United States: No Stays Of ITC Proceedings Based On IPRs, But Commission Grapples With Effect Of A Final PTAB Decision

Last Updated: May 31 2016
Article by Rose S. Lee and Lynn I. Levine

On March 3, 2016, Administrative Law Judge David Shaw denied a motion to stay Investigation No. 337-TA-983 pending resolution of instituted inter partes reviews (IPR) for two of the three patents asserted in the investigation.  The requested stay was denied even though the two IPRs were scheduled to conclude before the anticipated target date for the ITC investigation's final determination.  This is in keeping with the prevailing practice at the ITC of declining to stay Section 337 investigations based on the pendency of proceedings in other forums.  On a related note, the Commission recently asked for briefing in another investigation regarding the effect of a final written decision by the Patent Trial and Appeal Board (PTAB) on a pending ITC investigation.


Motions to stay Section 337 investigations based on the pendency of proceedings in other forums are rarely granted at the ITC.  Prior to Judge Shaw's ruling in Certain Laser-Driven Light Sources, Subsystems Containing Laser-Driven Light Sources, and Products Containing Same (Inv. No. 337-TA-983) ("Laser-Driven Light Sources"), a request for a stay of a Section 337 investigation based on a pending IPR had been made in only one other investigation and was similarly rejected.  In that instance, the Judge denied a motion to stay the investigation pending completion of post-grant proceedings regarding five asserted patents—three patents for which ex parte reexaminations were in advanced stages and two patents for which IPR petitions had been filed but not yet instituted.  See Certain Microelectromechanical Systems and Products Containing the Same, Inv. No. 337-TA-876, Order No. 6:  Denying Request for Stay (May 21, 2013).  With respect to the patents for which IPR petitions had been filed, the Judge noted that it was not yet clear whether the PTAB would institute the requested IPRs, and, accordingly, any stay as to those patents would be premature.

Denial of Stay in Laser-Driven Light Sources

Respondents moved to stay the 983 investigation until the PTAB) issued final written decisions in IPR proceedings involving two of the three asserted patents.  Fifteen days before the ITC complaint was filed, the PTAB instituted IPRs of seven claims of patents asserted in the ITC case.  Those IPRs were scheduled to conclude by November 2016, before the anticipated May 2017 target date for the ITC investigation and even before the anticipated January 2017 date for issuance of the Initial Determination.  Respondents argued that it would be a waste of resources to proceed with the investigation inasmuch as IPRs were designed "to be faster than any other forum in adjudicating patent claims (including [the ITC] and only 8% of patents for which IPR proceedings are instituted emerge unchanged."  Laser-Driven Lights Sources, Inv. No. 337-TA-983, Order No. 8 at 2 (March 3, 2016).

Judge Shaw denied the motion to stay upon consideration of several factors:  "(1) the state of discovery and the hearing date; (2) whether a stay will simplify the issues and hearing of the case; (3) the undue prejudice or clear tactical disadvantage to any party; (4) the stage of the PTO proceedings; and (5) the efficient use of Commission resources."  Id. at 4-5 (citing Semiconductor Chips, Inv. No. 337-TA-605, Comm'n Op., 2008 WL 2223426, at *2 (U.S.I.T.C. May 27, 2008).

Regarding factors (1) and (4), Judge Shaw reasoned that because the IPRs would conclude six months before the target date for the ITC investigation's final determination, there would be a window for the Commission "to integrate the insights obtained from the IPRs into this investigation."  He concluded that in such circumstances, the status of the IPR proceedings provided no reason to stay the investigation.

With respect to whether a stay would simply the issues, Judge Shaw found that the PTAB could do nothing to simplify the case as to the third patent asserted in the ITC investigation since no IPR petition had been filed regarding claims in that patent.  Judge Shaw also noted that the IPR process uses a different claim construction standard—the "broadest reasonable interpretation"—and that IPRs address only 35 U.S.C. §§ 102 and 103 invalidity issues (e.g., not the question of indefiniteness under 35 U.S.C. § 112) and therefore the IPRs may not simplify the ITC investigation.

With respect to prejudice, Judge Shaw concluded that "[d]elaying a final determination may mean that respondents would have years to import infringing products, where any importation of infringing merchandise derogates from the statutory right, diminishes the value of the intellectual property and thus indirectly harms the public interest."

Finally, with respect to the efficient use of Commission resources, Judge Shaw found that the IPR proceedings and ITC investigation were "not truly parallel because the investigation involves numerous other issues separate from the IPRs."  He concluded that the most efficient use of Commission resources was to proceed with the investigation.

Accordingly, Judge Shaw denied Respondents' motion to stay pending resolution of the IPRs.

Recent Question Raised In Three-Dimensional Cinema Systems Regarding Effect Of A Final Written PTAB Decision Upon Pending ITC Investigation

Interestingly, the Commission recently extended an investigation to consider the potential effect of a final written decision by the PTAB in an IPR proceeding.  See Certain Three-Dimensional Cinema Systems and Componets Thereof, Inv. No. 337-TA-939, Notice of Commission Determination to Extend the Target Date (April 18, 2016) Respondents' Answer to the Complaint in Three-Dimensional Cinema Systems stated that IPR petitions regarding each of the patents asserted in the investigation had been filed in October 2014, a month before the Complaint was filed at the ITC (it does not appear that a motion to stay the ITC investigation was filed based on those petitions).  In his Final Determination, Judge Theodore Essex found a violation of Section 337 based on infringement of the asserted claims in the three remaining patents at issue.  In February 2016, the Commission decided to review various aspects of the Judge's determination relating to the asserted patents.

Four days before the target date for completion of the investigation (and well after final briefing on the merits and remedy, public, interest and bonding had concluded), on April 14, respondents advised the Commission that the PTAB had issued a final written decision finding certain claims of U.S. Patent No. 8,220,934 ("the '934 patent") unpatentable, including two of the three claims asserted in the ITC investigation.  The Commission then extended the target date by approximately two and a half months and asked the parties to brief the following question:

What is the effect of the PTAB's Final Written Decision on the Commission's final determination, including any underlying findings, in this investigation? Please include in your response any effect on the issuance of remedial orders with respect to the asserted claims of the '455 and '296 patents and claim 11 of the '934 patent.

Although no Section 337 investigation has been stayed on the basis of a pending IPR, the outcome in the Three-Dimensional Cinema Systems investigation could potentially impact how future requests for stays based on pending IPRs will be handled at the Commission.  The target date for completion of the investigation is currently set for June 1, 2016.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Rose S. Lee
Lynn I. Levine
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