Transcript section 337 ip litigation at the us international trade commission

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SECTION 337 IP LITIGATION AT
THE U.S. INTERNATIONAL
TRADE COMMISSION
Presented to:
Colorado Bar Association, IP Section
Presented by:
Kent R. Stevens
May 8, 2008
Overview of Presentation
•
Background on ITC as an institution
•
Advantages/Disadvantages of ITC Litigation
•
Substantive Elements of a Section 337 Case
•
Procedural Overview of a Section 337 Case
•
Trends
•
Time Permitting: The Downstream Remedy in Broadcom v.
Qualcomm
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Background on the ITC
•
Independent federal agency
•
Responsible for international
trade investigations,
Harmonized Tariff Schedule;
studies and reports for the
President, USTR and the
Congress
•
Relatively small agency (60
million dollar budget, 350
employees); Section 337 as 17%
of activity
•
Six Commissioners appointed
by the President approved by
Senate
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United States International Trade
Commission (cont.)
U.S. International Trade Commission Organization
Chairman
COMMISSION
Office of the
Administrative
Law Judges
Office of
the General
Counsel
Office of the
Director of
Operations
Office of
the Secretary
Office of
Unfair
Import
Investigations
Source: www.usitc.gov
Section 337 responsibilities
Non-Section 337 activity
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United States International Trade
Commission (cont.)
ITC Administrative Law Judges
Section 337 cases assigned to Administrative Law Judges
Career civil servants; independence and authority per the
Admin. Proc. Act
Procedures akin to Federal Civil Procedure and District Court practice
Procedural rules similar to Fed. Rules (19 C.F.R. Chapter II, Part 210)
Judges Ground Rules provide key guidance, reflect substantial experience
Trials akin to District Court bench trials
Exception: ITC Judges follow but not bound to Federal Rules of Evidence
ITC Judges more likely to admit hearsay
ITC evidentiary record typically voluminous
ITC Judges render “Initial Determinations” that are subject to full ITC review
ITC Judges will render an opinion on all issues
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United States International Trade
Commission (cont.)
ITC Administrative Law Judges (cont.)
•
Honorable Paul J. Luckern
–
Georgetown (J.D. 1959)
–
B.S. Degree Chemistry
–
M.S. Degree Organic Chemistry (Cornell)
–
Patent Examiner (1956 – 1960)
–
ALJ since 1984
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United States International Trade
Commission (cont.)
ITC Administrative Law Judges (cont.)
•
Honorable Charles E. Bullock
–
Appointed as of May 5, 2002
–
Since 1996 was an ALJ for US EPA
–
George Washington University (J.D. 1971)
–
Political Science B.A. from Bucknell University (1968)
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United States International Trade
Commission (cont.)
ITC Administrative Law Judges (cont.)
•
Honorable Carl C. Charneski
–
Appointed as of April 16, 2007
–
Previously served as ALJ at the U.S. Environmental Protection
Agency from 1995 until his ITC appointment; ALJ at U.S. Social
Security Administration from 1994 to 1995; Trial Attorney with
the Mine Safety and Health Administration of the U.S.
Department of Labor from 1991 to 1994 and appellate attorney
with that agency from 1988 to 1991; Counsel to Commissioner
L. Clair Nelson at the Federal Mine Safety and Health Review
Commission from 1983 to 1988; Attorney in Office of the
General Counsel at the Federal Mine Safety and Health Review
Commission from 1977 to 1983
–
St. John’s University School of Law (J.D.)
–
St. Francis College (B.A.)
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United States International Trade
Commission (cont.)
ITC Administrative Law Judges (cont.)
•
Honorable Theodore R. Essex
–
Appointed in Fall 2007
–
Previously served as ALJ at the Office of Medicare
Hearings and Appeals in Cleveland, Ohio from
November 2006 until his ITC appointment
–
Consultant to Compensation and Pension Service of
Department of Veterans Affairs in Washington, D.C. from
2005 to 2006
–
From 1985 to 2005, served in a variety of positions with
U.S. Air Force
–
Ohio State University (J.D.)
–
Miami University in Oxford, Ohio (B.A.)
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United States International Trade
Commission (cont.)
