NPEs Solidify Enforcement Jurisdiction at USITC

By Dennis Crouch

InterDigital v. USITC and Nokia (Fed. Cir. 2013) (en banc)

An en banc request for rehearing in the Interdigital case has been denied, but the panel majority has released a new opinion particularly addressing the patent-troll-domestic-industry question. Judge Newman has also released a new dissenting opinion.

The question in the appeal raised by Nokia is whether InterDigital's patent licensing activities satisfied the "domestic industry" requirement of section 337 of the Tariff Act of 1930, 19 U.S.C. §§ 1337(a)(2) and 1337(a)(3). Here, the court again sided with InterDigital and held that the "most natural reading" of the statute indicates that section 337 relief is "available to a party that has a substantial investment in exploitation of a patent through either engineering, research and development, or licensing." There is no requirement for manufacture by the patentee or any other domestic party. Rather, "[a]s long as the patent covers the article that is the subject of the exclusion proceeding, and as long as the party seeking relief can show that it has a sufficiently substantial investment in the exploitation of the intellectual property to satisfy the domestic industry requirement of the statute, that party is entitled to seek relief under section 337." The majority opinion was written by Judge Bryson and joined by Judge Mayer.

In dissent, Judge Newman argued that a domestic industry requires domestic manufacture. No other judge joined Judge Newman in dissent – suggesting that the majority opinion is on solid footing with the court. And the result is that NPE lawsuits in the ITC are also on solid footing. The benefit of ITC litigation is the stronger likelihood of injunctive relief and the potential of industry-wide enforcement. To collect monetary damages, that injunction would need to be translated into a license agreement.

= = = = =

19 U.S.C. §1337(a)(2) creates a prerequisite to IP enforcement in the USITC that "an industry in the United States, relating to the articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established."

19 U.S.C. §1337(a)(3), as amended in 1988 describes the "industry in the United States" as follows:

[A]n industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned—

(A) significant investment in plant and equipment;

(B) significant employment of labor or capital; or

(C) substantial investment in its exploitation, including engineering, research and development, or licensing.

= = = = =

Apart from jurisdiction, there has been a recent push for the USITC to consider delaying, reducing, and rejecting injunctive relief in situations where the patentee's motivation for an injunction is to force a monetary settlement. See Colleen V. Chien and Mark A. Lemley, Patent Holdup, the ITC, and the Public Interest, 98 Cornell Law Review 1 (2012). The statute provides that:

If the Commission determines, as a result of an investigation under this section, that there is a violation of this section, it shall direct that the articles concerned, imported by any person violating the provision of this section, be excluded from entry into the United States, unless, after considering the effect of such exclusion upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers, it finds that such articles should not be excluded from entry.

19 U.S.C. § 1337(d)(1).

= = = = =

Nokia is expected to file a petition on this issue to the Supreme Court.

49 thoughts on “NPEs Solidify Enforcement Jurisdiction at USITC

  1. 49

    Yes, anon, didn’t you know? If I don’t like the rules and don’t like the law, I call it “poorly drafted” and that’s that. It’s invalidated.

  2. 48

    The “non-response, run away and post the same crrp elsewhere” crowd is noticeably absent from actually agreeing to any of the substantive improvements to this blog that I have suggested.

    Is anyone really surprised?

  3. 47

    In your case, the blatant lies dealing with “configure to” = structure, and the proper legal recognition of the exceptions to the printed matter doctrine.

    Thanks for asking.

    (LOL at the more MM self-defeat)

  4. 46

    Perfect example of mischaracterization crrp: my posting is free of the crrp I actaully identify and MM purposefully mistates what I have said.

    It’s a cheap trick and easily seen through for what it is worth – more banal and empty posting by MM.

    btw, MM – thanks for proving my point.

  5. 45

    But the shame is evident in the black and white results that are on these threads for all to see – and I would posit that I have been extremely successful in making such evident.

    Exactly what “results” are you referring to?

  6. 44

    Such use of monikers was (clearly) not the driver of crrp on this blog.

    Whether that’s true or not, could you please remind us again why you chose to make “such use of monikers”?

    I have made clear what that crrp is and it remains – even as I have used but a single moniker.

    Yes, you have made it very clear that you post the same crrp regardless of what moniker you post under. So why did you use all those different monikers before?

  7. 43

    LOL – Well, to be perfectly blunt, the offender may not feel shame at all (and one reason why I asked Prof. Crouch to do more than just state his policies). Some have no shame. And since we can see that I have done as requested and post in single moniker, but the crrp of blatant lies, deception, strawmen, mischaracterizations, post-crrp-and-run-away-only-to-return-later-and-post-the-same-crrp remains from others, well, as I mentioned to IANAE, that actually proves my point (not that you could see that with your eyes clenched tightly closed).

