Practice Tips

Welcome to ITC 337 law blog!

By Eric Schweibenz
|
Feb
11
Oblon, Spivak decided to start this ITC 337 Law Blog in response to the rising interest in section 337 practice and the recognized need for a forum for sharing information relating to this unique type of litigation.  The ITC continues to gain popularity as a preferred forum for intellectual property owners to enforce their rights. In 2008, the ITC instituted approximately 50 new section 337 investigations – more than a 30% increase from the same time period in 2007.  These numbers represent an upward trend in section 337 filings that we expect to continue in the years to come. Despite the growing popularity of section 337 litigation, however, there are very few resources in the public domain that provide reliable up-to-date information and comments on issues relating specifically to this practice.  There is, of course, the ITC’s useful website (www.usitc.gov) and a wealth of information that can be gathered by using the ITC’s Electronic Document Information System (“EDIS”), but monitoring these sources for recent developments can be time-consuming. There remains a void, in our view, for easily-accessible reporting of interesting developments about new and pending investigations, litigation trends, statistics, practical insights into the Administrative Law Judges, and commentary on important ITC decisions.  We hope that this blog will help fill that void and that you will adopt it as a useful resource for quickly finding useful information relating to section 337 practice.  We certainly welcome any comments or ideas you have as to how we can make this blog a valuable tool for all ITC practitioners. For those of you who have found this website useful, please tell your friends and colleagues about our blog. We welcome your support and comments and look forward to providing you with information and insight into the unique and exciting practice of section 337 litigation.
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Did you know...The defenses established under 35 U.S.C. § 271(g) are not available in the ITC?

By Eric Schweibenz
|
Feb
18
When asked to identify the major differences between patent litigation in the ITC and in federal district court, most practitioners would likely identify 1) the domestic industry requirement and 2) the form of relief (injunctive relief but no money damages).  Another difference is that certain defenses to infringement are not available to respondents in the ITC. In Certain Abrasive Products Made Using a Process for Making Powder Preforms, and Products Containing Same (Inv. No. 337-TA-449), the ITC determined that with respect to the offshore practice of a patented product, the defenses to infringement under 35 U.S.C. § 271(g) are not available to respondents in infringement actions before the ITC.  Respondent Kinik asserted a defense to infringement under § 271(g) because even if its process were found to include all of the steps of the patent claims, it asserted that the product of those steps was “materially changed by subsequent processes” and thus placed Kinik within the exception of § 271(g)(1). In rendering its decision, the ITC relied primarily upon the legislative history of the Process Patent Amendments Act of 1988 which states, in adding § 271(g), that “the amendments made by this subtitle shall not deprive a patent owner of any remedies available . . . under section 337 of the Tariff Act of 1930, or under any other provision of the law.”  The ITC also cited legislative history in which it was stated that the statute was intended to provide patent owners with a new right to sue for damages “in Federal district court when someone, without authorization, uses or sells in the United States, or imports into the United States a product made by their patented process.”  The ITC further relied upon the Senate Report which provided that there was no “intention for these provisions to limit in any way the ability of process patent owners to obtain relief from the U.S. International Trade Commission.” On appeal to the Federal Circuit, Kinik argued that the defenses of § 271(g) should apply in Section 337 actions because Section 337(c) states that all legal and equitable defenses may be presented in ITC actions.  Kinik also argued that it was anomalous to create a legislative distinction in the defenses available in different tribunals.  As set forth in Kinik Co. v. ITC, 362 F.3d 1359 (Fed. Cir. 2004), the Federal Circuit disagreed with Kinik, and affirmed the ITC’s ruling.  It found that the ITC’s interpretation of the statute was supported by the text, the legislative history, and by precedent.  It also noted that, to the extent there was any uncertainty or ambiguity in the interpretation of the statute, deference should be given to the view of the agency that is charged with its administration.
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35 U.S.C. § 315(c) and its Uncodified Cousin -- Inter Partes Reexamination Estoppel(s) at the ITC?

By Eric Schweibenz
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Feb
24
35 U.S.C. § 315(c) is the well known and oft-cited civil action estoppel provision of the codified inter partes reexamination laws (35 U.S.C. §311 et seq.).  Section 315(c) prevents an adverse party (i.e., a third party requester) from seeking district court review of the same validity questions presented in the inter partes reexamination proceedings.  Specifically, section 315(c) provides that a third-party requester is estopped from asserting at a later time, in a civil action under 28 U.S.C. § 1338, the invalidity of any claim “finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings.”  Until the creation of the Central Reexamination Unit (CRU) and its “patent killer” reputation, section 315(c) was often identified by defense counsel in district court litigation as a primary reason for third parties not to request inter partes reexamination.  ITC litigators have not shared the concerns of district court litigators because application of section 315(c) is restricted to “any civil action arising in whole or in part under section 1338 of title 28 ….”  28 U.S.C. 1338(a) provides:

The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks.  Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases.  

However, should ITC litigators be concerned with the uncodified forgotten cousin of section 315(c) -- i.e., section 4607 of the American Inventors Protection Act (AIPA)?  Section 4607 of the AIPA provides:

Any party who requests an inter partes reexamination under section 311 of title 35, United States Code, is estopped from challenging at a later time, in any civil action, any fact determined during the process of such reexamination, except with respect to a fact determination later proved to be erroneous based on information unavailable at the time of the inter partes reexamination decision.  If this section is held to be unenforceable, the enforceability of the remainder of this subtitle or of this title shall not be denied as a result.  (1)

Unlike 35 U.S.C. §315(c), section 4607 of the AIPA does not expressly restrict application of the estoppel to district court civil actions relating to patents.  Rather, section 4607 of the AIPA seemingly applies to any civil action.  Thus, the rub -- is a determination by the ITC under 19 U.S.C. §1337(c) a civil action? 

Probably not.  In SSIH Equipment, S.A. v. United States International Trade Commission, 718 F.2d 365, 371, 218 USPQ 678, 684 (Fed. Cir. 1983), the Federal Circuit stated its belief that the term “‘civil action’ … does not embrace the proceedings before the [International Trade] Commission.”  In light of the Federal Circuit’s dicta, a respondent in ITC litigation should consider the pros and cons of requesting inter partes reexamination on a case-by-case basis with little or no concern that estoppel provisions (codified or uncodified) will limit any of their potential defenses.  (2)

Although an exclusion order at the ITC is the goal of patent owners, successful and/or settling parties should be aware that a subsequent challenge of the patent via inter partes reexamination, on the same art, may still be available to the respondents because of the absence of an applicable estoppel.   Specifically, 37 C.F.R. 1.907 (b) provides:

Once a final decision has been entered against a party in a civil action arising in whole or in part under 28 U.S.C. 1338 that the party has not sustained its burden of proving invalidity of any patent claim-in-suit, then neither that party nor its privies may thereafter request inter partes reexamination…..

ITC respondents should consider the availability of inter partes reexamination as a bargaining chip to leverage settlement discussions.   Once initiated, the USPTO will not terminate the proceedings.  However, the third party requester may stop participating, thus improving the patent owner’s chances of a favorable termination.  Likewise, a settlement prohibiting a later inter partes reexamination may be highly desirable.  

With the creation of the CRU at the USPTO, an emphasis has been placed on improving the efficacy of patent reexamination.  Currently, patent reexamination is increasingly leveraged as a concurrent track to litigation.  Careful consideration should be accorded to reexamination as a tactical option for ITC respondents.

