Posts Tagged: "ITC"

This week in Other Barks & Bites: the Federal Circuit affirms a Section 101 invalidation of patent claims in favor of Mayo Collaborative Services; Apple wins an order to limit damages in Qualcomm patent case; Google frets over proposed European Union copyright rules; India proposes jail time for film piracy; patent validity challenges drag down the stock of a major pharmaceutical firm; and a snag in the U.S.-China trade talks throws Wall Street for a loop.

5G, or 5th generation wireless communication, has reached the point of determining which core technologies will be used. Suddenly, decisions about which companies will be picked are upon us. And the stakes could hardly be higher — for the companies and for our national (and American citizens’) security. The two businesses in the ring, Qualcomm and Huawei, each find themselves in a tough fight to dominate the IP-based 5G technology on which countless devices—from automobiles to mobile phones to who-knows-what—will interoperate. The 5G platform will empower the Internet of Things, artificial intelligence writ large and more—a technological advance with tremendous potential as well as tremendous risk exposure to spies, hackers and such. Both companies face hurdles from the U.S. government. One makes sense. The other makes no sense.

Standard Essential Patents (SEPs) are patents that are unavoidable for the implementation of a standardized technology. They represent core, pioneering innovation that entire industries will build upon. These patents protect innovation that has taken extraordinary effort to achieve. Standard Development Organizations (SDOs) exist as a mechanism for industry innovators to work together to collectively identify and select the best and most promising innovations that will become the foundation for the entire industry to build upon for years to come. Those contributing patented technologies to the development of a standard are asked to provide a FRAND (which stands for Fair, Reasonable and Non-Discriminatory) assurance, in essence committing to providing access to patents that are or may become essential to the implementation of the standard.

The doctrine of assignor estoppel has been around for over a century and most often applied in the U.S. International Trade Commission (ITC) and U.S. district courts to prevent a first party assigning a patent to a second party from then challenging the validity of the patent they had just assigned. In a November 9, 2018 decision, the U.S. Court of Appeals for the Federal Circuit ruled that the doctrine of assignor estoppel does not apply in the inter partes review (IPR) context (see Arista Networks, Inc. v. Cisco Systems, Inc., (Fed. Cir. 2018). This raises intriguing possibilities regarding how companies might be able to protect themselves. One possibility might be to revise their employment agreements for signing by new employees.

In devices such as the iPhone, Apple and Intel merely operate on the technological connectivity platform Qualcomm created. In short, what Intel does well doesn’t compete meaningfully with Qualcomm where American 5G leadership is concerned… Apple’s cavalier conduct toward other people’s intellectual property should run into a red, white and blue brick wall at the American border, courtesy of the ITC, in the form of immediately effective exclusion and cease-and-desist orders, keeping iPhone imports that infringe Qualcomm’s patents out of the United States.

Although many readers might be more familiar with patent infringement claims asserted in Section 337 actions at the ITC, BIC Vice President and General Counsel Steve Burkhart notes that trademark and trade dress infringement claims in a Section 337 context aren’t terribly different. “We’ve had our three-dimensional trademark registration for decades,” Burkhart said, adding that one of the defendants in the ITC action was familiar with BIC’s trademark because it was cited as a basis for denying their own trademark application filed with the U.S. Patent and Trademark Office. “Quantitatively, you may see more Section 337 filings on the patent side but there are many examples in the patent and trademark areas where filings encounter denials because of prior art,” Burkhart said.

The Federal Circuit panel of Chief Judge Sharon Prost and Circuit Judges Jimmie Reyna and Kimberly Moore determined that the ITC erred in applying res judicata to deny the petition without considering the effect of district court litigation which invalidated the claims asserted in the Section 337 proceeding… Ultimately, the Federal Circuit ruled that the ITC is not barred from reassessing the EPROM factors and determining whether to modify or rescind the civil penalty based on the final judgment of invalidity. The ITC’s decision was, therefore, reversed and the case remanded for the Commission to consider whether to rescind or modify the civil penalty in light of the final judgment of invalidity of the relevant claims.

