ITC Vacates Suspension Of Carbon And Alloy Steel Products Investigation

As we reported in a previous blog, in an unusual development, USITC ALJ Lord determined to suspend the investigation of the Chinese steel industry in Certain Carbon and Alloy Steel Products, Inv. No. 337-TA-1002, on the grounds that its antitrust and false designation of origin claims “come[] at least ‘in part’ within the purview of the antidumping and countervailing duty laws.” On review of the ALJ’s decision, the ITC has determined to vacate the suspension and continue the investigation, finding any overlap merely “hypothetical.” Comm’n Op. at 13.

Please read our full blog on The Trade Practitioner for further detail.

ITC Opinion Explaining Reasons It Deferred to PTAB Unpatentability Ruling Provides Grist for Future Challenges

In Certain Three-Dimensional Cinema Systems and Components Thereof, Inv. No. 337-TA-939, the ITC for the first time suspended enforcement of a remedial order in view of a Patent Trial and Appeal Board Final Written Decision of unpatentability after inter partes review even though the ITC itself had found the patent valid and infringed. The ITC’s recently-issued opinion explaining the basis for the suspension sheds light on the potential impact of post-grant review proceedings on future Section 337 cases.

In particular, the ITC does not have a favorable view of issue preclusion (i.e. collateral estoppel) arguments based on IPR rulings. While it found the accused infringer (respondent) had not shown that the necessary issue preclusion prerequisites were met, the ITC also recited the “well-known” exception to issue preclusion where different burdens of persuasion apply. The ITC stated that the respondent had not adequately addressed the applicability of the exception in view of the fact that a PTAB petitioner has a lesser burden than a respondent challenging patent validity before the ITC.

The ITC also rejected respondent’s arguments based on the effect of the PTAB’s findings on the merits of the ITC case as unpersuasive because many findings “were made in the context of the PTAB’s analysis and denial of [the patent owner’s] motion to amend,” where the burden is on the patent owner to prove patentability. The Commission also noted that “the evidence and arguments considered by both tribunals do not appear to be entirely the same,” including evidence that the patent owner’s “domestic industry products practice at least one asserted claim” of the patent at issue in the PTAB proceeding, which “supports a different conclusion than the PTAB with respect to secondary considerations.”

Despite rejecting the arguments for the preclusive effect or persuasiveness of the PTAB’s IPR ruling, the ITC nevertheless determined to suspend the remedy based on its “broad discretion in selecting the form, scope and extent of the remedy.” The ITC noted that discretionary suspension was warranted in light of the “advanced posture of the IPR proceeding” and because the suspension would have no practical effect given that all of the products would still be subject to exclusion based on the ITC’s violation finding with respect to two other patents.

The ITC’s reliance on its remedial discretion rather than on issue preclusion or other legal doctrines makes its holding less significant for future cases than it otherwise might have been. Nevertheless, certain dicta in the opinion may have more significance than the holding. First, the opinion throws cold water on the possibility of staying an ITC investigation based on a parallel IPR proceeding in the PTAB, noting “the statutory mandate to complete section 337 investigations expeditiously.” Second, the opinion leaves open the option to “take appropriate” action upon conclusion of any appeal. The opinion’s recitation of the Federal Circuit’s holding in Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2013) that there is no distinction in the effect on a litigation “between a final, affirmed court decision determining invalidity and a final, affirmed PTO decision determining invalidity,” followed by reference to the ITC’s own practice of modifying remedial orders after invalidity holdings by district courts, signals that the Commission may ultimately modify its remedial orders in this and potentially other investigations in deference to an affirmed IPR decision. If so, IPRs may take on increased importance as a strategy for parrying ITC remedial orders.

