More Patent Trouble for HTC and Motorola at the ITC

On Thursday, June 7, 2012, the U.S. International Trade Commission (ITC) announced that it had launched an investigation into whether certain RF Micro Devices, Inc. (RFMD) products infringe patents owned by Peregrine Semiconductor Corporation, a leading provider of high-performance radio-frequency (RF) integrated circuits (ICs). The action and investigation initiated by the ITC include Motorola Mobility, Inc. and HTC Corporation (HTC), whose products incorporate the alleged infringing RF ICs. Peregrine holds numerous U.S. and foreign patents based on its work in developing and manufacturing high-performance products that can be produced using standard CMOS-based semiconductor manufacturing processes. These patented innovations allow RF solutions to be produced with a combination of high levels of monolithic integration and performance, small size and low power consumption.

This ITC investigation is the result of complaints filed by Peregrine by and through Rosa Jeong, an attorney in the Washington, DC, offices of Greenberg Traurig.  The first complaint was filed with the ITC on February 14, 2012 and an amended complaint filed on May 11, 2012.  The ITC specifically identified the amended complaint filed by Peregrine on May 11, 2012 as the complaint that provoked the investigation. The amended complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain radio frequency integrated circuits and devices containing same that infringe patents asserted by the complainant.

The complaint filed by Peregrine requests that the ITC issue an exclusion order and cease and desist orders, which would prevent the importation and sale of infringing products in the United States. More specifically, the complaints allege that certain RFMD semiconductor devices infringe Peregrine patents related to silicon-on-insulator (SOI) technology for RF ICs. The investigation involves five Peregrine patents and 38 separate patent claims.

By instituting this investigation (337-TA-848), the ITC has not yet made any decision on the merits of the case. The USITC’s Chief Administrative Law Judge will assign the case to one of the ITC’s six administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.

The ITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation the ITC will set a target date for completing the investigation. ITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

Pursuant to Section 337, the Commission is authorized to issue two types of remedies to complainants, namely: (1) exclusion orders; and (2) cease and desist orders. An award of money damages is not available as a remedy for violation of Section 337, which is why ITC filings are typically associated with concurrent district court patent infringement proceedings.  Of course an Order by the ITC can and does provide significant leverage when accused infringing devices are found to infringe and the patent owner is able to obtain relief. Nevertheless, only a United States Federal District Court may issue money damages.

Because the ITC offers a much faster proceeding it is becoming quite popular for patent owners to see exclusion orders for alleged patent infringement, thereby stopping the alleged ongoing infringement, and simultaneously filing a patent infringement action seeking monetary damages. This gives the plaintiff two bites at the apple, so to speak, and can create leverage for the patent owner if successful at the ITC.  Even if the patent owner is not successful at the ITC there is another opportunity to seek injunctive relief because District Courts have the authority to provide both money damages and injunctive relief.  The District Court is also not bound by the ITC determination.

In the situation where the patent owner successfully obtains an exclusion order the ITC will direct the U.S. Customs and Border Protection to exclude articles from entry into the United States. A cease and desist order directs the defendant in the Commission investigation to cease its unfair acts, including selling infringing imported articles out of U.S. inventory. Unlike exclusion orders, cease and desist orders are enforced by the Commission, not by U.S. Customs.

“We are very pleased that the ITC has taken this matter seriously and will investigate our complaints,” said Jim Cable, president and chief executive officer. “The employees of Peregrine have spent 20 years of intensive research and development activity to bring our proprietary UltraCMOS® process and design innovations to the RF marketplace. We are steadfast in our position to protect that investment on behalf of all the stakeholders of Peregrine.”

HTC was also the subject of yet another complaint filed at the ITC earlier in the week when Apple filed another complaint seeking an ITC investigation relating to certain personal data and mobile communications devices and related software.  See Apple files third ITC complaint against HTC. This latest HTC – Apple matter at the ITC comes not he heels of Apple winning an Order from the ITC in December against HTC, which required that ITC develop a work around of the patents found to be infringing.  The ITC gave HTC four months to develop the work around, and now Apple is again alleging patent infringement and seeking an exclusion order from the ITC against HTC.

Motorola has had its own troubles of late at the ITC as well.  Less than a month ago the ITC issued an exclusion order relative to certain Android-based Motorola Mobility devices that infringe U.S. Patent No. 6,370,566, which is owned by Microsoft.  See ITC orders import ban against Motorola Android devices.  The ‘566 patent covers innovations relating to a mobile device that provides the user with the ability to schedule a meeting request from the mobile device itself.

Indeed, HTC and Motorola are not strangers to fighting patent battles at the ITC.  The ITC is becoming a hot-bed of patent infringement litigation activity and there is no sign that this will be changing any time soon.  Thus, patent infringement disputes will be played out at the ITC, in the Federal District Courts and at the United States Patent and Trademark Office in reexamination proceedings, with rulings in each forum eventually working their way to the United States Court of Appeals for the Federal Circuit.  What a mess!  Fighting patent battles on multiple fronts is certainly good for lawyers, but definitely creates a real strain on the Judicial System that must address, re-address and re-re-address issues brought in a variety of forums.



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