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  He further found that even if the remedial orders are enforceable, that they should be provisionally rescinded pending final resolution of a district court case.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
 
In association with
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
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.

Disclaimer

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.

Registration

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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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.