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The ITC May Wait Until All Appeals from a Patent Office PTAB Proceeding Are Exhausted Before...

Wednesday, November 8, 2017   (0 Comments)
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The ITC May Wait Until All Appeals from a Patent Office PTAB Proceeding Are Exhausted Before Modifying Or Suspending an Order Excluding Infringing Products from Being Imported into the U.S.

By John PaulBrian Kacedon, and Cecilia Sanabria
Edited by Cecilia Sanabria and Robert MacKichan
(Authors and editors are attorneys at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.)

Abstract: Succeeding in obtaining a ruling in an inter partes review petition at the Patent Trial and Appeal Board that issued patent claims are unpatentable, may not be enough to modify or suspend an ITC exclusion order previously entered by the ITC, based on the successfully challenged patent claims. Instead, the ITC may require exhaustion of all appeals from the PTAB decision and the USPTO issuing and publishing a certificate canceling the claims of the patent before the ITC will modify such an order.

Background

Cisco filed a complaint in the International Trade Commission (“ITC”) alleging that Arista infringed its patents. The Commission found a violation as to certain claims on two of the patents and issued (1) a limited exclusion order (“LEO”) prohibiting entry into the United States of network devices and related software and components thereof that infringe those claims and (2) a cease and desist order (“CDO”) prohibiting Arista from “importing, selling, marketing, advertising, distributing, transferring (except for exportation), soliciting United States agents or distributors, and aiding or abetting other entities in the importation, sale for importation, sale after importation, transfer (except for exportation), or distribution of certain network devices, related software and components thereof that infringe” those claims.

Separately, the validity of those two patents was challenged through inter partes review (“IPR”) proceedings at the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office (“USPTO”).

Shortly after the Commission’s decision, the PTAB issued final decisions in those IPR proceedings, finding all of patent claims that formed the basis of the Commission’s decision unpatentable. Arista moved for emergency motions to modify, suspend, or rescind the remedial orders pending appeal of the PTAB decisions. Cisco opposed, and the Commission denied Arista’s motions.

The 337-TA-945 ITC Investigation Decision

In a short opinion, the Commission refused to modify, suspend, or rescind its order that excluded importation of products that infringed the patents. It denied Arista’s petition for failing to satisfy the requirements of 19 U.S.C. § 1337(k), which generally indicates exclusion orders remain in effect until the Commission finds the conditions that lead to the exclusion no longer exist, and 19 C.F.R. § 210.76, which governs petitions for modification or rescission of exclusion orders, cease and desist orders, and consent orders.

Citing 35 U.S.C. § 318, the Commission explained that “[t]he legal status of the claims at issue will not change unless and until the United States Patent and Trademark Office issues a certificate cancelling the claims following the exhaustion of all appeals.” Thus, the basis of the Commission’s decision was simple: because the PTAB’s decisions do not change the legal status of the claims they “do not constitute a changed circumstance such that the remedial orders should be rescinded.”

Strategy and Conclusion

This case shows how it is useful for respondents involved in ITC investigations to consider how IPR petitions at the PTAB to challenge validity of patents in the USPTO fit with their strategy for the case and tools in settlement negotiations.

The Certain Network Devices, Related Software and Components Thereof (II) decision can be found here.

This article is for informational purposes and does not constitute legal advice. The views expressed do not necessarily reflect the views of LES (U.S.A. and Canada) or Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.