The decision in U.S. International Trade Commission (ITC) investigation Certain Magnetic Data Storage Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012 (“1012 Investigation”), is still confidential, but the ITC has issued a notice stating that ALJ Shaw has ruled in favor of patentee Fujifilm against Sony and recommended that an exclusion order be issued. This is important because it is the first time the ITC has issued an exclusion order on standard-essential patents (SEPs), and may be the first time any U.S. tribunal has issued exclusionary or injunctive relief on patents which were declared standard essential. In the opinion, which should become public in a few weeks, ALJ Shaw, who presided over the case, is expected to address a number of key issues relating to the assertion of SEPs in general, and at the ITC specifically. In this case many of Sony’s affirmative defenses relate to the alleged essentiality of the asserted patents and the Administrative Law Judge was asked to answer a number of questions relating to SEPs generally and the ability to enforce them at the ITC.
On May 17, 2017, the International Trade Commission (ITC) reversed an ALJ’s ruling and found a violation of Section 337 in Certain Air Mattress Systems, Components Thereof and Methods of using the Same (“Certain Air Mattress Systems”), Inv. No. 337-TA-971, due to the importation of certain air mattresses, and components of air mattresses, by the named respondents. The public version of the Commission opinion has been released and provides future ITC litigants with guidance regarding the proper allocation of expenses for domestic industry purposes, and how the Commission views certain types of products for public interest consideration.
Several months ago, we were struck with the question of whether, as counsel for a patent owner at the ITC, our clients’ case would benefit from a Markman hearing. Claim construction during an ITC investigation was routinely performed as part of the evidentiary hearing in an investigation, rather than as part of earlier Markman proceedings. This has now changed. Recently appointed ALJs at the ITC have been trending towards conducting Markman hearings rather than pushing claim construction to the final hearing. This new trend has resulted in additional litigation strategy considerations at the ITC, regarding whether Markman hearings are beneficial, or detrimental, and what affect the increase in Markman hearings have on investigations.
Claim construction will occur at some point in any patent-based ITC investigation. From a patent owner’s perspective, the question is whether having a Markman hearing at the ITC will be helpful. A negative claim construction order, especially early in the investigation, may imperil the ability to reach the evidentiary hearing as an adverse ruling could result in summary determination. In contrast, a favorable claim construction order could result in added pressure for settlement.