Lashify, Inc. v. International Trade Commission

Lashify v. International Trade Commission, decided March 5th, 2025. A panel of the Federal Circuit, in an opinion by Judge Taranto, held that the Trade Commission read the domestic-industry requirement of Section 337 too narrowly. A complainant's investments in sales, marketing, warehousing, quality control, and distribution are not categorically excluded from the economic prong. The court vacated that determination and remanded. Here's the brief.

Lashify is an American company that sells artificial eyelash extensions, along with applicators and cases. It conducts its research, design, and development in the United States, but manufactures its products abroad before shipping them to customers, who buy through its website.

Lashify owns three patents on these products — one utility patent and two design patents. It filed a complaint at the International Trade Commission, alleging that other importers of like products were violating Section 337 of the Tariff Act by importing goods that infringe those patents.

To obtain relief under Section 337, a patent owner must show a domestic industry in the United States relating to the patented articles. That requirement has two parts: an economic prong and a technical prong.

The Commission denied relief. It found that Lashify had not satisfied the economic prong, because it disregarded Lashify's spending on sales, marketing, warehousing, quality control, and distribution. It also found the technical prong unmet for the utility patent. Lashify appealed to the Federal Circuit.

The question was how to read the economic prong — specifically, which domestic investments count.

The statute defines when a qualifying domestic industry exists.

The Commission read clause (B) — significant employment of labor or capital — to exclude spending on functions like sales, marketing, warehousing, quality control, and distribution unless it was paired with domestic manufacturing or similar activity. Exercising its independent judgment after the Supreme Court's decision in Loper Bright, the court asked whether that reading was correct.

The court held that the Commission's interpretation was contrary to the statutory text.

Clause (B), the court explained, declares that significant employment of labor or capital, with respect to the patented articles, is sufficient to satisfy the economic prong. It covers labor and capital without limiting the enterprise function they serve.

The court read clause (B) against its neighbors. Clauses (A) and (B) name concrete inputs — plant, equipment, labor, and capital — without limiting the functions those inputs serve, while clause (C) speaks of exploitation. Congress joined the clauses with "or," making each one independently sufficient. Giving "labor" and "capital" their ordinary 1988 meanings, the court found nothing to exclude these common commercial functions.

On the technical prong, the court separately affirmed the Commission's construction of "heat fused" and its finding that Lashify did not satisfy the technical prong for the utility patent. The court vacated the economic-prong determination for all three patents and remanded for the Commission to reassess.

Lashify clarifies the economic prong of Section 337's domestic-industry requirement. A complainant's investments in sales, marketing, warehousing, quality control, and distribution are not categorically excluded, and the statute does not require domestic manufacturing. A company whose qualifying domestic activities are primarily commercial rather than technical can still, on a sufficient showing, establish a domestic industry under clause (B).

Lashify v. International Trade Commission, 130 F.4th 948, decided March 5th, 2025. I'm Kyle Coleman. Thanks for watching.