Weekly Data Privacy Alert – 15 August 2016

Please click here to read the latest data privacy alert from the Squire Patton Boggs Data Protection & Cybersecurity team. This week’s alert covers news from:

UK

  • The ICO Announces the UK is Well-equipped to Protect Data After Brexit
  • The ICO Launches Online Helpline

US

  • Pokémon GO Raises Data Privacy Concerns
  • AIG Launches Cyber Policy

For more information on any of these items, or data privacy issues generally, please feel free to call any of the following individuals:

Caroline Egan (Birmingham)

Francesca Fellowes (Leeds)

Colin Jennings (Cleveland)

ITC’S Bow To PTAB’S Invalidity Ruling Adds New Dimension To Section 337 Investigations

In a recent decision in Certain Three-Dimensional Cinema Systems and Components Thereof, Inv. No. 337-TA-939 (2016), the ITC has for the first time suspended enforcement of remedial orders in view of a Patent Trial and Appeal Board Final Written Decision of patent invalidity after inter partes review.

Not surprisingly, the suspension is only effective as to the patent that was the subject of the IPR proceeding at the Patent Office.  Because two other patents were found by the ITC to be valid and infringed, the suspension appears to have no practical effect on the exclusion of the accused products in this case.  However, the decision is still significant, because the ITC rarely suspends enforcement of its remedies for any reason, let alone pending review of decisions of another agency.  In Certain Composite Wear Components, Inv. No. 337-TA-644 (2009), the ITC temporarily suspended its remedies after an invalidity ruling, but that ruling had been made by a district court.

Because the Commission’s full opinion has not yet issued, and the Commission’s reasoning is not provided in the Notice, it is difficult to gauge the potential impact of the ruling.  Nevertheless, the decision seems likely to lead to suspension requests by litigants in other ITC cases presenting similar circumstances.  In light of the popularity and speed of post-grant review proceedings and their high rate of invalidity findings, the decision’s ultimate impact on Section 337 litigation is potentially significant.

The Trade Secrets Directive in Force – What UK Businesses Should Know

The EU Trade Secrets Directive came into force on 5 July 2016 and must be implemented in EU member states by 9 June 2018.  Via this link, read a summary of what this means for UK businesses, together with a more detailed analysis of the Directive and suggested steps to prepare for its introduction.  The impact of Brexit on the application of the Directive to the UK is also considered.  For more information, or to discuss the implications for your business, please feel free to call Carlton Daniel.

ITC Declines To Reach Question Of Whether Laches Is An Available Defense In Section 337 Investigations

138290667In a previous blog post, we reported that the ITC had requested briefing in Certain Network Devices, Related Software, and Components Thereof, Inv. No. 337-TA-944 on whether a laches defense is available in Section 337 investigations in view of the Federal Circuit’s recent decision in SCA Hygiene Prods. v. First Quality Baby Prods., 807 F.3d 1311 (Fed. Cir. 2015) (en banc).  The ITC’s powers are injunctive only, and previous ITC decisions have held that laches could not bar such prospective relief under the rule in A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc).  However, the Federal Circuit held in SCA Hygiene that the Aukerman rule that laches is not a defense to injunctive relief could not stand in light of the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014).

In an opinion issued on July 26, the ITC writes that it “declines to reach the legal issue of whether laches is an available defense at the Commission given the uncertainty of the law [with SCA Hygiene pending in the Supreme Court,]” but that “regardless of whether laches is available as a defense at the Commission,” the burden of proof was not satisfied.  Among other reasons, the Commission found there was no “open and notorious” infringement triggering a duty to investigate and that “requiring . . . infringement analyses for every feature that a sales team is aware of, is unreasonable” in view of the complainant’s “extensive patent portfolio.”

Although the Commission’s opinion leaves open for now the question of whether laches is an available defense at all in Section 337 investigations, the reason it givesthe Supreme Court’s recent grant of certiorari in SCA Hygiene—is unsatisfying.  SCA Hygiene determined that laches (1) could bar injunctive relief for patent infringement and (2) that it could do so even if the claim was brought within the Patent Act’s six-year statutory limitations period.  The issue that divided the en banc Federal Circuit, and the sole issue on which the Supreme Court granted certiorari, is the latter ruling.  Therefore, it is doubtful that a ruling by the Supreme Court in SCA Hygiene will eliminate any uncertainty relevant to the legal issue that the Commission declined to consider in this investigation, i.e., whether laches is an available defense in Section 337 investigations.