ITC Office of Unfair Import Investigations (“OUII”)
•
Advises ITC on whether to commence an investigation
–
•
Offers informal pre-filing advice to Complainant on
compliance with pleading rules
Participates as an independent party in an investigation on
behalf of the public interest
–
Serves discovery
–
Takes positions on motions
–
Examines witnesses at depositions and trial
–
Takes position on merits of case
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United States International Trade
Commission (cont.)
•
Why the ITC?
–
Speed
–
IP Expertise
–
Broad Injunctive Remedies
–
Other Benefits (i.e., no counterclaims)
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United States International Trade
Commission (cont.)
•
Speed
–
Statutory responsibility to complete cases quickly
–
Statutory/rule responsibility to adhere to target dates for
completion
ITC Budget Justification FY2006 at 85
Strategies
1.
Meet statutory and key
administrative and court
deadlines, conclude
section 337 investigations
expeditiously, and reduce
the average time to
conclude ancillary
proceedings
Performance Indicators
a.
Investigations are
instituted, target dates
are set, and court
briefs are filed, on time
(OUII/GC)
b.
Final IDs and final
determinations are
issued on their target
dates (GC)
FY 2005 Performance
Goals
FY 2006 Performance
Goals
a.
100% of actions
occur on time
a.
100% of actions occur
on time
b.
100% of actions
occur on time
b.
100% of actions occur
on time
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United States International Trade
Commission (cont.)
•
Speed (cont.)
–
Investigation commenced within 30 days after
Complaint filed
–
Nearly all 12(b) issues resolved by ITC’s 30-day
preliminary investigation
–
ITC serves Complaint and Notice of Investigation
(no delays)
–
Protective Order issues immediately
–
Discovery commences immediately
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United States International Trade
Commission (cont.)
•
Speed (cont.)
–
Judge conducts initial discovery conference
–
Discovery/motions proceed on short deadlines
–
Judges available to resolve discovery disputes
•
–
No competing civil or criminal docket
Average Time To Trial: about 10 months
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United States International Trade
Commission (cont.)
•
IP Expertise
–
Statutory responsibility and budget to conduct IP
investigations for domestic industries
–
ITC Judges as IP comfortable
•
–
Approximately 9/10 cases are patent cases
ITC has internal review process
•
Multiple attorneys involved in determining whether
to adopt or modify Judge’s opinion before issuance
of final ITC opinion
–
ITC defends its own opinions at the Federal Circuit
–
Result: High Percentage of ITC Decisions Affirmed by
Federal Circuit
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United States International Trade
Commission (cont.)
•
Broad Injunctive Relief
–
The Exclusion Order
•
Directs U.S. Customs Service to deny entry at all U.S.
ports
•
Framework for Customs Service seizure and forfeiture
•
An In Rem Order – Functions without regard to personal
jurisdiction
•
Can cover downstream products that contain an infringing
component
•
ITC procedures available to Complainant to broaden
Customs enforcement (advisory opinion procedures,
enforcement procedures, modification procedures)
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United States International Trade
Commission (cont.)
•
Broad Injunctive Relief (cont.)
–
–
The Limited Exclusion Order
•
Issued by ITC in the typical one-on-one case
•
Bars importation of the products of the Respondent in the
ITC case
The General Exclusion Order
•
Bars importation of infringing products from all sources
(even sources that were not parties to the case) See, e.g.,
Ink Cartridge Investigation No. 337-TA-565 (October 19,
2007)
•
Highly coveted; higher statutory standard for issuance
–
Typically requires proof of widespread infringement;
ease of entry into the business; and difficulty of
identifying source of infringing product (the “Spray
Pump” factors)
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United States International Trade
Commission (cont.)
•
Broad Injunctive Relief (cont.)
–
Downstream Product Remedies
•
Excludes infringing product and all downstream
products
–
Analysis of nine factors (the “EPROMs factors”)
–
Balances Complainant’s interest in full
protection against burdens on third-parties and
potential disruption of legitimate trade
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United States International Trade
Commission (cont.)
