By Eric Schweibenz and John Presper
On January 26, 2017, the International Trade Commission (“Commission”) issued its opinion finding a violation of Section 337 in Certain Lithium Metal Oxide Cathode Materials, Lithium-Ion Batteries for Power Tool Products Containing Same, and Power Tool Products with Lithium-Ion Batteries Containing Same (Inv. No. 337-TA-951).

By way of background, this investigation is based on a February 20, 2015 complaint filed by BASF Corp. (“BASF”) and UChicago Argonne LLC (“Argonne” or “ANL”) (collectively, “Complainants”) alleging violation of Section 337 in the importation into the U.S., sale for importation, and/or sale within the U.S. after importation of certain lithium metal oxide cathode materials, lithium-ion batteries containing same, and products with lithium-ion batteries containing same that infringe one or more claims of U.S. Patent Nos. 6,677,082 (“the ’082 patent”) and 6,680,143 (“the ’143 patent”). See our February 23, 2015 and April 1, 2015 posts for more details on the complaint and Notice of Investigation, respectively. On February 29,2016, ALJ Thomas B. Pender issued his final Initial Determination (“ID”) finding a violation of Section 337 by Respondents Umicore N.V. and Umicore USA Inc. (collectively, “Umicore”) in connection with claims 1-4, 7, 13, and 14 of the ’082 patent and claims 1-4, 8, 9, and 17 of the ’143 patent. See our March 1, 2016 post for more details regarding the ID.

According to the Opinion, Umicore petitioned the Commission for review of the ID’s infringement and domestic industry findings, and rejection of its laches defense. The Commission Investigative Attorney (“OUII”) petitioned for review of the ID’s finding that a laches defense fails as a matter of law in Section 337 investigations. Complainants filed a contingent petition challenging construction of one claim term and the ID’s finding that they failed to establish induced infringement. The Commission determined to review-in-part the ID with respect to (1) the ID’s contributory and induced infringement findings; (2) the ID’s domestic industry finding under Section 337(a)(3)(C); and (3) the ID’s findings on laches.


On review, the Commission found that, regardless of whether laches is an available defense in Section 337 investigations, Umicore failed to prove the merits of its laches defense based on the facts in the record. Specifically, the Commission cited the ID’s finding that “between 2005, when Umicore provided Argonne with 1 kg of its Cellcore® MX10 product for performance testing, and the time Complainants filed their complaint against Umicore in this investigation, there is no evidence that Complainants knew that Umicore had launched its NMC products in the United States.” (Emphasis in original). The evidence also failed to “show that BASF knew Umicore was selling the accused materials in the United States in 2009 when BASF discussed a potential collaboration with Umicore.” (Emphasis in original). The ID also found “no evidence that any alleged delay by Complainants caused Umicore to alter its position or otherwise to act differently, to the prejudice of Umicore.”

As to the legal question of whether laches is an available defense in Section 337 investigations, the Commission vacated the ID’s discussion and took no position on the issue. The Commission noted its previous position that laches is not available as a defense in Section 337 investigations because the Commission’s remedy is prospective in nature and the Federal Circuit held in A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020, 1033 (Fed. Cir. 1992), that laches does not bar prospective relief. The Commission also noted, however, that the holding in Aukerman has been overruled by SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 807 F.3d 1311, 1331 (Fed. Cir. 2015) (en banc), and that SCA Hygiene is currently pending before the Supreme Court.

Contributory Infringement

The legal question raised by Umicore is whether a good-faith belief of non-infringement can rebut a prima facie showing of contributory infringement. Umicore contended that Complainants failed to prove that Umicore had the requisite “knowledge” to establish contributory infringement based on Umicore’s alleged good-faith belief of non-infringement. The Commission took no position on the legal question of whether a good-faith belief of non-infringement rebuts a prima facie showing of contributory infringement. Regardless of whether, as a legal matter, a good faith belief in non-infringement rebuts a prima facie showing of contributory infringement, the Commission found that the evidence of record did not support the ID’s findings that Umicore had established a sufficient good-faith belief of non-infringement, as discussed further below with respect to induced infringement.

