By: Yury Kalish and Blaney Harper – The ITC issued a final determination in a long-running dispute between Sony and Fujifilm.  Certain Magnetic Tape Cartridges And Components Thereof, Inv. No. 337-TA-1058, Notice Of A Commission Final Determination (March 25, 2019).  This investigation was instituted on June 1, 2017, based on Sony’s Complaint and has been the subject of earlier posts.  With reference to this investigation, earlier posts covered the importance of the procedural schedule (here), pitfalls of late amendments to the list of domestic industry products (here), and reliance on Staff for raising invalidity arguments that a party itself is precluded from raising (here).

The ALJ issued the initial determination on August 17, 2018, finding that Fujifilm infringed all three patents and that Sony met the domestic industry requirements for all of them.  However, the ALJ found one patent invalid, and therefore the ID found a violation of Section 337 only with respect to two of the three patents asserted by Sony.  On October 18, 2018, the Commission determined to review the ID with respect to issues raised by Sony and Fujifilm in their petition for review under the Commission Rule 210.50(a)(4).

On October 23, 2018, the PTAB issued a Final Written Decision in an IPR filed by Fujifilm, finding two claims of one patent unpatentable, including one claim previously found to be valid in the ID in this Investigation.  Fujifilm requested that the Commission stay the enforcement of any remedial orders should the Commission find a violation of section 337 with respect to that claim.

On March 25, 2019, the Commission has issued a Notice of its Final Determination.  The Commission affirmed or took no position on most findings in the ID.  Accordingly, the Commission’s action resulted in determination of violation of Section 337 as to the asserted claims of two patents (including the claim invalidated in the IPR), but no violation as to the asserted claim of the third patent – same result as in the ID.  The Commission also followed the ALJ’s recommendations with respect to remedies and issued a limited exclusion order (LEO) and a cease and desist order (CDO) against Fujifilm, and required no bond during the Presidential review period.

With respect to the patent that was the subject of the IPR, the Commission expressly addressed only the invalidity challenges that Fujifilm could not raise at the PTAB –112 issues and product prior art.  The Commission found all asserted claims of that patent valid over the 112 issues and product prior art.  However, in view of the PTAB’s decision finding one of the claims asserted in this Investigation unpatentable, the Commission determined to suspend the enforcement of the LEO and CDO as to that claim pending final resolution of the PTAB’s Final Written Decision.

Takeaway

While it is uncommon for the ITC to consider patentability determinations from the PTAB before all appeals are exhausted and the determination is final, parties at the ITC should be aware that an IPR can still be a strategically valuable tool.  If filed early enough, the Commission may be in a position to address the PTAB’s finding before issuing its final determination.

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Blaney Harper, who co-chairs the Firms intellectual property ITC practice, focuses on strategic patent litigation representing electronics, software, and information technology companies in matters such as patent enforcement in United States District Courts and the International Trade Commission (ITC). Blaney also represents and counsels clients concerning patent portfolio development and patent prosecution and appeal, including Inter Partes Review, in the USPTO. Blaney co-chairs the Firm's ITC practice and is the IP Practice Coordinator for the Washington Office.