As we recently reported, the ITC, at complainant’s request, instituted a modification proceeding in Certain Marine Sonar Imaging Devices, Inv. No. 337-TA-921 (Modification Proceeding) and determined to modify its exclusion to cover components of the at-issue marine sonar imaging devices that are intended to be included in a fully-assembled (also referred to as fully “kitted”) infringing product after importation. In a subsequent opinion, the ITC has denied respondent’s request that the ITC stay enforcement of the modified exclusion order, pending appeal to the Federal Circuit.
In denying the stay, the ITC held that the respondent had “failed to demonstrate either that the Commission’s issuance of the modified LEO presents ‘an admittedly difficult legal question’” (which is the standard under prevailing ITC law) or that respondent was “likely to succeed on appeal of the Commission’s modification determination.” Among other things, the ITC rejected respondent’s argument that the modification proceeding violated the Administrative Procedure Act (APA)’s notice and hearing requirements, stating that “the Commission’s governing statute explicitly distinguishes a Commission determination regarding whether a violation of Section 337 has occurred, which is subject to the APA formal adjudication requirement, and subsequent Commission remedial action of the kind involved here, which is not.” The ITC also found that respondent failed to show irreparable harm and that the balance of hardships favored complainant, who “will be irreparably injured by a stay that denies its patents the full term to which they are entitled” and whose licensees would “suffer substantial harm” from continued imports.
As noted in our previous blog, the decision to exclude components that the ITC found to be non-infringing when sold as standalone products may raise questions concerning the scope of the ITC’s enforcement authority similar to those that have arisen in other recent cases. Indeed, in its opinion denying the stay, the ITC doubled down on its prior holding that it modified the exclusion order only “to clarify” that the order as originally issued covered components that are intended to be included in an assembled, infringing product. It remains to be seen how these two ITC determinations will be treated on appeal.