Page 1 of 3LITIGATION ACTIVITIES MAY BE INSUFFICIENT TO OBTAIN ANEXCLUSION ORDER: MOTIVA v. ITCBy Michael A. ShimokajiPate...
Page 2 of 3On appeal to the Commission, the matter was sent back to the ALJbecause, according to the Commission “litigatio...
Page 3 of 3Finally, the Federal Circuit stated “[t]here is simply no reasonablelikelihood that, after successful litigatio...
MICHAEL A. SHIMOKAJIMr. Shimokaji is a shareholder in the law firm of Shimokaji & Associates,P.C., located in Irvine, Cali...
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Litigation Activities May Be Insufficient To Obtain An Exclusion Order: Motiva v. ITC by Michael Shimokaji, www.shimokaji.com

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Patent owners often initiate concurrent proceedings against infringers in US district court and the International Trade Commission (ITC). The district court provides an avenue for an award of damages. The ITC provides an avenue for an order excluding the importation of infringing goods into the US.

The Federal Circuit, in Motiva v ITC, continues to create a barrier to jurisdiction before the ITC for those patent owners, such as Non-Practicing Entities (NPEs), whose business is focused on licensing and litigation.

For more information, contact info@shimokaji.com; www.shimokaji.com

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Litigation Activities May Be Insufficient To Obtain An Exclusion Order: Motiva v. ITC by Michael Shimokaji, www.shimokaji.com

