Source: http://www.itcblog.com/component/tags/tag/federal-circuit-cases-involving-the-itc?start=20
Timestamp: 2019-04-23 00:12:25+00:00

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Further to our October 29, 2009 post, on April 12, 2010, the Federal Circuit issued its opinion in SiRF Technology, Inc. v. ITC (2009-1262). In the opinion, the Federal Circuit affirmed the ITC’s findings that Global Locate, Inc (“GL”) had standing to assert U.S. Patent No. 6,606,346 (the ‘346 patent) and that SiRF Technology (“SiRF”) directly infringed both U.S. Patent Nos. 6,704,651 (the ‘651 patent) and 6,651,000 (the ‘000 patent), owned by GL. By way of background, GL filed a complaint with the ITC against SiRF in 2007, alleging that SiRF’s importation and sale of certain Global Positioning System (“GPS”) chips, chipsets, products, and software infringed the ‘346 patent, the ‘651 patent, the ‘000 patent, U.S. Patent No. 6,937,187 (the ‘187 patent), U.S. Patent No. 7,158,080 (the ‘080 patent), and U.S. Patent No. 6,417,801 (the ‘801 patent). The ITC instituted an investigation (Inv. No. 337-TA-602). ALJ Carl C. Charneski issued an initial determination on August 8, 2008, concluding that all asserted claims were valid and infringed. SiRF and the Commission Investigative Staff petitioned for review of several of ALJ Charneski’s rulings, but the ITC determined to review only three: (1) whether GL had standing to assert the ‘346 patent, (2) whether SiRF directly infringed the ‘651 patent, and (3) whether SiRF directly infringed the ‘000 patent. The ITC declined to review aspects of the ALJ’s decision relating to claim construction, invalidity, and infringement. On January 15, 2009, the ITC found that GL had standing to assert the ‘346 patent and that SiRF directly infringed both the ‘651 patent and the ‘000 patent. The ITC did not address several issues raised by SiRF, including claim construction issues and whether the intervening In re Bilski decision rendered certain of the claims of the ‘187 patent and the ‘801 patent not eligible under 35 U.S.C. § 101. The ITC issued a limited exclusion order and cease-and-desist orders, prohibiting the importation and sale of covered GPS devices. SiRF appealed the ITC decision. In its appeal, SiRF asserted that the investigation should have been terminated as to the ‘346 patent because of lack of standing due to the failure to join a co-owner of the patent. Specifically, SiRF argued that the invention was conceived while the inventor worked for another company, and that the other company should be deemed a co-owner of the patent. In reaching its decision to affirm the ITC’s finding that GL had standing, the Federal Circuit considered the language of the inventor’s employee agreement with the other company. That agreement required that employees assign “all inventions… which are related to or useful in the business” to the company. The Federal Circuit agreed with the ITC’s findings that SiRF did not prove that the ‘346 patent was “related to or useful in” the other company’s business, and thus failed to establish that the other company was a co-owner of the patent. Regarding the ‘651 and ‘000 patents, SiRF asserted that it did not infringe the two patents because it did not perform all of the steps in the method claims since, according to SiRF, certain steps of the method claims directed to satellite communication were performed by customers and end users. The ITC found joint infringement of such method claims. However, the Federal Circuit did not address joint infringement. Instead, the Court reviewed the claim construction, and concluded that SiRF directly infringed the claims. According to the Federal Circuit’s claim construction, the “communicating” step of claim 1 of the ‘651 patent and the “transmitting” step of the ‘000 patent are not limited to direct communication or transmission. Accordingly, SiRF performed these steps by initiating the process of communicating or transmitting, if the files are actually transmitted to the end users. No downloading - the step completed by the receiver- is required by the claim. The Federal Circuit also considered the construction of the “processing” limitation in claim 1 of the ‘651 patent, and the “representing” step in claim 1 of the ‘000 patent. The parties agreed that these steps must take place in the mobile GPS device. SiRF asserted that this meant the end users had to initiate the steps. The Federal Circuit disagreed, and found that SiRF infringed since its devices and software dictate the performance of the “processing” and representing” steps. The Federal Circuit noted that “once the GPS receiver is enabled and ready to process the data, only SiRF’s actions are involved in ‘processing’ or ‘representing’ the data.” Since SiRF performed all of the steps, the Federal Circuit found direct infringement. The Federal Circuit found SiRF’s arguments regarding certain issues which the ITC declined to review unpersuasive, including issues regarding claim construction in the ‘080 patent, the ‘801 patent, and the ‘187 patent. However, the Federal Circuit did comment on SiRF’s In re Bilski argument. SiRF asserted that the methods of the ‘801 and ‘187 patents do not meet the “tied to a particular machine or apparatus” or “transforms a particular article into a different state or thing” tests announced in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), rendering the claims not patent-eligible under 35 U.S.C. § 101. SiRF contended that the claimed methods could be performed entirely in the human mind. The Federal Circuit disagreed. The Court noted that claim 1 of the ‘801 patent required “pseudoranges” to estimate the distance from “the GPS receiver to a plurality of GPS satellites.” Claim 1 of the ‘187 patent requires the estimation of “states” that are “associated with the satellite signal receiver, and the formation of a “dynamic model… to compute [the] position of the satellite signal receiver.” The Court found that the methods could not be performed without the use of a GPS receiver, and that the presence of the GPS receiver placed a “meaningful limit on the scope of the claims.” Thus, the Court held that the claims of the ‘801 and ‘187 patents were directed to patentable subject matter.
