US launches probe into Taiwan firms

INFRINGEMENT: The investigation comes after a complaint from Vicor Corp, with the company seeking a limited exclusion order as well as cease-and-desist orders, the ITA said

The US International Trade Commission (USITC) has launched a Section 337 investigation naming Taiwanese technology companies, including Hon Hai Precision Industry Co (鴻海), Delta Electronics Inc (台達電) and Quanta Computer Inc (廣達), as respondents. The Ministry of Economic Affairs (MOEA) pledged assistance if needed.

The USITC said on Friday in a statement that it had voted to institute an investigation under Section 337 of the US Tariff Act of 1930 into certain vertical power delivery systems, related components and computing devices incorporating such systems.

The investigation covers 20 companies from Taiwan, China, Germany and the US, the commission said, adding that it has not made any decision on the merits of the case.

The US flag flies at the US Capitol building in Washington on July 12, 2022.

Photo: Bloomberg

The probe involves power delivery technology used in artificial intelligence servers, MOEA International Trade Administration (ITA) said.

In addition to the three Taiwanese companies, China-based Luxshare Precision Industry Co (立訊精密) and Foxconn Industrial Internet Co (工業富聯) are also named as respondents, it said.

The ITA said the investigation stems from a complaint filed by Massachusetts-based power technology company Vicor Corp on Sept. 9, with a supplemental filing submitted the following day.

Vicor alleges that vertical power delivery systems, related components and computing devices incorporating the technology infringe its patents when imported into or sold in the US. The company is seeking a limited exclusion order to bar imports of the accused products, as well as cease-and-desist orders to prevent their sale in the US.

The ITA said Section 337 investigations typically take 12 to 16 months to complete. If the complainant prevails, the USITC can issue exclusion and cease-and-desist orders restricting the affected products from entering or being sold in the US market.

The agency described the case as a patent dispute between private companies being handled under US Section 337 procedures. It said the government respects the legal process and would continue to monitor developments, maintain contact with the affected companies and provide assistance if necessary.

The USITC said the case would be assigned to an administrative law judge, who is to hold a hearing and issue an initial determination on whether Section 337 has been violated before the commission conducts its own review.

The commission said it would set a target date for completing the investigation within 45 days after instituting the probe.

Any remedial orders issued would take effect immediately and become final after 60 days unless disapproved by the US Trade Representative, it added.

Delta Electronics said it places great importance on intellectual property rights and compliance with laws in all jurisdictions, and would respond to the investigation through legal procedures to safeguard its rights and interests.

The company declined to comment further because the case is now in legal proceedings, but said its products are not currently affected by the investigation.