ITC Monthly Wrap-Up: June 2022

Authored by: Julianne Campbell

This month, there were two new complaints filed at the ITC, including complaints filed by Velodyne Lidar USA, Inc. (Certain Rotating 3-D LiDAR Devices, Components Thereof, and Sensing Systems Containing the Same, Inv. No. 337-TA-3624) and Maxell, Ltd. (Certain Mobile Electronic Devices, Inv. No. 337-TA-3625). The Commission also instituted six new investigations in June.

This month's ITC Wrap-up reviews a summary determination denial related to economic domestic industry in Certain Smart Thermostats, Load Control Switches, and Components Thereof, Inv. No. 337-TA-1277, and a complainant's untimely appeal in Lashify, Inc. v. ITC.

Certain Smart Thermostats, Load Control Switches, and Components Thereof, Inv. No. 337-TA-1277, Order No. 20 (June 24, 2022)

In Smart Thermostats, the complainant, Causam, claimed that it satisfied the economic prong of the domestic industry requirement based on investments that its licensee, Landis+Gyr, made in the United States. Specifically, Causam relied on three United States facilities that "conduct research and development directly related to the Domestic Industry Products and continue to employ research and development personnel." Order No. 20 at 2. One of the facilities is Landis+Gyr's North American headquarters. Id.

The respondents filed a motion for summary determination that Causam "cannot establish the economic prong of the domestic industry requirement, 19 U.S.C §§ 1337(a)(2) and (3)." Id. at 1. They argued, inter alia, that Causam's economic expert could only offer a "hypothetical 'illustrative' analysis" because the record developed "renders him 'unable to assess whether Landis+Gyr's domestic industry investment in plant and equipment or employment of labor capital is significant, or whether Landis+Gyr's domestic industry investment in engineering and research and development is substantial with respect to each of the Asserted Patents." Id. at 1-2.

The ALJ decided that, at a minimum, genuine issues of material fact existed concerning "(1) whether the plant, equipment, labor, and capital investments identified by Causam are significant under 19 U.S.C §¯1337(a)(3)(A) and (B) . . . and (2) whether the investments in research, development, and engineering identified by Causuam are substantial and are made 'with respect to the articles protected by' the asserted patents required by 19 U.S.C § 1337(a)(3)(C).'" Id. at 3. Therefore, the respondents did not show they are entitled to a summary determination as a matter of law and the ALJ denied the motion. Id. Based on the ALJ's rationale, one can infer that the respondents failed to show that Landis+Gyr's investments were unrelated to the articles protected by the patent.

Smart Thermostats illustrates that the domestic industry requirement can present a question of fact as to whether an investment is made with respect to the articles protected by the asserted patent.

Certain Artificial Eyelash Extension Systems, Products, and Components Thereof, Inv. No. 337-TA-1226

In Lashify, the Federal Circuit dismissed a premature appeal from a Commission determination. Lashify, Inc. v. ITC, No. 22-1566, Order (Dkt. No. 30) (Fed. Cir. June 1, 2022).

In the 1266 investigation, the complainant, Lashify, asserted three patents, including the '984 patent, against multiple respondents. The ALJ held an evidentiary hearing and then issued an ID finding that one set of accused products infringes the claims Lashify asserted from the '984 patent. Certain Artificial Eyelash Extension Systems, Products, and Components Thereof, Inv. No. 337-TA-1226, ID at 153-54 (Oct. 28, 2021). The ID also found that various other accused products do not infringe the '984 patent, that the asserted claims were not shown invalid, and that Lasify failed to satisfy the technical prong of the domestic industry requirement. Thus, the ID found that the respondents did not violate Section 337 with respect to the '984 patent.

Both Lashify and the respondents petitioned for review. Although the Commission declined to review the infringement findings, it decided to review the ID's finding that the asserted claims of the '984 patent were not obviousness. Id., Notice of Review (Jan. 20, 2022). Sixty days later, Lashify appealed the non-infringement findings.

At the Federal Circuit, the Commission moved to dismiss or stay the appeal as premature. The Commission argued that the appeal was premature because it had not entered a final decision under Tessera, Inc. v. ITC, 646 F.3d 1357, 1367—69 (Fed. Cir. 2011). The Commission argued that its decision as to the '984 patent was not final because all issues related to that patent—e.g., non-obviousness, technical prong, and economic prong—had not been resolved.

In Tessera, the Federal Circuit held that it lacks jurisdiction until the Commission has rendered a final determination or appealable order with respect to an entire patent. 646 F.3d. at 1369. There, the Court found Tessera's appeal of an exhaustion determination premature because the Commission was still reviewing claim construction and infringement issues for the patent the Commission found exhausted. Id. at 1367—69.

So too here, because the Commission had decided to review issues that could also prevent Lashify from obtaining an exclusion order, the Federal Circuit found Lashify's appeal was premature and dismissed it without prejudice.

Ultimately, Lashify represents a reminder that a complainant cannot appeal from a Commission determination until the Commission has resolved all issues associated with a given patent that might prevent it from obtaining an exclusion order.