Your SlideShare is downloading. ×
0
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
ITC Litigation
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

ITC Litigation

509

Published on

variety of industries and private practitioners attend this event for worthwhile benchmarking and networking with the “who’s who” of the 337 bar, including senior decision-makers from the ITC, …

variety of industries and private practitioners attend this event for worthwhile benchmarking and networking with the “who’s who” of the 337 bar, including senior decision-makers from the ITC, companies and practitioners involved in some of the most high profile cases to date.

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
509
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP NPEs and the Domestic Industry Licensing Requirement Chester Day (Google) Richard Rainey (GE) Kathleen Zylan (Cisco) Tom Jarvis (Finnegan/Moderating) 1 Tom.Jarvis@Finnegan.com
  • 2. ITC Statistics • ITC makes distinction between categories of NPEs – Category 1 NPEs • do not make a product practicing the asserted patents • Investments in research, development, or engineering • Includes universities, companies that failed to commercialize – Category 2 NPE/PAEs • do not manufacture products that practice the asserted patents • business models focused on purchasing and asserting patents • secondary market for IP rights 2
  • 3. ITC Statistics From “FACTS AND TRENDS REGARDING USITC SECTION 337 INVESTIGATIONS” Prepared by the U.S. International Trade Commission (June 18, 2012) 3
  • 4. ITC 337 Investigations Instituted Per Year ITC Patent Infringement Investigations 56 30 2006 35 37 2007 2008 62 38 29 2009 2010 2011 2012 Source: RPX Proprietary Research © 2006 Cisco Systems, Inc. All rights reserved. Cisco Restricted – Attorney Client Privileged; Attorney Work Product 4
  • 5. NPE CASES INCREASING IN THE ITC Respondents in NPE ITC Investigations NPE ITC Investigations 232 16 201 14 97 6 4 4 4 38 2 2006 8 2007 2008 2009 2010 2011 2012 15 2006 2007 2008 2009 22 2010 2011 2012 Source: RPX Research and EDIS © 2006 Cisco Systems, Inc. All rights reserved. Cisco Restricted – Attorney Client Privileged; Attorney Work Product 5
  • 6. ITC 337 Investigations Instituted Per Year 4 NPE Cases 16 Non-NPE Cases 4 2 6 6 28 31 31 2006 2007 2008 © 2006 Cisco Systems, Inc. All rights reserved. 14 52 46 25 2009 24 2010 2011 2012 Cisco Restricted – Attorney Client Privileged; Attorney Work Product 6
  • 7. Statutory Question • Domestic industry: – A. significant investment in plant and equipment; – B. significant employment of labor or capital; or – C. substantial investment in its exploitation, including engineering, research and development, or licensing. • Difference between a “traditional” DI based on manufacturing and a DI based on licensing? 7
  • 8. Issues • Manufacturing, Research & Development, and Engineering Analysis – Economic Prong: significant investments – Technical Prong: products practice asserted patent • Licensing analysis: – Economic Prong: substantial investments – Technical Prong: investments related to the asserted patents 8
  • 9. Certain Multimedia Display and Navigation Devices, Inv. No. 694 – Pioneer asserted 3 patents of a portfolio of more than 1,600 patents. – The ALJ found no violation, but that the economic prong of DI was satisfied. – The Commission reversed the ALJ on DI, holding that: • US investments relate to the asserted patents and licensing • For a portfolio license, complainant must show that its investments are focused on: – the asserted patent or – the relative importance or value of the asserted patent 9
  • 10. Certain Electronic Devices Including Handheld Wireless Communication Devices, Inv. Nos. 667/673 – NPE complainant alleged DI based on licensee activities. – The ALJ found on MSD that a DI existed through licensee R&D, even though that activity was not directly related to patented features of the products at issue. – ID non-reviewed by the Commission – Investigations settled. 10
  • 11. John Mezzalingua Assocs., Inc. v. ITC, 660 F.3d 1322 (Fed. Cir. Oct. 4, 2011) • Licensor appealed from the Commission decision in Inv. No. 650 that it failed to show DI. • Federal Circuit affirmed, finding expenses incurred in asserting and defending validity of its design patent did not constitute a “substantial investment in exploitation” of its patent through licensing. • Judge Reyna dissented that the Commission erred in rejecting litigation expenses. 11
  • 12. Certain Video Game Systems & Controllers, Inv. No. 743 • The ALJ found no DI, Commission non-reviewed the ID in relevant part. • ALJ found no existing DI at the time of the complaint and no DI in the process of being established – complainant had ceased any exploitation of the patent well before filing the complaint at the ITC – litigation expenses found insufficient to establish a DI. • Federal Circuit Appeal pending. 12
  • 13. Certain Liquid Crystal Display Devices, Including Monitors, Televisions, and Modules, and Components Thereof, Inv. Nos. 741/749 • 5 patents asserted against multiple parties • ALJ found a DI, Commission affirmed, finding: • Ongoing licensing programs related to the asserted patents; • Licensing negotiations focused on the asserted patents • Only a subset of the patents in the portfolio had accompanying “claim charts,” including the asserted patents • Despite apportioning the licensing with respect to other patents, Commission found investments substantial • Settled 13