Broad Injunctive Relief
•
eBay Standard Not Applicable
•
Supreme Court opinion on standard for granting injunctive
relief eBay, Inc. v. MercExchange, LLC, 126 S.Ct. 1837 (2006)
•
Commission finds eBay not applicable to Section 337 cases
–
Tariff Act of 1930 contains legislative determination that
there is an inadequate remedy at law for unfair acts in
import commerce
–
Amendments to remove injury requirement confirm that
irreparable harm need not be proven
–
Balance of harms and public interest analysis as part of
ITC analytical framework
–
Importation activity governed differently under the trade
laws
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United States International Trade
Commission (cont.)
•
Other Tangible Benefits of ITC Actions
–
No counterclaims
•
Case focused on allegations in Complaint and ITC
Notice
•
ITC directed by statute to not consider
counterclaims
•
Counterclaims, if any, must be removed to District
Court
–
Nationwide subpoena power
–
No issues with personal service of Complaint
–
No laches defense
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Disadvantages of ITC
•
Rarely an early Markman decision
•
No money damages
•
President can disapprove on public policy grounds
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ITC and District Court
•
Often a parallel District Court case is filed
•
Defendant can stay case as a matter of right
•
ITC case will proceed to conclusion
•
District Court stay can be lifted and case tried again, for
money damages
•
Commission determination on infringement and validity is
persuasive but not res judicata
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Section 337: Substantive Elements
• Importation
• Infringement
• Domestic Industry
•
•
Substantive Elements Pleaded Specifically
–
(fact pleading rather than notice pleading)
–
(19 CFR § 210.12)
Pleading rules require other details
–
•
(e.g., claim charts, description of related litigation, copies of
prior art)
Respondent must also plead certain matters in detail
–
(e.g., identity of manufacturer; manufacturing capacity)
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Substantive Element: Importation
•
Importation Requirement
–
Accused products must be
imported or sold off-shore
for importation into U.S.
–
ITC jurisdiction extends to
sales in U.S. of imported
products
• Case can be brought
against distributors and
distribution in the U.S.
•
Complaint must contain solid
evidence of importation
U.S. Port of entry
Source: Customs Website
“The following are unlawful] -- “The importation into the United States, the sale
for importation, or the sale within the United States after importation” [infringing
products]. 19 U.S.C. §1337(a)(1)(B)
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Substantive Element: Importation
(cont.)
•
Broad leeway in satisfying the
“Importation” element
–
Imported component that induces
infringement
–
Made in U.S.A., exported and
re-imported (mequiladoro plants)
–
Product imported as component
within downstream product
–
Process practiced in U.S., product
exported and re-imported
–
Contract sale for importation into
U.S., but not yet imported
Importation element satisfied by
importation of a single unit
(advance showing at U.S.
tradeshow)
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Substantive Element: Infringement
•
Standard patent infringement proof
–
Direct infringement
–
Induced infringement
–
Contributory infringement
–
Doctrine of equivalents
–
Product of patented process - No
§ 271(g) defense
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United States International Trade
Commission (cont.)
ALJ Claim Construction Practices
•
•
Judges Luckern and Charneski
–
No formal Markman procedure
–
Construe claims at Hearing or summary determination
decisions
Judge Bullock
–
Has had a few Markman hearings
–
The few Markman hearings have been based on briefing
and attorney argument, but has not precluded testimony
and would leave open the door to it. Bullock is in favor
of a quick procedure.
–
Still has an open mind on claim construction
procedures
–
Finds helpful in limiting scope of proceeding
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United States International Trade
Commission (cont.)
•
Judge Essex
–
Only Judge with Ground Rule on Markman Hearing (Ground
Rule 5A)
5A. Markman Hearing on Claim Construction
“If the Administrative Law Judge determines that a Markman
hearing would be beneficial to the investigation, the
Administrative Law Judge may conduct a Markman
hearing.....”
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Substantive Element: Domestic
Industry
•
Domestic Industry Requirement
–
Section 337 as an international trade statute to protect
U.S. industry
–
Complainant must demonstrate that there exists an
industry in the U.S. exploiting the patent-in-suit
“. . .only if an industry in the United States, relating to the
articles protected by the patent, copyright, trademark, mask
work or design concerned, exists or is in the process of
being established.” 19 U.S.C. § 1337(a)(2)
–
Two elements: (1) “Economic prong,” and
(2) “Technical prong”
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Substantive Element: Domestic
Industry (cont.)
