Insights

On January 31, 2024, NETGEAR, Inc. sued Huawei in California federal court, claiming the Chinese tech giant broke U.S. antitrust laws by refusing to license its patents on reasonable terms. The Complaint accuses Huawei of fraud, racketeering, and other offenses for allegedly withholding patent licenses for technology that NETGEAR’s routers require in order to comply with the international Wi-Fi networking standards.

The Federal Circuit recently denied a petition for rehearing en banc in the much watched In re Cellect matter.  The landmark panel decision determined how obviousness-type double patenting (“ODP”) is impacted when patent term adjustment (“PTA”) is added to the term of one or more patents in a family under 35 U.S.C. § 154(b), resulting in different terms for the family member patents that would otherwise expire on the same day.

A recent Final Initial Determination (“FID”) from newly appointed Administrative Law Judge Hines confirmed the statutory authority of the International Trade Commission (“ITC” or “Commission”) to investigate the alleged importation of goods incorporating misappropriated trade secrets causing injury to a domestic industry, as held by the Federal Circuit in TianRui Grp. Co. Ltd. v. Int’l Trade Comm’n, 661 F.3d 1322 (Fed. Cir. 2011).  The ALJ also held that Complainant had proven its domestic industry had been substantially injured despite the fact that its revenue had increased during the same period.  For Crowell’s previous client alert on TianRui, see here.

The Federal Circuit issued an important and precedential decision in In re Cellect, LLC regarding the interaction of patent term adjustment (“PTA”), terminal disclaimers, and obviousness-type double patenting (“ODP”).  Under the judicially-created ODP doctrine, patent claims that are not patentably distinct from those in a commonly owned, earlier-expired patent are subject to invalidation.  The issue in In re Cellect was whether the challenged patents that expired after another family member solely because of PTA can be unpatentable over the earlier-expired patent under ODP.  As the ODP analysis requires determining which are the later-expiring patents, the answer hinges on when the PTA is applied. 

Recently, the U.S. International Trade Commission (ITC) confirmed a decision to enter default judgment against India-based Viraj Profiles, a stainless-steel producer, for stealing an American company’s trade secrets. The ITC’s ruling bars the entry of certain Viraj’s products into the U.S. for a period of 16 years. This severe penalty comes in response, not only to Viraj’s misappropriation of trade secrets, but also to its subsequent wholesale destruction of evidence. The Commission’s decision again exemplifies how the ITC can be an effective forum to litigate international trade secret misappropriation.

The U.S. Supreme Court held argument yesterday on whether enhanced damages should be easier to obtain in patent infringement cases. Based on the tenor of the questioning, the Supreme Court appears ready to topple the Federal Circuit's "rigid" two-part willful infringement test and give district courts more discretion in awarding enhanced damages. If it does, the reversal would be yet another step in the High Court's now long trail of disagreement with the Federal Circuit on issues unique to patent law. The Justices grappled, however, with exactly which test or guidance they would use to replace the current test. Regardless of the ultimate replacement, it is likely that more patent plaintiffs will seek enhanced damages than before.

Apple won a major victory on Wednesday in its seemingly endless patent battles against Samsung when the Federal Circuit denied Samsung's petition for a rehearing en banc. By doing so, the Federal Circuit let stand an earlier opinion that Apple was entitled to a narrow, feature-based injunction against Samsung. On the same day, the majority of the divided panel reissued a slightly amended version of that precedential opinion, which had vacated the district court's holding that Apple did not establish the first two eBay factors: (1) that it was irreparably harmed by Samsung's infringement; and (2) that monetary damages were inadequate.

In this issue:

The Federal Circuit recently issued the highly-anticipated decision in the appeal of the nearly $1 billion verdict in Apple v Samsung, where the jury had found Samsung infringed Apple's patents and trade dresses. Apple Inc. v. Samsung Electronics Co., Ltd., --- F.3d --- (Fed. Cir. 2015). Although the Federal Circuit vacated the trade dress verdict and associated damages, it affirmed $548 million in damages for Apple's patent infringement claims. 

Yesterday, the Supreme Court decisively struck down the "good-faith belief of invalidity" defense for induced patent infringement cases in Commil USA, LLC v. Cisco Sys., Inc., No. 13-896, U.S. (May 26, 2015). While the Court acknowledged that the validity of a patent is a predicate to its enforceability, it rejected the notion that a mere good-faith belief of invalidity could shield against liability for induced infringement.

In a highly-anticipated decision, the Supreme Court held in Teva Pharm. USA, Inc. v. Sandoz, Inc., 574 U.S. ___ (January 20, 2015) that the Federal Circuit must review factual findings underlying a district court's patent claim construction for clear error, overturning the de novo standard long-applied by the Federal Circuit.  See, e.g., Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc); Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc). While the ultimate conclusion of patent claim construction remains a legal one subject to de novo review, factual determinations subsidiary to that legal conclusion will now be overturned only if clearly erroneous. The Supreme Court's decision will likely have a profound impact as parties become more cognizant of the now-important divide between questions of fact and law in district court claim construction rulings.