  • 14. Certain Integrated Circuits, Chipsets, & Products, Inv. No. 786 • 1 patent asserted against multiple respondents. • ALJ found no DI; the Commission affirmed, finding: – Failure to show what proportion of expenses were foreign versus domestic – Failure to show how expenses related to the asserted patent – Failed to provide sufficient information as to how the asserted patent fit into overall licensing program. 14
  • 15. InterDigital Communications, LLC v. Int'l Trade Comm'n, 2010-1093, 2013 WL 124064 (Fed. Cir. Jan. 10, 2013) • Appeal from Commission decision in Inv. No. 613, finding no violation - no infringement and no DI. • The Federal Circuit reversed and remanded on claim construction, but affirmed on DI. • Respondent filed a combined petition for panel rehearing and for rehearing en banc on DI. 15
  • 16. InterDigital Communications, LLC v. Int'l Trade Comm'n, 2010-1093, 2013 WL 124064 (Fed. Cir. Jan. 10, 2013) • Federal Circuit denied combined petition; held that substantial investment in R&D of intellectual property was with respect to the articles protected by the patent, within the meaning of Tariff Act’s “domestic industry” requirement. • Judge Newman dissented that complainant does not make the patented invention in the US, and seeks to impose on respondent that is “not a license to manufacture any patented product in the United states; it is a license to import products made in foreign countries.” 16
  • 17. Nexus between licensing and asserted patents – Whether the patents at issue are directly connected to a licensing domestic industry – Whether the licensee’s efforts relate to a protected article – Number of patents in the portfolio – Relative importance/value of asserted patents to the portfolio – Successfully litigated by complainant – Relates to a technology industry standard – Considered a “base patent” or “pioneering patent” – Prominence of the asserted patents in licensing discussions 17
  • 18. Policy Objectives of 337 & Licensing Issues • Is there a distinction between revenue-driven and production-driven (industry creating) licensing, and is such a distinction useful? • Largest USA companies are selling patents into the secondary market that will obviously be used for licensing and litigation • Licensing market has changed since statute amended; what actually constitutes a licensing industry now? 18
  • 19. Policy Objectives of 337 & Licensing Issues • Licensing based in research & development spurs adoption of technology • Does the value of patents sold (or purchased) in the secondary market funnel back to the original entity who performed the research, and thereby spur further R&D? • Originally, ITC focused on threats of foreign competition 19
  • 20. Policy Objectives of 337 & Licensing Issues • Are there articles to be protected in a licensing DI, and does there need to be? • Has a requirement been read out of the statute? • What connection to a “real” DI exists in licensing? • Do the justifications underpinning 337 make sense in the licensing context, with no connection to protected articles? 20
  • 21. Disparity of leverage litigating before the ITC? • Licensing entities typically have no products, usually not risk of counter claims or counter suits • Licensing profit from settlements, not market exclusivity. 21
  • 22. Distinctions between NPEs and PAEs • Distinctions between PAEs and NPEs – Legal – Economic – Is a company who makes products, but not in the U.S., but depends on licensing for a DI an NPE or PAE? • Has the PAE/NPE issue become politicized? • Have any PAEs obtained an exclusion order? • Have any NPEs obtained an exclusion order? 22
  • 23. High Costs of DI Economic Prong Defenses • Defending against PAE/NPE DI claims – Expensive – Risky – Rarely resolved on summary determination • Procedural solutions? 23
  • 24. Possible Procedural Solutions: Pre-Institution • Ask Commission allow the ALJ to take evidence on Public interest Issues of licensing DI • Ask Commission find the complaint deficient if a licensing DI is insufficiently supported • Commission could require more details in complaint, possibly supported by third-party affidavits 24
  • 25. Public Interest Issues Implicated by Licensing DI • Identify injury to the “real” licensing DI • Evaluate nexus to: – licensing – exploitation (revenue driven v. production driven) – articles (emerging or established industry) • Consult with other government agencies responsible for trade policy, protecting competition and jobs in US economy, and protecting consumers. 25
  • 26. Possible Procedural Solutions • Summary determination often delayed or precluded by unsubstantiated claims of on activities of licensees • requiring subpoenas to third parties • Ask the ALJ to accelerate discovery of claims of investments of licensees, and to stay other discovery until complete 26
  • 27. Possible Procedural Solutions • Early Summary Determination motions on DI Economic prong issues • Request oral arguments (mini-hearing) • Request an accelerated decision • Require details on allocation of investment per patent; no allocation, insufficient information to show DI. 27
  • 28. Possible Procedural Solutions • Limiting Response to MSD to evidence set forth in the complaint • Complainants know their own domestic industry • Technical prong and/or other technology-related issues would be minimized, as a pure licensing claim requires no technical prong of DI. 28
  • 29. Possible Legislative Solutions • Redefine the statute to distinguish between revenue driven and production driven licensing • Mandate the adequacy of monetary damages (eBay) • Irreparable harm + Causal nexus (eBay) 29
  • 30. Questions/Comments 30

×