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WT/DS162/R/Add.1 Page 79

against imported goods (but not domestic goods) infringing on US patents.  A US patent holder also may pursue an infringement claim against imported (and domestic) goods in a federal district court.  


Japan recalls that the panel found this scheme to be inconsistent with Article III:4 of the GATT 1994 in several ways.  First, the panel found that:

"[…] to provide the complainant with the choice of forum where imported products are concerned and to provide no corresponding choice when domestically-produced products are concerned is in itself less favourable treatment of imported products and therefore is inconsistent with Article III:4."260

Second, the panel found that several differences between the Section 337 and federal district court proceedings disadvantaged or treated less favourably, foreign patent holders defending against Section 337 claims.261 Among the differences noted by the panel as significant were:


a foreign Section 337 defendant could not raise counterclaims, but a defendant in a federal district court proceeding could;


Section 337 provides for penalties (exclusion orders) that are not available against US-origin products; and


a foreign patent holder could be subject to two claims, one under Section 337 and one in federal district court, but a domestic patent holder could be sued only in federal district court.262


Japan argues that, as in United States - Section 337, in the present case, the United States is in violation of Article III:4 of the GATT 1994 because it has established a separate legal regime solely for imports, in addition to the regime that applies to imports and domestic goods.  Imports are required to meet a legal requirement, the 1916 Act, which does not apply to domestic US products.  Thus, US law permits a US entity, but not a foreign entity, to engage in international price discrimination.


Japan further notes that the United States consistently has argued that the 1916 Act is the equivalent of the Robinson-Patman Act, which is the basic US price-discrimination statute.  It prohibits sellers from discriminating in price between or among purchasers of goods so as to substantially limit competition or tend to create a monopoly.  The existence of the Robinson-Patman Act cannot, however, be invoked to establish that domestic products are treated in the same way.263


Japan recalls that imported products are also subject to the Robinson-Patman Act in the same way as domestic products.  This Act, like any legitimate competition or antitrust measure, does not distinguish between imported and domestic products.  Discriminatory sales are prohibited by the Act whether they involve US products or products of foreign origin.  The Robinson-Patman Act is entirely origin-neutral, unlike the 1916 Act, which is entirely origin-specific.  Japan acknowledges that the Robinson-Patman Act only applies to price discrimination committed in the United States and that the 1916 Act may be considered to complement it in that it applies to dumping, which is a price discrimination practiced between the domestic market of the producer and an export market.

260 United States – Section 337, Op. Cit., para. 5.18.

261 Japan refers to ibid., para. 5.19.

262 Japan refers to ibid., paras. 5.19-5.20.

263 Japan notes that in its discussion of the Robinson-Patman Act, it focuses on "primary-line cases", where the plaintiff is a competitor of the defendant (as in a 1916 Act case).

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