ITC Section 337 Update – August 29, 2014

by King & Spalding

Patent Bar Associations And Tech Industry Divided On How Federal Circuit Should Decide Suprema – On August 18, 2014, the American Intellectual Property Lawyers Association (“AIPLA”), Intellectual Property Owners Association (“IPO”), Dell Inc.; Adobe Systems, Inc.; Ford Motor Co.; Google Inc.; Hewlett-Packard Co.; LG Display Co., Ltd.; LG Electronics, Inc.; Netflix, Inc.; Samsung Electronics Co., Ltd.; Netflix, Inc.; Samsung Electronics Co., Ltd.; And SAP America, Inc. (“some of the world’s leading technology companies”) and Microsoft Corporation (“Microsoft”) each filed an Amicus Brief in Suprema v. ITC, No. 12-1170 (Fed. Cir.)  Both AIPLA and IPO advocate that the en banc Federal Circuit should reach a different result than the result advocated by some of the world’s leading technology companies and Microsoft (collectively “Tech Industry”).   Both AIPLA and IPO, who each take no position on the outcome of the case, argue that the ITC should have the authority under 19 U.S.C. §1337 to ban importation of articles that will result in induced infringement of a method patent, even when direct infringement will take place after importation, as long as the requirements for inducement are met.  In contrast,  the Tech Industry argue that the Federal Circuit panel’s decision should be re-affirmed because the panel correctly held that Section 337 cannot apply to a claim of inducement if the infringement does not occur at the time of importation.  Microsoft also argued that “the Commission has exceeded its authority under Section 337(a)(1)(B)(i) … by asserting authority over the alleged direct or indirect infringement of method claims.”   

Northern District Court Of Illinois Contemplates Holding Asserted Patent Unenforceable Based On Breach Of FRAND Commitment – On July 23, 2014, Judge James Holderman issued an Order to Show Cause and Jury Verdict in Fujitsu v. Tellabs, Consolidated C.A. Nos. 1:09-cv-04530, 1:12-cv-03229, 1:13-cv-04991 (N.D. Ill.), where a jury found that Tellabs proved Fujitsu agreed it was willing to grant a license of Fujitsu’s ‘737 patent on FRAND terms in compliance with the International Telecommunication Union’s (“ITU”) Patent Policies; that Fujitsu’s ‘737 patent is essential to one or more of the ITU’s recommended standardized technology specifications; and that Fujitsu willfully breached its agreement that it was willing to grant a license of Fujitsu’s ‘737 patent’s technology on FRAND terms by, inter alia, not offering to grant Tellabs a license on FRAND terms and filing a lawsuit against Tellabs seeking injunctive relief based on alleged infringement of the ‘737 patent.  The Order requires Fujitsu to show cause why the ‘723 patent should not be held by the Court to be unenforceable as to Tellabs.  Fujitsu filed a Response to the Court ‘s Order on August 18, asserting that “patent unenforceability is a remedy that has never before been invoked against a patent owner in Fujitsu’s situation – and for good reasons….Setting new precedent to the contrary would cast a chill over the willingness of patent owners to participate in SSOs.”  Tellabs’ response is due September 8, with a status conference scheduled for September 23, 2014.

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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