ITC Section 337 Update – July 2014

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Commission Affirms No Domestic Industry Based On Research And Development In 859 Investigation – On July 21, 2014, the Commission issued a Notice To Affirm In Part, Reverse In Part And Vacate In Part The Final Initial Determination Finding No Violation in Certain Integrated Circuit Chips And Products Containing The Same, Inv. No. 337-TA-859.  The Commission affirmed in part Judge Dee Lord’s March 21, 2014 final Initial Determination finding no violation, including Judge Lord’s finding that no domestic industry exists under 19 U.S.C. 1337(a)(3)(C) based on research and development despite determining that claims 1-10 of the asserted ‘928 patent were infringed by accused chips made with bond pad structures, and at least claim 10 was valid and infringed.    Prior to rendering its decision, the Commission issued a Notice on May 29, 2014 (79 Fed. Reg. 30878-80) including seventeen questions to the parties, including inquiring:  (i) how Complainant Realtek’s research and development in the United States involves or relates to articles protected by the asserted patent, citing Microsoft Corp. v. ITC, 731 F.3d 1354, 1362 (Fed. Circ. 2013); and (ii) requesting identification of each investment in the United States in exploitation of the asserted patent and explaining why the investments, as a whole, are substantial.  Another issue in the investigation raised by Respondents LSI and Seagate was that Realtek failed to present evidence that its alleged domestic industry activities are ongoing, and therefore, Realtek is not entitled to a remedy, and if a limited exclusion order were to issue, a quarterly reporting requirement would be appropriate to ensure that a domestic industry continues to exist in the future.  A public version of the Commission’s Opinion has not yet been released.        

The Federal Circuit Vacates Commission Decision That Reviewed A Non-Final ALJ Order – In Align Technology, Inc. v. Int’l Trade Comm’n, 2013-1240 (Fed. Cir., July 18, 2014), the Federal Circuit held that the Commission’s decision to terminate Inv. No. 337-TA-562 based on the Commission’s review of a non-final ALJ order exceeded the Commission’s authority.  Specifically, the Commission’s decision overturned an order by former ALJ Rogers denying ClearCorrect’s motion to terminate an enforcement proceeding into whether ClearCorrect Operating LLC (“ClearCorrect”) breached a 2006 agreement with Align Technology, Inc. (“Align”) not to import products protected by Align’s U.S. patents.  Align argued, and the Federal Circuit agreed, that ALJ Rogers’ ruling was a non-final order, and thus not subject to review by the Commission, unless the respondents moved for an interlocutory appeal, which they did not.  The Federal Circuit found that the Commission exceeded its authority under Rule 210.24 by reviewing the ALJ order – which was not an initial determination – denying and not granting a motion to terminate the investigation.  The Federal Circuit also noted that although the Commission could have amended or waived its rules to review the ALJ order for good reason, the Commission never attempted to do so.

Fifth Annual “Live At The ITC” Forum To Be Held July 30 – On July 30, 3:00-8:00 p.m., King & Spalding LLP will host the ABA’s fifth annual “Live At The ITC” forum on Section 337 and other developments at the U.S. International Trade Commission.  The forum will consist of two round-table discussions featuring ITC Commissioners and former attorneys from the Office of Unfair Import Investigations (OUII), as well as remarks by current OUII Director Margaret Macdonald.  The first round-table discussion, “An Intimate Q&A Session With The ITC Commissioners,” will feature a discussion on topics including recent substantive and procedural developments at the Commission.  The Commissioners are open to responding to questions that do not touch on current issues for decision before the Commission.  Questions for the Commissioners may be submitted in advance to James Altman (jaltman@fostermurphy.com) and Jeffrey Telep (jtelep@kslaw.com).  Director Macdonald will discuss various roles that OUII plays in Section 337 investigations and how to work effectively with OUII.  Rounding out the evening, the second round-table discussion, “Jurisdiction Under Section 337,” will examine issues including non-traditional uses of Section 337 to protect trade secrets, copyrights, and trademarks, as well as how recent investigations involving electronic imports may affect the Section 337 landscape.  Refreshments will be served immediately after the second round table.  To register, click here.

Topics:  ITC, Patent Infringement, Patent Litigation, Patents, Section 337

Published In: Administrative Agency Updates, Antitrust & Trade Regulation Updates, Civil Procedure Updates, Intellectual Property 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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