Posts Tagged: "§ 337"

The Subcommittee is Chaired by Congressman Darrell Issa (R-CA), who has been an outspoken advocate for the need for more patent reform in order to provide relief from those he believes are abusing the patent litigation system — those sometimes called patent trolls. Indeed, from the start of the Thursday’s hearing, the debate regarding patent infringement at the ITC was couched in the language of the patent troll debate. For example, during his opening statement Congressman Issa rather imperiously stated: “for purposes of my opening statement ‘plaintiff’ and ‘troll’ will be interchangeable.” Issa, himself a patent owner, was forced to litigate against companies that pirated technology covered by his patents. As a patent owner forced to sue at numerous infringers, it would seem that Congressman Issa believes that patent owner and inventor Issa was a patent troll.

On November 2, 2015, San Francisco-based Fitbit Inc. filed a Section 337 complaint with the International Trade Commission (ITC) against AliphCom (d/b/a Jawbone) and BodyMedia, Inc. (Investigation No. ITC-337-3096). In a parallel proceeding in the U.S. District Court for the District of Delaware, Case No. 1:15-CV-00990, Fitbit alleged infringement of three patents assigned to Fitbit—namely, U.S. Patent Nos. 8,920,332 (titled Wearable Heart Rate Monitor); 8,868,377 (titled Portable Monitoring Devices and Methods of Operating Same); and 9,089,760 (titled System and Method for Activating a Device Based on a Record of Physical Activity). According to the district court complaint, Jawbone’s products associated with components of its UP series of trackers indirectly infringe the patents-at-issue. Fitbit hopes that it will be successful in preventing the import and sale in America of wearable activity tracking devices sold by Jawbone by requesting the ITC to issue a limited exclusion order and a cease and desist order.

This year our panel of industry insiders is quite diverse, with commentary from Bob Stoll (Drinker Biddle), Ashley Keller (Gerchen Keller), Paul Morinville (US Inventor), Alden Abbot (Heritage Foundation), Marla Grossman (American Continental Group) and Steve Kunin (Oblon). Unlike last year where there was near unanimous agreement that the Supreme Court’s decision in Alice v. CLS Bank was the biggest moment of the year, this year our panel of industry experts focused on a variety of different matters. There was one recurring theme, however. The inability of patent reform to advance on Capitol Hill was undoubtedly one of the biggest stories of the year.

Reversing the panel en banc, the Federal Circuit found that the ITC does have jurisdiction to issue an exclusion order predicated on induced infringement. Under Chevron step two, the Court deemed that the ITC’s interpretation of Section 337 was reasonable because it was “consistent with the statutory text, policy, and legislative history of Section 337,” as “Section 337 contemplates that infringement may occur after importation.” Further, the panel’s interpretation of Section 337 would unnecessarily “eliminate relief for the unfair trade act and induced infringement” by allowing foreign entities “to circumvent Section 337 by importing articles in a state requiring post-importation combination or modification before direct infringement could be shown.”

If the President disapproves of the ruling for policy reasons he has the authority to nullify the determination. The statute specifically explains that upon disapproval of the President an ITC determination “shall have no force or effect.” The problem that President Obama faces is very real and offers no easy way out. He will no doubt be pushed to used his authority under Section 1337(j) to disapprove of the ITC determination in order to assist Apple and AT&T, both important US companies. The trouble is that Apple is a non-practicing entity and could (and probably should) be properly characterized as a patent troll. So will President Obama use his authority under Section 1337 to help a patent troll?

This InterDigital complaint arises under Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337). Pursuant to Section 337, the ITC conducts investigations into allegations of unfair practices relating to importation and trade. Section 337 declares the infringement of certain statutory intellectual property rights and other forms of unfair competition to be unlawful practices. Section 337 investigations conducted by the U.S. International Trade Commission most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods. In this case, the InterDigital complaint asserts the defendants are infringing U.S. Patent Nos. 7,349,540, 7,502,406, 7,536,013, 7,616,970, 7,706,332, 7,706,830, and 7,970,127.