(1)  Emphasis added.  This latter provision is evidence that Congress had reservations concerning whether the language of section 4607 is unconstitutionally vague and hence could be held unenforceable as such.  This may have also been the reason that section 4607 was never codified in title 35 of the United States Code.  For example, the estoppel is not limited to final inter partes reexamination determinations.  On its face, it could apply to any finding of fact adverse to the position of the third party requester at any stage of the proceeding even at a time prior to the third party exercising an independent right to an appeal to the Board of Patent Appeals and then to the Federal Circuit.  This raises a question as to whether such estoppel provision would violate third parties’ rights to due process.

(2)  Of course, ex parte reexamination is a further option for those patents which do not meet the date provision for inter partes reexamination. 

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Did you know…hearsay is generally admissible in the ITC?

By Eric Schweibenz
|
Mar
06
In many ways, section 337 practice is similar to patent litigation in the federal district courts.  However, there are a number of subtle, yet important, distinctions.  By way of just one example, hearsay is generally admissible in section 337 proceedings at the ITC. “‘Hearsay’ is a statement, other than one made by the declarant while testifying at trial or hearing, offered in evidence to prove the truth of the matter asserted.”  Fed. R. Evid. 801(c).  Pursuant to Rule 802,              “[h]earsay is not admissible except as provided by these rules or by other rules prescribed by the Supreme Court pursuant to statutory authority or by Act of Congress.”  Fed. R. Evid. 802. Under Commission Rule 210.37(b), “relevant, material, and reliable evidence shall be admitted,” and “irrelevant, immaterial, unreliable, or unduly repetitious evidence shall be excluded.”  This includes the admission of hearsay statements.  In Certain Light-Emitting Diodes and Products Containing Same (Inv. No. 337-TA-512 ), ALJ Bullock stated that “hearsay evidence is not per se excludable in administrative proceedings but is an argument affecting the weight to be given certain evidence.”  This is very different from district court, where judges are bound by the strict requirements of the Federal Rules of Evidence.  In district court, hearsay must qualify under one of the enumerated exceptions if it is to be admitted.  In the ITC, in contrast, ALJs have wide discretion in determining whether or not to admit hearsay evidence. In exercising this discretion, ALJs often admit the hearsay evidence and state that any objections to the hearsay’s reliability will go to the weight of the evidence rather than its admissibility.  After all, there are no juries in section 337 proceedings, and each ALJ works to create as complete a record as possible for the Commission.  In certain circumstances, ALJs will cite one of the hearsay exceptions from the Federal Rules of Evidence in order to justify their decision to admit a particular piece of evidence, but this is not necessary.  In fact, ALJs will often issue ground rules specifically stating that hearsay is admissible.  For example, ALJ Luckern’s ground rules in Certain Video Game Machines and Related Three-Dimensional Pointing Devices (Inv. No. 337-TA-658) state that “section 337 investigation hearings are governed by the Administrative Procedure Act (the APA) and hearsay may be admissible.” However, if the proffered evidence is clearly unreliable, it may still be excluded.  For example, in Certain Integrated Circuit and Telecommunications Chips (Inv. No. 337-TA-337), ALJ Luckern held that “out of court declarations by counsel for other respondents whose interests may not be the same as that of [present respondents], and which could not be tested…were not sufficiently reliable to allow their admission into evidence.”  Thus, while there is no per se rule excluding hearsay evidence in the ITC, ALJs do have the discretion to exclude such evidence if they believe that it is unreliable. Accordingly, ITC litigants should be prepared for hearsay evidence to be admitted.  Traditional arguments from district court practice that hearsay evidence should be automatically excluded based on the Federal Rules of Evidence are not likely to succeed at the ITC.
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Did You Know . . . Determinations Of Patent Issues At The ITC Are For Purposes Of Section 337 Only And Do Not Have Res Judicata Effect?

By Eric Schweibenz
|
Mar
19
Patent owners often simultaneously file suits in both the ITC and district court on the same patent(s).  If an ITC investigation is ongoing, an accused infringer can request, as a matter of right, a stay of the parallel district court action under 28 U.S.C. § 1659.  Even if the accused infringer does not request a stay, the ITC investigation typically will conclude before (and sometimes well before) a trial in district court.  After the ITC issues a final determination on infringement, validity, and/or enforceability of a U.S. patent, one might think this ruling would be binding on a district court.  This is not the case, however, because the doctrine of res judicata does not apply to ITC determinations concerning patents.  The doctrine of res judicata, which is also referred to as claim preclusion, means “the thing has been decided.”  The doctrine is rooted in the principle that once a competent court has rendered its final judgment on a matter, that judgment has a conclusive effect upon subsequent litigation between the parties regarding the same cause of action.  However the Federal Circuit has held that “ITC findings neither purport to be, nor can they be, regarded as binding interpretations of the U.S. patent laws in particular factual contexts.  Therefore, it seems clear that any disposition of a Commission action by a federal court should not have a res judicata or collateral estoppel effect in cases before such courts.”  Tandon Corp. v. U.S.I.T.C., 831 F.2d 1017, 1018 (Fed. Cir. 1987).  The reason often cited for lack of a preclusive effect for ITC holdings is that Congress intended the ITC to be primarily responsible for administrating the trade laws and not the patent laws which is specifically referenced in the legislative history of Section 337.  Texas Instruments v. Cypress Semiconductor Corp., 90 F.3d 1558 (Fed. Cir. 1996).  Without the aid of res judicata, ITC determinations of non-infringement, invalidity, and/or unenforceability of a patent do not provide a complete barrier for a patent holder seeking to assert the same patent rights in district court.  However, while the ruling of the ITC is not binding on the district court, it can be used as persuasive evidence.  In Texas Instruments, the plaintiff initiated an ITC action against the defendants alleging unfair competition based on importation and sale of encapsulated circuits produced by processes covered by the plaintiffs’ patent claims.  The Federal Circuit held that even in the absence of res judicata the district court has broad interpretive discretion.  90 F.3d at 1569.  The Federal Circuit determined that, “[T]he district court can attribute whatever preclusive value to the prior ITC decision as it considers justified.”  Id.  But cf. In re Convertible Rowing Exerciser Patent Litigation, 721 F.Supp. 596, 603-604 (D. Del. 1989) (denying defendants’ motion for summary judgment of invalidity despite prior ITC determination of no violation of section 337 based on invalidity).
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The John Marshall Review of Intellectual Property Law Publishes Six Articles On Section 337 Litigation

By Eric Schweibenz
|
Mar
23
The John Marshall Review of Intellectual Property Law has recently published an issue of its law review devoted entirely to section 337 litigation at the ITC. The issue is entitled “A Written Symposium on Litigation Before the International Trade Commission,” and features six articles, including an article written by ALJ Carl C. Charneski.  ALJ Charneski’s article provides an overview of the Office of the Administrative Law Judges within the ITC, and provides his comments on various procedural issues that arise in section 337 proceedings from the issuance of a Notice of Investigation to the Commission’s decision whether to review the ALJ’s initial determination. The second article addresses the two unique statutory criteria that a complainant must satisfy to seek relief in a section 337 proceeding – importation and domestic industry.  The third article discusses a common misperception that the enforcement of ITC remedial orders is automatic or self-implementing.  The fourth article discusses how recent ITC decisions have clarified the state of the law for gray market trademark infringement at the ITC.  The fifth article addresses the value, relevance, and role that the ITC has in the modern United States patent law system.  The sixth article offers advice on how to minimize the risk of violating Commission orders and avoid section 337 infringement when importing “new and improved” or redesigned products into the U.S.  This issue of the John Marshall Review of Intellectual Property Law can be viewed by visiting http://www.jmripl.com.
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Did You Know…Existing English Language Translations of Documents Must Be Produced During Discovery At The ITC?