•
Economic Prong
Asks: Is there an industry in the U.S.
to protect?
•
Technical Prong
Asks: Does the U.S. industry practice
the patent?
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Overview of an ITC Patent Case
Administrative
Law Judge
Initial Decision
on merits
Commission
Final Decision
Federal Appeals
Court
Appellate Decision
Deferential on remedy issues
Orders remedy
•
ITC Remedies
–
Exclusion of products from U.S. – enforced by Customs
–
Cease and desist orders – enforced by ITC with civil
penalties
–
No money damages
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Chronology of a Section 337 case
Response to
Complaint
(domestic parties)
Notice of Investigation
published
ITC pre-filing
review of
complaint
Discovery
Conference
Discovery served
Judge issues
Target date
ITC votes to
institute
investigation
Complaint
filed
Judge issues
Ground rules
ITC serves
Complaint
and Notice
Judge issues
Protective
Order
Confidential
treatment
request filed
Jan.
File Discovery
Statement
Feb.
Mandatory
Settlement
Conference
Response
to
Complaint
(foreign
parties)
Mar.
Apr.
May
June
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Chronology of a Section 337
case (cont.)
Pre-trial
conference
TRIAL
(2 weeks)
Cut-offs for:
- Sum. Det. Motions;
- Fact Discovery; and
- Expert Discovery
Motion(s) for
summary
determination
Tutorial
Reply Briefs
Objections to Findings
Objections to
rebuttal exhibits
Expert Rebuttal
served
Reply Findings
Objections to
exhibits
Expert
identified
Prior Art
notice
Post-trials Briefs
Rebuttal exhibits
Post-trial Findings
of Fact
Expert Report
served
Pre-trial
briefs
June
July
Aug.
Sep.
Oct.
Nov.
Dec.
Jan.
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Sample Chronology of a Section 337
case
Briefs on Remedy, Public
Interest, Bonding
(per date in ITC notice)
Presidential
Review
Final
Commission
Determination
Reply to
Petitions
CAFC
Appeal
Commission
Notice on
Review
Petitions for
Review
Initial
Determination
(after 4:00 pm)
Jan.
Feb.
Mar.
Apr.
May
June
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“Appeal” of Initial Determination
•
Following petitions filed by either party, the Commission will
decide whether to review the Initial Determination
•
If the Commission elects to review, it may request additional
briefing
•
Following review the Commission may: reverse the Initial
Determination; reverse it in part; remand for further hearing
and/or briefing
•
The Commission ultimately issues a Final Determination
•
Remedies enforceable after issuance of Final Determination
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ITC Public Interest Review
•
The ITC’s Public Interest Review of Proposed Remedies
–
ITC required to take account of public interest before
issuing remedial order
The Commission shall direct exclusion of the articles from entry “unless,
after considering the effect of such exclusion upon the public health and
welfare, competitive conditions in the United States economy, the production
of like or directly competitive conditions in the United States, and United
States consumers, it finds that such articles should not be excluded from
entry.” 19 U.S.C. § 1337(d)
–
Cited by ITC when declining to exclude downstream
products
–
Public interest can block relief (rare)
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ITC’s Public Interest Review
•
Statutory duty to consult with other agencies during “the
course of each investigation”
•
ITC serves Notice of Investigation on:
–
FTC (Director, International Antitrust)
–
Justice (Foreign Commerce, Antitrust Division)
–
HHS (National Institute of Health)
–
Customs (IPR Branch)
•
ITC serves certain ID’s on agencies
•
Agencies may seek to intervene before ALJ
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Presidential Review (USTR review)
•
60-day review period
•
President may disapprove of an ITC
order “for policy reasons”
•
Very rare: Cited most recently to
disapprove of order directed to
downstream products
•
Product may be imported during 60
day period under bond
–
Rarely invoked
–
Bonds typically 100% of
entered value
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Presidential Review
•
Trade Policy Committee
–
Chaired by USTR
–
ITC as non-voting member
•
Trade Policy Staff Committee
•
Input via Hill, Agencies, Parties, Public
•
Remedy modification recommendations
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The Presidential Disapproval Power
Has Been Exercised on Only Five
Occasions
•
Welded Stainless Steel Pipe and Tube, Inv. No. 337-TA-29,
43 Fed. Reg. 17,789 (Apr. 22, 1978)
•
Certain Multi-Ply Headboxes, Inv. No. 337-TA-82,
46 Fed. Reg. 32,361 (June 22, 1981)
•
Molded-In Sandwich Panel Inserts, Inv. No. 337-TA-99,
47 Fed. Reg. 29,919 (July 9, 1982)
•
Certain Alkaline Batteries, Inv. No. 337-TA-165,
50 Fed. Reg. 1655 (Jan. 11, 1985)
•
Certain Dynamic Random Access Memories,
Inv. No. 337-TA-242, 52 Fed. Reg. 46,011 (Dec. 3, 1987)
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Appeals of ITC Final Determination
•
Appeals to U.S. Court of Appeals for
Federal Circuit
•
ITC named as Appellee; defends own
decisions
•
ITC Final Determinations often limit issues
for appeal
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United States International Trade
Commission (cont.)
