Domestic Industry and Hindsight Bias

by Dennis Crouch

Broadcom Corp. v. ITC (Fed. Cir. 2022)

Broadcom petitioned the ITC to halt imports by Renesas Electronics (and others) because they infringe two Broadcom patents:

  • US7512752, claims 1, 2, 5, 7, 8: memory access unit with improve access to shared memory.
  • US7437583, claims 17–18, 25–26: gating clock signals to reduce power consumption.

But, the ITC sided fully with Renesas:

  • For the ‘583 patent, the ITC found no “domestic industry” to protect – a prerequisite for USITC action. In particular, Broadcom was unable to show any licensed domestic use of the invention as claimed. In addition, the ITC found no infringement of claims 25-26.
  • For the ‘752 patent, the ITC found infringement of claim 5, but concluded that claim 5 was invalid as obvious. (In a parallel IPR proceeding, the PTAB also found claim 5 obvious).

On appeal, the Federal Circuit consolidated the ITC case with the IPR appeals and has affirmed in favor of Renesas.

Domestic Industry: The International Trade Commission (ITC) is a branch of the U.S. government whose role is the protection of domestic industry against foreign overreach.  As part of its role, a patentee can complain to the ITC about infringing imports.  A prerequisite for these Section 337 cases is the existence of a domestic industry to protect.

[ITC powers over infringing imports] apply only if 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)(2).  Thus, the statute requires “an industry in the United States, relating to the articles protected by the patent” being asserted.  The patentee can prove that the domestic industry already exists by pointing to actual products in the US market that practice at least one claim of the asserted patent.  Of course, minimal domestic sales do not equate to “an industry.” Rather, the law also requires a showing that the patentee has made significant/substantial investment in equipment, labor, engineering, research and development, and/or licensing. 19 U.S.C. § 1337(a)(3).

Here, Broadcom pointed to its system-on-a-chip (SoC) in serving the domestic industry for the ‘583.  However, Broadcom’s chips do not include a “clock tree driver” required by all claims of the patent, and the ITC found no domestic industry.  Broadcom generally argued that aspect of the patent was integrated by clients. However Broadcom did not point to any actual instances of such integration.  But, generalities regarding the domestic industry are insufficient. The court explained:

As in Microsoft, Broadcom failed to identify any specific integration of the domestic industry SoC and the “clock tree driver” firmware, or a specific location where the firmware was stored. [And therfore] the Commission’s finding that Broadcom failed to satisfy the domestic industry requirement of Section 337 was supported by substantial evidence.

Slip Op.  After losing before the ALJ, Broadcom added further evidence pointing to a particular system.  However, the ITC and CAFed both concluded that new argument had been waived.

Broadcom was able to show a domestic industry for the ‘752 patent, but the court also affirmed the PTAB findings that the asserted claims were invalid.  The court’s only real quibble was with regard to grammar. In a footnote, the court explained:

The Board and Commission decisions refer to what “is” obvious. Because § 103 addresses what “would have been” obvious, we recommend usage of the statutory language that looks back to the past in order to avoid the appearance of hindsight bias.

Slip Op. at Note 2. I read through the ITC decision and found the following line that appears to have raised Judge Lourie’s ire: “[T]he record evidence fully supports the FID’s finding that claim 8 is obvious over Foster alone.” [ITC Decision – 711340-1540697].   I also read through the PTAB decisions, but could not find any parallel offensive statements.  Rather, the PTAB was careful to repeatedly recite the line “would have been obvious.”  The PTAB did conclude that each problematic claim “is unpatentable under 35 U.S.C. § 103(a) as obvious.”  However, that statement does not appear problematic to me.

As with most grammar, Judge Lourie’s opinion has some rational basis but will have the primary result of protecting self-satisfied insiders. The Supreme Court as a non-patent court doesn’t appear to care. Guess what the Court wrote in the biggest obviousness case of the past 50 years: “THE COMBINATION IS OBVIOUS.” KSR (2007)

 

14 thoughts on “Domestic Industry and Hindsight Bias

  1. 6

    Maybe from now on the ITC and PTAB can just abbreviate such a finding to, e.g., “claim 5 is totes obvi AF, LOL!1!”

  2. 4

    Remind me: wasn’t there a CAFC judge who once floated the absurd “argument” that patent licensing and assertion was itself a “domestic industry”?

    1. 4.1

      Hi Malcolm – it was not merely some “absurd” CAFC judge.

      But we take note of your feelings on the matter (and promptly dismiss your drive-by v0m1t-fest).

  3. 3

    One of these days some defendant of a PAE ITC action is going to challenge at the Sup. Ct. the ITC’s interpretation of 19 U.S.C. § 1337(a) [a statute intended to protect domestic industry from foreign imports] as also protecting a “domestic industry” who’s sole business is spending money to buy up patents and pay lawyers to sue and collect money from real domestic industries.

    1. 3.1

      and your point…?

      Oh wait – I know – the Efficient Infringer cheerleading mantra (rah rah rah)

      1. 3.1.1

        Is that [to use your frequent expression] “pom-poms for patent trolls?”
        I would be happy to see a good factual, substantive, Congressional-intent, public interest, lower prices, or other defense of this particular ITC jurisdictional stretch that is blocking U.S. consumers from product importations. Especially one that can cite any recent patent troll suits of any kind in which the INVENTORS get ANY of the money collected by the patent troll attorneys and financiers from all the domestic industries they are suing.

        1. 3.1.1.1

          Your denigration does not stick, as one of the foundational aspects of US innovation protection law is the fully alienable nature of the basket of sticks of the negative right that is a patent.

          Pom-poms for that?

          Proudly.

          It’s very much a shame that you just don’t get it.

      1. 3.2.1

        I think that this is a position that will bring nearly everyone together around these parts. 😉

        1. 3.2.1.1

          I doubt that very much – you will have LOADS of people viewing that as a direct negative (including the cognitively dissonant of the likes of Malcolm, and the long-abandoned “protector” of innovators like Paul F. Morgan)

          You will ALSO have those who will jump on the direct negative bandwagon and assert that such a position has ZERO impact on an attorney’s legal ethics (as if they were entirely unknowing of such, even as others – such as myself – have made that counter point very clear.

  4. 2

    Saying that “the claim IS obvious” [rather than was] is not nearly as publicly misleading and erroneous as the frequent references to or in patent “validity” decisions which are really only decisions of invalidity not proven by that defendant.

    1. 2.1

      meh,

      the common vernacular often does not understand the necessary use of the double negative — I would not ascribe ANY harmful intent to such.

      (but, you being you, I can see why you do)

  5. 1

    As with most grammar, Judge Lourie’s opinion has some rational basis but will have the primary result of protecting self-satisfied insiders.

    Huh?

    The Supreme Court as a non-patent court doesn’t appear to care.

    As long as it is against the patent holder…. (Reprise the self-describing quote of, “The only valid patent is one that has not yet appeared before us”)

    Guess what the Court wrote in the biggest obviousness case of the past 50 years: “THE COMBINATION IS OBVIOUS.” KSR (2007)

    See above self-describing quote…

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