Motorola’s Appeal To Ninth Circuit Of A Jury Determination That Motorola Breached Its FRAND Obligation – In a case involving the first time a federal district court judge determined a FRAND royalty rate for standard essential patents as reported in ITC Section 337 Update dated October 3, 2013, Motorola’s Appeal No. 14-35393 of a subsequent jury verdict that Motorola breached its FRAND royalty obligation to license its standard essential patents to Microsoft on fair terms was Argued before the Ninth Circuit on Wednesday, April 18, 2015. Motorola contends that it never consented to District Court Judge James L. Robert of the Western District of Washington ruling on a FRAND royalty rate in a bench trial and then having that royalty rate and corresponding findings become case precedent in a subsequent jury trial to determine whether Motorola breached its FRAND obligation. Motorola argued this “biased the jury trial” because the jury was told the FRAND royalty rate is a “miniscule fraction of the rate” offered by Motorola of 2.25 percent of the sales price of every Microsoft Xbox, PC/laptop, smartphone, etc. Motorola is seeking to reverse the $15 million damages judgment or, in the alternative, order a new trial. An issue under consideration by the Ninth Circuit panel comprised of Chief Judge Sidney Thomas, Judges Clifford Wallace, and Marsha Benzon, who took the parties’ arguments under submission, is whether Motorola timely objected to the evidence concerning the FRAND royalty rate submitted to the jury. This Update will continue to monitor the Ninth Circuit’s decision.

Commission Authorizes Office Of General Counsel To Seek Judicial Enforcement Of Subpoenas In Optical Disc Drives – On April 9, 2015, the Commission issued Notices granting the requests of ALJ Lord for judicial enforcement of subpoenas duces tecum and ad testificandum directed to Parabellum Capital LLC (“Parabellum”) and Credit Suisse Management LLP (“Credit Suisse”), non-parties served by Respondents in Certain Optical Disc Drives, Components Thereof, and Products Containing the Same, Inv. No. 337-TA-897. Following the Commission’s Order remanding the investigation in December 2014, ALJ Lord reopened discovery to trace all substantial rights of the patents-at-issue from inception to present. Subpoenas were served on Parabellum and Credit Suisse following application by Respondents seeking documents and testimony related to each party’s ownership rights and financial interest in the patents. Parabellum and Credit Suisse served objections, but did not move to limit or quash the subpoenas, and did not produce any documents. Respondents filed motions to enforce the subpoenas. ALJ Lord was not persuaded by the non-parties arguments regarding the timing and format of the subpoenas and held that requests for emails were not barred by the parties’ discovery stipulation because such stipulation does not apply to non-parties. ALJ Lord sought judicial enforcement of the subpoenas on March 30, 2015, pursuant to Commission Rule 210.32(g).

Federal Circuit Affirms Commission’s Finding Of No Domestic Industry – On March 20, 2015, the United States Court of Appeals for the Federal Circuit decided LSI Corporation v. International Trade Commission, No. 2014-1410, 2015 WL 1260672 (Fed. Cir. March 2015), affirming the Commission’s decision that LSI Corporation and Agere Systems LLC (collectively “LSI”) failed to establish the existence of a domestic industry. The Commission had reversed the ALJ’s conclusion that LSI had established the existence of a domestic industry as to one of the asserted patents, reasoning that there was no evidence that LSI’s licensing activities related to an article practicing the patent. In reaching its conclusion, the Commission relied upon its decision in Certain Computers and Computer Peripheral Devices and Components Thereof, Inv. No. 337-TA-841, 2014 WL 5380098 (Jan. 9, 2014). LSI argued that the Commission retroactively applied a new requirement from the 2014 Certain Computers decision to a factual record that had been compiled in 2013, depriving it of the opportunity to produce additional evidence to meet that standard. The Court noted that the Certain Computers decision interpreted a prior Federal Circuit decision, InterDigital Communications, LLC v. International Trade Commission, 707 F.3d 1295 (Fed. Cir. 2013), which held that where a complainant relies upon its investment in licensing activities to establish domestic industry, the licensing activities must relate to the “articles protected by the patent.” The Court held that the InterDigital Decision, which came before discovery closed, gave LSI notice of the evidence needed to meet the domestic industry requirement.