Litigation in the International Trade Commission
Increasing Trend for ITC Section 337 Investigations
projected > 50
50
45
40
35
34
32
31
30
27
25
25
21
20
16
15
15
10
10
12
11
12
12
10
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1
Source: ITC Annual Reports
(fiscal year October to October)
1 Projected based on numbers for first and second quarters FY 2008.
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USITC Resources
•
www.usitc.gov
–
–
Electronic Docket
•
Recent 337 Complaints
•
337 Investigational History
•
Outstanding Exclusion Orders
Electronic Document Information System (EDIS) and
Electronic Docket
•
19 U.S.C. §1337
•
19 C.F.R. § §201-210
•
Each Judge’s Ground Rules and Orders for a particular
investigation
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Appendix
• The Broadcom/Qualcomm Case
and the Downstream Remedy
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Procedural Background: Proceedings
before ALJ
•
ALJ bifurcates proceedings (issues on merits, issues on
remedy)
•
ALJ allows certain manufacturers and network operators to
intervene on remedy issues (Motorola, Samsung, Kyocera,
Samsung, Verizon and Sprint Nextel)
•
ALJ finds infringement of claims of one patent
•
ALJ recommends exclusion of accused Qualcomm chips
–
Recommends against remedy against downstream
products
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Procedural Background: Proceedings
before ITC
•
Commission affirms ALJ’s infringement determination
•
Commission holds two day hearing on remedy issues
•
Commission receives testimony and submissions from
parties, intervenors, members of Congress, FCC, FEMA, the
District of Columbia, academics, public safety associations,
and other interested groups
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Procedural Background:
Commission’s Determination
•
•
Majority:
–
Exclusion of accused Qualcomm chips and
–
Exclusion of “downstream handheld wireless
communications devices, including cellular
telephone handsets, that contain the infringing chips
and that are models not being imported into the
United States for sale to the general public on or
before June 7, 2007”
Two Commissioners dissented
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Procedural Background: Post
Commission
•
Presidential Review process per 19 U.S.C. § 1337(j)
•
USTR announces Commission order will not be disapproved
•
Appeals to Federal Circuit
•
Appellants include:
•
Kyocera
Motorola
Samsung
LG Electronics
Sanyo Fisher
T-Mobile
ATT Mobility
Sprint Nextel
Pantech
UT Starcom
High Tech
Shenzhen Huawei
RIM
Palm
Foxcomm
Casio Hitachi
Status: Pending before the Federal Circuit
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Commission’s Analytical Framework
the Downstream Issue
•
First: Consider a remedy that excludes all downstream
products
–
Analysis of nine factors (the “EPROMs factors”)
•
Balances Complainant’s interest in full protection
against burdens on third-parties and potential
disruption of legitimate trade
•
Second (contingent factor): Fashion alternative remedy if
relief against all downstream products deemed
inappropriate.