Further to our November 27, 2009 post, on May 26, 2010, the Federal Circuit issued its decision in Vizio, Inc. v. Int’l Trade Comm’n, No. 2009-1386. In the decision, the Federal Circuit affirmed-in-part and reversed-in-part the International Trade Commission’s (“the Commission”) final determination in Certain Digital Televisions and Certain Products Containing Same and Methods of Using Same (Inv. No. 337-TA-617), and remanded. By way of background, on October 15, 2007, Funai Electric Co., Ltd. and Funai Corporation (collectively, “Funai”) filed a complaint alleging violations of Section 337 through importation or sale of certain digital televisions that infringed several claims of U.S. Patent Nos. 6,115,074 (“the ‘074 patent”) and 5,329,369 (“the ‘369 patent”). The complaint named Vizio, Inc., AmTran Technology Co., Ltd., TPV Technology Ltd., TPV International, Inc., Top Victory Electronics Co., Ltd., and Envision Peripherals, Inc. (collectively, “Appellants”) as respondents. On November 15, 2007, the Commission instituted an investigation (Inv. No. 337-TA-617). ALJ Carl C. Charneski held an evidentiary hearing in August 2008 and issued an Initial Determination (“ID”) on November 17, 2008. In his ID, ALJ Charneski found a violation of Section 337 with respect to the ‘074 patent and concluded that the asserted claims of the ‘074 patent were not invalid and infringed by both Appellants’ legacy and work-around products. ALJ Charneski found no violation with respect to the ‘369 patent. The ’074 patent relates to apparatuses and methods by which television decoder devices identify and assemble specific “channel map information” carried in an MPEG compatible datastream in order to decode a digital television user’s selected program in a digital transmission. The asserted claims of the ‘074 patent relate to the replication of this “channel map information.” In the ID, ALJ Charneski construed the claim term “channel map information” to include at a minimum 4 specific data fields (program number, PCR_PID, elementary_PID, and stream_type) and that in order for the claimed apparatus to operate under an MPEG standard, certain Program Map Table (“PMT”) information must also be used. On February 11, 2009, the Commission determined to review the ID in part. On April 10, 2009, the Commission issued a Final Determination overturning ALJ Charneski’s finding of direct infringement by testing as to some respondents, but otherwise affirming ALJ Charneski’s findings with respect to infringement and validity. The Commission also accepted ALJ Charneski’s recommendations concerning remedy, which included the issuance of a limited exclusion order and cease-and-desist orders. Appellants then timely filed an appeal to the Federal Circuit. On appeal, in an opinion written by Judge Dyk, the Federal Circuit first addressed three issues of claim construction. The first issue was whether “channel map information” must replicate the four specific data fields named in ALJ Charneski’s ID and by the Commission. Appellants argued that only one of the four data fields was required. The Federal Circuit concluded that, based on intrinsic evidence and the understanding of one of ordinary skill in the art, the claims reciting “MPEG compatible channel map information” referred to the MPEG-2 standard. These claims thus required associating the program with all of the identifiers conveyed in the MPEG-2 program map information that are necessary to constitute a program, specifically all four minimum data fields identified by ALJ Charneski and the Commission. The second claim construction issue considered was whether the claims precluded the use of information other than “channel map information,” particularly whether they precluded the use of the MPEG PMT (i.e., the data used for decoding in the prior art). Appellants argued that the patentees had disavowed any and all use of the PMT during prosecution of the ‘074 patent. The Federal Circuit found that the cited statements from the ‘074 patent’s prosecution history merely explained the benefits of the patented invention over the prior art, namely, that it did not require the use of the MPEG PMT. Thus, the Federal Circuit agreed with the Commission, concluding that there had been no broad disclaimer of any and all use of the PMT, only a disclaimer of systems that required the use of the MPEG PMT. The third claim construction issue addressed was whether the claims required that the device and method be capable of utilizing the “channel map information,” or whether mere receipt and storage of the “channel map information” is sufficient. The Federal Circuit agreed with appellants that the “channel map information” must be capable of being used. Funai argued that even if the “channel map information” must be used for decoding, only some, not all, of the data need be suitable for use. The Federal Circuit disagreed, finding that all 4 minimum data fields of the “channel map information” must be suitable for use in decoding. Using this claim construction, the Federal Circuit affirmed the Commission’s determination that the asserted claims were not invalid. With regard to infringement, the Federal Circuit found that although Appellants’ legacy products infringed under the adopted claim construction, Appellants’ work-around products did not. The Federal Circuit concluded that the work-around products did not convert all the necessary “channel map information” into a useable format, and thus did not meet the requirements identified in the construction of the third claim construction issue discussed above. The Federal Circuit found no infringement by the work-around products, reversing the Commission’s determination in that respect and remanding. In dissent, Judge Clevenger disagreed with the majority’s finding of non-infringement with regard to the work-around products. Judge Clevenger stated that the third claim construction issue identified by the majority was not raised by the parties, and thus was not appealed. Therefore, Judge Clevenger expressed his opinion that, as that issue was not properly before the Federal Circuit, it should instead affirm.
Whether such an agreement, even if found to be anti-competitive, can be a proper basis for a patent misuse defense preventing enforcement of other patents used to practice the standard.
While it is difficult to predict how the CAFC will rule in Princo, in order to determine whether the license agreement is anti-competitive on its face, the court will likely consider the possible effects of such an agreement. One possible anti-competitive effect that could result from an agreement of this type relates to what would happen if a particular standard, which is the subject of such an agreement, fails. For instance, it may be the case that two standards are in direct competition. There may be patents that are considered essential to both standards. If one of the standards was to fail due to widespread adoption of the competing standard, and an agreement such as the one at issue in Princo is in place, developers of the failed standard would be left with a number of essential patents that may be unavailable for inclusion in a pool linked to the surviving standard. As a result, the pro-competitive advantage provided by the pooling of essential patents would have been impeded. In contrast, if an agreement between developers of a new standard to license a patent to be used only under the standard was found to be anti-competitive on its face, such agreements would be disfavored, and the resultant problems would be avoided. In addition, it is possible that a ruling that is consistent with the FTC’s amicusbrief may result. The FTC’s amicus brief takes the position that an agreement not to license a patent except for uses complying with a particular standard should be justified only when done ex ante (i.e., before the standard is finalized), and only when reasonably necessary to further pro-competitive technical collaboration. Whatever the outcome, the CAFC ruling in the Princo case could have significant effects in the area of patent pools and standards. A ruling is expected soon.
