On June 16, 2010, ALJ Theodore R. Essex issued Order No. 14, denying Respondents Toyota Motor Corporation, Toyota Motor North America, Inc., and Toyota Motor Sales, USA, Inc.’s (collectively, “Toyota”) motion filed June 1, 2010, for leave to file an application for interlocutory review of Order No. 12 in Certain Hybrid Electric Vehicles and Components Thereof (Inv. No. 337-TA-688).

By way of background, ALJ Essex’s Order No. 12, which issued May 21, 2010, denied Toyota's renewed motion for summary determination terminating this investigation on the basis of claim preclusion.  See generally our April 6, 2010 and March 29, 2010 posts for further details on the claim preclusion issue.  In Order No. 12, ALJ Essex determined that an exception to claim preclusion applied in this investigation because Complainant Paice LLC (“Paice”) was unable to seek the remedy or form of relief in the district court that it could seek in this investigation, namely, the ITC's exclusion orders.

According to Order 14, Toyota argued that the issues addressed in Order No. 12 involve controlling questions of law, including: “(1) whether the availability of exclusion orders provides a blanket exception to claim preclusion in ITC investigations following district court action; (2) whether the statutory language of Section 1337(a) that violations be dealt with ‘in addition to any other provision of law’ justifies a blanket exception to claim preclusion in ITC investigations; and (3) whether any differences between legal standards applied by the Commission for issuing exclusion orders and legal standards applied by district courts for issuing permanent injunctions pursuant to the Supreme Court decision in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), require a blanket exception to claim preclusion in ITC investigations.”  Toyota further argued that Order No. 12 also involved a controlling question of policy as to which there is a substantial ground for difference of opinion, namely “whether a patentee that fails to secure an injunction in district court should automatically be permitted to try to secure that same relief at the ITC for the same claim.”  Toyota additionally argued that an immediate appeal of these issues would advance the ultimate completion of this investigation, since if the matter resolved in Toyota's favor, this investigation would terminate.

In response, Paice argued that the law regarding claim preclusion is well-settled and that the ALJ correctly determined that an exception to claim preclusion applies.  Paice further argued that Toyota failed to establish that there was a controlling question of policy, because it is established that a patentee can bring both a federal court action and an ITC investigation against an alleged infringer.  Finally, Paice argued that Toyota failed to establish that an immediate appeal of the order would materially advance the ultimate completion of the investigation given the current procedural schedule.  The Commission Investigative Staff agreed with Paice and opposed Toyota’s motion on similar grounds.

ALJ Essex determined that Toyota failed to meet its “heavy burden” on both of the factors required for interlocutory appeal, namely, that (1) the ruling involves a controlling question of law or policy as to which there is substantial ground for difference of opinion, and that (2) either an immediate appeal from the ruling may materially advance the ultimate completion of the investigation or subsequent review will be an inadequate remedy.

ALJ Essex first addressed the second prong and determined that the evidentiary hearing started in merely five weeks, and that an interlocutory appeal would only advance the investigation if the ITC permitted the appeal, ruled in Toyota’s favor and terminated the investigation.  ALJ Essex therefore found that resources would be more efficiently used by proceeding with the investigation.  ALJ Essex further determined that Toyota failed to present any evidence that a subsequent review of the ALJ’s decision would be inadequate.

ALJ Essex then determined that Toyota failed to meet its burden regarding the first factor above, because his Order No. 12, was based “on an analysis of the facts of the instant investigation in light of the statutory language and Commission and Federal Circuit precedents,” and that such “an analysis does not rise to ‘controlling question[s] of law or policy’ as asserted by Toyota.”

For the above reasons, ALJ Essex denied Toyota’s motion for leave to file an application for interlocutory appeal.