    But the shame is evident in the black and white results that are on these threads for all to see – and I would posit that I have been extremely successful in making such evident.

    Funny – you had the same doubts about Techdirt. And equally funny, my success is present notwithstanding your doubts. Then again, your ability “to see” is severely impaired when you see the words “anon said” – it’s like you lose the ability to think rationally and develop this insane urge to shoot arrows at your feet.

  8. 42

    Unless you happen

    No. blatant lying is blatant lying. Your attempt at kicking up dust is rejected.

    Maybe that’s who you’re referring to?

    It is clearly evident I am referring to Ned Heller in particular. Such may very well apply to others. Personally, I have averred that my posts follow the terms of use as apply to personal posts and NOT to posts made for third party benefactors. Ned Heller cannot make this same statement. (Personally, I think you probably could make that statement, but your anti-patent, pro-infringer bias is well known, and your posting tactics fail other intellectually honest guidelines of not using strawmen and not purposefully making mischaracterizations – in fact, mischaracterization is your prime Calvinball face spike mechanism).

    That’s a statement of fact you can back up, right? And not a blatant lie?

    I notice you tryied to slipp in “and back up.” Nice slippery slope to wanting actual evidence. However, you must have missed the conversation between Ned and I that sussed out his violations of the posting policy (hint: it was on the same thread that my pal Leopold went all obsessive and misfired badly about what “terms of use’ mean). As to blatant lies – well, we know the prime example of that behavior, don’t we?

    blatant use of multiple sockpuppet…come under “blatantly ly(ing)?

    The answer is (unremarkably) no. Quite in fact, the use of multiple monikers is not covered by ANY prohibition posted in the terms of use or by Prof Crouch (i.e., like his direct “Lying is not allowed on Patently-O”).

    He asked me to stop and I have. Such was a personal favor and a showing of my goodwill in making this a better blog. Such use of monikers was (clearly) not the driver of crrp on this blog. I have made clear what that crrp is and it remains – even as I have used but a single moniker. So, IANAE, this actually quite proves my point, thank you very much.

    I have done what Prof. Crouch has asked. Let’s see some intellectual honesty and the stop of the real crrp. How about it? You up for an end of the mischaracterizations? You up for ending your addiction to Calvinball face spikes?

  9. 41

    Likewise, if posters repeatedly and blatantly lie about matters of fact and law, attacks may be the only recourse in shaming the offender.

    I’m curious – how often do you think your attacks have been successful in shaming an offender?

  10. 40

    if posters repeatedly and blatantly lie about matters of fact and law, attacks may be the only recourse in shaming the offender.

    Unless you happen to be about average or better at clearly stating the correct facts and law in a persuasive way. Speaking of which:

    making posts not of a personal nature but instead for third party benefactors

    That’s a statement of fact you can back up, right? And not a blatant lie? I seem to remember NWPA saying on a number of occasions that all his opinions magically align with those of his paying clients. Maybe that’s who you’re referring to?

    Also, does the blatant use of multiple sockpuppet accounts while accusing others of doing the same come under the umbrella of “blatantly ly(ing) about matters of fact”? Just trying to suss out when “shaming the offender” is a recourse you consider appropriate.

  11. 39

    not be subjected to posts personally attacking another poster in any respect?

    Actually Ned, I do not agree. If a poster opens themselves up to attacks (for example by making posts not of a personal nature but instead for third party benefactors), then attacks can serve an important norming function.

    Likewise, if posters repeatedly and blatantly lie about matters of fact and law, attacks may be the only recourse in shaming the offender.

    Your attempt at excusing motives (yet again) is expressly rejected. For the same reasons previously posted, namely, motives can (ands in your case, does) prevent a full and unfettered exchange – rather than excuse motives, motives should be made abundantly clear.

    It took a long time to pin you down on your motives and knowing such explains why you refused to be intellectually honest in our discussions. I would much rather have it that posters not have such motives – but ignoring them simply does not work. If ignoring them worked we would not be having this conversation at all.

    Instead of ‘banning’ the notion of motives, I would much rather ban the blatant lies, deceptions, posting-running-away-and-posting-the-same-crrp-again, strawmen, mischaracterizations, and the like that are true stranglers of adult, intellectually honest conversation. These are all the things I have shared previously with Prof. Crouch as to truly making his blog better.

