White House Disapproves Commission Determination To Issue Exclusion Order In 794 Investigation – By Letter of August 3, 2013, U.S. Trade Representative Michael Froman, acting on authority from the President, notified the Commission of the President’s decision to disapprove the Commission’s June 4, 2013 determination to issue exclusion and cease and desist orders on a FRAND patent in ITC Investigation No. 337-TA-794.  This is the first time since 1987 that the President has disapproved a Commission exclusionary remedy.  Under 19 U.S.C. §1337(j), the President is required to engage in a policy evaluation of the Commission’s determinations to issue exclusion and cease and desist orders within a 60-day review period.  If the President disapproves such determination then “effective on the date of such notice, such determination. . . shall have no force or effect.”  The President’s decision cites to the January 8, 2013 Policy Statement issued by Department of Justice and U.S. Patent and Trademark Office which “explains that, to mitigate against patent hold-up, exclusionary relief from the Commission based on FRAND-encumbered SEPs should be available based only on the relevant factors described in the Policy Statement,” such as, for example, “if a putative licensee refuses to pay what has been determined to be a FRAND royalty, or refuses to engage in a negotiation to determine F/RAND terms.”  Click Here for an analysis of the “Latest Developments On Injunctive Relief For Infringement Of FRAND-Encumbered SEPs”, including a summary of the current case law in ITC, FTC and U.S. District Courts.

First Case Addressing The Question Of Whether Asserted Patent Claims Are Standard-Essential – On Friday, July 26, 2013, Judge James Holderman of the U.S. District Court for the Northern District of Illinois issued the first Opinion that “addressed the question of whether asserted patent claims are standard-essential.”  In re Innovatio IP Ventures, LLC Patent Litigation, 2013 WL 3874042, *27 n. 2 (N.D. Ill. 2013).  Plaintiff and patent holder Innovatio was subject to a FRAND commitment based on Letters of Assurance provided by Innovatio’s predecessors to license patents believed to read on devices operating under the 802.11 WLAN standard.  The Court held that the bylaws of the SSO at issue, IEEE, included language that “plainly contemplate that some claims but not others in a particular patent may be standard-essential.”  The Court further held that, under the IEEE bylaws, “[to] prove that a patent claim is standard-essential, an accused infringer must establish by a preponderance of the evidence that (1) at the time of the standard's adoption, the only commercially and technically feasible way to implement a particular mandatory or optional portion of the normative clauses of the standard was to infringe the patent claim; . . . and (2) the patent claim includes, at least in part, technology that is explicitly required by or expressly set forth in the standard (i.e., that the patent claim does not recite only Enabling Technology).”  Id. at *10.

FTC Finalized Decision And Order In Google And Motorola Mobility Case – On July 23, 2013, the FTC issued a final Decision and Order in the In re Motorola Mobility LLC, and Google Inc., Docket No. C-4410, permitting Motorola/Google to seek Covered Injunctive Relief only for alleged infringement of a FRAND patent against a potential licensee who:  “1. is outside the jurisdiction of the United States District Courts …; 2. has stated in writing or in sworn testimony that it will not license the FRAND Patent on any terms; PROVIDED THAT for the purposes of this paragraph, challenging the validity, value, Infringement or Essentiality of an alleged infringing FRAND Patent does not constitute a statement that a Potential Licensee will not license such FRAND Patent; 3. refuses to enter a License Agreement covering the FRAND Patent on terms that have been set in the Final Ruling of a Court or through Binding Arbitration; or 4. Does not provide the written confirmation requested in a FRAND Terms Letter within thirty (30) days …; PROVIDED, HOWEVER, that Respondents shall not assert in any Court that such written confirmation constitutes a specific agreement to license on any particular terms.”  The FTC initially issued a draft Decision and Order on January 3, 2013, and following a public comment period, the FTC made technical modifications to several provisions in the Decision and Order, including those pertaining to the arbitration process to resolve disputes over FRAND terms.

Comments Support Modification To Procedures Used By CBP To Enforce ITC Exclusion Orders – In response to a request from U.S. Intellectual Property Enforcement Coordinator for public comments by July 21, 2013 (78 Fed. Reg. 37242-43) on improving the procedures used by U.S. Customs and Border Protection (“CBP”) to enforce exclusion orders issued by the U.S. International Trade Commission (“ITC”), several associations, including Intellectual Property Owners Association and U.S. International Trade Commission Trial Lawyers Association, and private parties, outlined a number of recommendations.  Among their concerns are:  (i) ITC, which is involved in the underlying investigations and issues the exclusion orders, should take a more active role in the procedures to enforce such exclusion orders; (ii) CBP relies on ex parte processes to determine whether a new, nonadjudicated product or redesign is noninfringing and thus falls outside the scope of the exclusion order; and (iii) although CBP prepares “field instructions” to the ports of entry to describe the scope of what is being excluded, the instructions are not shared with the parties to the investigation.  Recommendations include, inter alia:  (i) ITC should provide more guidance within the exclusion orders themselves and/or take an expanded role in enforcement; (ii) CBP should create an inter partes procedure when it encounters products that it suspects are in violation of an exclusion order and provide notice to the complainant rightsholder to participate in such procedure; and (iii) CBP should be required to seek input from both complainants and respondents on field instructions.

Federal Circuit Does Not Sponsor Or Endorse Advisory Council E-Discovery And Claim Limitation Model Orders – On August 1, 2013, the Federal Circuit issued the following Statement: “Model orders concerning e-discovery and limitations on claims and prior art were posted on the court’s website.  Those orders have now been removed since the court has not sponsored or endorsed the orders.  In light of the court’s determination, the advisory council should not be viewed as having sponsored or endorsed these orders on behalf of the court.”  The statement appeared after the Advisory Council’s July 22 publication of a Model Order Limiting Excess Patent Claims And Prior Art (“Limitations Model Order”), adopted a phased approach to limiting the number of asserted claims and prior art references:  In the first phase, plaintiffs must select 10 claims per patent, and 32 claims total, 40 days after production of “core” technical documents, while defendants are limited to 12 prior art references per patent and 40 references total.  After a claim construction order issues, plaintiffs must select 5 claims per patent, and not more than 16 total, while defendants must select 6 prior art references and 20 references total.  The Advisory Council’s 2011 E Discovery Model Order proposing limitations on e-discovery, including on the number of record custodians and search terms for e-mail production, had been adopted by many courts.  The Advisory Council’s Model Order Committee includes Federal Circuit Chief Judge Rader, several Article III judges, and ITC ALJ Essex.