Last week the United States International Trade Commission (ITC) reached a final determination in in a matter involving patent infringement charges brought by Advanced Micro Devices, Inc. (AMD) against LG Electronics MobileComm U.S.A., Inc., VIZIO, Inc., MediaTek, Inc. and MediaTek USA, Inc. (collectively MediaTek), and Sigma Designs, Inc. (SDI). The result of the ITC investigation was the issuance of a cease and desist order against Respondent VIZIO, a cease and desist order against Respondent SDI, and a limited exclusion order against Respondents VIZIO, SDI and MediaTek.
AMD was represented by attorneys Michael Renaud, Jim Wodarski, Michael McNamara, Bill Meunier, Adam Rizk, Marguerite McConihe, Matthew Karambelas, and Catherine Xu, and Aarti Shah, of Mintz Levin Cohn Ferris Glovsky & Popeo PC.
The AMD complaint alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and was based upon the unlawful importation into the United States, the sale for importation, and the sale within the United States after importation of certain graphics systems, components thereof, and consumer products containing the same. The importation in question was asserted to infringe certain claims of the U.S. Patent No. 7,633,506 (“the ’506 patent”); U.S. Patent No. 7,796,133 (“the ’133 patent”); U.S. Patent No. 8,760,454 (“the ’454 patent”); and U.S. Patent No. 9,582,846 (“the ’846 patent”).
The decision of the ITC was a win for AMD, but rather surprisingly AMD has not issued a press release touting the win and is also not otherwise taking a victory lap. Generally, when a company scores a win of this magnitude, with either a limited exclusion order or a cease and desist order, it is news that is shared far and wide. In this case both a limited exclusion order and two cease and desist orders were obtained, and there hasn’t been as much as a peep from AMD. The fact that AMD has chosen to remain silent suggests negotiations are ongoing and an omnibus settlement may be announced in the coming days or weeks.
With respect to the win itself, on August 22, 2018, the ITC found there were violations of section 337 with respect to the ’506 patent by Respondents VIZIO, SDI and MediaTek. For reasons that are not clear from the public version of the Final Initial Determination by Administrative law Judge MaryJoan McNamara or mentioned in the final decision of the Commission itself, AMD did not seek a cease and desist order against MediaTek, instead seeking only cease and desist orders against VIZIO and SDI (see Final ID, April 13, 2018 at pg. 145). Nevertheless, the Commission did find that VIZO, SDI and MediaTek all engaged in activities that infringed claims 1-5 and 8 of the ‘506 patent.
The Commission determined the appropriate remedy for the unlawful importation and sale of products violative of claims 1-5 and 8 of the ‘506 patent to be a limited exclusion order against the infringing products of VIZIO, SDI and MediaTek. The limited exclusion order issued by the Commission prohibits the unlicensed entry into the United States of MediaTek’s and SDI’s covered graphics systems and VIZIO’s televisions containing the same, manufactured abroad by or on behalf of the Respondents or any of their affiliated companies, parents, subsidiaries, or other related business entities, or their successors or assigns.
Separately, the Commission also on August 22, 2018, found that the violations of section 337 by SDI and VIZIO also warranted issuance of cease and desist orders.
The Commission has also determined that the public interest factors did not preclude the issuance of the limited exclusion order and cease and desist orders in this case. See 337(d)(l) and (f)(1) (19 U.S.C. 1337(d)(l), (f)(1). The Commission still further determined to set a bond at zero (0) percent of entered value during the Presidential review period (19 U.S.C. 1337(j)).
The limited exclusion order and cease and desist orders are a win for AMD, but they do cover different things, which may not be apparent on the surface. Limited exclusion orders are essentially instructions to Customs that work to create a ban on importation of goods into the United States. Cease and desist orders, however, implicate prohibited domestic activity within the United States, and are generally considered much broader. The cease and desist orders achieved by AMD prohibit domestic activities such as marketing, distributing, advertising, and soliciting U.S. agents, for example. Furthermore, while both limited exclusion orders and cease and desist orders can be enforced at the ITC, a violation of a cease and desist orders can lead to a $100,000 per day civil fine.
The Commission’s orders and opinion were been delivered to the President and to the United States Trade Representative on August 22, 2018. Pursuant to 19 U.S.C. 1337(j), President Trump has 60 days from August 22, 2018 (the day after the Commission delivered the orders and opinion) within which to disapprove of the final determination of the ITC based on policy grounds. If the President does not disapprove of the final determination of the ITC within that 60-day Presidential review period, or if the President notifies the Commission before the close of the period that he approves of the orders and opinions, the determination becomes final.
Presidential disapproval of ITC orders and opinions is exceptionally rare. Having said that, President Obama did disapprove of an ITC an exclusion order in a case involving Apple and Samsung, which was the first time in 26 years that a President had used this statutory authority to overrule an ITC decision. See President Obama Vetoes ITC Exclusion Order of Apple Products. The President stepping in here is not anticipated, and this Commission Order should become final in due course.
 LG was not a party to the final outcome, having been dropped as a Respondent from the case much earlier in the proceedings.