ITC Initiates Pilot Program to Allow ALJs to Issue Interim Initial Determinations

Earlier today, the U.S. International Trade Commission (ITC) announced a pilot program that will allow Administrative Law Judges (ALJs) to issue interim Initial Determinations (IDs) on fewer than all issues in Section 337 investigations. The announcement can be found here. The pilot program is part of the ITC’s ongoing efforts to expeditiously resolve Section 337 investigations, either through resolution of issues on the merits or by facilitating settlement. The pilot program will apply to all investigations instituted on or after May 12, 2021, and to investigations instituted prior to May 12, 2021 at the discretion of the ALJ.

Under the pilot program, ALJs can issue interim IDs focused on case-dispositive issues or significant issues that may facilitate settlement, in advance of the main evidentiary hearing. Possible issues may include infringement, patent invalidity, patent eligibility, standing, and/or the domestic industry requirement. ALJs will have discretion to decide whether to utilize the program for a particular issue. ALJs will also have discretion to modify the Procedural Schedule in an investigation in the pilot program, including suspension of discovery and the Procedural Schedule with regard to other issues, so long as the modifications do not violate the ITC’s statutory obligation to resolve Section 337 investigations at the “earliest practicable time.”

Key features of the pilot program procedures include:

  • Interim IDs will issue no later than 45 days before the scheduled start of the main evidentiary hearing in the investigation.
  • The ALJ will develop a factual record, hold an evidentiary hearing and receive briefing on the discrete issues that are part of the pilot program.
  • The ALJ will issue an interim ID on these discrete issues, which will be subject to petitions for Commission review and resolution.
  • The Commission will determine whether to review an interim ID within 45 days of issuance, and resolve any review within another 45 days.

Feedback from ALJs, the Office of Unfair Import Investigations (OUII), members of the ITC bar, and private parties are welcome throughout the pilot program. After two years, the ITC will decide whether to promulgate procedural rules governing interim IDs.

The pilot program process is similar to that used by the ITC to implement its “100-day proceedings.” The ITC first introduced a pilot program for 100-day proceedings in 2013 and then formally adopted procedures for 100-day proceedings a few years later. However, 100-day proceedings, have not been utilized frequently. Critics note that 100-day proceedings are limited in scope and can be initiated only by the Commission, not by the ALJ. The current pilot program gives the ITC more tools to resolve Section 337 investigations and gives the ALJ more flexibility and control over Section 337 investigations. At the same time, given the tight time constraints of a Section 337 investigation, ALJs might be hesitant to use the pilot program if it is not clear that an issue likely will resolve the case or if resolution of an issue will give an advantage to one party over the other. If both parties agree on the issue to be resolved, ALJs might be more inclined to utilize the pilot program.

Evidence Relating to Third Party Chips Better Be Good When It’s TV Time at the Federal Circuit: The admissibility of third-party source code as a business record under FRE 803(6)

Set of four retro tv setsIn patent infringement cases involving consumer electronics and the like, the accused instrumentality oftentimes includes components the accused infringer obtained from third-party suppliers. To prove infringement, the patent owner may need discovery from the third party, such as source code, and that discovery would in turn be relied upon by the patent owner’s testifying expert. In a recent precedential opinion, the Federal Circuit exposed a range of evidentiary challenges the patent owner faces when trying to rely on third party discovery to prove its infringement case, thereby providing litigants and the bar with valuable lessons. In this opinion, Wi-LAN Inc. v Sharp Electronics Corporation and Vizio, Inc., the Federal Circuit affirmed a decision by Chief Judge Stark of the District of Delaware granting summary judgment of non-infringement to the accused infringer and excluded consideration of source code from a third party chip maker as inadmissible hearsay. Without the excluded source code, the patent owner, Wi-LAN, could not prove infringement against Sharp and Vizio as a matter of law.

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When Compulsory Licenses Apparently Just Won’t Do: The US Backs Waiver of Rights to IP Relating to COVID-19

On Tuesday, May 5, 2021, the U.S. Trade Representative Katherine Tai released an unprecedented statement supporting a “Covid-19 TRIPS Waiver.” Specifically, Ambassador Tai stated “[t]he Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines. We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen.”

The stock market was unimpressed.

To quote the Talking Heads: “And you may ask yourself, well, how did I get here?’

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) set the minimum standards for intellectual property protection in the world today. Relevant here, TRIPS permits WTO Member states to engage in compulsory licensing as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting intellectual property incentives.

