Motiva v. ITC and Nintendo

By Jason Rantanen

Motiva, LLC v. International Trade Commission and Nintendo Co., Ltd. (Fed. Cir. 2013) Download 12-1252.Opinion.5-9-2013.1
Panel: Newman, Prost (author), O'Malley

In order to bring a section 337 action in the International Trade Commission to prevent the importation of a product that infringes a patent, the plaintiff must establish that a domestic industry exists or is in the process of being established for the articles protected by the patent. Earlier this year, a Federal Circuit panel consisting of Judges Bryson and Mayer held that:

section 337 makes relief available to a party that has a substantial investment in exploitation of a patent through either engineering, resale and development, or licensing.  It is not necessary that the party manufacture the product that is protected by the patent, and it is not necessary that any other domestic party manufacture the protected article. As 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.

InterDigital v. USITC and Nokia, 707 F.3d 1295, 1303-4 (Fed. Cir. 2013) (emphasis added). You can read more about Interdigital here. Based on this holding, the InterDigital majority sided with the ITC plaintiff. Writing in dissent, Judge Newman viewed the domestic industry requirement as necessitating domestic manufacture.

In Motiva v. ITC and Nintendo, a panel consisting of Judges Newman, Prost and O'Malley have limited InterDigital to some extent. In Motiva, the panel concluded that the domestic industry requirement is not satisfied by a plaintiff whose only activities at the time of filing its complaint consisted of its litigation against the ITC defendant when those activities were "not an investment in commercializing Motiva's patented technologies that would develop a licensing program to encourage adoption and development of articles that incorporated Motiva's patented technology." Slip Op. at 10.

Motiva’s investment in the litigation against Nintendo could indeed satisfy the economic prong of the domestic industry requirement if it was substantial and directed toward a licensing program that would encourage adoption and development of articles that incorporated Motiva’s patented technology. See InterDigital Commc’ns, LLC v. Int’l Trade Comm’n, 707 F.3d 1295, 1299 (Fed. Cir. 2013) (clarifying that efforts directed toward licensing a patent can satisfy the domestic industry requirement where they would result in the production of “goods practicing the patents”)….

However, the ALJ found that Motiva’s litigation against Nintendo was not directed at developing such a licensing program. Relying on extensive documentary evidence and witness testimony, the ALJ concluded that the presence of the Wii in the market had no impact on Motiva’s commercialization efforts or ability to encourage partners to invest in and adopt its patented technology. And Motiva was never close to launching a product incorporating the patented technology—nor did any partners show any interest in doing so, for years before or any time after the launch of the Wii. Motiva’s only remaining prototype was a product far from completion, and a multitude of development and testing steps remained prior to finalizing a product for production. Moreover, the evidence demonstrated that Motiva’s litigation was targeted at financial gains, not at encouraging adoption of Motiva’s patented technology. The inventors looked forward to financial gains through Motiva’s litigation, not hopes of stimulating investment or partnerships with manufacturers.

Slip Op. at 10 (emphasis added).

Timing of the domestic industry analysis: The Federal Circuit also held that the date of the filing of Motiva's ITC complaint is the "relevant date at which to determine if the domestic industry requirement of Section 337 was satisfied." Slip Op. at 11. Thus, irrespective of Motiva's earlier attempts to develop a domestic industry for its technology before 2007, there was "no evidence in the record relating that development activity to Motiva’s efforts to establish a domestic industry at the time Motiva chose to file its complaint three years later." Id.

36 thoughts on “Motiva v. ITC and Nintendo

  1. link to news.cnet.com

    If design patents are so fraudulent in the case of Apple, how do you explain that people find the minor differences that the anti’s here think are underserving of protection offer such enormous subjective benefits by PEOPLE–customers.

    The anti’s–are intellectual dishonest (and some are communists.)

  2. An idea for you, INANE: try focusing on making comments worth posting instead of being a smart-@$$ without the smart.

  3. And the real world also eschews such absurdity as law.

    Back for more face sp1kes with the Clavinball, I see.

  4. That would be absurd Ned.

    Most everything out there is ‘absurd.’ The real world is messy like that.

  5. That would be absurd Ned.

    And quite the reverse of established polciy of being able to challenge the validity of a patent (not to mention violating the freedom to contract policy).

  6. We should adopt this rule:

    If an infringer wants to avoid an injunction when a patentee is offering RR licensees to all comers on fixed terms, he should be required to take out a license before he sues for invalidity or non infringement.

  7. Another vacuous post, Malcolm.

    Attaboy.

    Why not discuss the way that court systems have set up for themselves the concept of handling precedence (completely disassociated from writing patent law)…

    Hmmm… that might take some actual thought from you. And you might have to realize that I am correct (yet again).

    After you have pulled the matador’s banderillas from your hide, you might then attempt to give the answer requested from you concerning precedence of the Alice decision.

    (Pardon me for not holding my breath waiting for anything approaching real answers from you).

  8. I mean it is not a constitutionally directed non-judge written rule

    HUMPTY HAS SPOKEN!!!! BOW DOWN!!!!

  9. Oh, I mean it is not a constitutionally directed non-judge written rule (like the exrpess power to write patent law is given to a very specific brnach of the government).

    D’Oh (said in the best Homer Simpson tones)

    Pay attention, Malcolm.

    Better trolling please.

