United States: ALJ Finds ITC Remedial Orders Unenforceable, ITC Blog

We previously wrote about the uphill battle Respondent Eko Brands faced in an enforcement proceeding after it defaulted in the underlying investigation.  The ALJ found during the proceedings that res judicata barred its defenses of non-infringement and invalidity.  However, Judge Essex issued an interesting determination this month finding that the Commission's remedial orders are not enforceable against Eko because Complainant Adrian Rivera and Adrian Rivera Maynez Enterprises ("ARM") did not properly establish the domestic industry requirement in the underlying investigation.  He further found that even if the remedial orders are enforceable, that they should be provisionally rescinded pending final resolution of a district court case.

Our previous posts contain the factual and procedural background of Certain Beverage Brewing Capsules, Components Thereof, And Products Containing the Same, Inv. 337-TA-929.  The highlights are:

  • ARM filed a Section 337 complaint against a number of respondents, including Eko, alleging that their coffee pods infringed independent claims 5 and 18 and dependent claims 8 and 19 of U.S. Patent No. 8,720,320. ARM claimed that its domestic industry products practice claims 1, 5, 10, and 18.
  • Eko never responded to the Complaint and was found in default.
  • ARM subsequently dropped claims 8 and 19 from the proceeding as to the non-defaulting respondents.
  • The Commission found no violation of Section 337 with respect to the non-defaulting respondents because claims 5 and 18 are invalid for not having written description support, but found Eko in violation for infringing claims 8 and 19 because it defaulted.
  • The Commission also found that the technical prong of domestic industry was not met for invalid claims 5 and 18, but took no position as to claims 1 and 10.
  • Eko brought a declaratory judgment action in district court which found that Eko's products did not infringe any of the claims of the '320 patent.
  • ARM filed an enforcement complaint alleging that Eko has violated the remedial orders issued against it.
  • ALJ Essex struck Eko's affirmative defenses of non-infringement and invalidity.
  • Eko moved for rescission of the remedial orders.

Enforceability

The ALJ based his finding that the remedial orders are unenforceable on an argument not directly raised by the parties: that the ITC lacked statutory authority to issue the remedial orders because ARM never established that it meets the domestic industry requirement.

Judge Essex explained that his initial determination in the underlying investigation found that ARM had satisfied the technical prong of the domestic industry requirement as to claim 5, and had also satisfied the economic prong of the domestic industry requirement.  On review the Commission found claim 5 to be invalid, and explained that "[b]ecause we find that claim 5 is invalid, ARM cannot satisfy the technical prong through claim 5."  The Commission employed the same reasoning with respect to claim 18, and concluded that "because we find that claim 18 is invalid, ARM cannot satisfy the technical prong through claim 18."  ALJ Essex further noted that ARM also alleged that its domestic industry articles practiced claims 1 and 10 of the '320 patent, but the initial determination made no findings on whether the domestic industry products practiced claims 1 and 10.  The Commission declined to "determine whether ARM's products practice [claims 1 and 10.]"

The ALJ concluded that "[t]he Commission's opinion, in invalidating claims 5, leaves ARM without an affirmative domestic industry determination. Domestic industry is a statutory requirement for finding a violation of Section 337, and a violation of Section 337 is a statutory prerequisite to the issuance of an exclusion or a cease and desist order. The absence of a domestic industry determination in this investigation renders the remedial orders effectively unenforceable."

Rescission

After analyzing the ITC's precedent for rescission of remedial orders, Judge Essex found that the ruling of noninfringement by the U.S. District Court for the Western District of Washington occurred subsequent to the Commission's issuance of the remedial orders and has substantially changed the circumstances under which the orders were issued.  He thus recommended that the ITC provisionally rescind the remedial orders until the district court's noninfringement decision is affirmed or reversed on appeal, or the time for appeal has passed.

Takeaway 

The ALJ's determination is interesting for a couple of reasons.  First, Judge Essex seems to treat ARM's allegations of infringement differently than its allegations that it meets the technical prong.  As a result of Eko's default, the Commission presumed that ARM's allegations in its complaint that were not specifically adjudicated to be true.  For example, Eko did not infringe claims 5 and 18 because the Commission found them invalid, but Eko was presumed to infringe claims 8 and 19 because there was no finding on invalidity.  Judge Essex ruled that res judicata barred Eko from challenging this infringement ruling.

The same does not seem to apply for the technical prong of domestic industry.  The Commission specifically found that ARM could not rely on claims 5 and 18 for satisfaction of the technical prong because they are invalid, but it took no position on ARM's allegations in the complaint that its products practice claims 1 and 10.  Judge Essex appears to hold that the Commission could not presume that ARM practices claims 1 and 10 even though it could presume that Eko infringes claims 8 and 19.  It remains to be seen whether the Commission will agree on review.

Second, if its stands on review, Judge Essex's ruling that a district court's finding of non-infringement is grounds to rescind ITC remedial orders implicates possible strategies for respondents.  For example, a respondent that is found to violate Section 337 could consider filing a declaratory action in a fast jurisdiction such as the Eastern District of Virginia during the pendency of an appeal of the ITC action.

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.

Authors
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
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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