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USITC Remands ALJ’s Enforcement Decision to Address Infringement Issues

In an August 4, 2017 Notice, the US International Trade Commission announced that it has determined to review an administrative law judge (ALJ)’s initial determination in the enforcement proceeding in Certain Network Devices, Related Software, and Components Thereof, Inv. No. 337-TA-944 (Enforcement Proceeding).  The Commission’s notice could lead to additional rulings by the presiding ALJ (Shaw) that may prove to be important markers for enforcement actions under Section 337.

pencil, light bulb, idea

The enforcement proceeding in Network Devices was initiated based on a complaint filed by the complainant in the original proceeding, alleging that respondent had violated the Commission’s order to cease and desist from importing and selling products found to infringe U.S. Patent No. 7,162,537 (the ‘537 patent).  Prior to the filing of the enforcement complaint, the respondent had obtained an initial letter ruling from U.S. Customs and Border Protection that its products containing redesigned software did not infringe the ‘537 patent, and Customs later issued a final ruling to the same effect.  In an initial determination issued on June 20, 2017 (made public July 17, 2017), Judge Shaw held that there had been no violation of the cease and desist order based on a finding that the accused products did not infringe the asserted patent claims.  He also considered, but rejected, respondent’s argument that the contempt-based “colorable differences” test is the appropriate test for determining whether the cease and desist order had been violated.

The Commission’s Notice finds fault with the ALJ’s decision and remands the investigation to him to address certain issues identified by the Commission.  Specifically, the Notice states that

The final EID includes analysis comparing the redesigned products to products found to infringe in the underlying investigation to conclude that the redesigned products do not infringe the ‘537 patent. However, this analysis, while addressing the parties’ arguments, does not address the issue of whether the language of the claims reads on the redesigned products. See e.g., EID at 14-20. For example, the EID does not provide a clear application of the claim limitations to the redesigned products or find that the limitations were not met for other reasons (e.g., waiver).

The Notice then directs the ALJ to issue a final remand enforcement determination that will:

(1) address literal infringement in terms of whether the asserted claims, as construed, read on the redesigned products, and make appropriate findings, and further, if necessary, modify any other affected findings, including findings under the doctrine of equivalents; (2) consider and address, if necessary, the alleged inconsistency between the EID’s finding for what constitutes a “client subsystem” and the EID’s findings for the “managing subsystem”; and (3) identify which accused products are addressed in the EID.

The Commission mandated no deadline for the remand proceeding.  That said, the remand is likely to be closely watched because the ALJ’s resolution of the issues to be addressed on remand could also provide important guidance on Section 337 enforcement proceedings that may apply more generally beyond the specific facts of this case.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Bryan Schwartz, Squire Patton Boggs, intellectual property attorney, litigation lawyer, patent law, US International Trade Commission legal counsel
Principal

Bryan brings nearly 25 years of intellectual property litigation experience to the Squire Patton Boggs Intellectual Property & Technology Practice Group’s US litigation practice, including numerous representations of parties in Section 337 investigations at the US International Trade Commission.

Bryan has also appeared in numerous US district courts and before arbitration panels in IP disputes. His litigation experience extends to a diverse array of technologies, including semiconductors, lasers, wireless communications, batteries,...

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