By Eric Schweibenz
|
Apr
01
At the ITC, each of the Administrative Law Judges (“ALJ”) employ their own unique set of Ground Rules.  Most ALJs have a ground rule that requires production of existing English language translations of any document produced during discovery.  See, e.g., Chief ALJ Luckern Ground Rule 4(v) in Certain Video Game Machines and Related Three-Dimensional Pointing Devices (337-TA-658). The bounds of this particular ground rule were tested in Certain Microlithographic Machines and Components Thereof (Inv. No. 337-TA-468) (Order No. 8).  In that investigation, respondent ASML (citing Ground Rule 4(v)) sought to compel all existing English language translations of more than 100,000 pages of Japanese language documents produced in discovery by complainant Nikon.  In response, Nikon argued that of the approximately 32,000 documents (totaling around 600,000 pages) that it produced, its counsel selected and compiled 304 of those documents to be translated for further study and use in the litigation.  Nikon further argued that the selection and compilation of these documents represented Nikon’s counsel’s work product and thus were immune from discovery.  ALJ Bullock disagreed and ordered Nikon to produce English language translations for all of subject documents.  Specifically, ALJ Bullock determined that “[i]f during discovery the supplier of a document has it translated in order to aid in screening its contents for relevance, materiality, and non-privilege prior to production, and the supplier determines at the conclusion of that process that the original document should be produced, it follows that all copies of that document, and thus all translations, are equally relevant, material and non-privileged, and are therefore subject to production as well.  If that were not the case, then the original document would not have to be produced either.” Different results may occur in district court litigation where translations withheld under similar assertions of the attorney work-product doctrine may be given protection against challenges for their disclosure.  By way of comparison, in Fleischmann v. McDonald’s Corp., 244 F.R.D. 434 (N.D. Ill. 2007), McDonald's similarly asserted that translations created at the direction of an attorney in preparation of litigation constituted attorney work-product. There, the district court agreed with McDonald’s. See also Brunetti v. Federal Bureau of Investigation, 357 F. Supp. 2d 97, 110 (D.D.C. 2004) (holding that a letter translated into Italian qualified as work-product, as it was prepared by an attorney in anticipation of litigation); In re Air Crash Disaster Near Warsaw, Poland on May 9, 1987, 1996 U.S. Dist. LEXIS 22712 (E.D.N.Y. Nov. 19, 1996) (holding that because English translations were prepared in anticipation of litigation at the direction of attorneys, those documents constituted attorney work-product and were thus immune from discovery). Accordingly, ITC litigants should be aware that when preparing English language translations of foreign-language documents produced in discovery, such English language translations may be required to be produced.
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The William and Mary Law Review Publishes A Study By Professor David L. Schwartz Comparing Claim Construction Decisions Rendered By The District Courts And The ITC

By Eric Schweibenz
|
Jun
04
The William and Mary Law Review has recently published a study entitled “Court Specialization: An Empirical Study of Claim Construction Comparing Patent Litigation Before Federal District Courts and the International Trade Commission.”  The study was authored by David L. Schwartz, Assistant Professor of Law at The John Marshall Law School in an effort to predict the effectiveness of specialized patent trial courts which are currently being considered by Congress. In the study, Mr. Schwartz suggests that “proposed quasi-specialized patent courts should be approached with some skepticism.”  Mr. Schwartz bases his suggestion on the fact that his study found little empirical evidence that specialized patent courts would be more accurate on the essential issue of claim construction.  Using the ITC as an example of a specialized patent court, the study compared the reversal rates of ALJs and District Court judges on the issue of claim construction.  In particular, the study found that the ITC’s reversal rate was slightly higher at 31.0% than the reversal rate of 30.7% averaged for the five busiest district courts (i.e., N.D. Cal., C.D. Cal., N.D. Ill., D. Del., and S.D.N.Y.).  In view of the reversal rates, Mr. Schwartz concludes that ALJs perform no better than district court judges on the essential issue of claim construction.  Further, Mr. Schwartz suggests three possible explanations for the apparent similar performance of the District Court and ITC on claim construction issues.  The explanations are that “(1) trial judges (including ALJs of the ITC) cannot master claim construction; especially without a technical background; (2) the Federal Circuit’s claim construction case law is poorly articulated; or (3) claim construction is inherently indeterminate.”
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Did You Know…That Public Interest Factors Can Trump The Finding Of A Violation At The ITC?

By Eric Schweibenz
|
Jun
17
Public interest factors can override the finding of a violation of Section 337 at the ITC.  Upon finding a violation, the administrative law judge (“ALJ") considers the impact that exclusion orders would have upon (1) the public health and welfare, (2) competitive conditions in the U.S. economy, (3) the production of like or directly competitive articles in the U.S., and (4) U.S. consumers.  The ALJ next weighs these factors against the public interest in protecting U.S. intellectual property rights by excluding infringing imports. In making this public interest determination, the ALJ considers whether there are alternative sources (such as the complainant or its licensees) for the accused products that can adequately meet the demands of the U.S. market, whether there are alternative and non-infringing products that would not be subject to the remedial order, and the effect such an order would have on U.S. consumers.  See Certain Circuit Telecommunications Chips, Inv. No. 337-TA-337. Although relatively uncommon, the ITC has, on four occasions, limited remedies due to public interest factors despite finding Section 337 violations.  For example, during an oil shortage in late 1979, the ITC found that it was not in the public interest to exclude the importation of crankpin grinders (which are used to make pins on crankshafts for internal combustion motors) because of an overriding national interest in the supply of fuel efficient automobiles, where domestic industry was unable to supply domestic demand.  See Certain Automatic Crankpin Grinders, Inv. No. 337-TA-60.  By way of further example, the ITC also denied relief in Certain Inclined Field Acceleration Tubes due to an overriding public interest in continuing basic atomic research using imported acceleration tubes which were of higher quality than the domestic product.  See Certain Inclined Field Acceleration Tubes, Inv. No. 337-TA-67.  Four years later, the ITC denied relief in Certain Fluidized Supporting Apparatus, finding it was not in the public interest to exclude the importation of specialized hospital beds for burn patients, where the domestic producer could not supply beds within a commercially reasonable time and where no therapeutically comparable substitute was available.  See Certain Fluidized Supporting Apparatus, Inv. No. 337-TA-182/188. More recently, the ITC has cited the public interest factors in crafting an exclusion order to reduce the burdens such order imposed on third parties and consumers.  In Certain Baseband Processor Chips, Broadcom asserted a patent regarding power saving features of mobile wireless communications devices against Qualcomm, and several mobile phone manufacturers and service providers intervened.  See Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, including Cellular Telephone Handsets, Inv. No. 337-TA-543.  For its part, Qualcomm argued that an exclusion order would operate against the public interest by decreasing the effectiveness of first responders during an emergency. In response, the ITC limited its remedy regarding infringing chips and chipsets for 3G wireless communication devices, including mobile phones and PDAs, by excepting previously imported models from the exclusion order.  The ITC cited this limitation as “necessary to reduce the burdens imposed on third parties and consumers particularly in light of the limited availability of alternative devices that do not contain infringing chips or chipsets.”  The ITC further determined that, “while exclusion of handheld wireless communications would have some impact on the public interest, particularly the public health and welfare, competitive conditions in the U.S. economy, and U.S. consumers, the exemption for previously imported models sufficiently reduced this impact such that the exclusion order should issue.” Other respondents have been less successful with their public interest arguments.  For example, in Certain Automotive Parts, Taiwanese auto parts manufacturers argued that eliminating the importation of infringing replacement automotive parts would harm the public interest by eliminating all competition for replacement parts for Ford F-150 trucks, creating a monopoly for Ford in parts for repairing those trucks.  The ITC determined, however, that “[e]vidence that an exclusion order could lead to higher prices is not dispositive of the public interest.”  See Certain Automotive Parts, Inv. No. 337-TA-557.  In addition, after the ITC finds a Section 337 violation and issues an exclusion order, public interest factors may further be considered during the 60-day Presidential Review period.  During this period, the U.S. Trade Representative may disapprove of the ITC’s order “for policy reasons.”  19 USC § 1337 (j); Presidential Memo of July 21, 2005, 70 Fed. Reg. 43251 (July 26, 2005) (assigning this power to the U.S. Trade Representative).  This Presidential power has been exercised five times.  See Certain Dynamic Random Access Memories, Inv. No. 337-TA-242; Certain Alkaline Batteries, Inv. No. 337-TA-165; Certain Molded-In Sandwich Panel Inserts, Inv. No. 337-TA-99; Certain Multi-Ply Headboxes, Inv. No. 337-TA-82; Welded Stainless Steel Pipe and Tubes, Inv. No. 337-TA-29. Accordingly, prospective respondents should consider the public interest factors that may favor their case, and complainants should be prepared to respond to such arguments.
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Did You Know . . . Importation Is A Separate Requirement In Section 337 Cases?

