Opinion ID: 757016
Heading Depth: 2
Heading Rank: 1

Heading: ITC Jurisdiction Under Section 337

Text: 18 This court has exclusive jurisdiction over final determinations of the United States International Trade Commission relating to unfair practices in import trade made under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337). 28 U.S.C. § 1295(a)(6) (1994); see also 19 U.S.C. § 1337(c) (1994). This court reviews a final determination of the ITC in accordance with Chapter 7 of the Administrative Procedure Act (APA), 5 U.S.C. §§ 701-706 (1994). See 19 U.S.C. § 1337(c). Accordingly, we review factual findings of the ITC under the substantial evidence standard. See Checkpoint Sys., Inc. v. United States Int'l Trade Comm'n, 54 F.3d 756, 759, 35 USPQ2d 1042, 1045 (Fed.Cir.1995). The substantial evidence standard is satisfied by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Consolidated Edison Co. v. National Labor Relations Bd., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). 19 As the agency charged with the administration of section 337, the ITC is entitled to appropriate deference to its interpretation of the statute. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); Farrel Corp. v. United States Int'l Trade Comm'n, 949 F.2d 1147, 1151, 20 U.S.P.Q.2d 1912, 1916 (Fed.Cir.1991) (While this court generally reviews ITC interpretations of statutory provisions de novo, some deference to constructions by the agency charged with its administration may be appropriate, particularly if technical issues requiring some expertise are involved.); Texas State Comm'n for the Blind v. United States, 796 F.2d 400, 406 (Fed.Cir.1986) (The issue to be decided by this court is whether the statute is capable of more than one interpretation and whether the agency's interpretation is reasonable.). Under the Chevron decision, we are directed to determine whether Congress has directly spoken to the precise question at issue. Chevron, 467 U.S. at 842, 104 S.Ct. 2778. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Id. at 842-43, 104 S.Ct. 2778. Where the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778 (footnote omitted). This court will therefore uphold the ITC's interpretation of section 337 if it is reasonable in light of the language, policies and legislative history of the statute. See Corning Glass Works v. United States Int'l Trade Comm'n, 799 F.2d 1559, 1565, 230 USPQ 822, 826 (Fed.Cir.1986). In addition, we review the ITC's factual determinations of whether the various jurisdictional provisions of the statute have been met in this case to determine if they are supported by substantial evidence. 20 Section 1337(a)(1)(B) of title 19 of the United States Code deems unlawful [t]he importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that infringe a valid and enforceable United States patent. The ITC concluded that the term sale in section 337 is properly defined as including contracts for sale in light of Uniform Commercial Code (U.C.C.) § 2-106(1). The ITC then found that Enercon and NWP had entered into a contract for sale of the E-40 wind turbines, thereby bringing those devices within its jurisdiction under section 337. 21 Enercon first argues that the ITC's exclusion order should be vacated because it lacks jurisdiction over the accused goods under 19 U.S.C. § 1337(a)(1)(B). Enercon claims that no sale for importation within the meaning of section 337 has occurred to give the ITC jurisdiction over its variable speed wind turbines. Enercon argues that the ITC erroneously based its interpretation of the term sale in section 337 upon the definition of sale in U.C.C. § 2-106(1) and that the ITC should have interpreted the term sale to require a delivery of the goods to the purchaser. Enercon asserts that under this more restrictive definition of sale, the ITC does not have jurisdiction over Enercon's wind turbines since there was never a delivery of the turbines to NWP. 22 As the ITC correctly pointed out, the term sale is not defined within section 337. There is also no explicitly stated definition of the term sale in the legislative history of section 337. We therefore believe that Congress intended to give the term its ordinary meaning, thereby making an explicit definition unnecessary. 23 Black's Law Dictionary defines the term sale as [a] contract between two parties, called, respectively, the 'seller' (or vendor) and the 'buyer' (or purchaser), by which the former, in consideration of the payment or promise of payment of a certain price in money, transfers to the latter the title and the possession of the property. Black's Law Dictionary (6th ed.1990). Webster's Dictionary defines the term sale as the act of selling: a contract transferring the absolute or general ownership of property from one person ... to another for a price.... Webster's Third New International Dictionary 2003 (1986). Plainly, the common, or usual meaning of the term sale includes those situations in which a contract has been made between two parties who agree to transfer title and possession of specific property for a price. 