On October 20, 2016, the Commission denied yet another request for a stay of a remedial order in an investigation pending appeal to the Federal Circuit. The Commission's denial in Certain Marine Sonar Imaging Devices, Inv. No. 337-TA-921, follows a long line of decisions denying stays of remedial orders pending Federal Circuit appeal (with a recent, notable exception in Digital Models), indicating that it continues to be very difficult to stay ITC remedial orders absent an "admittedly difficult legal question" concerning the order.
Standard for Obtaining a Stay
In evaluating whether to stay a remedial order pending appeal, the Commission applies a modified version of the Federal Circuit's four-part preliminary injunction test: "(1) whether the stay applicant has made a strong showing that [it] is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether the issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies." See Certain Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Products Containing the Same, and Components Thereof, Inv. No. 337-TA-921, Comm. Op. Denying Stay at 4 (Oct. 20, 2016) (citing Standard Havens Prods., Inc. v. Gencor Industries, Inc., 897 F.2d 511, 512 (Fed. Cir. 1990)).
The first prong of the test has been modified by the Commission, as the movant is not required to demonstrate a likelihood of success on appeal, given that the Commission "has recognized the futility of establishing a likelihood-of-success in this context given that it would be difficult to ask an agency to find that its own decision is likely to be overturned on appeal." Id. (citations omitted). In lieu of the first prong, the Commission considers whether it has "ruled on an admittedly difficult question." Id. (quoting Washington Metro. Area Transit Comm. v. Holiday Tours, Inc., 559 F.2d 841, 844-45 (D.C. Cir. 1977)).
Commission and Federal Circuit Orders in Marine Sonar Imaging Devices
After Complainant Navico's petition for modification of a limited exclusion order (LEO) against Garmin was granted in Certain Marine Sonar Imaging Devices, Garmin filed a motion requesting that the Commission stay enforcement of the modified LEO pending its appeal. Garmin also moved the Federal Circuit to stay enforcement of the modified LEO. Both the Commission and the Federal Circuit denied Garmin's respective motions. Regarding the first prong of the test for a stay, the Commission noted that Garmin failed to address the "admittedly difficult question" analysis: whether modifying the LEO was appropriate given the facts presented during the modification proceeding. Instead, Garmin presented three arguments, all of which the Commission found unpersuasive. Specifically, the Commission held that (1) remedy determinations are not subject to a formal APA proceeding; (2) the ITC had jurisdiction to modify the LEO; and (3) the scope of the modified LEO is clear. Id. at 5-13.
Regarding the irreparable harm prong, the Commission found that Garmin's claims that its marine business would suffer injury to its reputation, loss of goodwill, and loss of actual and potential customers were speculative and without support. See id. at 13-14. The Commission then rejected Garmin's arguments that Navico would not be harmed by the stay, and thus the balance of hardships did not weigh in Garmin's favor. See id. at 14-15. Lastly, the Commission rejected Garmin's public interest argument, and noted that public interest favors enforcement of valid patents. Id. at 15 (citing Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 931-32 (Fed. Cir. 2012)).
The Federal Circuit similarly denied Garmin's request to stay enforcement of the modified LEO pending appeal. See Garmin Int'l, Inc. v. ITC, No. 2015-2584 (Fed. Cir. Oct. 21, 2016) ( order denying stay of modified LEO).
Outlier: Digital Models Stay
The Commission has routinely denied most requests to stay remedial orders pending appeal, with a recent, notable exception: Certain Digital Models, Inv. No. 337-TA-833. In the Digital Models investigation, the ITC found that the issue on appeal, whether electronically transmitted information qualifies as an imported "article" for purposes of the ITC's jurisdiction, was an admittedly difficult question (see our previous post regarding the Commission's decision). However, the Commission made it clear that its decision in Digital Models was unusual and "should not be viewed as a sharp departure from prior determinations denying stays." Certain Digital Models, Digital Data, and Treatment Plans for Use in Making Incremental Dental Positioning Adjustment Appliances, the Appliances Made Therefrom, and Methods of Making the Same, Inv. No. 337-TA-833, Comm'n Op. Granting Stay at 10 (June 11, 2014). For more on the Commission's decision to grant a stay in Digital Models and a thorough analysis of this topic, see our previous journal article.
In another recent decision, the Commission issued a partial stay of remedial orders in Three-Dimensional Cinema Systems, Inv. No. 337-TA-939, pending final appellate resolution of a PTAB final written decision that invalidated one of the three parents found infringed by the ITC (see our previous post). See Certain Three-Dimensional Cinema Systems and Components Thereof, Inv. No. 337-TA-939, Comm. Op. at 60-61 (Aug. 23, 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.
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