By Eric Schweibenz
|
Jun
25
Section 337 of the Tariff Act of 1930, codified at 19 U.S.C. § 1337, authorizes the ITC to declare unlawful the “importation into the United States, the sale for importation, or the sale within the United States after importation. . . of articles that - (i) infringe a valid and enforceable United States patent . . . ; or (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.”  Actions under this statute only require the ITC to have in rem jurisdiction over the imported articles at issue.  Unlike the personal jurisdiction requirement to bring an infringement case in a U.S. district court, the ITC does not need personal jurisdiction over any party.  The explicit requirement in section 337 is often referred to as the importation requirement.  In the ITC, a complainant must establish that infringing articles have been, or imminently will be, imported into the United States in order to prevail.  In contrast, establishing importation is not required when initiating a patent infringement case in a U.S. district court.  Proving importation in a section 337 proceeding is not typically arduous.  Parties often stipulate to this element while, in other cases, importation is decided by the ITC on summary determination.  Importation of an article into the U.S. does not have to actually occur in order to bring a complaint before the ITC, but it must at least be imminent.  In this respect, the Commission has previously recognized that there could be an imminent importation without a sale.  See, e.g., Certain Variable Speed Wind Turbines and Components Thereof (Inv. No. 337-TA-376).  For example, a contract for future sale for importation into the U.S. has been deemed sufficient to establish importation.  Id.  Further, a complainant can satisfy the importation requirement even if the sale was made outside the U.S. by a foreign manufacturer to an intermediary.  See Ride-On Toy Vehicles (Inv. No. 337-TA-314) (importation established through sale to trading company outside the U.S.).  Moreover, if accused articles are imported into the U.S., even a small quantity will satisfy the importation requirement, such as samples for a trade show.  See, e.g., Acesulfame Potassium and Blends (Inv. No. 337-TA-403).  Also, products such as software can be imported electronically and thus are still considered as imported goods under section 337.  See, e.g., Hardware Logic Emulation Systems (Inv. No. 337-TA-383).  The ITC has even found importation when the very act of infringement occurs inside the U.S., if the accused article is exported from the U.S. and is later reimported.  See, e.g., Sputtered Carbon Coated Computer Disks (Inv. No. 337-TA-350). With the increased popularity of the ITC as a forum for enforcing intellectual property rights, it is important to be cognizant of the importation requirement, even if it presents a relatively low hurdle for complainants in 337 investigations. * Chad Gorka is a summer associate at Oblon Spivak
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Did You Know…That All Counterclaims Asserted in Section 337 Cases are Automatically Removed to U.S. District Court?

By Eric Schweibenz
|
Jun
30
Respondents involved in patent infringement investigations at the ITC typically raise affirmative defenses in response to a Section 337 complaint.  Similar to district court practice, respondents may also assert counterclaims.  In Section 337 actions, however, counterclaims are automatically removed to a U.S. District Court of appropriate venue so as not to delay the ITC investigation. By way of background, a counterclaim is a claim that “(1) arises out of the transaction of occurrence that is the subject matter of the opposing party’s claim and (2) does not require adding another party over whom the court cannot acquire jurisdiction.”  Fed. R. Civ. P. 13. In a Section 337 investigation, under Commission Rule 210.14(e), the filing of any counterclaim must occur 10 days prior to the commencement of the evidentiary hearing.  In conjunction with the ITC filing, the respondent must file a notice of removal with the U.S. district court in which venue exists under 28 U.S.C. § 1391.  Section 337(c) addresses this in the same manner -- “immediately after a counterclaim is received by the Commission, the respondent raising such counterclaim shall file a notice of removal with a United States district court in which venue for any of the counterclaims raised by the party would exist under section 1391 of title 28.”  Section 1391 addresses the venue requirements that must be satisfied in order for a civil action.  Furthermore, Title 28 addresses section 337 claims in Section 1368 and 1446(f).  Section 1368 provides that the district courts have original jurisdiction of any civil action based on a counterclaim raised under Section 337(c).  28 U.S.C. § 1368. Section 1446(f) explains that the district court shall resolve a counterclaim in the same manner as an original complaint and that the date of the counterclaim relates back to the date of the original ITC complaint.  28 U.S.C. § 1446(f). By way of example, in Certain Nitrile Gloves (Inv. No. 337-TA-608), respondent Ansell Healthcare Products LLC filed a notice of counterclaim with the ITC under 210.14(e) and filed a notice of removal with the United States District Court for the District of Columbia.  Upon removal to the district court, counterclaim-defendant Tillotson Corporation then filed a Motion to Dismiss for Improper Venue or in the Alternative to Transfer.  Ansell Healthcare Products LLC v. Tillotson Corp., 567 F. Supp. 2d. 196, 201 (D.D.C. 2008).  The District of Columbia district court found that it was not the appropriate venue and transferred the counterclaims filed in its court to the District Court in Delaware where Ansell had previously field suit against Tillotson seeking declaratory judgment. “Venue in that District [of Delaware] is proper under 28 U.S.C. § 1391(a)(2), which allows in a case based on diversity of citizenship, venue in any judicial district where a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.”  Id. at 201. Due to the complex nature of Section 337 cases, prospective complainants should anticipate that counterclaims may be raised by respondents but, if so, litigants should be ready and prepared to litigate such counterclaims in the appropriate district court and not at the ITC. * Gregory Redmann is a summer associate at Oblon Spivak
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Did You Know How Claim Construction Is Handled In Patent-Based Section 337 Investigations?