    In fact, motives – per se – are not bad. There actually is no reason to try to obscure motives. Knowing that you have motives actually explains your posting (and non-answering) style, and simply making a post reflecting that truth seems much better for all than my endless chasing and re-explaining things to you, only to have you disappear from the discussion when things don’t go your way.

  12. 38

    Would you agree, anon, that it would be better that this blog not be subjected to posts personally attacking another poster in any respect? We can discuss issues of law. We can express one’s opinions. We can disagree with the opinions expressed by others. But we should refrain from making personal attacks on another poster such as impugning their motives such as by stating they have agendas and the like.

  13. 36

    NWPA,

    You are too kind in attributing any of Newman’s legal reasoning to MM. He has ventured no basis of legal reasoning, and as I posted at 8:47 PM, his is merely “a case of “the enemy of my enemy is my friend.”

    btw, Newman is off with the word game – consistently equating “industry” with “domestic manufacture when it is abundantly clear that “industry,” while it may include domestic manufacture is explicitly not limited to or constrained to be domestic manufacture.

    Go back through the opinion and make this note every time Newman uses the term “industry,” and her position evaporates.

  14. 35

    So, from my reading of Newman’s dissent, MM is basically right in saying that Newman is saying that the inclusion of licensing was meant to extend the right to bring ITC actions and not to mean that it was part of the domestic industry.

    But, Newman plays a bit of a word game, I think. She tries to make it seem as if ID does not have other licenses to the patent and that this action is only to force a license and not protect the licenses that ID already has.

  15. 34

    Dennis I can understand that Leopold is weary of the troll, and irritated by it. Me too. There was a time when you thought it displayed redeeming features but that was some time ago and I have not seen any for a long time. After a while, the incessant need gratuitously to hurl insults at all and sundry, simply to provoke a response, any response, really do cease to be amusing and instead become tedious.

    Frankly, I think this dilution is detrimental to this blog. Lawyers I respect have told me that they love your postings but ignore the threads because of the pollution in them.

    For these reasons, I second Leopold’s proposal.

  16. 33

    Like I said. You asked a question. I answered. I directly and honestly provided my answer to your question, and cited some specific Supreme Court cases

    LOL – that was no answer – that was you going off on a railroad tangent with your favorite pet-theory-lark and me pointing out that you were still not saying anything with non-vacuous legal reasoning to establish your “policy” feelings.

    Try to stay on point and actually provide an answer to the topic at hand.

    Still waiting.

  17. 31

    your false (and bitter) elitism

    Remind me again: was it you or me that outposted everyone here for a couple years under a myriad aliases pretending to attack a “vocal minority” that includes some of the same people who outnumber you but you continue to attack today?

    Please answer. You accused me of never answering questions but I’ve answered you numerous times in this thread. Answer that question.

    You know, it’s not too late for you to get into a line of work that you believe in and stop your festering self-loathing.

    LOL. Okay, let’s say I become less “self-loathing.” Do you then suddenly stop spewing a—hole generic insults aobut dead prisoners, dead horses, calvinball, shooting arrows and all the other generic insulting c–p that you spew here every day? No, you don’t. We know that now. It doesn’t matter at all to you if you post under multiple aliases or post (most of the time, at least) under one.

    You a troll, bro’.

  18. 30

    More tired “accuse others of what you do” when asked to provide some minimal non-vacuous legal reasoning.

    As the link I provided on the allowance thread shows, it is you and your same old same old stale Malcolm B$ that can be cut and pasted without thought or reason.

    Try adding to the conversation instead of spewing your tired wanna-be policies.

    Like I said. You asked a question. I answered. I directly and honestly provided my answer to your question, and cited some specific Supreme Court cases. You don’t remember anyone anyone spewing hyperbolic nonsense about what should happen if the Supreme Court decided those claims weren’t invalid or ineligible? Really? You don’t remember that? Remind me again what the Supreme Court decided in those cases and show me evidence of the terrible suffering inflicted upon our nation’s beloved patent profiteers as a result.

    That reminds me: have you or any of your clients ever been sued for infringing a patent? Was it fun? Let me know. How did it feel? Did you settle or was there a judgment? Or did you lose? Whether or you lost or settled, did you feel that it was “worth it”?

    Returning to your response to my comment, you posted generic bullc—p that could have been replaced with any randomly selected “substance” of yours and nobody would know the difference. Read what you wrote, man. Maybe you need a vacation?

  19. 29

    that are relevant to only a very few extremely privileged people

    LOL – btw, your false (and bitter) elitism is showing again. While I love patent law and love what I do, your vile anti-patentism cannot help but seep through.

    You know, it’s not too late for you to get into a line of work that you believe in and stop your festering self-loathing.

