ITC’s Treatment of Pending Reexaminations OK’d by CAFC

| 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. 

On the other hand, the CAFC’s decision was limited.  It concluded merely that the ITC had not abused its discretion by excluding the infringing imports, hardly a ringing endorsement of the ITC’s standard for considering of pending reexaminations.  Thus, it is not clear how the CAFC might rule in another ITC case.  And the distinction the CAFC drew between ITC investigations and District Court cases means that District Courts cannot assume that the ITC’s standard for considering the reexamination status of patent claims is correct.

There are several interesting footnotes to the case.  First, Tessera’s patents both expired in September, ending the ITC’s exclusion orders.  In November, the PTO issued a Notice of Intent to Issue a Reexamination Certificate confirming the validity of all claims in their original form – claims of an expired patent cannot be amended in reexamination and all past amendments are withdrawn upon expiration.  The PTO even withdrew an amendment of the specification by the patentee to define a critical claim term; no doubt the PTO considered this an indirect attempt to amend the claims.  And the second Tessera patent is on appeal at the Board, with the examiner vigorously defending his rejections.

Category: ITC

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