While the policy debates continue as to whether, and how, the antitrust laws can be used to curb abusive practices by Patent Assertion Entities (PAEs), the FTC has entered the fray alleging for the first time under Section 5 that PAE MPHJ Technology Investments, Inc. (MPHJ) engaged in misrepresentation and deceptive practices through a large scale letter writing campaign. MPHJ, along with its owner and law firm, settled the FTC's claims by agreeing not to engage in unsubstantiated representations in the future. Although the FTC has long debated internally about the proper scope of the "unfair competition" half of Section 5, this seemingly novel application of the FTC Act's "deceptive practices" authority in fact reflects settled FTC power to prevent unsubstantiated claims.

The Obama Administration on Saturday overturned two orders issued by the U.S. International Trade Commission (ITC or "Commission") barring sales and imports of Apple's older iPhone and iPad models found to infringe a Samsung Electronics Co. Ltd. standard-essential patent (SEP). The Department of Justice (DOJ) and the Federal Trade Commission (FTC) have repeatedly opined that the pursuit of injunctive remedies, including ITC exclusion orders, in cases involving SEPs can harm competition by allowing the SEP owner to unfairly leverage the power conferred on the patent through its incorporation into a technical standard. The recent veto decision signals the Administration's agreement on this point. The Administration issued its veto just one day before the ITC orders were to take effect, the first time the White House has vetoed an ITC exclusion order since 1987, when President Reagan overturned a ban on Samsung memory chips.

The U.S. International Trade Commission issued an unexpected victory for Samsung in its longstanding patent battle with Apple when it granted Samsung's request for an import ban on older Apple iPhone and iPad devices found to infringe one of Samsung's standard-essential patents (SEP). The Commission's ruling on June 4th vacated an Initial Determination by Administrative Law Judge Gildea, which found no infringement by Apple.

In InterDigital Commc'ns, LLC v. Int'l Trade Comm'n, No. 2010-1093 (Fed. Cir. Jan. 10, 2013), the Federal Circuit held that the domestic industry requirement of Section 337 can be satisfied by domestic licensing activities standing alone, even if no product covered by the patents-in-suit is manufactured domestically or by a domestic entity. This decision may result in more Non-Practicing Entities ("NPEs") gaining easier access to the U.S. International Trade Commission ("ITC"), where injunctive relief in the form of an exclusion order is more readily available than injunctive relief from district courts.

On October 5, 2012, the U.S. International Trade Commission (ITC) published proposed amendments to its rules of procedure that would limit e-discovery and provide guidance regarding the assertion of privilege claims in Section 337 proceedings. The goal of the proposed amendments "is to reduce expensive, inefficient, unjustified, or unnecessary discovery practices in agency proceedings while preserving the opportunity for fair and efficient discovery for all parties." Based largely upon Rule 26 of the Federal Rules of Civil Procedure, the proposed amendments (1) provide specific limitations on the discovery of electronically stored information that is not reasonably accessible due to undue burden or cost, is duplicative or can be obtained from a less burdensome source, or where the burden of discovery outweighs its likely benefits; and (2) require the production of a privilege log with specified categories of information, set forth a procedure for promptly resolving privilege disputes, and allow parties to enter into agreements regarding the inadvertent production of privileged information. 

On July 10, the State Duma ratified Russia's protocol of accession to the World Trade Organization. The Federation Council, the Russian parliament's upper house, passed the measure on July 10, paving the way for signature by President Putin on July 21. With the completion of these steps, Russia will officially become a WTO member on August 22.

On July 12, the International Trade Commission (ITC) issued a comprehensive proposal to overhaul its rules of Practice and Procedure. The ITC's proposal is aimed at streamlining Section 337 investigations and clarifying existing ambiguity in the rules. If adopted as proposed, the most significant changes would affect written discovery, depositions, pre-institution amendments and petitions for review. 

The Federal Trade Commission ("FTC") recently submitted comments to the U.S. International Trade Commission ("ITC") opposing the issuance of exclusion orders banning imports of products that infringe on RAND-encumbered standard essential patents (SEPs) in two investigations. Specifically, the FTC argued that the threat of an exclusion order would give the SEP holder leverage to extract royalties that are not reasonable and that an exclusion order would therefore be anticompetitive. The FTC went further in expressing skepticism that exclusion orders are appropriate in any investigation involving RAND-encumbered SEPs. The FTC's comments, made in the context of a major uptick in ITC cases, reflect increased interest by antitrust regulators in intellectual property issues generally and in standard setting activities in particular that could have implications for the broader interplay between antitrust and patent law.