United States: Final ITC Terminations In Favor Of Arbitration Under Section 1337(C) Are Appealable To The Federal Circuit

In InterDigital Communications, LLC v. International Trade Commission, No. 12-1628 (Fed. Cir. June 7, 2013), the Federal Circuit reversed the ITC's order terminating an investigation as to LG Electronics, Inc., LG Electronics USA, Inc., and LG Electronics Mobilecomm USA, Inc. (collectively "LG") in favor of arbitration per a prior patent license agreement between InterDigital Communications, Inc. (formerly InterDigital Communications, LLC) ("InterDigital") and LG, and remanded to the ITC for further proceedings, explaining that "there is no plausible argument that the parties' dispute in this case arose under their patent license agreement."  Slip op. at 2.

InterDigital and LG entered into a patent license agreement ("Agreement") in which InterDigital granted LG for the term of the Agreement a license to certain InterDigital patents with respect to devices designed to operate according to both second ("2G") and third ("3G") generation wireless standards.  According to its terms, the Agreement terminated on December 31, 2010.  A "survival" clause included in the Agreement provided that at the end of the term of the Agreement, LG will have a "fully paid-up" license for the life of InterDigital's patents for 2G products.  The Agreement also permitted either party to submit to arbitration any dispute arising under the Agreement.

The following year, InterDigital amended its complaint with the ITC, asserting that LG violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by importing wireless devices that infringed patents relating to its 3G wireless technology.  LG subsequently moved to terminate the investigation, arguing that its accused 3G products were still covered under the Agreement and that InterDigital's infringement claim was subject to arbitration because it arose under the Agreement.  Despite InterDigital's arguments that LG did not have an ongoing license for 3G products under the plain text of the Agreement, the ALJ issued an initial determination granting LG's motion to terminate the investigation as to LG based on the framework for analyzing a motion to stay pending arbitration outlined in Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (Fed. Cir. 2006).  Under that framework, the ALJ determined that "the parties clearly intended to delegate the question of arbitrability to an arbitrator" and that LG's request for arbitration was not "wholly groundless."  Slip op. at 7.  The ITC declined to review the ALJ's decision.  InterDigital subsequently appealed the ITC's order terminating the investigation as to LG.

"[A] party may appeal an ITC order that is not a final decision on the merits if 'its effect upon appellants is the equivalent of a final determination.'"  Slip op. at 13 (quoting Import Motors, Ltd. v. U.S. Int'l Trade Comm'n, 530 F.2d 940, 944 (C.C.P.A. 1976)).

As a threshold matter, the Federal Circuit first addressed whether it had jurisdiction over InterDigital's appeal.  Section 1337 lists various ITC determinations for which a party may seek review by the Federal Circuit, namely, a final determination of the ITC under subsection (d), (e), (f), or (g).  LG and the ITC argued, however, that the investigation termination was not a final determination under one of the enumerated subsections.  Specifically, the ITC terminated the investigation under subsection (c), which permits the ITC to terminate an investigation on the basis of an agreement between the private parties to present the matter for arbitration.  The Federal Circuit first looked to precedent from the Court of Customs and Patent Appeals that provided a framework for analyzing whether an ITC order is appealable under section 1337(c).  Specifically, the Federal Circuit noted that the proper inquiry as to whether a party may appeal an ITC order that is not a final decision on the merits is if "its effect upon appellants is the equivalent of a final determination."  Id. at 10 (quoting Import Motors, Ltd. v. U.S. Int'l Trade Comm'n, 530 F.2d 940, 944 (C.C.P.A. 1976)).  Additionally, the Federal Circuit relied on the general rule that "judicial review will not be precluded on the sole ground that specific procedures for judicial review of a particular agency action are not spelled out in a statute."  Id. at 13 (quoting Allied Corp. v. U.S. Int'l Trade Comm'n, 850 F.2d 1573, 1579 (Fed. Cir. 1988)).

In evaluating whether the ITC order had an effect equivalent to that of a final determination, the Federal Circuit analogized the facts of this case with those of Farrel Corp. v. U.S. International Trade Commission, 949 F.2d 1147 (Fed. Cir. 1991), in which the Court found an order terminating an investigation in favor of arbitration to be an appealable final determination because "the dismissal was with prejudice and [the] petitioner [could] not request reopening."  Slip op. at 14-15 (alterations in original) (quoting Farrel, 949 F.2d at 1151 n.4).  Similarly, the Federal Circuit found that "InterDigital will have to await the outcome of the proceeding before the arbitrators to find out whether it can file a new complaint.  Until the arbitrators determine whether InterDigital's claims are subject to arbitration, any new complaint InterDigital filed would also be terminated in favor of arbitration."  Id. at 15.  Thus, the Court found that the ITC's "order therefore has 'the same operative effect, in terms of economic impact' as a final determination" and thus is an appealable final determination under 19 U.S.C. § 1337(c).  Id. (quoting Import Motors, 530 F.2d at 945-46).

As to the merits of the ITC's termination, the Federal Circuit noted that the ALJ applied the appropriate framework outlined in Qualcomm, in which once it is determined that "the parties to the agreement did clearly and unmistakably intend to delegate the power to decide arbitrability to an arbitrator, then the court should perform a second, more limited inquiry to determine whether the assertion of arbitrability is 'wholly groundless.'"  Id. at 17 (quoting Qualcomm, 466 F.3d at 1371).  The Court found, however, that the ALJ did not perform the proper analysis under that framework when he failed to assess the text of the parties' license agreement to determine whether LG's assertion of arbitrability was "wholly groundless."  Specifically, the Court explained that in Qualcomm, it noted that "[i]n undertaking the 'wholly groundless' inquiry, the district court should look to the scope of the arbitration clause and the precise issues that the moving party asserts are subject to arbitration."  Id. (quoting Qualcomm, 466 F.3d at 1374).   After examining the provisions of the Agreement, the Court found LG's assertion of arbitrability to be "wholly groundless" because "the only surviving portion of the grant clause is that portion providing LG with a 'fully paid-up' license for the life of InterDigital's patents for 2G products."  Id. at 20.  The Court further stated that "[t]here simply is no plausible argument that LG's license for 3G products survived the termination of the Agreement."  Id.  Accordingly, the Court reversed the ITC's order terminating the investigation as to LG and remanded to the ITC for further proceedings.

Dissenting-in-part, Judge Lourie agreed that there is no plausible argument that LG could prevail under its patent license agreement.  Judge Lourie, however, would dismiss the appeal, because he did not believe that the Court had jurisdiction to entertain the appeal.  In his view, the first section of 19 U.S.C. § 1337(c) should be the Court's starting point in determining the subject matter jurisdiction of the Court.  According to Judge Lourie, the language of the statute is clear:  "[A] termination due to an arbitrability agreement is a termination 'without . . . a determination.'  As it is not a determination, it is also not a 'final determination.'"  Lourie Dissent at 2.  Judge Lourie also stated that the Court did not have jurisdiction because the ITC's determination was not a final determination under subsection (d), (e), (f), or (g).

Judges: Lourie (dissenting), Bryson, Prost (author)

[Appealed from ITC]

This article previously appeared in Last Month at the Federal Circuit, July, 2013.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
13 Nov 2018, Conference, Washington, DC, United States

Finnegan is an Event sponsor of the PTAB Bar Association Thought Leader Summit. The program will take place at the Westin Hotel in Alexandria, Virginia.

13 Nov 2018, Conference, California, United States

Finnegan is a Lunch sponsor of the fifth annual Corporate IP Strategy Conference, hosted by Unified Patents.

14 Nov 2018, Speaking Engagement, Washington, DC, United States
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions