United States: ITC v. PTAB: Is Winning In IPR Enough To Avoid An ITC Exclusion Order?

Last Updated: September 6 2017
Article by Stuart V.C. Duncan Smith

Parties accused of patent infringement often turn to IPRs to invalidate the asserted patents, and winning in an IPR can mean relief from whatever remedy would be imposed as a consequence of a finding of infringement. That strategy came under examination in a recent decision from the International Trade Commission (ITC), which declined to get rid of an exclusion order (i.e., an injunction) even after the PTAB found the infringed claims unpatentable. That does not mean, however, that the party found to infringe is without options.

In an administrative infringement case brought by Cisco Systems, the ITC determined that Arista Networks infringed several claims of several patents that were found not to be invalid. The ITC's resulting order prevented Arista from importing or selling certain networking devices. Less than a month later, the PTAB found all of the claims at issue in the ITC investigation to be unpatentable.

Arista asked the ITC to "modify, suspend, or rescind" its order. The ITC denied Arista's motion, relying on a distinction between PTAB proceedings and district court cases. The ITC reasoned that while a district court decision invalidating claims of a patent has immediate effect, even if that decision is appealed, a similar decision by the PTAB does not take effect until after appeal is complete. Because appeal of Arista's IPRs was still pending, the ITC determined that the PTAB's finding of unpatentability did not affect the ITC's order.

The situation that Arista faces is a consequence of the particular features of ITC and IPR proceedings. While IPRs are fast, so are ITC proceedings. Even if the party accused of infringement moves quickly to petition for IPR, the ITC may still complete its proceeding before the PTAB issues its final written decision. Therefore, the final written decision in the IPR will often issue after the ITC has decided whether to issue an exclusion order.

So what should a party do, that is found to infringe in the ITC but has won in the PTAB? Arista illustrates several options. First, Arista asked the ITC to stay the exclusion order shortly after the ITC denied its request to "modify, suspend, or rescind" the exclusion order. Second, Arista appealed the ITC's exclusion order and asked the Federal Circuit to stay its application pending appeal. In either instance, a stay would stop the exclusion order from going into effect, even if it wouldn't get rid of it entirely (as a successful request to "modify, suspend, or rescind" would). Time will tell whether Arista's stay requests are more successful than its prior request.

Takeaways

  • Parties accused of infringement at the ITC should consider all procedural options to delay an exclusion order. Even if the ITC does not "modify, suspend, or rescind" the exclusion order after the PTAB finds the asserted claims unpatentable, the ITC or the Federal Circuit may still stay the exclusion order.
  • Don't lose track of timing. Given the speed of ITC investigations, parties accused of infringement should consider IPRs early, move quickly if IPRs are the right strategy, and develop a plan if they find themselves in Arista's position.

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.

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