By Eric Schweibenz
|
Jul
06
There are no general ITC rules regarding the procedure for how an Administrative Law Judge (ALJ) is to construe claims and, therefore, claim construction is ALJ specific.  Historically, claim construction testimony and evidence in section 337 investigations has been presented during the evidentiary hearing along with other arguments, including, e.g., infringement and invalidity and, thus, there was no separate Markman hearing and no separate ruling.  In this respect, the parties to an investigation typically received the ALJ’s claim construction of disputed terms for the first time as part of the ALJ’s Initial Determination (ID).  More recently, certain ALJs have conducted Markman hearings prior to the evidentiary hearing.  In investigations where a Markman hearing is held, there is no requirement that the ALJ provide a separate claim construction ruling prior to the issuance of the ID.  Since the ALJ issues the ID after the evidentiary hearing (absent special circumstances), the parties are often forced to make arguments based on the competing claim constructions asserted by the other parties so as not to waive any arguments.  However, ALJ Essex recently issued an Order that construed disputed claim terms prior to an evidentiary hearing in Certain Semiconductor Chips Having Synchronous Dynamic Random Access Memory Controllers and Products Containing Same (Inv. No. 337-TA-661) (for more on this matter, see our June 29 post).

How a given ALJ handles claim construction can be discerned by examining each ALJ’s recently issued ground rules.  The Ground Rules of ALJs Rogers, Bullock, and Essex specifically address claim construction in a provision entitled “Markman Hearing on Claim Construction.”  This provision provides a general outline and structure of the procedural schedule surrounding a Markman hearing if the ALJ determines that a Markman hearing would be beneficial to the investigation.

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Did You Know…Proof of Licensing Activities Alone Can Satisfy The Domestic Industry Requirement?

By Eric Schweibenz
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Sep
14
In Section 337 actions, the domestic industry requirement includes two prongs: (1) the economic prong, which involves investment activities, and (2) the technical prong, which involves the practice of the asserted intellectual property right. Subsection 337(a)(3) defines domestic industry as follows:
    An industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned – (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing. 
The domestic industry requirement can be met by satisfying any one of these three criteria.  Certain Integrated Circuit Chipsets and Products Containing Same, Inv. No. 337-TA-428, Order No. 10, Initial Determination (May 4, 2000), citing Certain Variable Speed Wind Turbines and Components Thereof, Inv. No. 337-TA-376, Comm’n Op., USITC Pub. 3003 (Nov. 1996).  If a complainant relies on either Subsection (A) or (B) to prove domestic industry, it must also show satisfaction of the technical prong.  Certain Set-Top Boxes and Components Thereof, Inv. No. 337-TA-454, Initial Determination, USITC Pub. 3564 (Nov. 2002).  If, however, a complainant relies on Subsection (C) to prove domestic industry, it is not always necessary to show satisfaction of the technical prong. Subsection (C) was added to Section 337 in 1988, making it possible to demonstrate domestic industry using proof of exploitation of the intellectual property right, including if a complainant patent owner makes U.S. investments in the licensing of its patent(s), domestic industry may exist under Subsection 337(a)(3)(C).  See Certain Digital Satellite System (DSS) Receivers and Components Thereof, Inv. No. 337-TA-392, Initial Determination (Oct. 20, 1997) (complainant satisfied the domestic industry requirement solely through investment of money in a patent licensing program); Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Inv. No. 337-TA-432, Order No. 13, Initial Determination (Jan. 24, 2001) (summary determination granted in favor of complainant on the existence of domestic industry based solely on activities related to licensing); Certain Zero-Mercury-Added Alkaline Batteries, Parts Thereof and Products Containing Same, Inv. No. 337-TA-493, Initial Determination (Jun. 2, 2004) (U.S. investment in exploitation of patent through licensing alone satisfied Subsection 337(a)(3)(C) for domestic industry); Certain 3G Mobile Handsets and Components Thereof, Inv. No. 337-TA-613, Order No. 42, Initial Determination (Mar. 10, 2009) (grant of summary determination of domestic industry based on licensing activities alone). When domestic industry exists under Subsection (C) due to investments made in the licensing of a patent, it is unnecessary to show that complainant patent holder or its licensee(s) are involved in actual domestic production to satisfy the technical prong.  Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Inv. No. 337-TA-432, Order No. 13, Initial Determination (Jan. 24, 2001).  It is, however, necessary to show a nexus between the licensing activities relied on by complainant under Subsection 337(a)(3)(C) and the asserted patent(s).  Certain Microlithographic Machines and Components Thereof, Inv. No. 337-TA-468, Initial Determination (Jan. 29, 2003).  In addition, a complainant must actually receive some revenue, such as a lump sum payment or royalty payments, from its licensing activities in the U.S., Certain Digital Processors and Digital Processing Systems, Components Thereof and Products Containing Same, Inv. No. 337-TA-559, Order No. 24, Initial Determination (May 11, 2007), and the investment in licensing activities must be substantial to alone satisfy domestic industry under Subsection 337(a)(3)(C).  Certain Stringed Musical Instruments and Components Thereof, Inv. No. 337-TA-586, Initial Determination (Dec. 3, 2007). As summarized recently by Chief ALJ Paul J. Luckern, “[u]nder 337(a)(3)(C), a complainant may satisfy the domestic industry requirement solely by relying on licensing activities that relate to the patent(s) asserted in the investigation, even if the complainant (or a licensee of the complainant) does not manufacture patented products in the United States. …  [C]omplainant need only demonstrate that (1) it has made a substantial investment in its licensing program and (2) there is a sufficient nexus between the patent at issue and the alleged domestic licensing industry.”  Certain Short-Wavelength Light Emitting Diodes, Laser Diodes and Products Containing Same, Inv. No. 337-TA-640, Order No. 72, Initial Determination (May 8, 2009).
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Did You Know…Parties May Obtain Clearance To Import Redesigned Products After Issuance Of An Exclusion Order?

By Eric Schweibenz
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Sep
25
Following the issuance of an exclusion order by the Commission in a Section 337 investigation, any person seeking a determination that its redesigned products do not violate such exclusion order may seek (1) an advisory opinion under Commission Rule 210.79; and/or (2) an administrative ruling from U.S. Customs under 19 C.F.R. §177. Under Commission Rule 210.79, any person may request an advisory opinion from the Commission to determine whether a proposed course of action or conduct would violate a Commission order.  The party requesting the advisory opinion must establish standing by showing that the proposed course of action is not hypothetical, that it has a compelling business need for the advice, and that the request was made as fully and as accurately as possible.  The Commission also takes into consideration whether an advisory opinion would facilitate the enforcement of Section 337, would be in the public interest, and would benefit consumers and competitive conditions in the United States.  Although the Commission’s rules do not require that an Administrative Law Judge (“ALJ”) issue an advisory opinion within a certain timeframe, the Commission can require that an ALJ set an abbreviated procedural schedule.  Typically, the Commission requires that the ALJ issue an initial advisory opinion within nine months of the publication date of the Commission’s Notice of Advisory Opinion Proceedings.  See, e.g., Certain Lens-Fitted Film Packages, Inv. No. 337-TA-406, Notice of Formal Enforcement and Advisory Opinion Proceedings and Accompanying Order (July 31, 2001) (9-months after notice publication).  Advisory Opinion proceedings are not subject to the requirements of the Administrative Procedures Act and thus the ALJ has discretion concerning the course of the advisory opinion proceeding, including taking evidence beyond what is already in the record, whether or not to hold an evidentiary hearing, and the scheduling for the proceeding.  Further, an advisory opinion by the Commission is not appealable as it does not represent a final determination. Alternatively, persons who desire clarification about whether a redesigned product is covered by an exclusion order may request a ruling under 19 C.F.R. § 177 by sending a written request to U.S. Customs.  Requests are normally processed by U.S. Customs in the order received and as quickly as possible, usually within two to six months.  If U.S. Customs finds that the redesigned product falls outside the scope of the exclusion order, it will issue a ruling to that effect and permit the articles to enter the United States.  On the other hand, in the event that U.S. Customs denies entry of a redesigned product in light of an existing exclusion order, U.S. Customs will issue a ruling.  Such a ruling is subject to a right to appeal to the U.S. Court of International Trade (“CIT”).  Appeals from final decisions of the CIT may be taken to the U.S. Court of Appeals for the Federal Circuit and, ultimately, to the Supreme Court of the United States.
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Did You Know…A Laches Defense Is Not Available In Section 337 Cases?