The term “compulsory licensing” does not appear in TRIPS. Rather, Article 31 of TRIPS permits a Member State to “allow[] for other use of the subject matter of a patent without the authorization of the right holder” as long as “the following provisions [are] respected.”

Two provisions are particularly relevant here.

Article 31(b) generally requires that “such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder.” That requirement, however, “may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.”

Second, Article 31(h) requires that, regardless, “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization.”

TRIPS does not, however, purport to establish a “one size fits all” approach to intellectual property, a fact made clear by the 2001 Doha Declaration. In that Declaration, the WTO stated:

  1. “Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.”
  2. “Each member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.”

Nonetheless, in October 2020, South Africa and India pushed the WTO for more, demanding that the Council essentially impose a ban on COVID-19 patents. Despite widespread support, that request has stalled. Likely not for much longer. The issue of a waiver—despite the compulsory license provisions of TRIPS—will certainly be the center of discussion at the June 8-9 meeting of the TRIPS Council. With the US backing and support of an India/South Africa-style “waiver” of TRIPS provisions relating to COVID-19, it may just pass.

Beware! Reliance on Aspirational and Futuristic Statements in a Prior Art Reference May Require Supporting Evidence

US PatentIn patent disputes involving complex technologies, especially when the disputed patent was developed in an early stage of the technical field, research papers and similar publications are oftentimes relied on to make obviousness-based invalidity challenges. It is common for such research papers to include predictions or aspirations with regards to potential future developments in the field. These aspirational statements are routinely relied upon to support motivations to combine prior art and assertions that the direction of advancement predicted by these statements renders a patent’s claimed invention obvious.

The Federal Circuit’s decision in the precedential Raytheon Technology Corporation v. General Electric Company case indicates that when relying on future-looking or “aspirational” research papers in an obviousness attack, it is important to introduce sufficient evidence to establish that the relied-upon portions of the prior art would enable a person of ordinary skill in the art (AKA the “skilled artisan”) to make and use the challenged claimed inventor or element thereof. Continue Reading

Senator Cornyn Considers Expansion of ITC’s Authority under Section 337

Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337 (“Section 337”), gives the U.S. International Trade Commission (“ITC”) broad powers to investigate and address unfair acts and unfair competition in the importation of articles into the United States. Most Section 337 investigations address issues of infringement of statutory intellectual property such as patents, trademarks, and copyrights. Recently, however, Section 337 has increasingly been used to address other unfair acts such as misappropriation of trade secrets, false advertising, breach of contract, and antitrust violations. One primary advantage of the ITC over other fora is the ITC’s ability to issue Exclusion Orders – powerful remedies that are enforced by U.S. Customs and Border Protection (“CBP”) to prevent the importation of offending products into the United States.

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Incompetent #ad Disclosure – the ASA Issues Warning to Influencers

The ASA has issued a stark warning to advertisers: non-compliance with ASA rules on disclosures in advertising is rife and that is unacceptable. The regulator now plans to get tough with those in breach.

We blog regularly on Advertising Standards Authority (ASA) scrutiny of advertising rules in the social media landscape. The ASA has now released a social media compliance report following its analysis of over 24,000 social media posts by over 100 UK-based influencers. The ASA looked specifically at compliance with ad disclosure rules in social media.

The ASA’s CAP Code and UK and EU consumer law require marketing communications that are promotional to be clearly labelled as ads. The disclosure is required so that consumers know what is promotional and what is genuine unbiased opinion. The ASA recommends that influencers use #ad in social media posts to communicate that message to consumers clearly. However, the ASA analysis unveiled low levels of compliance: only 35% of posts were correctly labelled and obviously identifiable as advertising.

Key Issues Identified by ASA’s Report:

  1. Inconsistent disclosure across social media posts – when a piece of ad content spans a number of consecutive social media posts, unless it is absolutely clear that this is part of the same posting, each individual post must be disclosed separately as an ad.
  2. Visibility of ad labels – where social media posts were labelled as ads, labels were often in a small font, obscured by platform architecture, in a similar colour to the background or otherwise difficult to spot.
  3. Own-brand ads – influencers should not rely on bios or past posts to make it clear to consumers that they are connected to a product.

Own-brand ads are where the influencer promotes their own brands, rather than a paid collaboration with a third party. The fact that the ASA see this as a key issue is interesting. Indeed, it is an area in which the ASA has recently taken enforcement action against Molly Mae Hague, when she ran a non-compliant prize draw, which we commented on.

