ITC : US PTO Litigation Alert™

Will AIA Post-Issuance Cases Increase ITC’s Popularity?

Scott Daniels | June 6, 2013

In recent years, District Court judges have tended to favor stays of infringement actions pending completion of the PTO reexamination proceedings of the patents-in-suit.  Anecdotally, at least, that tendency to stay has increased for the new AIA inter partes review and covered business method post-grant proceedings.

By contrast, the U.S. International Trade Commission has resolutely refused to suspend its investigations to allow reexaminations at the Patent Office to play through.  The Commission’s attitude is based largely on that fact that it, unlike the District Courts, has no authority to award money damages to patentees at the end of its investigations – only prospective relief (by an exclusion order and/or a cease and desist order) is available at the ITC.


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Walker Digital Resorts to ITC to Work around Reexamination

Scott Daniels | December 9, 2011

In April Walker Digital (of Priceline-Jay Walker fame) sued LG, Samsung, Sharp, Sony, Toshiba and a series of other makers of Blu-ray disc players in Delaware for infringement of U.S. Patent No. 6,263,505.  In June an anonymous third-party requested reexamination of five of the 43 ‘505 patent claims, and in September Sony requested reexamination of the remaining 38 claims.  Defendants then moved to stay the Delaware infringement action pending completion of the reexaminations.

In the meantime, the PTO has moved expeditiously with the reexaminations.  It granted the first reexamination and then rejected all 43 claims as being either anticipated or made obvious by the cited prior art, but it denied Sony’s request for failing to raise any substantial new question of patentability not already raised in the first reexamination.  The rejection relies, essentially, on a single prior art reference, yet it is quite detailed and might be difficult to overcome.  The apparent strength of the rejection, plus the speed with which the PTO is moving in the reexamination, mean that there is a strong possibility that they will grant Defendants’ stay motion.  A stay would mean that the validity issue would be decided by the PTO, rather than by the District Court, to the obvious advantage of Defendants.


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PTO Board Sides with NVIDIA on Two Rambus “Barth I” Patents

Scott Daniels | September 2, 2011

Yesterday the PTO Board handed NVIDIA victories (here, here) against two DRAM patents: the Board affirmed the examiner’s rejection of claims 1-25 of U.S. Patent No. 7,287,109 and reversed the examiner’s refusal to adopt proposed rejections of claims 1-37 of U.S. Patent No. 6,470,405, the so-called “Barth I Patents.”  Rambus may now appeal the rejection of the ‘109 claims to the CAFC.  Since the Board’s reversal of the examiner regarding the ‘405 herepatent constitutes a new ground of rejection, Rambus may argue that rejection with the examiner.

The ‘109 and ‘405 patents were the subject of an ITC investigation that concluded last August with a determination that the patents were valid and infringed.  On the basis of that determination, the ITC issued a limited exclusion order prohibiting NVIDIA, HP and a host of other companies from importing infringing DRAMs into the United States.  It also issued separate cease & desist orders against the individual respondents forbidding them from selling infringing DRAMs already in the United States.  NVIDIA was reported to have taken a license under the Barth I Patents, thereby exempting it from the ITC’s remedial orders.


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The Doors of the U.S. International Trade Commission Are Open to non-U.S. Plaintiffs: Standing and the ITC’s Domestic Industry Requirement

Merritt Blakeslee | January 19, 2011

ITC practitioner Merritt Blakeslee has written the following article on the “domestic industry requirement” that a patent owner must satisfy to successfully pursue an infringement case at the U.S. International Trade Commission.  This is not our normal fare of reexamination, reissue and interference matters.  Still, the issue addressed – standing to sue at the ITC – is of such obvious importance to patent holders both foreign and US that we post it today. 

Companies whose U.S. intellectual property rights are being infringed by imported products are seeking relief at the U.S. International Trade Commission in ever-greater numbers.  Section 337 cases filed at the ITC, so-called because they are authorized by Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337), have doubled since 2005 and more than tripled since 2000.  Indeed, the ITC, which is the only specialized trial level patent adjudication forum in the United States, now conducts more full patent adjudications on an annual basis than any federal district court in the nation. [1]  In 2008, one out every seven patent infringement cases that went to trial in the United States was tried at the ITC.

The reasons for the ITC’s popularity are self-evident, at least to those familiar with the forum.  The ITC offers numerous, significant advantages to a plaintiff (called a “complainant” at the ITC):  speedy adjudication, relaxed rules on personal jurisdiction and service of process, no opportunity for a defendant (called a “respondent”) to seek a change of venue, short discovery deadlines, no rule-based impediments to taking discovery abroad, no counterclaims, [2] administrative law judges who are specialists in intellectual property law, and broad, vigorous injunctive relief that is enforced by U.S. Customs and Border Protection and the ITC.  Although the ITC cannot award monetary damages, such relief may be, and routinely is, sought by the complainant in a parallel federal district court action.