  1. 1. Page 1 of 3LITIGATION ACTIVITIES MAY BE INSUFFICIENT TO OBTAIN ANEXCLUSION ORDER: MOTIVA v. ITCBy Michael A. ShimokajiPatent owners often initiate concurrent proceedings against infringersin US district court and the International Trade Commission (ITC). Thedistrict court provides an avenue for an award of damages. The ITCprovides an avenue for an order excluding the importation of infringinggoods into the US.The Federal Circuit, in Motiva v ITC, continues to create a barrier tojurisdiction before the ITC for those patent owners, such as Non-PracticingEntities (NPEs), whose business is focused on licensing and litigation.Motiva sought to initiate an ITC proceeding against Nintendo over itsWii video game system. Nintendo argued that the domestic industryrequirement for jurisdiction was not satisfied.Under 19 U.S.C. §1337, it is unlawful to import articles in the US thatinfringe a US patent if "an industry in the United States, relating to thearticles protected by the patent . . . exists or is in the process of beingestablished." The “industry” requirement can be satisfied by “(A)significant investment in plant and equipment; (B) significant employmentof labor or capital; or (C) substantial investment in its exploitation, includingengineering, research and development, or licensing.”The administrative law judge (ALJ) found that Motiva did not meetthe industry requirement. The ALJ found that the district court litigationagainst Nintendo was the “only activity that could be related tocommercializing the technology covered by the [patents-in-suit] at the timethe complaint was filed.” “That activity . . . was insufficient to satisfy thedomestic industry requirement because it was not adequately directed towardlicensing activities related to the practical application of the patents claimedinventions.” Further, “Motiva was not engaged in any licensing activities:Motiva never offered to license, never received a request to license, andnever in fact licensed either” of the patents.
  2. 2. Page 2 of 3On appeal to the Commission, the matter was sent back to the ALJbecause, according to the Commission “litigation could be relevant in alicensing effort directed at ‘encouraging adoption and development of the[patented] technology by bringing a product to market’ and protecting theability of a patentee to derive revenues from patented technology byengaging ‘potential manufacturers, investors, and licensees who were notalready involved in existing production.’”Upon returning back, the ALJ “found that the litigation costs relatedto the district court proceedings were not relevant to the domestic industryanalysis because the litigation itself was not ‘in any way related to theexploitation of the patents.’” The ALJ further found that “Motiva was not‘concerned with taking swift actions to remove Nintendo from the market"through litigation; it was only interested in extract[ing] a monetary awardeither through damages or a financial settlement.’"The ALJ additionally found that the “size of Motivas investments inlitigation were not substantial. Because of a contingency fee arrangement,Motiva had yet to pay ‘any attorneys fees or expenses related to Motivaslitigation against Nintendo’ and never had to pay those costs unless Motivaobtained a recovery as a result of the litigation.”On review by the Federal Circuit, the court noted that the ALJ foundthe district court litigation was “not directed at developing such a licensingprogram.” The court further noted that the “ALJ concluded that the presenceof the Wii in the market had no impact on Motivas commercializationefforts or ability to encourage partners to invest in and adopt its patentedtechnology.”According to the Federal Circuit, “the evidence demonstrated thatMotivas litigation was targeted at financial gains, not at encouragingadoption of Motivas patented technology. The inventors looked forward tofinancial gains through Motivas litigation, not hopes of stimulatinginvestment or partnerships with manufacturers. Motiva also never asked fora preliminary injunction from the district court, and it waited three yearsbefore seeking relief from the Commission--even though the importation ofthe Wii was allegedly the only obstacle to adoption of its patentedtechnology in the market.”
  3. 3. Page 3 of 3Finally, the Federal Circuit stated “[t]here is simply no reasonablelikelihood that, after successful litigation against Nintendo, Motivaspatented technology would have been licensed by partners who would haveincorporated it into ‘goods practicing the patents.’What Motiva can mean to NPEs and other patent owners is that a realand substantial licensing program must exist alongside a litigationenforcement program to gain entrance to the ITC. Simply extracting alicense in settlement of litigation does not appear sufficient.
  4. 4. MICHAEL A. SHIMOKAJIMr. Shimokaji is a shareholder in the law firm of Shimokaji & Associates,P.C., located in Irvine, California. The firm is engaged in intellectual propertylitigation and the procurement of patent rights domestically and abroad.For more than 25 years, Mr. Shimokaji has supported clients in industries asdiverse as aerospace, apparel, chemicals, computer software, householdproducts, medical devices, photo imaging, and semiconductors. His expertiseincludes infringement litigation, patent and trademark portfolio development,and intellectual property monetization. He has lectured for local and nationalorganizations in the US, as well as abroad, on various intellectual propertytopics.He has been a member of the Steering Committee for the California MinorityCounsel Program. He was a founding director of the Orange CountyJapanese-American Lawyers Association and has served as an instructor inthe paralegal program at the University of California, Irvine. Mr. Shimokaji is apast president of the Orange Coast Optimist Club which is part of aninternational organization that supports programs for children. He served forthree years on the Executive Committee for the California State BarIntellectual Property Section, and another three year term on the CaliforniaState Bar Federal Courts Committee. Mr. Shimokaji has been a member ofthe editorial board for The Journal of the Association of University TechnologyManagers. For the Pro Bono Civil Rights Panels of the US District Courts inCalifornia, Mr. Shimokaji is a volunteer attorney. Mr. Shimokaji has beenformally trained at the Straus Institute for Dispute Resolution and is amediator for the Los Angeles County Superior Courts.He is the author of articles that include “Inducement and ContributoryInfringement Theories to Regulate Pre-Patent Issuance Activity” 37 IDEA 571(1997); “Type of Use Determines Whether Use of Web Content Will BeInfringing” L.A. Daily Journal, August 22, 2002; and “Cease and Desist LettersMay Contain Some Hidden Perils” L.A. Daily Journal, February 27, 2003;“Contingency Defense in Patent Lawsuits” L.A. Daily Journal, August 1, 2006;“Putting Designs to the Test” L.A. Daily Journal, October 30, 2008; “Mind OverMatter” Los Angeles Lawyer, April 2009.Following graduation from the University of California, Irvine with a bachelor’sdegree in chemistry, Mr. Shimokaji received his Juris Doctorate degree fromSouthwestern University School of Law. In law school, Mr. Shimokaji was anexecutive editor for the school’s law review. He has served as a judicialextern for the Honorable Robert M. Takasugi, Judge, United States DistrictCourt. Mr. Shimokaji is admitted to the California Bar and the United StatesPatent and Trademark Office.

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