24 The U.C.C. has been recognized as the general law governing the sale of goods and is another useful, though not authoritative, source in determining the ordinary commercial meaning of the term sale. Section 2-106, which defines the various terms used throughout the U.C.C., states that a  '[c]ontract for sale' includes both a present sale of goods and a contract to sell goods at a future time. Section 2-106 further states that a  'present sale' means a sale which is accomplished by the making of the contract. Id. Therefore, the U.C.C. is in accordance with the above referenced dictionaries in defining the term sale as having been accomplished when a contract for the transfer of goods has been completed. There is nothing in section 337 to contradict this interpretation. 25 Enercon argues that the term sale as used in section 337 inherently requires that title in specific goods pass from the buyer to the seller and that without such delivery of the goods, no sale within the meaning of section 337 has occurred. In particular, Enercon reads the phrase [a] sale consists in the passing of title in specific existing goods from the seller to the buyer for a price in section 2-106 as requiring a delivery of control of the goods to a U.S. domiciliary desiring to import them, even if the goods are not physically sent to the buyer. Thus, Enercon argues that before the ITC may assume jurisdiction under the phrase sale for importation, there must be: 1) delivery of title and control of the goods to the buyer; and 2) a buyer who is a U.S. domiciliary intending to import the goods into the U.S. We detect no such restrictions on the term sale. It is common for a sale to be completed even though delivery is to be made in the future. As Enercon cites in its brief, this court has previously stated, albeit in the context of interpreting the on sale bar of 35 U.S.C. § 102(b), that [i]t is well settled that a sale is a contract between parties to give and to pass rights of property for consideration which the buyer pays or promises to pay the seller for the thing bought or sold. In re Caveney, 761 F.2d 671, 676, 226 U.S.P.Q. 1, 4 (Fed.Cir.1985). The term sale in section 337 therefore does not require an immediate delivery of the goods in order for the ITC to assume jurisdiction. 26 Further, the ITC's construction of the phrase sale for importation is not inconsistent with the legislative history of section 337, as suggested by Enercon. Prior to 1988, section 337 read as follows: 27 Unfair methods of competition and unfair acts in the importation of articles into the United States or in their sale by the owner, importer, consignee or agent of either ... are declared unlawful,.... 28 Tariff Act of 1930, § 337, 46 Stat. 703 (1983). 29 The pre-1988 version of section 337 did not contain the provision prohibiting a sale for importation. Congress amended this section to add the phrase sale for importation in 1988. The Conference Report explains that the addition of this language was not intended to change the interpretation of the statute. In changing the wording with respect to importation or sale, the conferees do not intend to change the interpretation or implementation of current law as it applies to the importation or sale of articles that infringe certain U.S. intellectual property rights. H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. 633 (1988). Rather, the 1988 amendments were intended to strengthen the statute's effectiveness in eliminating the problems caused by the importation of goods that infringe U.S. intellectual property rights. See S. Rep. 71, 100th Cong., 1st Sess. 128 (1987); see also H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. 112 (noting that the purpose of [the amendments] is to make [section 1337] a more effective remedy for the protection of United States intellectual property rights.). Thus, contrary to Enercon's assertion, we believe that in passing the 1988 amendments to section 337, Congress did not intend to weaken the ability of the ITC to prevent unfair acts by including an additional limitation on its jurisdiction. Further, we reject Enercon's contention that in the 1988 amendments to section 337 Congress intended to separate accused infringement of intellectual property rights covered by subsections (b), (c) and (d), from the general class of unfair acts covered by subsection (a). 30 We have also considered Enercon's argument that delivery of control of the goods to a U.S. domiciliary intending to import them into the U.S. is necessary in order satisfy the minimum contacts requirement for in rem jurisdiction and find it to be without merit. It is clear that neither the language of section 337, nor traditional minimum contacts analysis inherently limits the jurisdiction of the ITC to situations in which there has been a delivery of control of the goods to a U.S. domiciliary intending to import them into the United States. 31 The ITC's determination that the phrase sale for importation includes the situation in which a contract for goods has been formed in accordance with section 2-204(1) of the U.C.C. is a reasonable interpretation of 19 U.S.C. § 1337 that we must uphold under the standards set forth by the Supreme Court in Chevron. We must next review whether substantial evidence supports the ITC's finding that a contract has been formed between Enercon and NWP for the sale of the accused goods thereby bringing those goods within the jurisdiction of the ITC under section 337. 