Section 337 was originally conceived as a piece of highly protectionist legislation; its framers intended that its powerful remedies would be available only to U.S.-based manufacturing firms.  Over time, however, the so-called “domestic industry requirement” has been relaxed to such an extent that today non-U.S. firms holding U.S. intellectual property rights routinely bring suit at the ITC.  In both 2009 and 2010, in fully one third of the Section 337 investigations instituted by the ITC, a least one of the complainants, usually the parent, was a non-U.S. company.  The present article discusses the rules under which a non-U.S. rights holder may gain access to the ITC and its truly remarkable mechanisms for the enforcement of U.S. intellectual property rights.
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ITC’s Treatment of Pending Reexaminations OK’d by CAFC

Scott Daniels | December 22, 2010

In a case of great commercial significance involving the structure of computer chip “packaging,” the CAFC yesterday affirmed the International Trade Commission’s (ITC) determination that products imported by Spansion and other companies infringed two patents owned by Tessera, in violation of § 337.  The CAFC also affirmed the ITC’s issuance of a limited exclusion order prohibiting future importation of the infringing products into the United States.  As we reported in an earlier post, the case raised interesting issues for reexamination practitioners because, at the time of the exclusion order, the claims of both patents had been rejected in pending reexaminations.  Should the ITC exclude imported products based on patent claims rejection as unpatentable?  Would such exclusion contradict the ITC’s statutory obligation to consider the public interest in its determination of suitable remedies for violation of § 337?

In its decision ordering exclusion of the infringing imports, the ITC concluded that rejections in pending reexaminations would not affect its analysis of a suitable remedy:  “Such adverse office actions in the reexamination process are fairly routine and are not an indication that the patent claims are necessarily going to be finally rejected.”  The ITC acknowledged that the claims of one of Tessera’s patents had received a final rejection and that prosecution had been closed, but still the ITC found that “it would be premature to give undue weight to reexamination proceedings until or unless Tessera has exhausted its appeals.” 

On appeal, the CAFC affirmed each of the ITC’s conclusions regarding the patent issues of validity and infringement.  Importantly for us, it also found that the ITC had “a sufficient basis” for excluding the infringing imports.  The CAFC explained that the eBay standard for injunctions, applicable to District Courts, does not apply to the ITC – unlike District Courts, the ITC is required by statute to issue an “injunctive-type” remedy.  And although the statute requires that the ITC consider “the public interest,” the statute also specifically defines that public interest. 
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Reissue Patent Invalid for Violating Recapture Rule

Scott Daniels | September 9, 2010

The “Recapture Rule” generally arises where an applicant makes a narrowing amendment to overcome a rejection in the original prosecution, and later attempts to “recapture” the abandoned subject matter through a reissue application.  In AIA Engineering Limited v. Magotteaux International S/A, decided last Friday, it was the applicant’s argument traversing a rejection in the original prosecution that triggered the Recapture Rule, invalidating the patent.

The original patent claimed a wear component of an apparatus used to grind surfaces. Claim 1 recited a “porous ceramic pad consisting of a homogeneous ceramic composite solid solution” alumina and zirconia (emphasis added). During the prosecution of the original patent, applicant repeatedly referred to the “solid solution” limitation to distinguish the claimed invention from the prior art, e.g., “the invention is based on the observation that the ceramic pad must be a homogeneous solid solution on Al2O3/ZrO2” (emphasis added).  The examiner allowed the application on the basis of that distinction.
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Rambus Wins Limited Exclusion Order at ITC against NVIDIA, despite Pending Reexaminations

Scott Daniels | August 16, 2010

Traditionally, District Court judges have issued permanent injunctions to stop infringement of valid patents, regardless of any pending reexamination of the patent in question.  Only if the rejection of the patent claims in reexamination is “final,” would the courts refuse to enjoin the accused infringer.  A few judges – notably Judge James Cohn of the Southern District of Florida and Judge Sue Robinson of Delaware – have recently shown a willingness to defer a decision on injunctive relief even where the rejection of the patent in reexamination is not final.

The Rambus/NVIDIA investigation raises the question of the extent to which the ITC is willing to order relief on the basis of patents that are in reexamination at the PTO.  Unfortunately for NVIDIA, its argument to the ITC that it stay relief against NVIDIA was weak because its attack on the Rambus patents by reexamination has been “an incomplete success” (to borrow a phrase from President Carter).

That weakness may account, in part, for NVIDIA’s agreeing at the end of last week to a license to the Rambus patents, effectively concluding the dispute between the parties.  Still, the ITC’s analysis in the Rambus/NVIDIA investigation remains of great interest to the IP community, as it suggests that the ITC will be extremely reluctant to withhold relief against infringing imports on the basis of an uncompleted reexamination.
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Patentee Establishes Priority by Reexamination

Scott Daniels | July 16, 2010

A party may be entitled at the outset of litigation to prevail on an outcome-determinative issue, such as claim construction or patent validity, but the trial judge refuses to grant summary judgment/determination.  The party is then required to proceed to trial, with uncertainty, to seek vindication.  Much quicker resolution of such issues is sometimes available through reexamination.  In a recent example, the patentee in the ITC investigation Certain Authentication Systems, Prism Technologies, established through reexamination that it was entitled to an early priority date, thereby removing the bulk of the prior art references asserted against it by the Respondent Research in Motion (RIM).
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Tessera Defends ITC Exclusion Order at CAFC

Scott Daniels | June 10, 2010

Last week I described the interesting issue raised in Tessera’s ITC case involving semiconductor packaging: whether the public interest is harmed if the ITC issues an exclusion order based on infringement of a patent that has been rejected as invalid in a copending but unfinished reexamination proceeding.
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Challenge at the CAFC to ITC Exclusion Order Based on Claims Rejected in Reexamination

Scott Daniels | June 2, 2010

Tessera’s ITC case involving computer chip packaging is of considerable commercial significance to the semiconductor industry.  But it also raises the fascinating legal question of whether the Commission should issue an exclusion order against infringing imported products where the patent claims have been rejected in copending reexamination proceedings.  Where the ITC finds violation of Section 337, the statute requires it to issue an exclusion order and/or a cease & desist order to protect the domestic industry, unless such relief would harm the public interest. Is the public interest harmed by the enforcement of patent claims currently under rejection at the PTO?
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