United States: ITC Remains Unpersuaded By Final PTAB Rulings

This week the ITC stood firm in its position that final PTAB rulings of unpatentability in IPR proceedings are not grounds to modify, suspend, or rescind remedial orders. In Certain Foam Footwear, Inv. No. 337-TA-567, the ITC issued a short order denying a petition for such relief. In the Order, the ITC cited its precedent in Certain Network Devices, Related Software and Components (II), Inv. No. 337-TA-945, Order (Sept. 11, 2017) which we discussed here.

Case Summary

The Commission instituted the underlying investigation on May 11, 2006, based on a complaint filed by Crocs alleging violations of Section 337 in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain foam footwear, by reason of infringement of claims 1-2 of U.S. Patent No. 6,993,858 and U.S. Patent No. D517,789. The complaint named several respondents including Double Diamond Distribution Ltd. ("Double Diamond").

On July 15, 2011, after an appeal to the U.S. Court of Appeals for the Federal Circuit and subsequent remand vacating the Commission's previous finding of no violation, the Commission found a violation of section 337 based on infringement of the asserted claims of the patents and issued a general exclusion order and cease and desist order directed against Double Diamond.

On September 14, 2017, Double Diamond and U.S.A. Dawgs, Inc. ("USA Dawgs," a non-party to the original investigation) petitioned to modify, suspend, or rescind enforcement of the GEO and CDO, with respect to the '789 patent, under Commission Rule 210.76(a) based on final rejection of the sole claim of this patent by the U.S. Patent Office as unpatentable over prior art at the conclusion of inter partes reexamination proceedings on August 9, 2017.

The Commission held that the circumstances here "are no different from Certain Network Devices, Related Software and Components (II), Inv. No. 337-TA-945, Order (Sept. 11, 2017), where the Commission determined that it would not disturb any issued remedial order, i.e., modify, suspend, or rescind the order, based solely on a final rejection from the PTO."

Takeaway

As we have previously posted, although IPR petitions remain an effective strategy in defending patent infringement suits in district court, their value as a defense in the ITC is limited. The speed of an ITC investigation, and the ITC's refusal to stay investigations in favor of IPRs, makes it unlikely that a respondent could obtain a final decision from the PTAB before the ITC issues remedial orders and all appeals are exhausted. In contrast to the ordinary scenario of using an IPR as a defense in the violation stage of an ITC investigation, the petitioners here were seeking to stay, modify, or rescind remedial orders that have been in place for over six years. It appears in the ITC's view that their petition was premature. It is likely that they will have greater success rescinding the remedial orders if the PTAB's decision is upheld on appeal.

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