An administrative law judge at the U.S. International Trade Commission recently found patent infringement in Qualcomm’s case against Apple, but then inexplicably refused to recommend that the commission issue an exclusion order against infringer Apple. Is there some new standard that “established and profitable companies” are no longer deserving of ITC action?  The International Trade Commission is in danger of causing the same harm to patent rights as the U.S. Supreme Court has inflicted on patent owners with the court’s lame-brained eBay decision.

“It seems self-evident that the same patent contested in different tribunals should have its meaning – its boundaries – determined using the same standard,” Director Iancu said when discussing the final rules implementing the Phillips standard at the PTAB… Those few who were not pleased by the change have cited a believe that the change to the Phillips standard would usher in a return to lower quality patents. With a bit of a confrontational tone, Director Iancu took issue with that, finding the argument without merit.

Despite finding patent infringement under Section 337 and upholding the validity of Qualcomm’s asserted patents, ALJ Pender found that the statutory public interest factors weighed against issuing a limited exclusion order in this case. This turns the victory for Qualcomm into nothing more than a pyrrhic victory at best given that the only remedy the ITC can hand out are exclusion orders and cease and desist orders. The ITC does not have any jurisdiction to hand out monetary damages. So what exactly would Qualcomm receive for Apple’s infringement? What exactly would Apple be required to pay or change as the result of engaging in infringing behavior? It would seem that there will be no remedy for Qualcomm under ALJ Pender’s decision, and no consequences for Apple infringing the patent claims that have been confirmed valid. 

Perhaps Rovi will take the opportunity to test the waters with the newly created Precedential Opinion Panel (POP), which is intended to bring uniformity between examination procedures and the PTAB at the USPTO. USPTO Director Andrei Iancu has promulgated new Standard Operating Procedures (SOPs), and new claim interpretations rules will soon be in effect at the PTAB. A patent litigator by training, Director Iancu seems very interested in the PTAB giving other tribunals that have previously considered validity matters due consideration, something the PTAB has rarely, if ever, done. With the creation of the POP, and new SOPs that give the Director the authority to make decisions of the PTAB precedential at his discretion, this string of Rovi cases could present a very interesting test case on whether the PTAB actually will provide deference to tribunals that have previously considered validity issues, or whether the PTAB with its lower threshold for invalidity will continue to be the court of last resort for infringers who have lost elsewhere. 

On Friday, October 5th, the U.S. International Trade Commission (ITC) issued a notice of institution of a Section 337 patent infringement investigation requested by New Zealand-based appliance manufacturer Fisher & Paykel against San Diego, CA-based medical equipment firm ResMed. The ITC instituted the Section 337 investigation after Fisher & Paykel alleged that certain sleep apnea products imported for sale by ResMed infringe upon U.S. patents held by the New Zealand firm.

Previously, the ITC instituted an investigation of Instradentdental implants based on a complaint filed by Nobel alleging violations of 19 U.S.C. § 1337 by reason of importation of an implant product infringing the ’977 patent and another patent. The ITC’s Administrative Law Judge issued an Initial Determination finding claims 1–5 and 19 anticipated by the ABT catalog but the ITC later issued a Commission Opinion finding that Instradent failed to show by clear and convincing evidence, the standard applied by the ITC, that the ABT catalog is prior art under § 102(b). A Federal Circuit panel affirmed the ITC’s decision without opinion. Subsequently, Instradent petitioned for IPR of claims 1–7, 9, and 13–20 of the ’977 patent, and Nobel filed a statutory disclaimer of claims 9 and 13–18.

The result of the ITC investigation was a win for AMD with 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. 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.

On Monday, August 6th, Santa Clara, CA-based computer networking Arista Networks filed a Form 8-K with the U.S. Securities and Exchange Commission (SEC) announcing the firm had entered into an agreement with San Jose, CA-based networking rival Cisco Systems that dismisses all pending litigation between the two firms in both U.S. district courts and at the U.S. International Trade Commission (ITC). Under the terms of the agreement, Arista will pay Cisco $400 million this month in return for Cisco dropping all patent infringement claims which it has filed against Arista. In addition to Cisco dropping its patent infringement claims, Arista also agreed to drop all antitrust claims which it has filed against its rival.