GE Wins at Federal Circuit in Mitsubishi Wind Turbine Case

On Friday, July 6, 2012, the United States Court of Appeals for the Federal Circuit issued a decision in General Electric Co. v. ITC.  The Federal Circuit, per Judge Newman with Chief Judge Rader and Judge Linn, did not give GE a total victory, but victory enough over Mitsubishi.  The Federal Circuit affirmed in part and reversed in part the original decision of the ITC, and remanded the case for further proceedings consistent with the decision.

GE appealed the decision of the United States International Trade Commission, which held that certain variable speed wind turbines imported by Mitsubishi Heavy Industries, Ltd. and Mitsubishi Power Systems Americas, Inc. (together “Mitsubishi”) did not violate section 337 of the Tariff Act, 19 U.S.C. §1337. The patents at issue were U.S. Patent No. 7,321,221, U.S. Patent No. 5,083,039 and U.S. Patent No. 6,921,985.  On February 1, 2011, the ’039 patent expired, and the Federal Circuit dismissed that portion of the appeal as moot, vacating the Commission’s rulings relative to the ’039 patent.  The appeal continued relating to the ‘221 patent and the ‘985 patent, which were the subject of this latest Federal Circuit decision.

As is always the case with the ITC, this matter started with the filing of a complaint and an investigation.  Upon the filing of the complaint by GE an Administrative Law Judge at the ITC held an evidentiary hearing on all of the issues raised by General Electric, by Mitsubishi as respondent and by the Commission’s investigators. The ALJ’s final determination included 126 pages of findings of fact and conclusions of law.  Ultimately, the ALJ held that section 337 was violated by the imported Mitsubishi turbines. The ALJ determined that the ’221 patent is not invalid by reason of obviousness; that the ’039 patent is not invalid by reason of obviousness, written description, or enablement; and that the ’985 patent is not invalid by reason of obviousness or best mode. The ALJ also determined that the three patents were infringed by the imported Mitsubishi wind turbines, and that the intent element of inequitable conduct as to the ’985 patent were not established. The ALJ also determined that the domestic industry requirement is not met as to the ’221 patent, but is met as to the ’039 and ’985 patents.

What is this part about domestic injury?  “An owner of an intellectual property right, hoping to show that certain imported products violate the ITC’s Section 337, must show that the right is valid, enforceable and infringed,” says Scott Daniels of Westerman Hattori Daniels & Adrian and author of Reexamination Alert, an experienced ITC litigator just coming off a trial at the ITC.  Daniels went on to say:

Additionally, the owner must show the existence of a domestic industry  — specifically that there is an industry in the United States, relating to the articles protected by the patent exists or is in the process of being established. Over the years, the ITC has applied the standard in a lenient manner, so that many intellectual property right owners have been able to satisfy the “domestic industry requirement.”  Two points are worth noting: first, that the authorized activities in the US of the owner’s licensees count toward proof of a domestic industry, and second, the nationality of the intellectual property right owner or its licensees is irrelevant to the issue of domestic industry.  Accordingly, there are many ITC cases where the domestic industry is represented by a foreign company and the importer is a US company.

If there is a domestic industry and if the IP right is found to be valid, enforceable and infringed, injury to the domestic industry is presumed.

After the ALJ issued the final decision both GE and Mitsubishi requested review by the full Commission. The full Commission determined that the ’039 patent is not invalid by reason of obviousness or written description, that the ’039 and ’221 patents are not infringed by the Mitsubishi turbines, and that the domestic industry requirement is not met as to any of the patents. As you might expect, an appeal proceeded to the Federal Circuit.

With respect to the patent GE prevailed on, the ‘985 patent, the issue was one of claim construction.  Did claim 15 of the ‘985 patent require that the circuit that shunts current on signal from the converter controller is located entirely outside of the inverter?  Claim 15 reads as follows:

(emphasis present in the CAFC decision).

The Commission had held that the shunt circuit must be separate from the inverter.  The Commission ruled that “[General Electric’s] shunt circuit does not shunt current from the inverter because it is within the inverter.” The ALJ had reached a different conclusion, holding that “whether a particular shunting circuit located within the inverter (as opposed to outside it) meets the claim limitation will depend upon whether it is found to be ‘coupled with the input of the inverter and the converter controller,’ as required by the claim.” Ultimately, the ALJ held that the claim does not contain the additional requirement that the shunt circuit is located entirely outside of the inverter.  The Federal Circuit agreed.