As we have previously reported, the Commission recently heard its first Section 337 oral argument in nearly ten years. Hot on the heels of that proceeding, the ITC has again granted an oral argument in a Section 337 investigation. This time they have asked for argument on an antitrust claim that was terminated by the presiding ALJ.
2016 was a banner year for Section 337 proceedings at the ITC. Sixty new Section 337 related complaints were filed at the ITC—a 50% increase over the previous year. 2016’s tally exceeds the number of complaints in each of the previous four years (2012-2015), and only lags behind the 2011 numbers—the height of the so-called ‘smartphone wars.’
ALJ Lord issued an Order Granting a Motion to Strike Affirmative Defense of unclean hands and inequitable conduct. Certain Krill Oil Products and Krill Meat for Production of Krill Oil Products, Order No. 8 (Feb. 7, 2017). Applying a heightened pleading standard for an inequitable conduct defense, ALJ Lord held that this affirmative defense did not satisfy the requirements of particularity articulated by the Federal Circuit in Exergen.
On February 7, 2017, the ITC issued a Notice modifying the ALJ’s Initial Determination in Certain Electric Skin Care Devices, Brushes and Chargers Therefor, and Kits Containing Same, ITC Inv. No. 337-TA-959 and issuing general and limited exclusion orders and cease and desist orders. Of note, the Commission vacated but took no position on the ALJ’s holding that R&D-related expenditures should not be counted toward meeting the domestic industry requirement under subsections A or B of the statute.
As we’ve previously reported here, 2016 saw a significant increase of ITC Section 337 investigations over prior years. The last complaint of the year was filed on December 30, 2016, by Lifetime Products, Inc. (“Lifetime” or “Complainant”) against Russell Brand LLC d/b/a Spalding (“Russell”) and Reliable Sports Equipment (Wujiang) Co. Ltd (“Reliable”) (collectively, “Respondents”). In the Matter of Certain Basketball Backboard Components and Products Containing the Same, Complaint 337-TA-____ (Dkt. 3191). Lifetime is asking ITC to issue a Limited Exclusion Order (LEO) and permanent cease and desist orders against the Respondents.
While 2016 saw numerous changes at the International Trade Commission (ITC), the number of asserted patents in an investigation was not one of them. In 2016, the vast majority of Complainants continued the trend of asserting five or fewer patents.