ITC Section 337 Update – February 2014

by King & Spalding
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Commission Petitions Federal Circuit For Panel Rehearing And Rehearing En Banc In Suprema Case – On Friday, February 14, 2014, the Commission filed a Combined Petition for Panel Rehearing and Rehearing En Banc in Suprema v. International Trade Commission, 2013 WL 6510929, Appeal No. 12-1170  (Fed. Cir. December 13, 2013).  In Suprema, a split panel of the Federal Circuit made new law by vacating the exclusionary remedy in Certain Biometric Scanning Devices, Inv. No. 337-TA-720, and 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."  The Commission’s Petition for rehearing makes four points in opposition to the split panel’s holding:  (1) the panel’s holding that infringement under Section 271(b) “is untied to an article” contradicts Supreme Court precedent in Grokster and Federal Circuit precedent; (2) the panel’s holding that liability for induced infringement does not attach at the time of importation contradicts Supreme Court precedent in Grokster and Federal Circuit precedent in Standard Oil; (3) the panel’s holding ignores Congressional endorsement of the Commission’s interpretation of its statute and fails to give required deference to the Commission; and (4) the panel misinterpreted the Commission’s remedial orders.  Amicus briefs are due in fourteen (14) days; and limited to ten (10) pages.  There is no deadline for the Federal Circuit’s response to the Commission’s Petition.

In En Banc Decision, Federal Circuit Declines To Change De Novo Review Of Patent Claim Construction – On February 21, 2014, the Federal Circuit decided en banc in Lighting Ballast Control LLC v. Philips Electronics North America Corp. Appeal No. 12-1014, not to change its long-standing practice of reviewing all claim construction rulings de novo on appeal, overruling proponents supporting that giving more deference to lower courts would make patent litigation more predictable.  The issue sharply divided the en banc Court, but the majority in the 6-4 decision concluded that the current de novo review standard for all claim construction rulings has worked well since it was established in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) and that there was no reason to change it.  Under Cybor, claim construction was a matter of law that received de novo review on appeal without any deference to a district court’s ruling.  The majority held the criteria for departing from stare decisis and changing existing claim construction methodology or abandoning de novo review had not been met.  The Federal Circuit‘s en banc decision also applies to Commission decisions in Section 337 investigations. However, the decision is now ripe for potential review by the U.S. Supreme Court.

White House Announces Steps To Strengthen Enforcement Of ITC Exclusion Orders – On February 20, 2014, the White House issued a Press Release announcing “progress on a series of initiatives designed to combat patent trolls and further strengthen our patent system and foster innovation” that the Administration had Announcedin June 2014.  Strengthening ITC exclusion orders is among the areas on which the Administration has been working to implement executive actions, according to the release, which states that the Office of the U.S. Intellectual Property Enforcement Coordinator launched an interagency review and “will, in the coming months, deliver its recommendations on refining” the process for making the enforcement of ITC exclusion orders “more transparent, effective, and efficient.”

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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