ITC Patent Docket Update

New Complaint

On July 12, the ITC received a Section 337 complaint from Dynamics, Inc., a U.S.-based company that designs and makes credit cards. Captioned as Mobile Devices with Multifunction Emulators, the complaint alleges infringement by Samsung of patents describing a credit card or other device that produces a magnetic field to mimic the swipe of a credit card without needing a magnetic stripe. Dynamics wants to block importation of all Samsung mobile phones and smartwatches that work with Samsung's mobile payment service, Samsung Pay.

Like so many other 337 investigations, this complaint appears to be part of a dispute between a patent holder and a potential licensee that can and should be decided in court. Dynamics has also sued Samsung in the Southern District of New York where a constitutionally appointed federal judge is fully capable of determining the validity and scope of Dynamics's patent claims. There is no suggestion here that trade relief might be necessary to protect a domestic industry from import competition by unreachable foreign infringers.

Severing Investigations

A complaint filed at the end of April by Lighting Science Group has led to the institution of three separate Section 337 investigations. The original complaint named twenty five respondents representing ten companies and asserted eight patents as well as a claim of false advertising. Proposed respondents submitted a multitude of public interest statements, requests not to institute, requests for early disposition on whether the complaint violates a settlement agreement, and a specific request from one respondent group to sever the complaint into two separate investigations.

The ITC has significant discretion in deciding whether and how to divide a complaint into multiple investigations. In a 2018 rulemaking, however, the agency noted that "instituting multiple investigations based on a single complaint would likely occur where the complaint alleges a significant number of unrelated technologies, diverse products, unrelated patents, and/or unfair methods of competition or unfair acts such that the resulting investigation, if implemented as one case, may be unduly unwieldy or lengthy."

In this instance, the complaint ITC chose to institute two separate investigations from the complaint. One of those—Light-Emitting Diode Products, Systems, and Components Thereof (II)—involves only four of the respondent companies accused of infringing two patents related to light fixture design and of false advertising related to compliance with the ENERGY STAR standard. The other investigation included the remaining patent claims and all named respondents but was furthered severed on July 10 by the administrative law judge assigned to the case, so that LED Products I will involve three patents related to upstream LED packages and LED Products III will involve two patents related to LED light fixtures.

Initial Determinations

On July 1, the ITC released a public version of the Final Initial Determination in Gas Spring Nailers (Inv. 1082) finding no violation of Section 337 by respondent Hitachi, because neither the accused products nor the domestic industry products practiced the claims of the patent. That is, complainant Kyocera failed to make its case on infringement and on the technical prong of the domestic industry test. Both parties are seeking review by the Commission of various patent-related findings in the Final ID.

ALJ Cheney issued a Final Initial Determination on July 12 in Convertible Sofas (Inv. 1122) finding that complainant Sauder's design patent was invalid for lacking an adequate written description and in any event was not infringed by respondent Kruger.

Also on July 12, ALJ Lord issued a Final Initial Determination in Microfluidic Systems (1100) finding a violation of Section 337 by Bio-Rad due to infringement of three of the four patents asserted by 10X Genomics.

Commission Review

The Commission is currently reviewing a Final Initial Determination in Digital Video Receivers II (Inv. 1103) that found Comcast violated Section 337 by importing cable boxes that infringed patents owned by Rovi, a licensing company that owns Tivo. This is the second of three cases Rovi has filed against Comcast at the ITC: the first—Digital Video Receivers I (Inv. 1001)—is currently under appeal at the Federal Circuit and the third—Digital Video Receivers III (Inv. 1158)—was just recently instituted in May 2019.

If the Commission reverses any findings in the Final ID, they will almost certainly do so on patent-related issues like claim construction, infringement, or validity. That's because the current case presents nearly identical facts on importation, jurisdiction, and domestic industry as the first DVR case, in which the ITC already found in Rovi's favor—a decision that was remarkable for its seemingly limitless interpretation of the agency's power to adjudicate purely domestic patent disputes.

For the same reason, no one should expect the Commission to find that the public interest compels them to deny an exclusion order. Nevertheless, the agency has received half a dozen submissions on the public interest from third-party organizations. The submissions all come from conservative policy organizations and offering similar, generic arguments about the value of enforcing patent rights.

Termination

On July 10, the ITC officially terminated Data Transmission Devices (Inv. 1150) after the complainant Data Scape moved to withdraw the complaint. The investigation

In a previous post, I described Data Transmission Devices as "the worst sort of Section 337 case." The accused products included all phones, tablets, and laptops made by Apple, Amazon, and Verizon, who were accused by a licensing company based in Ireland of infringing a patent on the "transfer of selected data from one device to a second device."

By instituting the investigation, the ITC was acting on behalf of "a foreign non-practicing entity seeking to ban three major American companies from importing billions of dollars worth of high-tech consumer products based on patents that are allegedly infringed when those companies offer services over the internet." In no way was this a trade dispute that warranted any sort of special remedy or preferential treatment.

The complainant apparently withdrew its ITC case after its patents were recently held invalid by a federal judge in a parallel district court lawsuit. So, ultimately, this investigation served no purpose but to increase litigation costs and waste taxpayer money.

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