How 4 International Trade Commission Bans In 2021 Impacted Stocks

One of the top news items from Wednesday was related to an International Trade Commission ruling on Roku ROKU. The commission issued a favorable final determination in Universal Electronic Inc.'s UEIC patent infringement case against Roku, concluding several Roku products infringe a UEI patent and barring the importation and sale of those products.

Roku denies that the ITC ban will disrupt imports, according to Joe Hollinger, VP of litigation and intellectual property at Roku.

Roku shares dipped by $29.83 or about 13.5%, to $191.72 intraday on Wednesday. Given the price action in Roku, investors seem to be showing concern with ITC involvement. Let's look at some historical context for that. 

Phillip Morris PM: a decision as a result of a patent case from rival R.J Reynolds. The commission found that a cigarette alternative infringed two Reynolds patents, sending Phillip Morris  down 12% from $106.10 on Sept. 3, 2021 to $94.79 at the time of filing on Sept. 30.

AutoStore Holdings Ltd.: a Norwegian robotics firm lost its patent infringement lawsuit to British online Supermarket group Ocado Group on Dec. 13, 2021, sharply sending the stock down 18% from Dec. 12 to 13. 

SK Innovation Co.  In February, 2021 the ITC issued an import ban on SK Batteries, a South Korean EV battery manufacturer. The 10-year ban was set to go into effect on April 11, however SK Batteries narrowly missed the ban through a $1.8-billion settlement that came in just hours before the ban was set to be enforced, surging the stock 18% in the early morning of April 10, 2021.

While most companies that are investigated by the Commission tend to apply a "quick fix" to the issue at hand, decisions handed down by the ITC carry some weight. For example, an ITC import ban against Comcast CMCSA in 2018 ultimately pushed the telecommunications provider to settle a long-running dispute with TiVo.

Photo courtesy of Roku.