By Eric Schweibenz
|
Oct
09
Section 337(c) states that “all legal and equitable defenses may be presented in all cases” before the ITC.  The Federal Circuit has explained that the Commission recognizes the same defenses and applies the same burdens of proof in patent cases as do the district courts.  Lannom Mfg. Co. v. United States Int’l Trade Comm’n, 799 F.2d 1572, 1578 (Fed. Cir. 1986).  Nevertheless, due to the remedies available in the ITC and the legislative history behind amendments to U.S. patent law, not all defenses that are available to defendants in district court are available to respondents in the ITC. If the Commission finds a violation of Section 337, then it is authorized to issue two types of remedial orders:  exclusion orders and cease and desist orders.  19 U.S.C. § 1337(d)-(f).  An award of money damages is not available as a remedy in the ITC.  The available remedies in the ITC are therefore prospective in nature.  The defense of laches in patent cases, on the other hand, is retrospective in nature:  if the defendant proves by a preponderance of the evidence that the patentee delayed filing suit for an unreasonable length of time from when it new or should have known of the claim against the defendant, and that the defendant suffered either economic or evidentiary prejudice as a result of the delay, then the patentee is barred from recovering pre-filing monetary damages.  Thus, “laches as it pertains to patent-based cases does not, as a matter of law, work to curtail the type of prospective relief sought in 337 cases.”  Certain Personal Watercraft and Components Thereof, Inv. No. 337-TA-452, Order No. 54 at 2, Initial Determination (Sept. 19, 2007) (citing Certain EPROM, EEPROM, Flash Memory and Flash Microcontroller Semiconductor Devices and Products Containing Same, Inv. No. 337-TA-395, Comm’n Op., Suppl. Views of Chairman Bragg at 11, n.65 (July 9, 1998)). It should be noted that while “ordinary” laches is not an available as a defense, respondents in the ITC may assert prosecution laches.  See Certain Data Storage Systems and Components Thereof, Inv. No. 337-TA-471, Order No. 42 (Jan. 4, 2003).  The two-prong test for prosecution laches requires (1) an unreasonable and inexcusable delay by the patentee in prosecuting the patent, and (2) material prejudice to the defendant attributable to the delay.  If prosecution laches applies, then the patent is rendered unenforceable.  Thus, unlike a laches defense to limit damages, a prosecution laches defense is not retrospective and will impact the type of prospective relief sought by patentees in the ITC.
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Did You Know…The Prevailing Party In A Section 337 Investigation Is Not Automatically A Party On Appeal At The Federal Circuit?

By Eric Schweibenz
|
Oct
23
In Section 337 investigations, the party that prevails before the Commission is not entitled to appeal to the U.S. Court of Appeals for the Federal Circuit the Commission’s final determination, and is not automatically a party to an appeal brought by the party that lost before the Commission.  However, the prevailing party is entitled to intervene if the losing party appeals the Commission’s determination. Under Section 337, an appeal of an adverse Commission determination must be made “in accordance with chapter 7 of title 5.”  19 U.S.C.  § 1337(c).  Chapter 7 of title 5, in turn, only provides for appellate actions “against the United States, the [federal] agency by its official title, or the appropriate officer.”  5 U.S.C. § 703.  Accordingly, appeals of adverse determinations at the ITC in connection with Section 337 actions cannot be brought against the other party to the investigation directly; rather, they must be brought against the ITC. Further, only parties who are “adversely affected” by a final determination of the ITC have standing to appeal to the Federal Circuit.  19 U.S.C. § 1337(c).  This statutory “adversely affected” language has been interpreted narrowly, in that only the ultimate outcome of the investigation is taken into account.  Surface Tech., Inc. v. U.S. Int’l Trade Comm’n, 780 F.2d 29, 30 (Fed. Cir.  1985); Krupp Int’l, Inc. v. U.S. Int’l Trade Comm’n, 626 F.2d 844, 846 (CCPA 1980).  This means that, e.g., respondents cannot appeal a determination that section 337 has not been violated.  See Krupp, 626 F.2d at 846; Surface Tech., 780 F.2d at 30; Tanabe Seiyaku Co., Ltd. v. U.S. Int’l Trade Comm’n, 1995 U.S. App. LEXIS 40961, at *2 (Fed. Cir. 1995). However, in order to mitigate this harsh rule, the Federal Circuit has repeatedly held that if the losing party appeals the Commission’s decision, then the prevailing party has the right to intervene and raise any available arguments in support of the Commission’s final determination.  See, e.g., Krupp, 626 F.2d at 846 (allowing respondent to intervene in complainant’s appeal in order to, inter alia, challenge the Commission’s findings related to four patents, even though the Commission had found no violation of Section 337, due to non-infringement for one of the patents and invalidity for the other three); see also Rule 15(d) of the Federal Rules of Appellate Procedure (providing further information regarding the required substance and timing for a motion to intervene at the Federal Circuit).  Thus, as a practical matter, the prevailing party can argue against unfavorable Commission findings on appeal, as long as the losing party appeals the overall final determination first.
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Did You Know…Section 337 Settlement Agreements Must Be Approved By The ITC?

By Eric Schweibenz
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Nov
04
When parties to a Section 337 investigation settle their dispute, whether through a license agreement or otherwise, the parties may terminate the investigation by filing a motion under Commission Rule 210.21(a)(2).  However, any motion to terminate the investigation based on a settlement agreement must include:  (1) copies of the licensing or other settlement agreements, (2) any supplemental agreements, and (3) a statement that there are no other agreements, written or oral between the parties concerning the subject matter of the investigation. If the licensing or settlement agreements contain confidential information, such information can be removed from the public versions of these documents.  Indeed, if fewer than all parties settle the investigation, the settling parties might be able to maintain the confidentiality of the financial settlement terms from the non-settling parties.  See, e.g., Certain Machine Vision Software, Inv. No. 337-TA-680, Order 18 (October 29, 2009) (finding that the policy of encouraging settlement through maintaining financial terms secret trumps non-settling parties’ alleged need of such information for remedy issues).  However, keeping financial settlement terms from non-settling parties is not uniformly followed in all cases.  See, e.g., Certain Zero-Mercury-Added Alkaline Batteries, Inv. No. 337-TA-493, Order 35 (October 30, 2003) (while redacted financial information would be kept from non-settling respondents, ALJ denied complainant’s request to keep such information from outside counsel of non-settling respondents, because existing protective order was sufficient). According to the Commission Rules, the Administrative Law Judge (“ALJ”) is directed to consider and make appropriate findings regarding the effect of the proposed settlement on the public health and welfare, competitive conditions in the U.S., the production of like or directly competitive articles in the U.S., and U.S. consumers.  See Commission Rule 210.50(b)(2).  Although the ALJ may conduct a hearing on these public interest factors, the ALJ’s findings on this issue are normally made solely on the information submitted by the parties.  If the ALJ grants the motion to terminate the investigation based upon settlement, the ALJ then certifies to the full Commission the motion papers and agreements, with an initial determination terminating the proceeding for the affected parties.  Again, if confidential information is contained within the initial determination, agreements, and motion papers, then confidential and public versions of these papers are forwarded to the Commission. Under Commission Rule 210.42(e), notice of the initial determination based on settlement is provided to the U.S. Department of Health and Human Services, the U.S. Department of Justice, the Federal Trade Commission, the U.S. Customs Service, and any other departments or agencies that the Commission deems appropriate.  These institutions are permitted ten days after service of the notice to provide comments regarding the initial determination. The Commission then has an opportunity to review the settlement agreements along with any other comments provided by the parties, Commission Investigative Attorney, ALJ, and any agencies or departments.  The Commission can then take action as it sees fit, or more commonly, it will decide not to review the initial determination, in which case it will issue a notice to the public and the parties of its decision, and the investigation will terminate as to the affected parties.
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A Closer Look At Requests To Stay Section 337 Investigations Pending Reexamination At The U.S. Patent & Trademark Office