On August 27, 2010, the Federal Circuit issued its opinion in Pass & Seymour, Inc. v. Int’l Trade Comm’n, 2009-1338, -1369. This was an appeal by Pass & Seymour, Inc. (“P&S”) from the Commission’s final determination in Certain Ground Fault Circuit Interrupters and Products Containing Same (Inv. No. 337-TA-615) that General Protecht Group, Inc., Wenzhou Trimone Science and Technology Electric Co., Ltd., and Shanghai ELE Manufacturing Corp. (collectively, the “Respondents”) do not infringe the asserted claims of U.S. Patent Nos. 5,594,398 (the ‘398 patent) and 7,212,386 (the ‘386 patent) and therefore have not violated Section 337. See our June 4, 2010 post for more details. In the opinion, the Federal Circuit agreed with the Commission’s claim construction and infringement analyses and affirmed the determination of no violation of Section 337. The asserted patents and accused products at issue relate to circuit interrupters for use with household electrical appliances. In particular, the ‘398 patent is directed to improved ground fault circuit interrupters and the ‘386 patent is directed to a device that protects users and appliances from damage caused by miswiring. Two critical claim terms were at issue in the ‘398 patent: (1) the requirement that “both” contacts be in a spaced, circuit-breaking second position, and (2) the requirement that the electrically conducting member be “unitary” and “carry” the pair of spaced contacts. The Commission had found that the plain language of the claim required a construction of “both” that was not satisfied by the movement of only one contact. The Commission had also found that the specification required construing “unitary” to mean that the member was a single, continuous piece and that both contacts are disposed on the same member. Based on this claim construction, the Commission had found no infringement of the ‘398 patent by the Respondents’ accused products. On appeal, the Federal Circuit stated that it agreed with the Commission’s claim construction and infringement analyses, and affirmed. In the ‘386 patent, the dispute was over the claim limitation of a “circuit interrupter coupled to the actuator assembly, the circuit interrupter being configured to disconnect the first conductive path from the second conductive path in response to the actuator signal in the reset state.” Based on the plain language of the claim and the intrinsic evidence, the Commission had found that the circuit interrupter had to be configured to trip in response to the actuator signal in the reset state. The Federal Circuit agreed with this construction and dismissed P&S’s arguments to the contrary. The court then affirmed the Commission’s findings of non-infringement of the ‘386 patent by Respondents’ accused products. Accordingly, the Federal Circuit affirmed all of the Commission’s claim construction and infringement findings, as well as the Commission’s final determination of no violation of Section 337.
On August 27, 2010, the Federal Circuit issued its opinion in General Protecht Group, Inc. v. Int’l Trade Comm’n, 2009-1378, -1387, -1434. This is one of two opinions relating to appeals from the ITC’s March 9, 2009, final determination in Certain Ground Fault Circuit Interrupters and Products Containing Same (Inv. No. 337-TA-615). The Federal Circuit affirmed the ITC’s determination in all respects except for reversing and remanding infringement determinations regarding two of the three patents that the ITC found infringed. By way of background, Pass & Seymour (“P&S”) initiated the investigation against a number of respondents in connection with the importation and sales of products containing Ground Fault Circuit Interrupters (GFCI) that allegedly infringed U.S. Patent Nos. 7,212,386, 5,594,398 (the ‘398 patent), 7,283,340 (the ‘340 patent), and 7,165,564. Only three of the original respondents are involved in the appeals: General Protecht Group, Inc. (“GPG”), Shanghai ELE Manufacturing Corporation (“ELE”), and Wenzhou Trimone Science & Technology Electric Co. Ltd. (“Trimone”) (collectively, the “Appellants”). The ITC found that GFCI devices manufactured by Appellants infringe one or more claims in the ‘398 patent, the ‘564 patent, and the ‘340 patent, and that none of these patents is invalid or unenforceable. See our June 4, 2010 post for more details. ‘340 Patent The ITC found that the GFCI devices from each Appellant infringed the ’340 patent. Specifically, GPG’s 2003 and 2006 GFCIs infringed claims 14 and 18; Trimone’s 2006 GFCIs infringed claims 14 and 18; and ELE’s 2006 GFCIs infringed claims 14, 18, and 30. The opinion describes the ’340 patent as directed to a GFCI receptacle that detects the wiring state of the device and inhibits operation if the device is miswired. To effect the miswiring protection, the ’340 patent requires a “detection circuit” to detect whether the GFCI device is properly wired to an electrical circuit, and “four sets of interrupting contacts” configured to make or break an electrical circuit between the line terminals and the load terminals. The Appellants and the ITC did not challenge the ALJ’s interpretation of “detection circuit,” as meaning “at least one detection circuit having a circuit segment connected between the line terminals and configured to generate a predetermined signal in response to detecting a proper wiring condition, which occurs when the line terminals are connected to a source of AC power.” The Federal Circuit held that the ITC erred because the construed claims require the “detection circuit” to “generate a predetermined signal in response to detecting a proper wiring condition,” while the “predetermined signal” relied upon by the ITC was merely the “current flow” originating from the hot line terminal. In other words, the identified circuit does not generate this current; it is the current that comes from the AC power connection. So according to the opinion, instead of detecting a proper wiring condition and generating a signal in response, as the properly construed claim requires, the accused GFCIs simply have power to operate, or not. For this reason, the Federal Circuit reversed the ITC’s determination that ELE’s 2006 GFCIs infringe claims 14, 18, and 30 of the ’340 patent and GPG’s 2003 and 2006 GFCIs infringe claims 14 and 18 of the ’340 patent. The Federal Circuit further held that the ITC erred by counting receptacle outlets as two of the “four sets of interrupting contacts” required by the ‘340 patent. The issue turned on whether receptacle outlets could be considered “load terminals.” The opinion held that the ‘340 patent, “never describes receptacle outlets as load terminals,” and that, “the circuit diagram drawings in the ’340 patent all clearly label the load terminals separately from the receptacle outlets.” Additionally, the opinion stated, “experts here never suggested that receptacle outlets, which they also called ‘user load terminals’ or ‘user accessible load terminals,’ could be referred to as simply load terminals.” Instead, “they were fastidious in referring to them as separate elements.” For this reason, the Federal Circuit held that Trimone’s 2006 GFCIs and ELE’s 2006 GFCIs do not infringe the asserted claims of the ’340 patent. The ‘398 Patent According to the opinion, the ’398 patent discloses a new mechanical architecture for a GFCI receptacle, describing an improved contact system that can move between a circuit-making position and a circuit-breaking position. The ‘398 patent uses means-plus-function language to define several elements, including the limitation in dispute, which calls for a “latching means releasably retaining said conducting member.” The ITC held that the latching means of the ‘398 patent, described a mechanical structure, which included a pin passing through a hole in a block having a shoulder that cooperates with a hole in a latch member, and a spring biasing the pin to retain the conducting member. The Federal Circuit held that the ITC erred in determining that this mechanical arrangement was structurally equivalent to a magnetic latching system. It relied on Toro Co. v. Deere & Co., 355 F.3d 1313 (Fed. Cir. 2004), which held that “one system that accomplishes a function mechanically and another system that accomplishes the same function using magnetic force ‘function in fundamentally different ways.’” * * * * * * For all of the above reasons, the Federal Circuit reversed the ITC’s findings that GPG’s 2003 GFCIs infringe claims 14 and 18 of the ’340 patent; that GPG’s 2006 GFCIs infringe claims 1 and 7 of the ’398 patent and claims 14 and 18 of the ’340 patent; that Trimone’s 2006 GFCIs infringe claims 14 and 18 of the ’340 patent; and that ELE’s 2006 GFCIs infringe claims 14, 18, and 30 of the ’340 patent. The Federal Circuit additionally remanded to the Commission to modify its limited exclusion order. Judge Newman filed a dissenting opinion, arguing that substantial evidence supported the ITC’s determination that Appellants’ devices contained a “detection circuit” as per the ‘340 patent. Similarly, Judge Newman found substantial evidence supporting the position that receptacle outlets should be considered “load terminals.” She further found that a magnetic latch was known to be interchangeable with a mechanical latch and that her colleagues incorrectly overstated Toro as holding that there can never be equivalence between a mechanical latch and a magnetic latch.