Induced Infringement

The ID found no specific intent by Umicore to induce infringement due to its finding of a sufficient good-faith belief by Umicore of non-infringement, based on (1) a study commissioned by Umicore for the Institute of Condensed Matter Chemistry of Bordeaux, France (“Bordeaux Study”) to characterize the composition and crystal structure of the MX10 product, which allegedly reported that there was no Li2MnO3; and (2) a license agreement between Umicore and 3M, under which Umicore could have “credibly believed it practiced the 3M patents rather than the Asserted Patents.” The Commission disagreed, however, finding no evidence in the record that Umicore actually relied on the Bordeaux Study or the 3M license. In particular, the Commission noted the ID’s finding that the Bordeaux Study shows infringement, not non-infringement. In addition, the Commission stated that the ID “appears to rely” on the testimony of Umicore’s expert, Dr. Delmas, and Umicore’s employee, Dr. Levasseur. But the testimony of Dr. Delmas discussed in the ID’s citation was his expert testimony developed for the current investigation, which the Commission found “cannot support a previous good faith belief of non-infringement.” Further, Dr. Levasseur relied on the analysis of Umicore’s legal team to determine that Umicore’s accused products do not infringe, but Umicore “refused to disclose the analysis that Dr. Levasseur allegedly relied upon, and thus the ALJ precluded Umicore from relying on it at the hearing.”

Moreover, the Commission found that the record evidence established Umicore’s specific intent to infringe, such as the following: In August 2009, BASF approached Umicore about the possibility of a joint venture for NCM materials; during the meeting, Umicore discovered that BASF had partnered with another company (Toda Kogyo) to make NCM materials covered by the asserted patents; Umicore thus declined to partner with BASF, yet contacted Argonne on September 29, 2009 “to find out who had access to the ANL patent;” Argonne indicated that Umicore could obtain a sublicense from BASF or Toda; rather than obtaining a license to the ANL patents, Umicore continued to market its NMC in the U.S. without a license; Umicore’s customers began inquiring as to whether Umicore’s products infringe the asserted patents, but Umicore did not perform all the necessary testing to determine infringement. The Commission thus found that “[a]t a minimum, Umicore willfully blinded itself to infringement.”

Domestic Industry

The Commission affirmed the ID’s finding that BASF established a domestic industry under Section 337(a)(3)(A) and (B), and that Argonne established the existence of a domestic industry under Section 337(a)(3)(C), but took no position on the ID’s finding that BASF established a domestic industry under Section 337(a)(3)(C).

Remedy, Public Interest, and Bond

The Commission agreed with the ALJ’s recommendation that a limited exclusion order (“LEO”) issue directed to Umicore’s infringing products, and declined the Complainant’s request that the LEO include a provision requiring the Commission to adjudicate redesigns before importation. The Commission noted that Complainants did not request cease-and-desist orders (“CDO”), did not address the ALJ’s recommendation of no CDOs, did not submit draft CDOs for the Commission’s consideration, and “only later in in their reply brief responding to Umicore’s remedy brief” that Complainants made their request to the Commission for CDOs. Accordingly, the Commission declined to issue CDOs.

The ID concluded that none of the public interest factors weighed against issuance of an LEO. The Commission requested public interest comments from the parties and the general public. OUII argued that the relevant record evidence does not warrant denying entry of an exclusion order. The Commission received public comments from, inter alia, 3M and the Belgian Ambassador. 3M stated that “a Commission remedy is neither necessary nor appropriate.” The Belgian Ambassador urged the Commission to “give due regard” to Umicore’s “well-founded arguments” regarding the negative impact an exclusion order would have on the public interest in the U.S.” The Commission also received a letter from Congressman Jim Bridenstine of Oklahoma, who “[a]s a member of the House Armed Services Committee” urged the Commission to consider the significant national security implications of this investigation into the advanced battery materials technology and that “[a]ssured access to critical battery materials—in a competitive market—is increasingly important for national defense as well as industry.”

The Commission held a hearing the effects of an exclusion order on the public interest, in which several entities appeared and participated in a panel on the public interest—both in support of and against issuance of an exclusion order. The comments supporting issuance of an exclusion order rested primarily on the grounds that not issuing an exclusion order would be a disincentive to investing in research and development in the U.S., in part because of the significant investments that Complainants and the Department of Energy have made in the patented technology. The comments against an exclusion order were mostly that that an exclusion order would disrupt research and develop efforts using Umicore’s products. After reviewing all the evidence and testimony, the Commission agreed with the ALJ and OUII that none of the public interest factors weighed against the issuance of an LEO.

Finally, the Commission agreed with the ALJ that a bond be set in the amount of 3% of entered value for infringing products imported during the Presidential review period.