  20. 28

    More tired “accuse others of what you do” when asked to provide some minimal non-vacuous legal reasoning.

    As the link I provided on the allowance thread shows, it is you and your same old same old stale Malcolm B$ that can be cut and pasted without thought or reason.

    Try adding to the conversation instead of spewing your tired wanna-be policies.

  21. 27

    How is that even related to this thread?

    You brought up “radical evisceration of today’s law” and it reminded me instantly of the sunners’ hyperbolic laments about KSR, Bilski and Prometheus. Ah, bygones. Anyway, that’s the relation. I thought it quite obvious.

    Along the same lines, you are probably not self-aware enough to realize that you spend a great deal of time belligerently (and incoherently) defending “rights” that are relevant to only a very few extremely privileged people who need your “help” like they need another gold-plated t—let seat. As I noted earlier, every other comment of yours here reads like a disparaging fortune cookie with a typo. You berate everyone who disagrees with you as lacking “substance” but most of your comments in response to any sincere attempt to express an opinion that disagrees with yours appear to be recycled one-liners so devoid of “substance” they could be copied and pasted from anywhere and nobody would know the difference.

  22. 26

    It is as I thought (with only a fading glimmer that MM might actually participate as an adult): MM’s sympathy is not based on any legal rationale at all.

    If there is some non-vacuous legal underpinning, MM has yet to show his understanding of it. Rather, this appears to merely be a case of “the enemy of my enemy is my friend.”

    Not very convincing at all.

  23. 25

    Right. Like the…

    How is that even related to this thread?

    Please try to stay on point.

    And who is this “vast majority?” What the Sam Hill are you rambling about?

  24. 24

    “I’m sympathetic to Newman’s views”

    Let me guess, you washed your mouth out with soap after you wrote that?

  25. 23

    Perhaps your “yet” includes some radical evisceration of today’s law.

    Right. Like the Prometheus decision. Really, really
    “radical” stuff. The kind that drives you and EG nuts but which the vast majority of informed people have absolutely no problem with.

  26. 22

    where no research money is required to “invent” in the first place

    LOL – the return of be canard of “but for”

    QQ MM, QQ

  27. 21

    they were mentioned. Implicitly perhaps

    Yes, folks, there will be bonus tracks on the Greatest Hits of Intentional Misunderstanding.

  28. 20

    Yes, the US does not yet have a “working requirement” to bring a patent suit

    LOL – yet?

    Let me know how you are going to handle “working” with a negative (exclusionary) right and the fact that the law allows improvement patents on others’ inventions. Perhaps your “yet” includes some radical evisceration of today’s law.

  29. 19

    it’s a bit odd that they were never mentioned, isn’t it?

    LOL – but they were mentioned. Implicitly perhaps, but the part about patents being property and freely alienable (with no effect on substantive rights) is in there.

  30. 18

    I think MM that you have to admit that there is a philosophy inherent to the U.S. patent act that one [is not required to] practice their invention to enforce their rights.

    You mean there is an existing patent statute to that effect? Yes, I admit that. There’s also a statute that allows the President to mint a trillion dollar platinum coin. As for what constitutes “US philosophy”, opinions may differ.

    If NPE/trolls were contemplated during discussion of this statute, I missed it, Congress missed it, and so did Monsanto, evidently. If NPE/patent aggregators/patenteers who manufacture nothing and have no intent to create anything, to manufacture anything or to discover anything were considered to fall within the statute, it’s a bit odd that they were never mentioned, isn’t it? Universities were expressly mentioned, for example.

    I don’t see any discussion in the legislative history, for example, about how awesome it would be to create a new industry of patent speculators who mostly operate in the nether regions of eligible subject matter where no research money is required to “invent” in the first place. All you need to do is sniff about and guess what’s going to be the next information-sharing trend, then call your patent attorney and tell him to crank out the app and file it. “This is sort of like those methods where people use their phone except this is on a tablet.” Then the USPTO gets out its rubber stamp. Then you start trolling.

    There is a “philosophy” in some quarters that seems to favor grifting and skimming over productivity and progress. I don’t believe it’s a “US philosophy”. What’s interesting to me is that the bulldogs who yap about the virtues of NPEs are often the same folks who can’t abide the government giving a starving kid a few dollars a week for food or who think that the retirement age needs to be raised. What’s the “philosophy”?

  31. 17

    I think he means that it is poorly drafted in the sense that the plain language of the statute doesn’t reflect what it was intended to do.

    Incredibly, LB somehow managed to figure out what I meant when I said “what we’re looking at is a poorly drafted statute that simply fails to reflect the purpose contemplated by the legislature”.

