ITC Issues Unusual Stay in Section 337 Case

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In a recent decision, U.S. International Trade Commission (ITC) Administrative Law Judge (ALJ) Theodore R. Essex granted a stay in a Section 337 case six weeks before the hearing was scheduled.1 In doing so, the ALJ noted that the situation was "unique."

In the case, Freescale Semiconductor sued Zoran, MediaTek and the downstream users of their chip packages for alleged infringement of two claims of a patent dealing with a data-processing system and method for performing dynamic bus termination. The twist is that six months earlier, Freescale sued the same principal respondents on the same claims of the same patents, with a different set of downstream users.2 In his initial determination in the earlier case, a different ALJ found that the common patent at issue was invalid pursuant to 35 U.S.C. § 103.3 Respondents in this second case then filed a motion to stay, soon followed by a motion for summary determination of invalidity of the asserted patent.

Relying upon Commission precedent, the ALJ applied a five-factor balancing test to determine whether or not to grant a stay: 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 advantage to any party; 4) the stage of the parallel proceeding; and 5) the efficient use of Commission resources.4 In granting the stay, the ALJ found that all of the factors except for the third, undue prejudice, weighed in favor of a stay. The ALJ acknowledged that Freescale could be prejudiced by a stay because the asserted patent will expire in November 2013.

The ALJ flatly rejected Freescale's contention that the Commission's determination of invalidity would not end the question due to the right of appeal to the U.S. Court of Appeals for the Federal Circuit. Commission determinations have preclusive effect on ALJs, absent a contrary decision by the Commission or the Federal Circuit.5

ITC complainants will sometimes stagger cases to either facilitate or undermine joinder. This case would suggest that when filing seriatim cases where joinder is not desired, the complainant may wish to craft the two cases with sufficient differences in the claims so that an adverse disposition in the first case will not automatically dispose of the second case. Additionally, there is an ever-present risk of asserting patents close to their expiration date. As the principal ITC remedy is an exclusion order that, like a district court injunction, will only remain in effect for the life of the patent, complainants may want to ensure sufficient remaining time on the patent to account for the likely length of the ITC investigation.

For Further Information

If you have any questions about this Alert, please contact Rodney R. Sweetland III, Michael G. McManus, any member of the ITC Section 337 Litigation Practice Group or any attorney in the firm with whom you are in regular contact.

Notes

  1. Certain Integrated Circuits, Chipsets, and Products Containing Same Including Television Sets, Inv. No. 337-TA-822, Order No. 17 (August 6, 2012).
  2. Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions, Inv. No. 337-TA-786.
  3. Id., Initial Determination on Violation of Section 337 and Recommended Determination on remedy and Bond (July 12, 2012). This case is currently on review before the Commission.
  4. Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Inv. No. 337-TA-605, Comm’n Op. at 3 (May 27, 2008).
  5. Certain Integrated Circuits, Chipsets, and Products Containing Same Including Television Sets, Inv. No. 337-TA-822, Order No. 17 at 4–5.

Published In: Antitrust & Trade Regulation Updates, Civil Remedies Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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