ITC Section 337 Update - May 2014

by King & Spalding
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Federal Circuit Holds That There Is No Per Se Rule That Injunctions Are Not Available For Standard Essential Patents – In an Opinion by Circuit Judge Reyna on April 25, 2014 in Apple Inc. v. Motorola Mobility Inc., Appeal Nos. 12-1548, 12-1549, a Federal Circuit panel comprising Chief Judge Rader and Circuit Judges Prost and Reyna reversed and remanded for trial the summary judgment decisions, following a Daubert hearing, of U.S. Circuit Judge Posner (sitting by designation in the Northern District of Illinois) finding the testimony of both parties’ damages experts was inadmissible and cancelling a planned trial in 2012 on the ground that neither side could prove it was entitled to damages.  The Federal Circuit panel found it was the duty of the jury, not the judge, “to weigh facts, evaluate the correctness of conclusions, impose its own preferred methodology, or judge credibility, including the credibility of one expert over another.”  Id. at 40.  The majority panel also affirmed Judge Posner’s summary judgment decision to bar Motorola from seeking an injunction on a standard essential patent.  However, in a notable part of the majority panel’s Opinion,  the majority panel found that “To the extent that the district court applied a per se rule that injunctions are unavailable for SEPs, it erred.  While Motorola’s FRAND commitments are certainly criteria relevant to its entitlement to an injunction, we see no reason to create, as some amici urge, a separate rule or analytical framework for addressing injunctions for FRAND-committed patents. The framework laid out by the Supreme Court in eBay, as interpreted by subsequent decisions of this court, provides ample strength and flexibility for addressing the unique aspects of FRAND committed patents and industry standards in general.”  Id. at 71.  Chief Judge Rader dissented only on this issue, asserting that there was evidence that Apple may have been unwilling to pay a FRAND rate and Motorola should have been given an opportunity to prove that at trial.  

Respondents Request Sanctions In 892 Investigation Based On Complainant’s Last-Minute Withdrawal Of Complaint – In Certain Point-To-Point Network Communications Devices And Products Containing Same, Inv. No. 337-TA-892, Respondents Toshiba and LG filed a Submission in response to Complainant's motion to withdraw its complaint asking the Commission to sanction Complainant, Straightpath, for its last-minute motion to withdraw.  Toshiba and LG contend that Straighpath is seeking to withdraw its complaint on the eve of trial after forcing them and other third parties to incur substantial defense costs and after coming to the realization that its patents were likely invalid.  In particular, Toshiba and LG ask the ALJ to “state in a precedential termination order that, should Straight Path file a new complaint against Respondents in the future concerning either the same devices accused or the Netflix provided functionality accused, its misconduct in the termination here should be investigated by the commission prior to the institution of any complaint.”  Toshiba and LG also invite the ALJ to consider other sanctions. 

Federal Circuit Grants Rehearing En Banc In Suprema – On April 13, 2014, the Federal Circuit granted the petitions for rehearing en banc filed by the U.S. International Trade Commission and Cross Match Technologies, Inc. in Suprema, Inc. and Mentalix, Inc. v. U.S. Int'l Trade Comm'n et al., Court No. 2012-1170.  As previously reported in prior ITC Section 337 Updates, the Federal Circuit issued a split panel Opinion in Suprema v. ITC, 2013 WL 6510929, Appeal No. 12-1170 (Fed. Cir. December 13, 2013), holding that "an exclusion order based on a violation of 19 U.S.C. §1337(a)(1)(B)(i) may not be predicated on a theory of induced infringement under 35 U.S.C. §271(b) where direct infringement does not occur until after importation of the articles the exclusion order would bar."  We expect that the Federal Circuit will address this issue on en banc review.  The Federal Circuit also denied the petitioners request for panel rehearing, vacated the panel's December 13, 2013 opinion and judgment, and ordered that an en banc briefing schedule will be issued at a later date.

Rhonda Schmidtlein Sworn In As New ITC Commissioner – On April 28, 2014, Rhonda K. Schmidtlein was sworn in as the most recent Commissioner on the U.S. International Trade Commission for the term expiring December 16, 2021.  According to her official biography, Commissioner Schmidtlein served as an expert consultant to the World Bank for the two years immediately prior to her appointment.  From 2005-2011, she served as the Director of the Public Company Accounting Oversight Board.  Before that, Commissioner Schmidtlein served in the General Counsel's office of the United States Trade Representative and as a trial attorney at the United States Department of Justice.  Commissioner Schmidtlein succeeds Commissioner Shara L. Aranoff.

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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