The Defend Trade Secrets Act of 2016: Leveraging the New Federal Framework to Protect IP – Webinar

We invite you to attend a webinar – The Defend Trade Secrets Act of 2016: Leveraging the New Federal Framework to Protect IP – co-presented by Steve Auvil of Squire Patton Boggs. Steve will address key provisions of the DTSA , outlining what companies and their counsel need to know about protecting and enforcing IP rights. The program will cover:

  • Overview of important sections of the DTSA
  • Differences between Uniform Trade Secret Act (which almost all states use in some form) and the DTSA
  • Effect on state trade secret laws and causes of action
  • Changes required in agreements and policies with employees, contractors and consultants
  • Best practices under the DTSA

The webinar, organized by Strafford, will take place on Tuesday, July 26, 2016 from 1:00-2:30 p.m. edt.

Squire Patton Boggs has 10 complimentary registrations available on a first-come, first-served basis. If you would like to take advantage of this offer, please email Strafford at compline@straffordpub.com.

This program is eligible for up to 1.5 MCLE credits in certain states.  For more information and to register, visit the Strafford website.

Brexit and Intellectual Property Rights

On 19 July, we ran a webinar for clients entitled ‘Brexit: What could happen to my IP rights?’  We considered how IP protection in the UK will be affected by Brexit and discussed how IP filing and management strategies might be adapted now.  The webinar was well attended and client feedback was that it had been clear, comprehensive and useful.  To listen to a recording of the webinar, please click here.  If you have any questions, please feel free to contact the presenters – Florian Traub and Carl Rohsler.

We hope you will be able to join us for future webinars.

 

European Commission Finds Privacy Shield “Adequate” But Uncertainty Remains

As we predicted  last week, the European Commission has moved swiftly to issue an adequacy decision that formally adopts an agreement finalized with the US Department of Commerce in June concerning arrangements to legitimize the transfer of EU personal data to the US. The much anticipated “EU-US Privacy Shield” arrangements will replace the Safe Harbor regime, which was invalidated by the EU Court of Justice (CJEU) in October 2015.

Please see our alert for details about the path ahead, including key concerns, procedural and substantive requirements and the impact Brexit.

 

ALJ Lord Suspends Section 337 Investigation of Carbon and Alloy Steel Products Because of Overlap with Anti-Dumping and Countervailing Duty Laws

3d render of hitting judge hammer with added motion blurALJ Lord has determined, sua sponte, to suspend the USITC’s Section 337 investigations in Certain Carbon and Alloy Steel Products, Inv. No. 337-TA-1002, on the grounds that the investigation “comes at least ‘in part’ within the purview of the antidumping and countervailing laws . . . [and] therefore requires that the Commission notify the Secretary of Commerce” before determining how to proceed.

The ITC only recently instituted the investigation that is now suspended (its Notice issued on May 26th). The investigation is based on alleged violations of Section 337 by the Chinese steel industry, including antitrust, false designation of origin, and trade secret claims. Section 337(b)(3) requires that the ITC notify the Secretary of Commerce “[w]henever, in the course of an investigation under this section, the Commission has reason to believe . . . that a matter, in whole or in part, may come within the purview of” the antidumping or countervailing duty laws. The ALJ notes that “the antitrust claims explicitly rely upon determinations by the Commission and the Commerce Department that the Chinese government subsidizes the Chinese steel industry, and that Chinese steel manufacturers sell their products at less than fair value” and that the “false designation of origin claims are based explicitly upon Respondents’ alleged evasion of antidumping and countervailing duty orders issued by the Commerce Department.” The ALJ further notes the pendency of several ongoing Commerce Department investigations related to the steel products at issue in the investigation. Invoking a little-used Commission Rule that permits suspension of a Section 337 investigation on motion or sua sponte by the presiding ALJ or Commission “because of proceedings before the Secretary of Commerce,” ALJ Lord ordered suspension of the investigation “to allow the Commission to provide the statutorily required notice to the Secretary of Commerce.”

Although the ALJ’s order does not specify a time frame for the suspension, it suggests that “[b]efore lifting the suspension of this Investigation, the Commission may consider whether it is appropriate to wait for a response from the Department of Commerce or to further investigate U.S. Steel’s claims before remanding to the Administrative Law Judge for further proceedings.” The ALJ’s order was issued as an “Initial Determination,” which means that it is subject to Commission review.

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