关键词: 337调查, 博弈论, 专利诉讼策略, 和解概率

Abstract:     The Section 337 Investigation is an important way for US to establish trade barriers to Chinese enterprises. If Chinese enterprises are issued an exclusion order and a cease order, they will lose the US market. This paper builds a three-stage dynamic game model between US companies and Chinese companies based on characteristics of the Section 337 Investigation, and analyzes factors affecting the strategic movements of both parties from the perspective of their payoff. 
     By using backward induction method, this paper arrives main conclusions as follows. First, results of the model indicate that the respondents′ probability of settlement is proportional to the probability of searching the invalid evidence, the win rate of applicant and the US market-share lost by the applicant, and is inversely proportional to the applicant′s expense and the required license fee. Moreover, the applicants′ probability of settlement is proportional to the cost of respondents searching invalidation evidences. 
     To make each conclusion more reasonable, this paper discusses possible explanations for each result. For the probability of searching the invalid evidence, once the respondent successful invalidate patents in suit, the investigation will be terminated thereby making other respondents free-riding. This is not necessarily a good result for respondent who filed invalidation. Hence, if respondent have helpful invalid evidence, it will prefer to settle with applicant privately. Regarding to the win rate of applicant, when applicant has confidence, settlement by paying license loyalties is the preference of respondent since it will be afraid of losing the market in US. As for the US market-share loss of applicant, ability to exert a greater impact on the applicant′s market share indicates that the respondent is already a large-scale corporation. For listed corporations, Section 337 Investigations may result a drop in share price. Therefore, in order to reduce such losses, respondent will choose to settle with applicants as soon as possible. 
     Concerning the expense of applicant, since legal fees is associated with workload of lawyers, the increase of legal fee reflects that respondent has lower risk of infringement and tend not to settle. Turning to the license fee applicant asked, taking the purpose of applicant into consideration, if its main purpose is to expel the respondent from the US, the licensing fee that respondent needs to pay may even exceed its market share in US. Therefore, the respondent will choose not to settle. In the case of the cost of respondents for searching invalidation evidences, the higher the cost of respondent input in searching evidence, the higher the possibility of being successful. Since the applicant has to ensure that it can continue to investigate other respondents with valid patents, it will tent to settle with this respondent.
    Furthermore, these conclusions are verified by case study which conducts comparative analysis of two Section 337 Investigations encountered by China′s LED industry. Although five of six conclusions are match actual situation, there is a discrepancy about the US market-share lost by applicant. Specifically, while Chinese enterprises have stronger impact on applicant when the later investigation happened, they used ample evidence to get applicant to withdraw the case unconditionally instead choose to settle. The possible explanation for this inconsistency is the timing of later investigation. This investigation occurred in a trade war between China and US. If Chinese enterprises pay licensing fees to the applicant, it means they do not deny the existence of intellectual property infringement, which also means the deny of the effort of promoting the development of intellectual property work made by country and industry. Therefore, Chinese companies have defended their legitimate rights in the US market and such a victory is significant in the context of trade war. 
     Finally, this paper proposes recommendations for enterprises to dealing with Section 337 Investigations. Before Section 337 Investigations, export enterprises should strengthen their legal consciousness and analyze the patent layout of competitors to make early warning during product development stage. In this way, companies can reduce the risk of patent infringement from the beginning. Besides, through technological innovation and patent applications, companies can increase the negotiation bargaining chip with the applicant. Moreover, enterprises should pay attention to daily IP management practices, such as retaining related records and educating employees, thereby improving the response efficient when the Section 337 Investigation is initiated. 
     Regarding to suggestions during Section 337 Investigations, they are given according to the stage of the game model. In the first stage, enterprises should search invalidation evidence and use them as bargaining chips. In the second stage, companies shall evaluate the purpose of the applicant. If the applicant wants licensing fee only, enterprise shall negotiate with the applicant alone and use invalidation evidence to obtain reasonable settlement conditions. However, if the purpose of the applicant is to drive respondents out of the US market, more preparations will be made by applicant. Therefore, invalid evidences held in the previous stage may not bring advantages in settlement. In this situation, other settlement strategies can be adopted. Enterprises can take counter-measures in China, such as invalidating Chinese family patents, filing counterclaims in domestic courts, and accusing the applicant of abusing market dominance. These legal measures are less costly and will help companies reach a private settlement without letting competitors get a free ride. Moreover, considering the large scale of the company, in order to avoid problems such as stock price decline and loss of customers due to the Section 337 Investigation, companies should tie up with local news media and guide them to positively publicize their actively response to the lawsuit thereby taking advantage of the marketing value of the Section 337 Investigation. 
     In the last stage of the game, enterprises should make use of related resources. First, seek the policy support and guidance of the government. Second, ask industry associations to contact other respondents for establishing a response alliance which can share litigation expenses and relatively increase the economic burden of the applicant thereby increasing the probability of applicant withdrawing the case. Lastly, when the risk of infringement is high, companies need to design around to make new products not fall into the protection scope of patent claims and pass ITC certification thereby letting new products can enter the US market. 

Key words:  Section 337 Investigation, game theory, patent litigation strategy, settlement probability