ITC Commission Opinion Regarding the Economic Prong Requirement

Certain Electrolyte Beverages II, 337-TA-1435

On April 10, 2026, the Commission issued an opinion in Certain Electrolyte Containing Beverages and Labeling and Packaging Thereof (II), Inv. No. 337-TA-1435, affirming ALJ McNamara's summary determination of a Section 337 violation based on trademark infringement. The Commission's review focused specifically on the economic prong.

A Domestic Industry "In the Process of Being Established"

The complainant's situation was unusual. It produced its electrolyte beverage in Mexico for sale in the United States, and had made investments in a Texas facility intended for domestic production. At the time the complaint was filed, however, no U.S. production had begun. The ALJ found this sufficient to qualify as a domestic industry "in the process of being established," and the Commission agreed on review.

On review, the Commission solicited additional evidence about the Texas facility and confirmed that all of the complainant's domestic investments were devoted entirely to the domestic industry product. That exclusivity mattered. Had the facility served multiple product lines, the allocable share tied to the domestic industry product would have been smaller and might not have cleared the significance bar.

What is "Significant"? Comparing U.S. Investments to Foreign Cost of Goods Sold

The statute requires "significant investment in plant and equipment" under Subsection A, but it doesn't provide a bright-line rule as to what that means. Sometimes the Commission has compared a complainant’s foreign investments relating to the DI product to its U.S. investments. In Electrolyte Beverages, the Commission seems to endorse a variant of this reasoning in comparing the size of the domestic industry investment in plant and equipment to the foreign cost of goods sold. Comm. Op. at 13 (“The Commission also recognizes, as the ID did, that the [redacted] amount represents over [redacted] of Complainants’ cost of goods sold for Genuine U.S. Electrolit® manufactured in Mexico over the same period.”).

Size of Investment

As is typical, the specific financial information submitted by the complainant to establish domestic industry is redacted from the Public Version of the Commission Opinion. The Commission did, however, state that complainant had invested “millions of dollars” in plant and equipment in the United States. Comm. Op. at 14.

A Conservative Holding on Purpose

The Commission declined to reach several of the ALJ's related findings, including whether other investments independently supported domestic industry, whether a domestic industry currently exists (as opposed to one in the process of being established), and whether post-complaint activity supported the domestic industry finding. Thus, the Commission took a conservative approach and based its decision on narrow grounds so as to avoid unsettled areas of law.

General Exclusion Orders in Default Cases

Even where respondents are found in default, a complainant seeking a GEO must make a showing on the merits that each respondent has violated Section 337. 19 U.S.C. § 1337 (g)(2); see also Initial Determination, Order No. 18 (Sept. 10, 2025) at 7 (“Complainants have proven by a preponderance of evidence that Defaulting Respondents . . . have each violated Section 337”). The Commission is thorough in satisfying this obligation - Judge McNamara's ID was 61 pages in length.