    Amazing. We must be twins separated at birth. This is sarcasm.

    As for “US philosophy”, my comment in that regard is also unambiguous. Yes, the US does not yet have a “working requirement” to bring a patent suit (for better or worse). But our legal system does reward those who make and/or use their patented articles or methods. So their are competing “philosophies” it seems.

    I can hardly wait for the fruitful, fascinating discussion about the definition of “philosophy” and “competing”.

  32. 14

    Then let him so speak (and provide reasons, and answers to questions).

    That’s called an adult conversation.

    But wait, we don’t get actual answers from MM.

  33. 13

    It’s hard to read through all of the baseless pejoratives, but….

    I’m curious – where do you see baseless pejoratives, or any pejoratives at all, in the preceding discussion?

    MM can speak for himself, of course, but I think he means that it is poorly drafted in the sense that the plain language of the statute doesn’t reflect what it was intended to do.

  34. 12

    That, amongst other things, was the point of my question.

    I truly want to know MM’s view (and – gasp – reasoning). Is “poorly drafted” synonymous with “not how I want it” or does it mean something different?

    IANAE’s comment can be safely ignored. It is well known that he believes in infringers’ rights and that his ([in]fringe) position can be dismissed in any serious discussion.

  35. 11

    As for whether or not research and licensing is an “industry”, then at least we can agree that is our dispute.

    Riddle me this, then. Suppose your “domestic industry” is that you collect money from people who manufacture the patented article overseas and import it. There is no domestic manufacture.

    How is that “industry” harmed by the ITC letting another party manufacture the patented article overseas and import it? We’ve already agreed that the courts will still give you your royalties, even if you can’t show working. What’s the harm to your domestic licensing business?

  36. 10

    I agree IANAE that the ITC is a different story. But, let’s be real and not mischaracterize the other parts of the patent act.

    As for whether or not research and licensing is an “industry”, then at least we can agree that is our dispute. MM should make an honest attempt to narrow down the argument to the actual dispute.

  37. 9

    there is a philosophy inherent to the U.S. patent act that one must not practice their invention to enforce their rights.

    And indeed the courts will happily enforce your rights without any proof of working.

    The International TRADE Commission, however, has kind of an inherent philosophy that it acts to protect industry that is going on in the US by preventing competitive importation. Which isn’t exactly fulfilling its purpose if the “industry” is one American company licensing another American company to import products manufactured abroad. No matter how American the named inventor or his employer happens to be.

  38. 8

    It’s hard to read through all of the baseless pejoratives, but….

    Is your point that the statute is poorly drafted because it plainly says that licensing activity qualifies as “using” the patent for purposes of the statute?

  39. 7

    I think MM that you have to admit that there is a philosophy inherent to the U.S. patent act that one must not practice their invention to enforce their rights. This is best scene in the context of foreign countries that require proof of practicing the patent or losing your rights. And, in that damages are not calculated based on your damages of lost sales. I could go on, but let’s not be ridiculous.

  40. 6

    Is there a difference between “significant” and “substantial” in the statute?

  41. 5

    anon: the legislature explicitly state[d] that licensing activity was enough?

    Surely you are not referring to the poorly drafted statute itself…? That would be a silly response.

    This ties into the US philosophy

    That’s your “philosophy”, anon. Many aspects of US patent law are informed by a different philosophy, as I’m sure you are aware.

    I suggest you read Newman’s dissent. As I wrote upthread (first comment in the thread), this statute was poorly drafted but, unfortunately, not poorly enough to allow Newman’s analysis to override the plain language and the sympathies of the other judges. Hopefully a fix of one sort or another will follow.

  42. 3

    So why exactly then did the legislature explicitly state that licensing activity was enough?

    Read the first couple pages of Newman’s dissent.

  43. 2

    which was certainly not to encourage patent licensing schemes by NPEs

    So why exactly then did the legislature explicitly state that licensing activity was enough?

    (Not meant as a dig – looking for a genuine response)

    This ties into the US philosophy of not having a working or use requirement.

  44. 1

    I’m sympathetic to Newman’s views here but what we’re looking at is a poorly drafted statute that simply fails to reflect the purpose contemplated by the legislature, which was certainly not to encourage patent licensing schemes by NPEs. As she points out, Monsanto objected to the improved statute and their objections were overridden … or so it would have appeared.

    Hopefully this unfortunate result can be fixed or attenuated (per 19 U.S.C. § 1337(d)(1), for example, as proposed above).

    Of course, if we get Congress involved than we’ll need to know what Mr. Burns Gil Hyatt thinks about all this.

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