By Eric Schweibenz and Michael West
On October 4, 2018, Chief ALJ Charles E. Bullock issued the public version of Order No. 55 (dated August 31, 2018) in Certain Integrated Circuits with Voltage Regulators and Products Containing Same (Inv. No. 337-TA-1024).

By way of background, this investigation is based on a September 12, 2016 complaint filed by R2 Semiconductor, Inc. alleging violation of Section 337 by way of unlawful importation into the U.S., selling for importation, and/or selling within the U.S. after importation certain integrated circuits with voltage regulators and products containing same that infringe one or more claims of U.S. Patent No. 8,233,250. See our October 13, 2016 post for more details on the Notice of Investigation.

According to the Order, Respondents moved to stay the Investigation pending appellate review of two final written decisions issued by the U.S. Patent & Trademark Office’s Patent Trial and Appeal Board (“PTAB”) finding all asserted claims of the ’250 patent unpatentable. Complainant did not oppose the motion and stated, “it agrees that judicial economy weighs in favor of a stay pending resolution of the appeal.” The Commission Investigation Staff ("OUII") did not oppose the motion.

Specifically, Respondents explained that the PTAB issued its final written decisions in two inter partes Review (“IPR”) proceedings finding that all claims of the only asserted patent in the Investigation were unpatentable. Respondents asserted that, “this Investigation presents exceptional circumstances that warrant a stay—including that the asserted patent has already been found invalid ... and the fact that even the Complainant agrees a stay is appropriate.” Respondents noted that they were “unaware of any other Investigation that proceeded to hearing after the PTAB found all asserted patent claims to be invalid prior to the hearing—let alone where the facts were present and the parties agreed that the case should be stayed.” OUII did not oppose the motion stating, “[s]taying an investigation without certainty of resolution is contrary to the Commission’s statutory mandate to conclude investigations at the earliest practicable time. OUII does not oppose a stay, however, ‘[b]ecause both of the of the private parties desire a stay.’”

In view of the above and upon review of the relevant factors, Chief ALJ Bullock ruled in favor of a stay of the investigation.

The State of Discovery and the Hearing Date

ALJ Bullock found this first factor to weigh in favor of a stay. ALJ Bullock distinguished this case from previous requests for stays that have been made on the eve of trial. ALJ Bullock reasoned that a stay at this time would prevent the parties from expending further resources to complete discovery.

Whether a Stay Will Simplify the issues and Hearing of the Case

ALJ Bullock found this second factor to weigh in favor of a stay. ALJ Bullock noted that the Federal Circuit’s decision may be case dispositive. Thus, if the patent is invalid the Commission will need to terminate the Investigation. Further, ALJ Bullock reasoned, “even if the Federal Circuit does not affirm, staying the Investigation is highly likely to simplify and streamline issues that must ultimately be addressed at the hearing.”

The Undue Prejudice or Clear Tactical Disadvantage to Any Party

ALJ Bullock found this third factor to weigh in favor of a stay. ALJ Bullock determined that neither the parties nor OUII believes the stay will prejudice them and, in fact, the parties believe that judicial economy favors a stay. Again, ALJ Bullock reasoned that this case is different from other investigations in which this factor has weighed heavily against a stay. ALJ Bullock stated that the ’250 patent is not set to expire for more than ten years; accordingly, even after a stay, Complainant would have the opportunity to obtain relief.

The Stage of the PTO Proceedings

ALJ Bullock found this fourth factor to weigh in favor of a stay and acknowledged that the PTAB already issued its Final Written Decision, which distinguishes the present scenario from other investigations, such as Semiconductor Chips. Further, ALJ Bullock reasoned that appeals before the Federal Circuit generally proceed in a reasonable timeframe. Accordingly, it is reasonable to expect a decision from the Federal Circuit prior to the current target date of December 2019.

The Efficient Use of Commission Resources

ALJ Bullock found this last factor to weigh in favor of a stay and agreed with Respondents that there is significant risk that substantial resources of the ALJ and the Commission (in addition to those of the parties) would be ultimately wasted by proceeding with nearly eight months of pre-hearing discovery, a five-day evidentiary hearing, an Initial Determination (“ID”), and review of the ID by the Commission. ALJ Bullock also agreed that “[i]f this Investigation proceeded to a hearing and the Federal Circuit were then to affirm the PTAB’s decision, substantial resources would have been expended needlessly.” ALJ Bullock reiterated that the Commission has previously noted that, in scenarios where the asserted patent could be found invalid, the preservation of Commission resources favor a stay.

In conclusion, ALJ Bullock determined that this investigation “presents a clear example of when a stay is in the best interest.”

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