By Eric Schweibenz
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Nov
06
Patents asserted in Section 337 investigations at the ITC are often times subject to concurrent reexamination proceedings at the U.S. Patent & Trademark Office (“USPTO”).  When this occurs, respondents will sometimes seek to stay the Section 337 investigation pending the outcome of the reexamination at the USPTO.  However, because of the unique remedies available at the ITC, the analysis of whether a stay pending the outcome of the reexamination is appropriate at the ITC plays out somewhat differently than it does in district court litigation. In deciding whether to stay the Section 337 investigation pending the outcome of the reexamination is appropriate, the ITC typically considers the following five factors:  “(1) the state of discovery and the hearing date; (2) whether a stay will simplify the issues and hearing of the case; (3) the undue prejudice or clear tactical disadvantage to any party; (4) the stage of the PTO proceedings; and (5) the efficient use of Commission resources.”  Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Inv. No. 337-TA-605, Comm’n Op., 2008 ITC LEXIS 888, at *4 (May 27, 2008). The first factor relates to how far the Section 337 investigation has progressed towards resolution.  Generally speaking, if discovery has just commenced and the hearing date is far in the future, the first factor weighs in favor of granting a stay.  See Certain Personal Computer/Consumer Electronic Convergent Devices, Components Thereof, and Products Containing Same, Inv. No. 337-TA-558, Comm’n Notice, 2006 ITC LEXIS 568, at *2-3 (Jul. 31, 2006).  Conversely, if discovery is complete and the hearing date is rapidly approaching, the first factor weighs against granting a stay.  Certain Semiconductor Chips, Inv. No. 337-TA-605, Comm’n Op., 2008 ITC LEXIS 888, at *6-8. The second factor typically weighs in favor of granting a stay.  Awaiting the completion of concurrent reexamination proceedings has the potential to “simplify the issues and hearing of the case” because the reexamination can eliminate certain claims from consideration or even obviate the need for a hearing altogether.  Thus, even when a stay is ultimately denied, the ITC often finds that the second factor weighs in favor of granting a stay.  See, e.g., Certain Semiconductor Chips, Inv. No. 337-TA-605, Comm’n Op., 2008 ITC LEXIS 888, at *9-12. The third factor is what truly differentiates the stay analysis in ITC investigations from the analysis in district court litigation.  Since the ITC cannot award monetary damages for past infringement -- but can only prospectively exclude infringing products from the United States -- any delay in the completion of the investigation negatively impacts the complainant because it means that any potential remedy will be in effect for a shorter period of time.  Once the asserted patents expire, any exclusion orders based on infringement of those patents also expire.  Thus, a stay of a Section 337 investigation effectively grants respondents a royalty-free license during the stay.  Certain Course Management Systems Software Products, Inv. No. 337-TA-677, Order No. 5, 2009 ITC LEXIS 1342, at *10-11 (Jul. 24, 2009).  Accordingly, in the ITC, the third factor of the stay analysis will likely weigh against granting a stay because there is a clear tactical disadvantage to the complainant. The fourth factor is the mirror image of the first: the farther along the reexamination has progressed, the more likely a stay will be granted at the ITC pending the completion of the USPTO proceeding.  Thus, if the USPTO proceedings are still at an early stage, this factor weighs against granting a stay.  Certain Semiconductor Chips, Inv. No. 337-TA-605, Comm’n Op., 2008 ITC LEXIS 888, at *14-18.  Conversely, if the reexamination is nearly complete, this factor would weigh in favor of a stay. The fifth factor is similar to the second, and tends to be analyzed in the same way by the ITC.  In other words, this factor typically weighs somewhat in favor of granting a stay because it would typically be a more efficient use of Commission resources to wait until the reexamination is completed, thereby potentially narrowing the issues to be considered at the ITC.  Certain Semiconductor Chips, Inv. No. 337-TA-605, Comm’n Op., 2008 ITC LEXIS 888, at *18-19. In four relatively recent decisions involving whether or not to grant a stay of a Section 337 investigation pending the outcome of a concurrent reexamination at the USPTO, a stay was granted in one case but denied in three.  See Certain Personal Computer/Consumer Electronic Convergent Devices, Inv. No. 337-TA-558, Comm’n Notice (stay granted); Certain Semiconductor Chips, Inv. No. 337-TA-605, Comm’n Op. (stay denied); Certain Course Management Systems Software Products, Inv. No. 337-TA-677, Order No. 5 (stay denied); Certain Bassinet Products, Inv. No. 337-TA-597, Order No. 11, 2007 ITC LEXIS 995 (Sep. 10, 2007) (stay denied).  Additionally, in Certain Semiconductor Chips, Inv. No. 337-TA-605, respondent Freescale Semiconductor, Inc. sought a writ of mandamus from the Federal Circuit ordering the ITC to vacate its decision denying the requested stay, but its petition was denied.  In re Freescale Semiconductor, Inc., 2008 U.S. App. LEXIS 14739, at *4 (Fed. Cir. Jun. 25, 2008). While it is difficult to draw any broad conclusions, it is clear that stays pending reexamination are not routinely granted at the ITC, most likely because of the statutorily mandated rapid pace of Section 337 investigations coupled with the consistent and unavoidable prejudice suffered by complainants from the lack of any retrospective remedies at the ITC.  Thus, unlike district court litigation, stays of Section 337 investigations pending concurrent reexaminations are more likely to be granted only when factors 1 and 4 weigh heavily in favor of a stay, i.e., where the ITC investigation is in its infancy but the reexamination has already progressed significantly towards resolution. For a more comprehensive commentary on the benefits of patent reexamination and other post grant issues, please visit http://www.patentspostgrant.com.
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Did You Know…Parties May Obtain Temporary Relief Under Section 337?