  10. You want a statute for how the appeal courts set their treatment of precedence?

    Oh, you mean it’s one of those “judge-written” rules that you always complain about, except when the rule favors the patentee.

  11. It’s a good thing then that no one has a tidally bothered to assert that then.

    No one except the person I was talking to.

  12. Paul,

    “Circumvent” is not the right word as it is known that the ITC is not bound by the eBay decision.

  13. Ned, who files patent infringement suits only for an injunction w/o also seeking damages? Only the very rare patent owner wanting to avoid a jury trial.
    Furthermore continued knowing importation of a clearly infringing product could subject the importer to unsustainable treble damages for willful infringement.
    Also, are you suggesting that because you do not like the Sup. Ct. eBay requirements for an injunction that the Fed. Cir. should therefor interpret the ITC statute to effectively circumvent that Sup. Ct. decision?

  14. You want a statute for how the appeal courts set their treatment of precedence?

    Reminds me, now that you are going to start giving answers, lets start with your explanation of the precedence of the CLS Bank decision.

    LOL.

  15. Assume the US inventor sues in district court and his the only remedy he seeks is an injunction. Should he be non suited?

    No, but he should prepare to be disappointed.

  16. The lack of comments so far may be due to all the prior insistent comments by others that this decision would have to be the reverse?

    I was playing basketball with an old Army buddy visiting from out of town.

    But kudos to Judge Newman for not backing down. Asserting patents simply for the sake of asserting them is not a “domestic industry.” There has to be more.

  17. Nice strawman:

    In any case, it’s plainly ridiculous to assert that the existence of domestic industry can be determined by reading the front page of the patent.

    It’s a good thing then that no one has a tidally bothered to assert that then.

  18. In Motiva v. ITC and Nintendo, a panel consisting of Judges Newman, Prost and O’Malley have limited InterDigital to some extent.

    How does one panel limit another (earlier) panel? Doesn’t the infer panel doctrine get in the way?

  19. How would you decision affect future investment?

    We’re already talking about a patent that resulted from considerable R&D spend, that the patentee hasn’t managed to practice or license domestically at all. Pretty much a critical miss. Do you really think having someone to sue for royalties is going to be the tipping point in declaring it a bad investment and cutting future R&D spend?

  20. Thus IBM might have a hard time establishing a domestic industry itself if it did not make the patented product and there are no American licensees practicing.

    It should have a hard time, on those facts.

    Infringement doesn’t inherently cause harm. If infringement of a patent that the patentee was doing nothing to monetize has any effect on the patentee at all, it is to provide a potential source of licensing/litigation revenue. That’s a clear net positive for the “domestic industry” of producing patent applications.

    In any case, it’s plainly ridiculous to assert that the existence of domestic industry can be determined by reading the front page of the patent. There has to be more to the domestic industry test than whether an inventor or an infringer exists.

  21. >The R&D for that patent is long completed, so >importation doesn’t affect it, and the ITC can’t >even give the inventor money.

    Funny how you take static views of a dynamic system. How would you decision affect future investment? What was the expectation when the investment was made?

  22. Zeke, yeah, sure. Now consider eBay.

    Assume the US inventor sues in district court and his the only remedy he seeks is an injunction. Should he be non suited?

  23. IANAE, current owner has nothing to do with it. The R&D must be conducted in the US. Thus if an IBM patented invention resulted from German R&D, I say, no domestic industry. Thus IBM might have a hard time establishing a domestic industry itself if it did not make the patented product and there are no American licensees practicing.

    The focus has to be on investment in US R&D.

  24. if you want to ignore what ‘domestic’ means

    I actually do, a little, since I’m not talking about what “domestic” means, and I don’t think anybody reasonably disagrees on what “domestic” means.

  25. investments in the R&D needed to develop the technology that is patented.

    What’s your theory on how halting importation helps that particular domestic industry? The R&D for that patent is long completed, so importation doesn’t affect it, and the ITC can’t even give the inventor money.

    It’s ridiculous to find domestic industry on the basis that the inventor or current owner is American, or that there is an alleged importer of infringing devices. That can’t possibly be what “domestic industry” means, or it becomes meaningless.

  26. File a patent infringement lawsuit in Federal Court. (Hint: this is not the same place as the ITC)

    I mean, duh. Seriously.

  27. I think investment include investments in the R&D needed to develop the technology that is patented. If that investment is made in the US, I think is enough even if there are no products and no licensee yet. Anything else will deem US R&D not a domestic industry worth protecting.

  28. Zeke, what if there is no “domestic” industry at all because the foreign manufacturers have completely driven US industry out of business? But we have an American company who has invested and who had wanted to compete, but could not. They have no American licensees, because there are no American makers.

    So, what is this American company to do? Tell me? Give me a clue.

  29. Good. The whole point of an exclusion order is to halt infringing imports, so that domestic industry can continue meeting market need. Using ITC to extract settlement bucks is basically an abuse.

  30. Not at all.

    The fact pattern here does not include the argument that a domestic industry of licensing was present.

  31. The lack of comments so far may be due to all the prior insistent comments by others that this decision would have to be the reverse? That is, that the amendment of the statute to add “licensing” would trump and prempt what Congress logically intended by a “domestic industry” needing import exclusion order protection. Thus requiring blocking the importation of consumer products even by a purely patent litigation settlement recovery organization.

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