.

Reforms should aim to restore the ITC’s focus on trade-related harm.

Possible guardrails include stronger standards for demonstrating a genuine nexus to imported products or foreign actors, enhanced public-interest reporting requirements, and mandatory disclosure of funding sources and foreign involvement.

These measures would protect the ITC’s unique and legitimate role while denying non-practicing entities the ability to weaponize an import ban for leverage. Congress talks often and rightly about innovation, competitiveness, and supply chain resilience.

Protecting those priorities means ensuring federal trade tools serve their intended purpose: defending U.S. commerce from unfair foreign practices, not enabling opportunistic actors to extract settlements that impose hidden costs on innovators, workers, and consumers.

Appropriations oversight is the right place to start, but it cannot be the last.

Lawmakers should continue to use every tool available — rulemaking oversight, targeted funding conditions, hearings, and, if necessary, legislative reform — to ensure the ITC protects American innovation rather than undermining it.

The goal is simple: preserve a narrowly tailored, effective instrument for trade defense, and prevent it from becoming a cudgel for patent-gamesmanship.

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