By Tia Fenton
The Federal Circuit recently issued a precedential opinion in General Electric Co. v. ITC, 670 F.3d 1206 (Fed. Cir. 2012).  See our March 1, 2012 post.  In this opinion, the Court addressed its 1984 decision in Beloit, which gave the Commission the “liberty to reach a ‘no violation’ determination on a single dispositive issue,” such as non-infringement.  Beloit Corp. v. Valment Oy, 742 F.3d 1421, 1423 (Fed. Cir. 1984).  In other words, under Beloit, the Commission could dispose of investigations by reaching final determinations as to some, but not all dispositive issues.  Recognizing that the approach carried a risk of remand, the Court reasoned that the risk was outweighed by the benefits of easing the burden on a Commission that was often faced with “numerous complex issues … within rigid time limits,” and saving “the parties, the Commission, and this court unnecessary cost and effort.”  Id

On appeal in Beloit, the Respondent was precluded from arguing the issues of validity and domestic industry, as the Commission only took a position on non-infringement.  Id. at 1422-23.  This issue of judicial appeal, when the Commission takes no position on certain issues in disposing of a Section 337 action, was addressed by the Federal Circuit in the General Electric case.  In the General Electric (“GE”) investigation, the ALJ found that Respondent infringed three patents, including U.S. Patent No. 6,921,985 (the ‘985 patent); that the three patents were unenforceable or invalid; that GE had domestic industry with respect to two of the three patents; and that there was a violation of Section 337.  The parties petitioned for review and the Commission issued a Notice of Review, indicating that it would review all issues in the decision, except importation and the intent element of inequitable conduct.  With respect to the ‘985 patent, however, the Commission only addressed the technical prong of the domestic industry requirement in reversing the ALJ’s determination and finding no violation of Section 337.  See our January 9, 2010 and March 5, 2010 posts for more details on the Commission’s final determination in this investigation.  Complainant GE appealed to the Federal Circuit on all issues relating to the ‘985 patent that the Commission noticed for review, including those that the Commission did not take a position on in disposing of the investigation. 

Relying on Beloit on appeal, the Commission argued that GE had no basis to appeal issues that the Commission noticed for review, but did not address in the Final Determination.  General Electric Co., 670 F.3d at 1219 (“The Commission holds that when the full Commission does not review an issue that it noticed for review, that issue is removed from access to judicial review.”).  The Commission asserted that this procedure was established by the Federal Circuit in Beloit, and confirmed by 19 C.F.R. § 210.45, which states that the Commission “may take no position on specific issues or portions of the initial determination of the administrative law judge.”  The Federal Circuit rejected the Commission’s arguments, stating that “no statutory or regulatory provision contemplates excluding a fully litigated ITC decision from access to judicial review.”  Id

Regarding Beloit, the Court explained that “Beloit dealt with the situation in which the prevailing party in the Commission sought judicial review of other issues that the Commission did not reach … [and] held that the prevailing party had no right of appeal, and that issues which had not been reviewed by the Commission were not appealable by the party that prevailed in the Commission.”  Id. at 1220 (emphasis added).  However, “Beloit did not authorize the Commission to deprive the losing party of its right of judicial appeal.”  Id. (emphasis added).  The Court relied on 19 U.S.C. § 1337(c), which provides that “[a]ny person adversely affected by a final determination of the Commission … may appeal such a determination … to the United States Court of Appeals for the Federal Circuit.”  The Court further relied on 19 C.F.R. § 210.42(h)(2), which provides that “issues decided by Initial Determination and not reviewed by the full Commission become final, and are appealable to the Federal Circuit,” a right that “cannot be negated by taking no position on the issue.”  Id.  Thus, a losing party at the ITC may appeal any issue noticed for review, irrespective of whether the Commission decided the issue in the Final Determination.

In General Electric, the Court remanded to the Commission for “undefined further proceedings, for which one may be confident only of further time and cost in the Commission and upon re-appeal to this court.”  Id.  Although the practical implications of the Federal Circuit’s decision in General Electric are not yet fully appreciated, the decision may significantly increase the Commission’s workload.  Moreover, if the decision requires the Commission to decide every issue noticed for review when disposing of an investigation, in order to avoid a remand, it may make things much more difficult for the ITC to conclude its investigations “at the earliest practicable time” and with “expeditious adjudication,” as required by 19 U.S.C. Section 1337(b)(1).