Posts Tagged: "International Trade Commission"

In 2016, the ITC had its busiest year since 2011–which was the peak of the “smartphone wars”–in terms of new investigations instituted. In 2016, 55 complaints were filed, notably, 16 of these complaints were filed by foreign companies. The ITC had an above average settlement rate of 60%; normally the settlement rate is approximately 50%. Last year also had a slight growth in nonpatent investigations which includes antitrust, trade secret, copyright and Lanham Act violations. Despite the increased workload, the average target date was 15.8 months from institution date to final Commission opinion.

On Wednesday, January 18th, the U.S. International Trade Commission (ITC) began a probe into a Section 337 patent infringement complaint involving graphics processors and memory controllers against a collection of 17 firms, according to Reuters. These firms include some tech giants in the world of semiconductors and electronics, including Qualcomm, Inc. (NASDAQ:QCOM), Sony Corp. (NYSE:SNE), LG Electronics (KRX:066570), Lenovo Group (HKG:0992), Motorola Mobility LLC and Advanced Micro Devices, Inc. (NASDAQ:AMD) The Section 337 complaint was filed on December 16th by ZiiLabs Ltd., a Bermuda subsidiary of Hong Kong’s Creative Technology Asia Limited.

A patent and copyright squabble involving two players in the networking space for information technology (IT) development, which has ramped up in recent years, saw an interesting round of events play out in federal court and regulatory agencies this past December. At the center of the brouhaha is American networking and telecommunications giant Cisco Systems (NASDAQ:CSCO) of San Jose, CA, which has filed multiple legal actions against Arista Networks (NYSE:ANET) of Santa Clara, CA, alleging that Arista has moved into the networking equipment market using technologies developed and patented by Cisco, specifically through former Cisco employees who founded Arista.

A complaint regarding Elekta’s radiotherapy and cancer treatment technologies was filed by Palo Alto, CA-based Varian Medical Systems (NYSE:VAR) in September 2015. The complaint alleged that Elekta violated 19 U.S.C. § 337 which governs penalties for unfair practices in import trade. Varian alleged that Elekta’s medical systems infringe upon a series of six U.S. patents held by Varian.

American semiconductor giant Qualcomm has been taking actions in recent months against a Chinese smartphone developer whose stature has been on the rise. In a press release dated October 14th, Qualcomm announced that it had filed a complaint with the U.S. International Trade Commission (ITC) against Meizu, a portable electronics manufacturer founded in 2003 and headquartered in the Chinese city of Zhuhai. Along with the ITC complaint, Qualcomm also filed a patent infringement action against Meizu in Germany’s Mannheim Regional Court and initiated a infringement-seizure action in France to begin collecting evidence for a potential future patent infringement action in that company.

In late 2014, Nike Converse Inc. launched an aggressive attack in the U.S. District Court in Brooklyn against companies including Walmart, Under Armour and Ralph Lauren for infringing upon Converse’s signature Chuck Taylor shoe. Nike Converse sued a total of 31 companies for copying the rubber “bumper” running around the front, a “toe cap” on the top of the shoe above the bumper, and lines or stripes running around the sides of the classic kick. Many of us have either owned or seen the Chuck Taylor and can identify these unique traits.

It seems difficult to reconcile the Respondent’s principal argument that two standards should still apply: that is, that the PTAB should be permitted to continue applying its policy-derived broad BRI standard for construing patent claim scope in Congressionally mandated “adjudicative” IPR proceedings while still using the lower preponderance of the evidence standard provided under 35 U.S.C. § 316(e). The notion that the USPTO may “infer” such intent to also apply the BRI in the absence of any express guidance from Congress was weak, at best. Especially because having two such claim construction standards applied by Article III courts and the ITC on the one hand, and the USPTO’s unilateral application of an “examination” claim construction standard in an intended “adjudication” setting on the other hand, has already led to inequitable and presumably non-appealable results.

The Subcommittee is Chaired by Congressman Darrell Issa (R-CA), who has been an outspoken advocate for the need for more patent reform in order to provide relief from those he believes are abusing the patent litigation system — those sometimes called patent trolls. Indeed, from the start of the Thursday’s hearing, the debate regarding patent infringement at the ITC was couched in the language of the patent troll debate. For example, during his opening statement Congressman Issa rather imperiously stated: “for purposes of my opening statement ‘plaintiff’ and ‘troll’ will be interchangeable.” Issa, himself a patent owner, was forced to litigate against companies that pirated technology covered by his patents. As a patent owner forced to sue at numerous infringers, it would seem that Congressman Issa believes that patent owner and inventor Issa was a patent troll.

On November 2, 2015, San Francisco-based Fitbit Inc. filed a Section 337 complaint with the International Trade Commission (ITC) against AliphCom (d/b/a Jawbone) and BodyMedia, Inc. (Investigation No. ITC-337-3096). In a parallel proceeding in the U.S. District Court for the District of Delaware, Case No. 1:15-CV-00990, Fitbit alleged infringement of three patents assigned to Fitbit—namely, U.S. Patent Nos. 8,920,332 (titled Wearable Heart Rate Monitor); 8,868,377 (titled Portable Monitoring Devices and Methods of Operating Same); and 9,089,760 (titled System and Method for Activating a Device Based on a Record of Physical Activity). According to the district court complaint, Jawbone’s products associated with components of its UP series of trackers indirectly infringe the patents-at-issue. Fitbit hopes that it will be successful in preventing the import and sale in America of wearable activity tracking devices sold by Jawbone by requesting the ITC to issue a limited exclusion order and a cease and desist order.

This year our panel of industry insiders is quite diverse, with commentary from Bob Stoll (Drinker Biddle), Ashley Keller (Gerchen Keller), Paul Morinville (US Inventor), Alden Abbot (Heritage Foundation), Marla Grossman (American Continental Group) and Steve Kunin (Oblon). Unlike last year where there was near unanimous agreement that the Supreme Court’s decision in Alice v. CLS Bank was the biggest moment of the year, this year our panel of industry experts focused on a variety of different matters. There was one recurring theme, however. The inability of patent reform to advance on Capitol Hill was undoubtedly one of the biggest stories of the year.

Reversing the panel en banc, the Federal Circuit found that the ITC does have jurisdiction to issue an exclusion order predicated on induced infringement. Under Chevron step two, the Court deemed that the ITC’s interpretation of Section 337 was reasonable because it was “consistent with the statutory text, policy, and legislative history of Section 337,” as “Section 337 contemplates that infringement may occur after importation.” Further, the panel’s interpretation of Section 337 would unnecessarily “eliminate relief for the unfair trade act and induced infringement” by allowing foreign entities “to circumvent Section 337 by importing articles in a state requiring post-importation combination or modification before direct infringement could be shown.”

With Republicans in control of both Chambers, the Administration may finally get TPA, fast- track negotiating authority for trade agreements that allows the President to negotiate international agreements that Congress can approve or disapprove but cannot amend or filibuster. Senator Hatch will likely have an ally in incoming Senate Majority Leader Mitch McConnell (R- KY), who has signaled that TPA is a pro-business measure that could pass Congress and have the support of the President.