On August 30, 2010, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued its decision in connection with the en banc arguments in Princo Corp. v. Int’l Trade Comm’n, (2007-1386). Although several issues were raised by the briefs for Philips and the ITC, the court focused mainly on the issue raised in the Philips brief as to whether any agreement between Philips and Sony to suppress the technology embodied in Sony’s Lagadec patent would constitute patent misuse and would be a defense to Philips’ claim of infringement against Princo. In answering that question, the court held that such an agreement would not fall under the purview of patent misuse and would not render unenforceable Philips’ Raaymakers patents which were asserted against Princo and which were part of the Orange Book pooling agreement. In the holding, the court addressed two main points. First, the court explained that a patent misuse allegation must be directly related to the patents accused of misuse and must be more than a general “part and parcel” of the licensing agreement. Second, the court addressed whether the conduct at issue constituted an antitrust violation and applied the rule of reason to conclude there was no antitrust violation. In discussing the first point, the CAFC emphasized that “the purported agreement between Philips and Sony has none of the features that courts have characterized as constituting patent misuse. In particular, it does not leverage the power of a patent to exact concessions from a licensee that are not fairly within the ambit of the patent right.” The court went on to say that “if the purported agreement between Philips and Sony not to license the Lagadec technology is unlawful, that can only be under antitrust law, not patent misuse law; nothing about that agreement, if it exists, constitutes an exploitation of the Raaymakers patents against Philips’s licensees.” Specifically, the court drew a distinction between the present case and the line of patent misuse cases such as Motion Picture Patents Co. v. Universal Film Manufacturing Corp., 243 U.S. 502 (1917), Carbice Corp. of America v. American Patents Development Corp., 283 U.S. 27 (1931), and Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942) in which the patent owner leveraged his patents against the accused infringer to gain some added advantage from the patent. For instance, in Morton Salt the owner of the patent required that certain salt tablets be used in his patented machine. When different tablets were used, the user of the machine was sued for infringement. In contrast, in the present case, the court found that Philips had not leveraged the Raaymakers patents against Princo. Instead the court found that the requirement that the Lagadec technology be licensed together with the Raaymakers patents was within the rights of the patent owner and did not constitute patent misuse. In discussing the second point, the CAFC emphasized that agreements such as the one allegedly made between Philips and Sony would not have anticompetitive effects. Specifically, the court stated that “although joint ventures can be used to facilitate collusion among competitors and are therefore subject to antitrust scrutiny, see NCAA v. Bd. of Regents of the Univ. of Okla., 468 U.S. 85, 113 (1984), research joint ventures such as the one between Philips and Sony can have significant procompetitive features, and it is now well settled that an agreement among joint venturers to pool their research efforts is analyzed under the rule of reason.” In addition, the court stated that “the ‘ancillary restraints’ that are often important to collaborative ventures, such as agreements between the collaborators not to compete against their joint venture, are also assessed under the rule of reason.” Thus, based on the rule of reason, the court found that the agreement ancillary to the agreement corresponding to the Orange Book standard was not anti-competitive at least because such ancillary restraints cannot be viewed in isolation, but in the context of the joint venture or other collaborative effort. In addition, the court highlighted that the Lagadec technology was not a viable potential competitor to the technology embodied in the Raaymakers patents providing another reason that the agreement could not be considered anti-competitive. In the midst of the discussion of the question of anti-competitiveness, the court took the time to highlight the benefits provided by patent pools. For instance, the court stated that “collaboration for the purpose of developing and commercializing new technology can result in economies of scale and integrations of complementary capacities that reduce costs, facilitate innovation, eliminate duplication of effort and assets, and share risks that no individual member would be willing to undertake alone, thereby ‘promot[ing] rather than hinder[ing] competition.’” In addition, that court stated “cooperation by competitors in standard-setting ‘can provide procompetitive benefits the market would not otherwise provide, by allowing a number of different firms to produce and market competing products compatible with a single standard.’…those benefits include greater product interoperability, including the promotion of price competition among interoperable products; positive network effects, including an increase in the value of products as interoperable products become more widely used; and incentives to innovate by establishing a technical baseline for further product improvements.” The ruling by the CAFC has shown that the CAFC recognizes the significant benefits provided by patent pooling agreements even to the point of promoting their use, which is a positive sign for companies looking to move forward in this area.
