Looking Back: IP at the ITC in 2023

The intellectual property regime of the International Trade Commission (ITC) made mainstream news this year with its ban on Apple Watch importation and sales in the dispute between Masimo Corporation and Apple. While that dispute is ongoing and the subject of much coverage already, here are five other key IP cases with a variety of important rulings for parties at the ITC—particularly some outside of the typically patent-centric docket.

1. Certain Raised Garden Beds and Components Thereof, Investigation No. 337-TA-1334 – Administrative Law Judge Doris Johnson Hines, in her second Final ID since being appointed to the ITC bench, agreed with the Complainant in recommending a 12-month Limited Exclusion Order for violations of Section 337 based on the importation of products due to misappropriation of three trade secrets related to eight-inch raised garden bed configurations, the protective film used to protect the finish and the design to generate curves or bends in the panels, as well as for unfair competition and false advertising for related advertisements. The alleged misappropriation was based on a disclosure pursuant to an oral agreement before a confidentiality agreement was entered into, which ALJ Hines found was a reasonable measure to guard secrecy under the circumstances.

While trade secret matters are still rare for the ITC, they are being brought with increasing frequency over the past five years, which this decision will no doubt support.

2. Certain High-Performance Gravity-Fed Water Filters and Products Containing the Same, Investigation No. 337-TA-1294 – The Commission vacating a number of validity and infringement findings as to the sole asserted patent for which complainant Brita LP (“Brita”) alleged constituted a violation, instead finding various limitations (1) indefinite, (2) lacking written description, (3) not enabled, and finding other disputes moot. The Commission determined that the claim term “filter usage lifetime claimed by a manufacturer or seller of the filter” was indefinite because the claim uses “claimed” but the ALJ’s construction was that this mean the “total number of gallons of water that a manufacturer or seller has ‘validated””, which the Commission found “claimed” to be subject and not equivalent to “validated,” which implies some measure that would need to be defined in the patent. Interestingly, Commission Stayin would affirm the construction because Respondents waived any objection by not offering a contrary construction, and explaining that the majority offers no explanation as to waiver and credits arguments that were not presented to the ALJ at Markman.

Parties seeking to argue that certain claim terms are indefinite can rely on this ruling, especially where the terms indicate that further information must be provided in the patent.

3. Certain Automated Put Walls and Automated Storage and Retrieval Systems, Associated Vehicles, Associated Control Software, and Component Parts Thereof, Investigation No. 337-TA-1293– The Commission affirmed the Chief ALJ’s. Final Initial Determination of infringement of Complainant’s two patents. The technology at issue were “automated put walls”, which are systems used in e-commerce for automatically gathering, sorting and packaging and shipping. One of the key aspects of the decisions was that respondents challenged the complainant’s satisfaction of the economic prong of the domestic industry requirement, where complainant alleged that they had four R&D facilities in the U.S. The Commission took no position on the ALJ’s findings that where the complainant is not merely an importer, expenditures on sales, human resources, and travel (or other non-warehouse automation activities) can be included as part of the domestic industry. However, Commissioners Karpel and Schmidtlein would affirm the inclusion if it related to the articles that practice the asserted patents. The Commission did not affirm that a significant expenditure on R&D per se in the U.S. can be dispositive on the economic prong determination with no context-dependent considerations, which the Commission recognized would be a departure from Federal Circuit precedent and prior Commission decisions. However, the Commission found that U.S. expenditures could be compared to foreign activities for context, and that a growing amount of U.S. sales was contextually-significant, and a complainant did not need to compare its expenditures to the market. Moreover, the Commission did not think it was significant to this evaluation that complainant failed to show a domestic industry as of the date of the Complaint, instead of the most recent fiscal year.

If a complainant can substantiate that it has employees and an operating business in the United States, there are a variety of ways it can substantiate the economic prong of the domestic industry requirement. In addition, investments in non-technical aspects can be included, at least by this ALJ’s findings, if they related to the articles practicing the asserted patents.

4. Certain Casual Footwear and Packaging Thereof, Investigation No. 337-TA-1270– The Commission limited the Crocs trademark dramatically, issuing an exclusion order against some defaulting respondents but not against retailer Hobby Lobby and two small brands, Amoji and Orly Shoe (who sold the shoes to Hobby Lobby). The Commission affirmed the opinion of ALJ Moore that the marks do not cover the overall look of the shoe, which is a common or generic design element, and are limited to the specific patterns of 13 round holes in the horizontal portion of the shoe and a specific patterns of seven trapezoidal holes in the vertical portion of the upper. Using the Dupont factors (from In Re Dupont DeNemours & Co., 476 F.2d 1357 (CCPA 1973), the Commission held that the pattern and location of the holes were arranged differently and that the prices and tags were different (Crocs selling for $40 or more, while the accused shoes sold for $6-$10 for Orly/Hobby Lobby and $26-$30 for Amoji). The Commission also pointed out that while Crocs have a famous design, the evidence is that the fame is associated with the overall look of the shoes and not for the trademarked aspects, and also pushed back against substantial surveys, with extensive critiques, as well as ambiguous and weak evidence of actual confusion. Lastly, the Commission failed to credit the “gotcha” moment in a deposition where one witness confused the two shoes.

Complainants asserting trademark infringement must have a strong case with evidence of a likelihood of confusion to obtain the high bar of an exclusion order.

5. Certain Robotic Floor Cleaning Devices and Components Thereof, Investigation No. 337-TA-1252– The Commission affirmed in part and modified in part ALJ McNamara’s initial determination to ban imports of SharkNinja robot vacuums, finding a violation related to one of four asserted patents, but reversing the finding as to a second patent, and mooting the findings as to a third because of an intervening Patent Trial and Appeal Board (PTAB) decision during the period of review. The issue was whether the respondents’ devices infringed the navigation technology of complainant iRobot. Of particular note was that the Commission overturned the ALJ’s finding that iRobot has established the technical prong of the domestic industry requirement as to a valid claim, finding that the accused products do not practice one of the limitations recited because they do not react to “left” and “right” signals, but instead to a different “halo” signal, whereas the ALJ found that the limitations was practiced because the devices react to at least the “halo” signal (while the “left” and “right” signals were also operating). The Commission also conducted an extensive analysis of the technical prong of the terms “receiving system” and “autonomously identify,” comparing the functionality of the practicing products to the infringing products.

Complainants must support that the asserted claims can apply to both the alleged domestic industry products as well as the infringing products and must be careful in describing the functionality of each product to ensure that both requirements are met.

Takeaways

The ITC suffered a noticeable decline in investigations in 2023, down to 30 to 57 in 2022.  Expect that number to dramatically increase in 2024 to return to higher levels, as there were no less than 47 investigations started each year since 2016. This will likely be aided by the addition of ALJ Hines so that there is a full roster to handle matters, the longest-serving being MaryJoan McNamara, appointed in 2015. With the high profile Masimo investigation ongoing, the patent world will be closely watching the ITC for many months to come.

Image Source: Deposit Photos
Author: billperry
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