32 Section 2-204(1) of the U.C.C. provides that a contract for [the] sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract ... even though the moment of its making is undetermined. The ITC found that the writings and conduct of Enercon and NWP demonstrated, by more than a preponderance of the evidence, that NWP and Enercon had entered into a contract for the sale of Enercon's wind turbines for importation into the United States. In support, the ITC pointed to compelling evidence that NWP bid on the Big Springs project using the price quoted to it by Enercon and specifically stated that it would use Enercon's E-40 wind turbines. The ITC also found persuasive Enercon's documents that demonstrated an intent to deliver the turbines to NWP once Enercon learned that NWP's bid on the Big Springs project had been accepted by TU. 33 The ITC concluded from the totality of the written documentation and contemporaneous conduct by the parties that there was a clear intent by both Enercon and NWP to enter into a contract for the sale of Enercon's E-40 wind turbines. Enercon argues that the ITC failed to consider evidence that in late 1995, after the ITC began its investigation of Enercon, Enercon's managing director, Mr. Wobben, orally informed NWP that Enercon would not supply NWP with wind turbines for the Big Springs project. Enercon argues that this statement effectively cancelled any oral contract that may have been formed, thereby precluding the ITC from assuming jurisdiction in this case. The ITC plainly considered this evidence, but rejected Enercon's assertion, explaining that despite this statement, the evidence did not support a conclusion that Enercon would refrain from sending the accused products into the United States. In addition, this evidence is directly contrary to the deposition testimony of Mr. John Kuhns who stated that Mr. Wobben never indicated that he would not supply the wind turbines to NWP. We believe that the evidence presented fully supports a conclusion that a contract had been formed between Enercon and NWP, thereby bringing the accused devices within the ITC's jurisdiction under section 337. We therefore affirm the determination of the ITC that it had jurisdiction over the accused wind turbines.B. Literal Infringement 34 In determining whether there has been literal infringement, a two step analysis is required. First, the claims must be correctly construed to determine the scope of the claims. Second, the claims must be compared to the accused device. Markman v. Westview Instruments, Inc., 52 F.3d 967, 976, 34 U.S.P.Q.2d 1321, 1326 (Fed.Cir.1995) (in banc), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577, 38 U.S.P.Q.2d 1461 (1996); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1581-82, 39 U.S.P.Q.2d 1573, 1576 (Fed.Cir.1996). To establish literal infringement, a plaintiff must demonstrate that every limitation in the claim is literally met by the accused device. See Intellicall, Inc. v. Phonometrics, Inc., 952 F.2d 1384, 1388-89, 21 U.S.P.Q.2d 1383, 1387 (Fed.Cir.1992); Key Mfg. Group, Inc. v. Microdot, Inc., 925 F.2d 1444, 1449, 17 U.S.P.Q.2d 1806, 1810 (Fed.Cir.1991). Demonstration that every limitation of the claim is literally met by the accused device must be shown by a preponderance of the evidence. See Envirotech Corp. v. Al George, Inc., 730 F.2d 753, 758, 221 U.S.P.Q. 473, 477 (Fed.Cir.1984).
35 Claim construction is a matter of law and is reviewed by this court de novo. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456, 46 U.S.P.Q.2d 1169, 1174 (Fed.Cir.1998) (in banc); Markman, 52 F.3d at 979. Before the ITC, the parties' disagreement centered upon the limitation in claim 131 of the '039 patent which claims the step of rotating the reference waveform by a selected power factor angle to yield a template waveform. In particular, the parties' primary dispute on appeal is over the construction of the word rotating. The ITC concluded that the ordinary meaning of the term rotating in the context of the '039 patent was only a phase shift of the reference waveform. 36 Enercon argues that the term rotating is limited to a special type of phase shift that is disclosed in the written description of the '039 patent. All parties agree that the process of rotating a waveform results in a phase shift of the waveform in a plot against time. However, Enercon argues that the term rotating in claim 131 refers not to the generic process of phase shifting a waveform, but to a specific process used to perform the rotation known as a rotational transformation. Enercon relies primarily upon the specification of the '039 patent to support its interpretation. Enercon asserts that because the only method disclosed in the specification for performing a rotation is a rotational transformation which is described as part of the preferred embodiment at col. 17, ll. 29-45 of the '039 patent, the term rotating must be limited to this method of performing the rotation. Enercon finally points to other, extrinsic sources which also purport to describe a rotation as a transformation. 