On October 6, 2010, the Federal Circuit issued its opinion in Lucky Litter LLC v. Int’l Trade Comm’n, No. 2009-1470, -1474. This was an appeal from the ITC’s final determination in Certain Self-Cleaning Litter Boxes and Components Thereof (337-TA-625) in which the Commission found violations of Section 337 as to both Respondents Lucky Litter, L.L.C. (“Lucky Litter”) and OurPet’s Company (“OurPet’s”) as a result of infringement of U.S. Patent No. RE36,847 (the ‘847 patent). The Federal Circuit concluded that the Commission erred when it read a “cat exit” limitation into claim 33, and that, without this limitation, the claim would have been obvious. It reversed the Commission’s determination that claim 33 was not proven to be invalid and vacated the corresponding exclusion orders and cease-and-desist orders. By way of background, and as reported in our February 11, 2009 and April 13, 2009 posts, the investigation was instituted on December 28, 2007, based on the complaint of Applica Consumer Products, Inc. of Miramar, Florida (“Applica”) and Waters Research Company of West Dundee, Illinois (“Waters”). On December 1, 2008, ALJ Rogers determined that the Respondents Lucky Litter and OurPet’s violated Section 337 based on the importation, sale for importation, or sale after importation of certain self-cleaning litter boxes and components thereof by reason of infringement of claim 33 of the ‘847 patent. The Commission reviewed and affirmed ALJ Rogers’ findings of infringement and that claim 33 was not invalid, and issued both limited exclusion orders and cease-and-desist orders against Lucky Litter and OurPet’s. The Federal Circuit agreed with appellants that the construction adopted by the Commission – that “automatic operation position” be construed as “a position of the mode selector switch where combing is initiated in response to a cat exit” – was incorrect because neither the claim nor the specification provided support for limiting the term to a cat exit. Further, the Federal Circuit found that the prosecution history showed that “the patentee viewed his invention more broadly and sought reissue to remove ‘cat exit sensor and delay means which are too limiting of the invention.’” After determining the proper claim construction, the Federal Circuit then addressed the invalidity issue. It agreed that claim 33 was not anticipated by the Carlisi reference since Carlisi did not disclose a mode selector switch, as required by the claim. The Court found, however, that “even if Carlisi does not precisely disclose a mode selector switch, modifying Carlisi’s litter box to include such a switch would have been trivial to one of ordinary skill in the art.” The intervenors (Applica and Waters) asserted alternative bases for supporting a violation of Section 337 on the basis that the Commission erred when construing terms in other asserted claims of the ‘847 patent, and that under their proposed constructions, the accused products would infringe those other claims. The Court found these arguments “without merit” and concluded that there was no error in the Commission’s construction of these other claim terms.
On December 21, 2010, the Federal Circuit issued its opinion in Spansion, Inc. v. Int’l Trade Comm’n, (2009-1460, -1461, -1462, -1465). The Federal Circuit affirmed in all respects the ITC’s determinations, including those on infringement and the issuance of exclusion and cease and desist orders. By way of background, on April 17, 2007, Tessera, Inc. (“Tessera”) filed a complaint alleging violations of Section 337 in the importation or sale of certain semiconductor chips or products containing the chips, which infringe U.S. Patent Nos. 6,433,419 (the ‘419 patent) and 5,852,326 (the ‘326 patent). The complaint named Spansion, Inc. and Spansion, LLC (collectively, “Spansion”), Freescale Semiconductor, Inc. (“Freescale”), ATI Technologies, Ulc., ST Microelectronics N.V., and Qualcomm Inc. (“Qualcomm”) (collectively, “Appellants”) as respondents. On May 21, 2007 the ITC instituted an investigation (Inv. No. 337-TA-605). On December 1, 2008 ALJ Theodore R. Essex issued an Initial Determination (“ID”), finding no infringement with respect to the ‘419 and ‘326 patents, and determining that the patents were neither indefinite under 35 U.S.C. § 112, ¶ 2, nor anticipated under 35 U.S.C. § 102. The Commission reviewed the ID in part, and on May 20, 2009, issued a Final Determination reversing the ALJ’s infringement determinations, finding instead that Appellants directly infringed the ‘326 patent and contributorily infringed the ‘419 patent. The ITC further issued cease and desist and limited exclusion orders against Qualcomm, Freescale, and Spansion. Claim Construction The patents at issue address strain to semiconductor packages and printed circuit boards caused by temperature changes. Since their components are ordinarily formed by different materials having different coefficients of thermal expansion, they expand and contract by different amounts with each power cycle, causing electrical contacts on one component to move relative to the contacts of another component to which it is attached. This can ultimately lead to permanent damage of solder balls that electrically attach the terminals to the printed circuit board. According to the Federal Circuit opinion, the patents address this problem by inserting a layer of compliant material that is “flexible, compressible, and/or elastic” between the chip and its backing element to provide the semiconductor package with the ability to accommodate relative movement between its components. Appellants argued on appeal that the ITC incorrectly determined that the “moveable” limitation found in each of the asserted claims is not indefinite. The ITC interpreted the movable limitation to require that “in the operation of the assembly, the terminals are capable of being displaced relative to the chip by external loads applied to the terminals, to the extent that the displacement appreciably relieves mechanical stresses, such as those caused by differential thermal expansion which would be present in the electrical connections absent such displacement.” Appellants contended that (1) a person of ordinary skill would not understand whether movement of the terminals “appreciably relieve[d] mechanical stresses” as required by the ITC’s construction and thus would not be able to determine how much movement constitutes infringement, (2) the patents do not define any standard for measuring stress relief, and there is no “anchor” for determining when stress relief is “appreciable,” and (3) the patents fail to distinguish between the claimed movement and other unclaimed movement that is present in chip packages. The Federal Circuit affirmed the ITC’s finding that the claims were not indefinite, focusing on the fact that two of Appellants’ own experts were able to discern “a dividing line between what an appreciable relief of stress is and what is not.” The Federal Circuit further determined that the prosecution history “clearly differentiates claimed from unclaimed movement” by distinguishing solder ball deformation and “CTE matching” from claimed movement. This further limited claimed movement to that caused by “external loads,” and excluded movement caused by “internal loads,” (i.e., movement caused by internal components that occurs regardless whether the semiconductor package is connected to the circuit board). Finally, the Federal Circuit determined that although determining whether claimed movement occurred required an expert and detailed computer simulations, the difficulty of the infringement analysis did not necessarily speak to whether a claim is indefinite. The Federal Circuit also affirmed the ITC’s construction of the claim limitation “bonding wires extending downwardly alongside said edges of said chip” included in claim 1 of the ‘326 patent. The ITC construed the limitation to mean “along the side of the semiconductor chip, with the caveat that one of ordinary skill in the art would understand that