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
27 Nov 2017, Seminar, London, UK

Finnegan partner Anthony Tridico will present “U.S. Patent Case Law Update” at the Chartered Institute of Patent Attorneys’ annual Patent Case Law Review.

28 Nov 2017, Seminar, Milan, Italy

Finnegan partner John Paul will present “Internet of Things: Patent Liability, Enforcement and Licensing” and will join the Mock WIPO Mediation at International Technology Transfer—Licensing and ADR, co-hosted by Licensing Executives Society and World Intellectual Property Organization.

29 Nov 2017, Seminar, Tel Aviv, Israel

Finnegan is a platinum sponsor IVC Research Center’s start-up forum, “The Most Promising Start Ups for 2017 – A Synergy of Big Data, Artificial Intelligence, Machine Vision and IoT.”

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.