•
Third: Apply statutory public interest factors
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Factor 1: Comparative Value
•
“The value of the infringing articles compared to the value of the
downstream products in which they are incorporated”
–
Commission Opinion: “the value of the infringing
components relative to the targeted downstream products,
both in terms of the monetary value of the components
and the importance of the components to the operation
of the downstream products in which they are incorporated”
–
Commission declines to consider value of the patented
technology vis a vis the value of the downstream product
–
Held: Accused chip as “essential” to handset operation;
adds “significant” value
–
Factor 1 weighs in favor of downstream exclusion
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Factor 2: Party or Third-Parties
Products?
•
“The identity of the manufacturer of the downstream products,
i.e., whether it can be determined that the downstream products
are manufactured by the respondent or by a third party”
–
Commission Opinion: Factor generally weighs against
downstream relief where downstream products
manufactured by non-parties
–
Policy pronouncement: Commission policy favors
naming of parties that are known to or likely to import
products believed to contain infringing downstream articles
–
Held: Broadcom’s failure to name downstream
manufacturers weighs against relief against downstream
products but this factor is not given special weight. Factor
does not result in automatic denial of downstream remedy
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Factor 3: Value of full relief to
Complainant
•
“The incremental value to the complainant of the exclusion
of downstream products”
–
Commission Opinion: This factor is often the
“compelling factor” when the infringing product
is imported only in downstream products
–
Commission rejects analysis of sales competition
between Complainant and Respondent’s products
–
Held: Factor 3 “weighs heavily” in favor of downstream
relief
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Factor 4: Detriment to Respondents
•
“The incremental detriment to respondents of exclusion of
such products”
–
Commission Opinion: Analysis focused on detriment
to respondent’s non-infringing activities;
Qualcomm may lose sales of non-infringing chips
–
Held: Factor 4 weighs against exclusion of downstream
products; actor given “little weight”
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Factor 5: Third-Party Burden
•
“The burdens imposed on third parties resulting from
exclusion of downstream products”
–
Commission Opinion: Third parties can be generally
grouped according to their “proximity to Qualcomm and
the conduct in violation of Section 337”
•
Manufacturers
•
Network operators
•
Vendors of related supplies and services (e.g.,
Warner Music Group)
–
Commission rejects Broadcom argument on failure
of third-parties to mitigate harm
–
Held: Burdens on third parties weighs heavily against
exclusion of downstream products
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Factor 6: Non-infringing alternatives?
•
“The availability of alternative downstream products that do
not contain the infringing articles”
–
General Rule: Where alternative downstream
products available, this factor weighs in favor of
exclusion
–
Commission Findings: No alternative products for
certain market segments (e.g., 3G EV-DO products)
–
Held: Factor weighs heavily against exclusion of
downstream products
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Factor 7: Non-infringement of
products with same HTS number?
•
“The likelihood that the downstream products actually
contain the infringing articles and are thereby subject to
exclusion”
–
Commission Opinion: “The central issue with respect to
factor 7 is the effect of a downstream exclusion
order on products entered under the same HTS
number that do not contain infringing chips”
–
Commission Finding: Not all phones imported under
the HTS number have infringing chips
–
Held: Factor weighs “somewhat against” relief against
downstream products
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Factor 8: Opportunity for evasion?
•
“The opportunity for evasion of an exclusion order that does
not include downstream products”
–
Commission Opinion: Focus is on whether relief
directed against the infringing product only (i.e., chips)
may become ineffective by subsequent practice
of importing the product incorporated into
downstream product
–
Finding: The pre-existing practice is importation in
downstream products
–
Held: Factor not germane; inapplicable to the analysis
Fact that chips are imported in downstream products
weighs in Factor 3 (incremental benefit of downstream
relief to Complainant)
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Factor 9: Enforceability by Customs
•
“The enforceability of an order by Customs”
–
Generally not dispositive
–
Burdens on commerce reduced by certification
provision
–
Importers may certify to Customs that a product does
not contain the accused chip
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Commission’s Conclusion on EPROMs
Nine Factors
Commission’s Reasoning on EPROMs Analysis
•
Consideration of EPROMs factors “as a whole”
•
“weigh the complainant’s interest in obtaining maximum
protection from all infringing imports against the potential of
such relief to harm third parties and disrupt legitimate trade
in products that were not found to violate Section 337”
•
No rigid formula; no factor necessarily dispositive
•
Analysis first applied to the default remedy of exclusion of
all downstream products
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Summary of EPROM factors applied to
the default remedy
Limited
Weighs in Favor
Weighs Against
Significance
•
Factor 1 (value of infringing article
vis a vis downstream product).......................................X
•
Factor 2 (identity of downstream manuf.).....................................................X
•
Factor 3 (incremental value to Complainant).................X
•
Factor 4 (incremental detriment to Respondent).....................................................................X
•
Factor 5 (burden on third-parties)..................................................................X
•
Factor 6 (availability of alternatives)..............................................................X
•
Factor 7 (likelihood downstream product
Contains infringing product)...........................................X
•
Factor 8 (opportunity for evasion)............................................................................................X
•
Factor 9 (enforceability by customs)........................................................................................X
Conclusions: Burdens to third-parties and unavailability of EV-DO products weigh heavily
against relief against all downstream products. Exclusion of all downstream products not
appropriate.
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Fashioning an Alternative Remedy
•
Commission sought alternative remedy that would provide
“meaningful relief” yet “substantially ameliorate the
burdens imposed on third parties”
•
Proposal: Exclude all downstream products, yet exempt
certain products to provide for continued sales of EV-DO
devices (and WCDMA devices)
•
Determination: (1) Exclude all downstream products in
particular HTS category (handsets) and (2) exempt from
exclusion (or “grandfather”) any model that was being
imported into the United States for sale to the general public
on or before date of the exclusion order (June 7, 2007)
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Public Interest Analysis
•
Commission examines the proposed remedy against
public interest considerations
•
Analysis limited to the public interests enumerated in
the statute (19 U.S.C. § 1337(d))
–
The public health and welfare;
–
Competitive conditions in US economy;
–
Production of like or directly competitive
articles in US; and
–
US consumers
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Public Interest Analysis (cont.)
•
Analysis involves a balancing of the patentee’s rights and
the public interest in IP enforcement against the statutory
public interest factors
•
Statue directs that the remedy should be issued except
where public interest concerns are “so great as to trump the
public interest in enforcement of intellectual property
rights”
•
Conclusion: Public interest concerns do not preclude
issuance of the proposed exclusion of downstream
products
•
Approach advocated in concurring and dissenting opinions
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Key Points: ITC Authority to Issue
Limited Exclusion Orders Cover
Products of Non-parties
•
Intervenors’ position:
–
Section 337(d)(2) limits ITC authority to exclude
non-party products
•
–
“[t]he authority of the Commission to order an
exclusion from entry of articles shall be limited to
persons determined by the Commission to be
violating this section”
Section 337(d)(2) as required to bring statute into
compliance with GATT “national treatment”
requirements per GATT panel finding
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Other Key Points: ITC
•
•
Commission’s conclusions re statutory authority:
–
Statute directs the Commission to exclude “the articles
concerned”
–
Violation determination focused on specific chips; remedy
does not extend beyond products containing the specific
infringing articles
Section 337(d)(2)
–
“. . .the authority. . . .shall be limited. . .” relates to General
Exclusion Orders
•
Statutory command that the Commission “shall” exclude
contains no exception for downstream products
•
Commission concludes it has authority to exclude
non-party downstream products
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Other Key Points: The Default Remedy
Against All Downstream Products
•
Commission “presumption” of exclusion of all downstream
products
•
[w]e generally exclude all downstream products containing
the infringing chips, unless a contrary result [is] counseled
by our evaluation of the EPROMs factors of the statutory
public interest considerations”
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Other Key Points: eBay Standard Not
Applicable
•
Supreme Court opinion on standard for granting injunctive
relief eBay, Inc. v. MercExchange, LLC, 126 S. Ct. 1837 (2006)
•
Commission finds eBay not applicable to Section 337
cases
–
Tariff Act of 1930 contains legislative determination that
there is an inadequate remedy at law for unfair acts in
import commerce
–
Amendments to remove injury requirement confirm that
irreparable harm need not be proven
–
balance of harms and public interest analysis as part of
ITC analytical framework
–
importation activity governed differently under the trade
laws
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