Posts Tagged: "International Trade Commission"

Licensing U.S. intellectual property strengthens the economy and improves our trade balance. Section 337, the statute that regulates unfair practices in import trade, is a key element of the nation’s trade laws and ensures that American innovators, including licensing companies, will not be harmed by the importation of goods that infringe valid and enforceable U.S. patents. Importers of foreign made products – both U.S. based and foreign companies – have appealed to Congress for several changes to Section 337 that would, in effect, limit access to the ITC and/or weaken the powers of the ITC to deal with cases of unfair trade practices. Weakening the ITC’s jurisdiction would benefit foreign economies, foreign competitors, and other foreign manufacturers to the detriment of the U.S. economy.

Perhaps the infringer lobby needs a refresher course on the rights granted to a patent owner. 35 U.S.C. § 271(a) says: “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” (emphasis added). So, as it turns out, importation of products covered by a patent during the term of the patent are an infringement of the patent rights granted. Let’s not forget that at the end of the day what these Silicon Valley elite are arguing is that it should be more difficult for a patent owner to stop infringement. The wrong-doers are NOT the patent owners who have the audacity to exercise rights granted by the federal government. The wrong-doers are those who infringe those rights and there is absolutely no reason to make it easier for them to engage in infringement.

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. Ultimately, the Federal Circuit ruled that claim 15 of the ‘985 patent, correctly construed, covers the domestic industry turbines. Of note, the CAFC continues to interpret “connected to” and “coupled to” as not requiring physical separation.

On Thursday, June 7, 2012, the U.S. International Trade Commission (ITC) announced that it had launched an investigation into whether certain RF Micro Devices, Inc. (RFMD) products infringe patents owned by Peregrine Semiconductor Corporation, a leading provider of high-performance radio-frequency (RF) integrated circuits (ICs). The action and investigation initiated by the ITC include Motorola Mobility, Inc. and HTC Corporation (HTC), whose products incorporate the alleged infringing RF ICs. Peregrine holds numerous U.S. and foreign patents based on its work in developing and manufacturing high-performance products that can be produced using standard CMOS-based semiconductor manufacturing processes. These patented innovations allow RF solutions to be produced with a combination of high levels of monolithic integration and performance, small size and low power consumption.

Commenting on the Yahoo! Inc. patent infringement lawsuit filed against Facebook in March of 2012, Mr. Cuban concludes his post by stating: “I hope Yahoo[!] is awarded $50 billion dollars. It is the only way that consumers will realize what is at stake with patent law as is. Then maybe we can get it right and further innovation and competition in this country.” These statements are from a very influential technology entrepreneur, investor and generally-recognized American business guru. Thus, it would seem that the continuous negative headlines from the smart phone patent wars are definitely giving patents a bad rap!

What’s troubling is that Hewlett Packard itself, the original startup headquartered in a garage, was one of the earliest and most-respected leaders of the 20th Century high-tech revolution that had its epicenter in Silicon Valley. It was William Hewlett who gave a 13-year-old Steve Jobs spare parts for a device Jobs was building — and a summer job as well. And it was Mr. Hewlett and his executive heirs who insisted that HP conscientiously patent its breakthrough innovations and fight against those that infringed those patents. HP today earns hundreds of millions of dollars annually by licensing its patent rights to others — according to IAM magazine, “at any one time, HP has about 150 licensing transactions in process.” And as the court dockets show, it certainly isn’t shy about filing suit against infringers who refuse to take a license.

So who is the villain in all of these wars responsible for again giving patents a bad rap? Well, the villain in not the ITC, USPTO or any U.S. government agency. Nor it is any country’s protectionist trade regime, or an “irreparably broken” U.S. or global patent system. No, the real villains here may very well be a handful of companies that willingly contributed patented technologies to various SSOs, championing their adoption and encouraging their use in a host of consumer electronics, and now claim (years later) that the very producers they encouraged to implement these standards should be barred from making, using or importing their products into the U.S. market.

The avalanche of patent assertion entities (PAE) cases, in the ITC and District Court, exists because the PTO issues hundreds, if not thousands of patents that can be asserted against every minute feature and functionality of tech products and services. The overwhelming majority issued to so-called inventors who played no part in developing these features and functionalities, including to patent mills that specialize in stalking the development of technology standards and obtaining claims they hope will read on those standards. And tech patent applications often pend (through continuations) for 10 years or more, enabling patentees to intentionally draft claims to read on existing products and services. In fact, these euphemistically entitled “early priority date” patents are the grist of tech patent litigation today, including PAE cases in the ITC.

Such is the case with the newest lobby in Washington, the self-described “ITC Working Group.” You won’t learn anything about this organization by searching Google — odd, considering that Google is a member — but according to industry sources, its aim is twofold: First, it wants to block the International Trade Commission (ITC) from hearing patent infringement cases brought by “non-practicing entities” — i.e., patent holders like universities, independent inventors, and others who license their patents for manufacturers to commercialize. And second, it wants to weaken the ITC’s power to block the importation of infringing products into the U.S.

Simply stated, the OPEN Act would be completely and totally ineffectual and, therefore, it must be opposed. There is simply no point in enacting more pointless legislation, we have enough pointless legislation already. Content creators cannot create in a vacuum devoid of economic reality. If you take eyeballs away and/or provide things for free that are supposed to be paid for you are causing injury and making it all the more difficult to be a content creator. Think about it for a second. The content that you most value, is that created by commercial enterprises or people just doing it for free as a hobby in their spare time? If you are honest with yourself we both know the answer.

To me a patent troll is not just someone who has acquired a patent for purpose of licensing or bringing a lawsuit, but rather one who is engaging in some kind of unfair business practice. The telltale sign of a patent troll is one who is abusing the patent right in order to shake down a defendant for payment. This type of behavior is typically exhibited by non-practicing entities who are not innovators, but rather acquire patent rights. However, the act of bringing specious claims to provoke a settlement would, in my opinion, be just as bad if brought by an innovator.

The vast number of America’s companies that need patents to prosper and grow should fear the post-grant provisions for challenging patents in H.R. 1249, the patent reform bill passed last month by the House of Representatives. In a system already plagued by delays in granting patents, they threaten to delay courts from enforcing patents once finally granted. This threat has received little attention, perhaps because advocates of the bill promise promptness that they cannot deliver.

The Innovation Alliance is disappointed that the America Invents Act as introduced today in the House of Representatives does not include some important safeguards against the potential for abuse of the post-grant review procedures at the U.S. Patent and Trademark Office (USPTO). In particular, the bill includes a weak threshold for ‘second window’ inter partes review proceedings, one that will allow virtually all challenges to proceed to a trial-like hearing before an administrative patent judge. We believe a higher threshold is needed to enable the USPTO to manage the increased workload of the new administrative review system fairly and efficiently by screening out meritless or unsubstantiated petitions.

The final decision in the ITC case brought by Kodak is expected by May 23, 2011, after deliberation of the full ITC Commission. As we wait for the full ITC Commission decision we are left to wonder. The patent at issue relates to a technology invented by Kodak for previewing images on a digital camera-enabled device and the claims of this particular Kodak patent were recently confirmed as valid by the U.S. Patent and Trademark Office (USPTO). So it would seem that the ITC may be poised to issue a ruling contrary to the determination of the Patent Office during reexamination proceedings.