37 This court has repeatedly stated that while claims are to be construed in light of the specification, they are not necessarily limited by the specification. See Markman, 52 F.3d at 980. Claims terms are also to be interpreted so as to give the terms their ordinary meaning, absent some clear special definition. See Vitronics, 90 F.3d at 1582; Athletic Alternatives v. Prince Mfg., Inc., 73 F.3d 1573, 1578, 37 USPQ2d 1365, 1370 (Fed.Cir.1996). Generally, particular limitations or embodiments appearing in the specification will not be read into the claims. Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 867, 228 USPQ 90, 93 (Fed.Cir.1985); SRI Int'l, Inc. v. Matsushita Elec. Corp., 775 F.2d 1107, 1121 n. 14, 227 U.S.P.Q. 577, 585 n. 14 (Fed.Cir.1985) (in banc) (merely because a specification describes only one embodiment does not require that each claim be limited to that one embodiment); Transmatic, Inc. v. Gulton Indus., Inc., 53 F.3d 1270, 1277, 35 U.S.P.Q.2d 1035, 1040-41 (Fed.Cir.1995) ([A] patent claim is not necessarily limited to a preferred embodiment disclosed in the patent.). Enercon has shown no reason to depart from this well established rule. 38 Only in the preferred embodiment is the more specific rotational transformation procedure described as a method to rotate the waveform. The remainder of the specification uses the words rotate and shift interchangeably. As the ITC noted, NWP's chief technology officer also used the words rotate and shift interchangeably in describing the operation of the patented device. Even Enercon's own expert admitted that he had heard the terms used interchangeably. 39 We have also considered Enercon's extrinsic evidence purportedly demonstrating what the term rotate means to one of skill in the art and find it to be unhelpful at best and misleading at worst. Submitted as part of Enercon's claim construction argument, the Mohan, Ooi and Thorburg references make no mention of the disputed claim term. Not only does the text of the references not purport to aid in determining the meaning of the term rotating, but the argument accompanying the citation of these references in Enercon's brief apparently attempts to show that several of the limitations of claim 131 can be found in the prior art. Because the validity of the '039 patent was not appealed to this court, these references may not be considered for that purpose. 40 As we have stated above, the specification clearly uses the terms rotate and shift interchangeably. In addition, all parties agreed that the phrase rotating the reference waveform indicates a shift in phase of the desired waveform. Because we see no evidence to indicate that the term rotate was intended to refer to the specialized method of performing a phase shift known as a rotational transformation, we hold that the term rotating is to be given its ordinary meaning. We therefore hold that the ITC was correct in interpreting the term rotating to mean merely a phase shift in the desired waveform.
41 Literal infringement of a claim exists when every limitation recited in the claim is found in the accused device. See Strattec Security Corp. v. General Automotive Specialty Co., 126 F.3d 1411, 1418, 44 U.S.P.Q.2d 1030, 1036 (Fed.Cir.1997); Johnston v. IVAC Corp., 885 F.2d 1574, 1580, 12 U.S.P.Q.2d 1382, 1384 (Fed.Cir.1989) (citing cases). We review the ITC's determination that the accused device infringes properly construed claim 131 under the substantial evidence in the record standard as set forth at 5 U.S.C. § 706(2)(E) (1994) and mandated by 19 U.S.C. § 1337(c). 42 Enercon makes only one argument on appeal that it does not infringe claim 131 of the '039 patent under the ITC's claim construction. The ITC plainly considered this argument, but because Enercon failed to comply with discovery requests on this issue, the ITC found as a sanction that the Enercon device formed a reference waveform as required by claim 131. Enercon does not challenge the ITC's discovery sanction as an issue on appeal until the very end of its reply brief. As we have stated before, [a] reply brief, which should 'reply to the brief of the appellee,' see Fed. R.App. P. 28(c), is not the appropriate place to raise, for the first time, an issue for appellate review. Amhil Enters. Ltd. v. Wawa, Inc., 81 F.3d 1554, 1563, 38 U.S.P.Q.2d 1471, 1477 (Fed.Cir.1996); see also Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 800, 17 U.S.P.Q.2d 1097, 1103 (Fed.Cir.1990). Therefore Enercon has waived this issue on appeal and the question of whether the accused device forms a reference waveform has been established as a matter of law. Enercon does not appeal any other portion of the ITC's finding that the accused wind turbines infringe claim 131. Because we affirm the claim construction of the ITC, and Enercon did not properly appeal the finding of infringement based upon that claim construction, we affirm the ITC's determination that claim 131 is infringed.