Key Takeaway:

Consumers are spending more time online and we expect to see the popularity of influencer advertising increasing year on year. The Competition and Markets Authority is also conducting its own investigation in this area, increasing regulatory pressure. CMA attention also adds the risk of financial penalties for those failing to follow the law.

The ASA’s Chief Executive, Guy Parker, has made clear that the regulators are poised to use their power to punish brands, agencies and influencers who fail to use the advertising disclosures the ASA has mandated.

Squire Patton Boggs has a team that focuses on advising on advertising and media matters. If you would like advice on how to comply with the CAP Code or UK and EU law on required disclosures, please contact Carlton Daniel, Partner.

The Unified Patent Court: A Squire Patton Boggs IP-practice Focus 

All European Union flags in front of parliament euPatent protection in Europe is regulated by a complex system. In addition to the “classic” national patents, there is a transition to a new Unitary Patent system, which has been in planning for almost a decade now and is expected to finally enter into force in Spring 2022. It will consist of the European Unitary Patent and a E(UPC). The Unitary Patent grants EU-wide protection through a single registration and allows for EU-wide injunctions. During the transition period there are many options to consider, such as the possibility to opt-out of the system. The proceedings under the UPC Agreement will face new possibilities with regard to, for instance, jurisdiction, language, and costs. Our dedicated UPC team is ready to advise in this area. Our team includes litigators with extensive experience in patent litigation, both locally and in cross-border situations. They have evaluated current possibilities for clients during the transition period and assessed the options on future patent applications and infringement actions. The UPC team has already summarized our most frequently asked questions on these topics, including strategies to opt-out of the system and the basics of the procedure of the UPC. Our UPC team is ready!


USPTO Establishes COVID-19 Prioritized Appeal Pilot Program

As a companion to the COVID-19 Prioritized Examination Pilot Program and patent-related relief provided by the 2020 CARES Act, the United States Patent and Trademark Office (“USPTO”) recently announced a similar Fast-Track Appeals Pilot Program for patent applications claiming a process or product requiring FDA approval for COVID–19 use. In general, under 35 U.S.C. § 134, once an Applicant’s claims have been twice rejected, the Applicant has a right to appeal the Examiner’s decision to a panel of administrative patent judges on the Patent Trial and Appeal Board (“PTAB”). However, one drawback to the appeals process can be the average appeal pendency of 13 months to receive a decision.

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Razor Scooter Trips Over Reissue Statute at the ITC

The U.S. International Trade Commission (“ITC”) recently terminated CERTAIN MOTORIZED SELF-BALANCING VEHICLES, Investigation No. 337-TA-1000, brought by Razor USA LLC against alleged infringers of a patent related to electric hoverboards, denying Razor any relief. In doing so, the ITC confirmed that an original patent is surrendered when a Reissue Patent issues, even if a pending Continuation Application from the Reissue Application includes the claims of the original patent.

The ITC instituted Investigation No. 337-TA-1000 in May 2016. On the same day the ITC instituted the investigation, the Complainant, Razor USA LLC, sought reissue of the asserted patent, U.S. Patent No. 8,738,278 (“the ’278 patent”), but subsequently requested that the PTO suspend examination of the reissue application during the investigation, which it did. The Investigation proceeded to a hearing and the ITC found no violation of section 337. The ITC found that none of the then-participating respondents’ accused products infringed the asserted claims and that the technical prong of the domestic industry requirement was not satisfied. Razor then appealed that decision to the Court of Appeals for the Federal Circuit.

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Growing Tension Between the ITC and the PTAB

One of the most common responses to being sued for patent infringement is a petition to the USPTO’s Patent Trial and Appeal Board (PTAB) challenging the validity of the patent. To avoid duplication of effort, either the Board or the tribunal can defer to the other. According to a recent decision, the U.S. International Trade Commission (ITC) will not defer to the PTAB in such situations. In Certain Automated Storage and Retrieval Systems, Robots, and Components thereof (337-TA-1228), Judge Lord emphatically confirmed that in order to conclude its investigations “at the earliest practicable time,” the ITC should not stay a Section 337 investigation in view of an Inter Partes Review (“IPR”) proceeding at the PTAB, even where this might deprive an accused infringer of the opportunity to have the PTAB review an asserted patent prior to the issuance of an Exclusion Order. Continue Reading