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.