through the wire bonding process, the bonding wires may extend up, outward and then downward toward the backing element.” Appellants argued that this construction impermissibly broadened the claim limitation and rendered the term “alongside” superfluous because it does not specify how far from the semiconductor chip edge the bonding wires are allowed to fan out. Appellants’ position was that the specification and prosecution history require that the limitation define “alongside” as being “in close proximity” to the edges of the semiconductor chip. The Federal Circuit determined that the specification to the ‘326 patent discloses only conventional wires connected through conventional wire bonding processes, wherein the bonding wires extend up, out and then down, and that Appellants conceded that all of the accused products use conventional wire bonding with wires extending up, our and away from the chip. The Federal Circuit further held there was no clear disclaimer in the parent to the ‘326 patent of connections not in close proximity to the chip edge. Infringement Before addressing infringement, the Federal Circuit reiterated that for factual findings, such as infringement, the Administrative Procedure Act requires the Federal Circuit to affirm ITC findings supported by “substantial evidence,” and therefore, the Federal Circuit could not substitute its judgment for the ITC’s finding, merely because the Federal Circuit believes its view is more reasonable. As to infringement, Appellants argued that testing by Tessera’s expert, Dr. Qu, failed to show that the accused products either practiced the claimed movement or that such movement caused appreciable stress relief. Appellants first argued that Dr. Qu’s fifty chosen samples were not representative of all accused products. The Federal Circuit disagreed, and cited Appellants’ expert’s testimony that “the accused devices were similar in structure,” and found that substantial evidence supported the ITC’s findings that the tested products operate similarly with respect to the claimed invention. With respect to Dr. Qu’s primary test to establish infringement, Appellants argued that: (1) loads were applied to the bottom of the solder balls instead of at the top; (2) the ITC improperly assumed that all observed stress relief was attributed to claimed movement; (3) the linearity assumption was a fatal defect in the test; and (4) the test was inherently unreliable because it was used only by Dr. Qu for the purpose of legal proceedings. The Federal Circuit was not persuaded by these arguments. The Federal Circuit found reasonable the ITC’s position that it was “undisputed that the PCB applies all of its force to the bottom of the solder ball,” and therefore “Dr. Qu properly simulated the external load being applied to the packages by determining displacement at the bottom of the solder balls, at least some of which is transferred to the terminals.” As to the remaining issues, the Federal Circuit found that the claim construction did not require a quantification of external load, and therefore a linearity approximation (which assumes that movements due to simultaneous internal and external loads was equal to the sum of those movements when they are separately applied) was sufficient to show infringement. The Federal Circuit further found that Tessera’s test was “based on industry-accepted modeling, was reliable evidence of infringement,” and that “this conclusion is not invalidated simply because the model was specifically tailored to the unique claim construction at issue.” Tessera admitted that accused standalone semiconductor packages can only indirectly infringe the ‘419 patent, because its claims requires such packages to be mounted on printed circuit boards. Appellants first argued that the ITC’s finding of indirect infringement should be reversed because evidence of direct infringement focused on Motorola who subsequently signed a license specifically authorizing use of the accused packages. The Federal Circuit responded that evidence of indirect infringement was not limited solely to Motorola, and that Appellants can seek modification of remedial orders from the ITC. Second, Appellants argued that the ITC ignored evidence that the standalone packages had non-infringing uses when mounted onto a printed circuit board with underfill or sockets. The Federal Circuit determined that Appellants’ general assertions of alternative uses did not overcome Tessera’s prima facie case of indirect infringement, which clearly showed that at least the accused devices included solder balls and had no substantial non-infringing uses. Finally, the Federal Circuit found that sufficient knowledge for contributory infringement was presumed from Appellants’ knowledge of the ‘419 patent through license negotiations and the absence of substantial non-infringing uses. Anticipation Several Appellants appealed the ITC’s finding that U.S. Patent No. 5,241,133 (the “Mullen patent”) and 5,216,278 (the “Lin patent”) did not anticipate Tessera’s asserted claims under 35 U.S.C. §102(e). The relevant issue was whether the inventions claimed in Tessera’s asserted patents were conceived prior to the filing dates of the Mullen and Lin patents. The Federal Circuit, after reviewing the record evidence that included an analysis of engineering notebooks and testimony, affirmed the ITC’s determination that the asserted patents had an invention date of June 1990, which is prior to the December 1990 filing dates of the Mullen and Lin patents, and are therefore not anticipated by those patents. Injunctive Relief Spansion argued that even if Appellants were liable for infringement, the ITC’s award of prospective injunctive relief should be vacated because the ITC failed to give meaningful consideration to the public interest consequences of the injunction. Spansion specifically argued that the public interest inquiry in this context is similar to the traditional test for injunctive relief that district courts apply under eBay Inc. v. Mer-cExchange, L.L.C., 547 U.S. 388 (2006). The Federal Circuit first noted that by statute, the ITC is required to issue an exclusion order upon finding a Section 337 violation absent a further finding that the effects of one of the statutorily-enumerated public interest factors dictate otherwise. The enumerated public interest factors include: (1) the public health and welfare; (2) competitive conditions in the United States economy; (3) the production of like or directly competitive articles in the United States; and (4) United States consumers. The Federal Circuit then considered the legislative history of the amendments to Section 337, and found that Congress intended injunctive relief to be the normal remedy for a Section 337 violation and that a showing of irreparable harm is not required to receive such injunctive relief. Given the different statutory underpinnings for relief before the ITC in Section 337, the Federal Circuit concluded that eBay does not apply to ITC remedy determinations under Section 337, and the ITC is therefore not required to apply the traditional four-factor test for injunctive relief used by district courts when deciding whether to issue the equitable remedy of a permanent injunction. Finally, the Federal Circuit noted that the ‘419 patent was subject to a final rejection in a reexamination, and that the ITC held it was premature to give the reexamination significant weight unless Tessera had exhausted its appeals. The Federal Circuit determined that PTO reexaminations are not explicitly listed as a public interest factor in Section 337 proceedings, and the ITC therefore committed no error in omitting discussion of the reexamination from its analysis of public interest factors when fashioning its remedy to Appellants’ violation of Section 337. For more discussion on this decision as it relates to reexaminations, please see December 22, 2010 post at the Patents Post-Grant Blog. Based on the above, the Federal Circuit affirmed the ITC’s decision in all respects.