By Eric Schweibenz
|
Jan
04
Under Section 337, complainants may seek and obtain temporary relief within a short time period.  Where such a motion for temporary relief is filed, and an investigation is instituted, the time period until a final determination by the Commission on the motion for temporary relief is extremely short, 90 days in most cases, and 150 days in “more complicated” cases.  Although Section 337 complainants rarely seek this form of relief, the Commission is currently considering such a motion in Certain Silicon Microphone Packages (Inv. No. 337-TA-695).  See our November 17, December 18 and 23 posts for more information. Temporary relief may be granted, under Section 337, to a party to “the same extent as preliminary injunctions and temporary restraining orders may be granted under the Federal Rules of Civil Procedure.”  19 U.S.C. § 1337(e)(3).  In order to obtain temporary relief, a party must show (1) reasonable likelihood of success on the merits, (2) irreparable harm caused if relief is not granted, (3) balance of hardships tipping in the requesting party’s favor, and (4) the public interest does not preclude issuance of relief.  Reasonable likelihood of success on the merits, in Section 337 cases, includes demonstration that a valid and enforceable intellectual property right has been infringed and that a domestic industry exists, or is in the process of being established, that practices the asserted intellectual property right. If a party wishes to file for temporary relief, in most cases, the complainant must do so at the time of the complaint. 19 C.F.R. § 210.52.  In certain circumstances, however, a motion for temporary relief may be filed after the complaint, but before the institution of an investigation.  19 C.F.R. § 210.53.  This requires a party to prove that extraordinary circumstances, warranting temporary relief, exist and that the party was not aware, and with due diligence would not have been aware, of those circumstances at the time the complaint was filed.  Id. Regardless of whether the motion is filed with the complaint or afterward, it must be accompanied by (1) a memorandum of points and authorities in support of the motion; (2) affidavits of persons with knowledge of the facts alleged; (3) all documentary information and other evidence intended to be submitted in support of the motion; (4) a detailed statement of facts bearing on whether the complainant should be required to post a bond; and if so required, (5) the appropriate amount of that bond.  19 C.F.R. § 210.52. Once a proper motion for temporary relief has been made, the opposing party has 10 days after the service of the motion to file a response. 19 C.F.R. § 210.59.  In the response, the opposing party will attempt to show that the complainant lacks a reasonable likelihood of success on the merits, that no irreparable harm will be caused if relief is not granted, that the balance of hardships tips in the opposing party’s favor, and that the public interest precludes issuance of relief.  Like the motion for temporary relief, the response should also include a memorandum of points and authorities; affidavits, where possible; and address the complainant’s bond assertions. Id. After the complaint, the motion for temporary relief, and the response have been filed, the Commission will determine whether to institute an investigation.  This determination must be made within 35 days of the filing of the complaint and motion for temporary relief.  19 C.F.R. § 210.10.  If an investigation is instituted, the motion for temporary relief is provisionally accepted and forwarded to an ALJ who will make an initial determination (“ID”) as to whether there has been a violation of Section 337 and whether temporary relief is appropriate.  The ALJ then has 70 days after the institution of the investigation to issue the ID.  19 C.F.R. § 210.58.  Like other Section 337 proceedings, the ALJ may deem the temporary relief portion of the investigation “more complicated,” thus extending the deadline for the ID to 120 days from the institution of the investigation.  Id.  By way of example, and as indicated in our December 23 post, ALJ Rogers designated the investigation “more complicated” in Certain Silicon Microphone Packages. After the ALJ issues an ID on the issue of temporary relief, the Commission has 20 days (30 days in “more complicated” cases) in which to modify or vacate the ID.  19 U.S.C. § 1337(e)(2).  Within that 20 day (or 30 day) period, the parties have the opportunity to submit commentary on any perceived errors in the ID.  If the Commission chooses to award temporary relief, they may do so either in the form of a temporary exclusion order or a temporary cease and desist order.
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Did You Know…Respondents Can Stay Parallel District Court Actions Under 28 U.S.C. § 1659?

By Eric Schweibenz
|
Feb
23
Under 28 U.S.C. § 1659(a), upon timely request of a Section 337 Respondent, who is also a party in a civil action, a “district court shall stay, until the determination of the Commission becomes final, proceedings in the civil action with respect to any claim that involves the same issues involved in the proceeding before the Commission.”  A Respondent’s request for a stay is deemed timely only if made within (1) 30 days after being named as a respondent in the ITC proceeding, or (2) 30 days after the district court action is filed, whichever is later. In addition to making a timely request, a Respondent also must show that the claims in the district court action involve the same issues before the ITC.  This similarity of issues requirement has been interpreted by some district courts to require that the patents asserted in both forums be identical.  By way of example, in Saxon Innovations, LLC v. Palm, Inc., 2009 U.S. Dist. LEXIS 105928 (E.D. Tx. Nov. 4, 2009), the plaintiff Saxon accused Palm of infringing its ‘873 patent.  Saxon had also asserted its ‘873 patent in a parallel ITC investigation.  Although Palm was a respondent in that parallel ITC investigation, Saxon did not assert its ‘873 patent against Palm in that forum.  The district court denied Palm’s request to stay the district court action against it finding that “[t]he claims against Palm in this case and the claims against Palm in the ITC investigation are not ‘identical parallel claims.’”  In explaining its ruling, the court noted the fact that the ITC will not consider Palm’s alleged infringement of the ‘873 patent nor will it consider Palm’s invalidity theories of the ‘873 patent, if any.  Similarly, in Micron Tech., Inc. v. Mosel Vitelic Corp., 1999 U.S. Dist. LEXIS 4792 (D. Id. Mar. 31, 1999), the district court denied the defendants’ request to stay under § 1659(a) a consolidated action in its entirety where only four of eleven patent infringement claims were asserted in the ITC.  The district court rejected the defendants’ assertions that the seven patent infringement claims not before the ITC were so related to the four patent infringement claims before the ITC that they implicated substantially similar legal and factual issues, including the fact that the plaintiff alleged the same products infringed all eleven patents.  Although the district court refused to stay the action with respect to the seven patent infringement claims not before the ITC, the court granted the defendants’ motion to stay the remaining four patent infringement claims until such time as the resolution of the ITC action became final. Other district courts have determined that although § 1659 may not be applicable, it can use its discretionary authority to stay any non-identical patent infringement claims.  For example, in SanDisk Corp. v. Phison Elec. Corp., 538 F.Supp.2d 1060 (W.D. Wis. 2008), the district court stayed, under its inherent power, a separate action involving non-identical patent infringement claims filed by the plaintiff against the same defendants/respondents.  In staying the separate action, the court noted that the patents shared the same prosecution history and specification of one of the patents asserted in the plaintiff’s other district court action that was stayed under § 1659.  Similarly, in Formfactor, Inc. v. Micronics Japan Co., Ltd., 2008 U.S. Dist. LEXIS 131114 (N.D. Cal. Feb. 11, 2008), in addition to staying two patent infringement claims under § 1659, the district court stayed, under its inherent power, two non-identical patent infringement claims.  The court noted that the four asserted patents shared at least two common inventors.  In staying the entire action, the district court cited the potential duplication of discovery that would occur if the two remaining claims were not stayed and stated that “the similarity of the patents in subject matter [was] sufficient to warrant staying the matter . . . in order to gain the additional knowledge of the ITC proceedings and  . . . to benefit from litigating the four patents in this action together.” In the event that a district court ultimately determines to stay a civil action under 28 U.S.C. § 1659(a), the civil action is stayed “until the determination of the Commission becomes final.”  This statutory language has been interpreted by the Federal Circuit to mean that “§ 1659 requires that the stay of district court proceedings continue until the Commission proceedings are no longer subject to judicial review.”  In re Princo Corp., 478 F.3d 1345, 1355 (Fed. Cir. 2007).
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