Further to our January 12, 2011 post, the Federal Circuit on January 18, 2011 issued a per curium Fed. Cir. R. 36 judgment affirming the ITC in Qimonda AG v. ITC (2010-1270). Accordingly, the Federal Circuit affirmed the ITC’s January 29, 2010 final determination in Investigation No. 337-TA-665, which found no violation of Section 337 by LSI Corporation, Seagate Technology, Seagate Technology (US) Holdings, Inc., Seagate Technology LLC, Seagate Memory Products (US) Corporation, and Seagate (US) with respect to Qimonda AG’s U.S. Patent No. 5,851,899.
On January 24, 2011, the Federal Circuit issued a per curiam Fed. Cir. R. 36 judgment affirming the ITC in Alcesia SRL v. ITC (2010-1156). Accordingly, the Federal Circuit affirmed the ITC’s October 1, 2009 final determination in Investigation No. 337-TA-643, which found a violation of Section 337 by Alcesia SRL and issued a general exclusion order with respect to gray market cigarettes bearing the Marlboro®, Virginia Slims®, and Parliament® trademarks. See our October 6, 2009 post for more details.
On May 23, 2011, the Federal Circuit issued its opinion in Tessera, Inc. v. Int’l Trade Comm’n, (2010-1176). This was an appeal by Tessera, Inc. (“Tessera”) from the International Trade Commission’s (the “Commission”) final determination in Certain Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-630) that Elpida Memory, Inc. and Elpida Memory (USA), Inc. (collectively, “Elpida”), Acer, Inc., Acer America Corporation, Nanya Technology Corporation, Nanya Technology Corporation U.S.A., Powerchip Semiconductor Corporation, Kingston Technology Co., Inc., Ramaxel Technology Ltd., SMART Modular Technologies, Inc., (collectively, the “Intervenors”) and Centon Electronics, Inc., and ProMOS Technologies, Inc. have not violated Section 337 in connection with the importation into the U.S., sale for importation, or sale within the U.S. after importation of certain semiconductor chips with minimized chip package size and products containing same. See our February 26, 2010 post for more details. In the opinion, the Federal Circuit affirmed the ITC’s determinations as to infringement, validity and patent exhaustion in connection with U.S. Patent No. 5,663,106 (the ‘106 patent) but vacated the ITC’s determinations and remanded with respect to U.S. Patent Nos. 5,679,977 (the ‘977 patent) and 6,133,627 (the ‘627 patent). The asserted patents in the investigation relate to semiconductor chip packages. In particular, the ‘106 patent is directed to innovations preventing the contamination of exposed terminals on packages during encapsulation. The ‘977 and ‘627 patents are not substantively discussed in the opinion. Two groups of accused products are involved in the investigation. Products in the first group include a polyimide-based package substrate and are referred to as “μBGA.” Products in the second group include a laminate-based package substrate and are referred to as “wBGA.” Only Elpida imports the accused μBGA products, whereas all Intervenors import the accused wBGA products. The Commission found that the wBGA products do not infringe the asserted claims of the ‘106 patent. However, with respect to the μBGA products, the Commission found that the products do infringe the ‘106 patent, but that Elpida is not liable for infringement under the doctrine of patent exhaustion because it acquired all of its accused μBGA products from entities to whom Tessera had licensed the ‘106 patent. On appeal, Tessera argued that the Commission had made errors in applying its claim construction and that therefore the Commission’s finding of non-infringement should be reviewed de novo because it was in reality a legal error in claim construction rather than a factual error in the infringement determination itself. The Federal Circuit rejected this argument, however, and proceeded to review the Commission’s non-infringement determination under the substantial evidence standard of review. Tessera argued that the Commission erred in finding that the “top layer” in asserted claim 1 of the ‘106 patent cannot include the solder mask layer of the accused wBGA products. The Intervenors and the Commission responded by arguing that substantial evidence supported the Commission’s finding. The Federal Circuit agreed that there was substantial evidence supporting the Commission’s determination and affirmed the finding of non-infringement. In particular, the Court found no reason to question the Commission’s factual finding that the laminate substrate layer in the wBGA products — and not the solder mask layer — is the “top layer.” As to invalidity, the Intervenors argued that the Commission had incorrectly found that the asserted claims of the ‘106 patent were not anticipated by certain references. However, the Federal Circuit found that the Commission’s findings of no anticipation were supported by substantial evidence and accordingly affirmed the final determination on this point. With respect to the patent exhaustion issue, Elpida and the Commission argued that the Federal Circuit lacked jurisdiction to hear Tessera’s appeal because the appeal had not been timely filed. By way of background, ALJ Theodore R. Essex issued the Initial Determination (“ID”) in this investigation on August 28, 2009, determining, inter alia, that Tessera’s patent rights were exhausted with respect to all accused products sold by Tessera’s licensees. Because the ALJ found that Elpida purchased 100% of its accused products from Tessera’s licensees, Elpida could no longer be subject to an exclusion order and was terminated from the investigation. On October 30, 2009, the Commission issued a notice announcing its decision to review certain issues in the ID but not to review the ALJ’s determination on patent exhaustion. See our November 2, 2009 post for more details. The Commission subsequently issued its Final Determination on December 29, 2009. Critically, Tessera filed its notice of appeal on January 28, 2010 — within sixty days of the Final Determination but more than sixty days from the Commission’s notice determining not to review the ALJ’s determination on patent exhaustion. The Commission argued that when it decided not to review the ALJ’s determination on patent exhaustion, the ALJ’s decision on that issue then became the final determination of the Commission. According to the Commission, because Tessera did not file a notice of appeal within sixty days of the Commission’s decision not to review the ALJ’s patent exhaustion determination, Tessera’s appeal was not timely and should be dismissed for lack of jurisdiction. Tessera responded that the Federal Circuit’s jurisdiction over appeals from the Commission is governed by 19 U.S.C. § 1337(c), which requires that “[a]ny person adversely affected by a final determination of the Commission … may appeal such determination, within 60 days after the determination becomes final.” Moreover, under 19 C.F.R. § 210.42(h)(2), an initial determination becomes the determination of the Commission “unless the Commission … shall have ordered review of the initial determination or certain issues therein …” (emphasis added). According to Tessera, since the Commission did decide to review certain issues in ALJ Essex’s ID relating to the ‘106 patent – albeit not the issue of patent exhaustion – the ID did not become final as to the ‘106 patent until the Commission issued its Final Determination on December 29, 2009. The Federal Circuit agreed with Tessera that the ID did not become final when the Commission issued its October 30, 2009 notice, but only when the Commission issued the Final Determination on December 29, 2009. In particular, the Court found that “whether Tessera could obtain an exclusion order on the ‘106 patent was still before the Commission” even after the October 30, 2009 notice. “Had Tessera appealed from the Commission’s Notice to Review, Tessera would still have been unable to obtain an exclusion order until, at the earliest, the Commission finished its review of the ALJ’s findings on claim construction and infringement.” Accordingly, the Federal Circuit found that Tessera’s appeal was timely and that the Court had jurisdiction over the patent exhaustion issue. The Court then proceeded to affirm the Commission’s finding that Elpida was not liable for infringement because it had obtained 100% of its accused μBGA products from Tessera’s licensees. Tessera argued that patent exhaustion did not apply because some of the licensees had not paid their license fees, but the Court rejected this argument. In particular, the Court found that Elpida could not be liable because the sale from the licensees to Elpida had been authorized by Tessera at the time, and the fact that Tessera might have later entered into a dispute with its licensees over payments required under the license agreements did not change the nature of the original sales to Elpida. Lastly, with respect to the ‘977 and ‘627 patents, the Court found that the appeal was moot because the patents had expired. In particular, the Court held that “[b]ecause the ITC has a limited statutory mandate and can only issue an exclusion order barring future conduct, nothing remains before the Commission with respect to the ‘977 and ‘627 patent.” Accordingly, the Court held that the portion of the appeal directed to the ‘977 and ‘627 patents was moot, vacated the portion of the Commission’s Final Determination relating to the ‘977 and ‘627 patents, and remanded with instructions to dismiss as moot the portion of the complaint relating to those patents.
On June 3, 2011, the Federal Circuit issued its opinion in MEMS Tech. Berhad v. Int’l Trade Comm’n (2010-1018). This was an appeal by MEMS Technology Berhad (“MemsTech”) from the International Trade Commission’s (the “Commission”) final determination in Certain Silicon Microphone Packages and Products Containing Same (Inv. No. 337-TA-629) that MemsTech has violated Section 337 in connection with the importation into the U.S., sale for importation, and sale within the U.S. after importation of certain silicon microphone packages. See our July 21, 2009 post for more details. Please note that Oblon Spivak represents MemsTech in this matter. In the opinion, the Federal Circuit affirmed the Commission’s determinations on claim construction, infringement, validity, domestic industry, and the applicability of the Commission’s exclusion order to MemsTech’s “chamber-chip” products. The asserted patents in the investigation relate to microelectromechanical system (“MEMS”) packages comprising a substrate, a cover, and a microphone (also termed a transducer). In particular, U.S. Patent No. 7,242,089 (the ‘089 patent) is directed to MEMS packages that allow acoustic energy to contact a transducer while protecting the transducer from light, electromagnetic radiation, and physical damage. U.S. Patent No. 6,781,231 (the ‘231 patent) relates to MEMS packages that shield the microphone from an interference signal or an environmental condition. As to claim construction, MemsTech appealed the Commission’s construction of the claim terms “volume” and “electrically coupled” in the ‘089 patent and “microelectromechanical system package” and “electrically coupled” in the ‘231 patent. The Federal Circuit affirmed the Commission’s constructions of these terms. With respect to infringement, the Federal Circuit affirmed the Commission’s findings because MemsTech had not disputed that under the Commission’s claim construction, MemsTech infringed the asserted claims of the ‘089 and ‘231 patents. As to invalidity, MemsTech appealed the Commision’s determination that certain asserted claims of the ‘089 patent are not invalid under 35 U.S.C. § 102 as anticipated by U.S. Patent No. 6,522,762 to Mullenborn or under 35 U.S.C. § 103 as obvious over (1) U.S. Patent No. 4,533,795 to Baumhauer (“Baumhauer”) alone or in view of an article by Kress, or (2) U.S. Patent No. 5,459,368 to Onishi (“Onishi”). MemsTech also appealed the Commission’s determination that certain asserted claims of the ‘231 patent are not anticipated by Baumhauer or obvious over Onishi. However, the Federal Circuit affirmed the Commission’s invalidity determinations. Regarding domestic industry, MemsTech appealed the Commission’s determination that Complainant Knowles Electronics LLC (“Knowles”) satisfied the technical prong of the domestic industry requirement with respect to the ‘089 patent. However, the Federal Circuit affirmed the Commission’s findings on this issue because MemsTech’s argument was based on its contention that the Commission had erred in its construction of the claim terms “electrically coupled” and “volume.” Since the Court had already determined to affirm the Commission’s construction of those terms, the Court also affirmed on the domestic industry issue. Lastly, with respect to the “chamber chip” issue, MemsTech argued that the Commission had violated its duties under the Administrative Procedure Act by granting Knowles’s petition for reconsideration under 19 C.F.R. § 210.47 with respect to the Commission’s original determination that the chamber-chip products “should not be covered by the Commission exclusion order” in the investigation. However, the Federal Circuit found that the Commission’s decision to grant the petition under Rule 210.47 was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. Accordingly, the Federal Circuit affirmed the Commission’s final determination of a violation of Section 337.

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