By: Alex Li and Vishal Khatri – In a recent opinion, the International Trade Commission (“ITC”) issued a limited exclusion order and cease and desist orders (“CDOs”) directed towards Respondent Toshiba’s infringing products. Certain Non-Volatile Memory Devices and Products Containing Same, Inv. No. 337-TA-1046, Commission Opinion.[1]  In earlier posts, we reported that ALJ Lord denied Complainant’s motion for summary determination that the economic prong of domestic industry was met (here) and that the Commission found economic investments and activities related to patented pre-commercial and non-commercial articles can meet the domestic industry requirement (here).  This recent Commission Opinion evaluated the public interest factors as they relate to the issuance of remedial orders.

According to Section 337 of the Tariff Act, the ITC must evaluate the effect of any remedial order on the “public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and the United States consumers.”  In the investigation, the Commission considered the effects of the remedial orders against Respondent Toshiba, and determined that none of the public interest factors weighed against the issuance of the remedial orders.

With respect to public health and welfare, the Commission found that that the infringing products were not unique components of medical products, pharmaceuticals, or other products integral to the delivery of healthcare or the maintenance of public safety.

As to competitive conditions in the United States economy and the production of like or directly competitive article in the United States, the Commission determined that the effects were insufficient to bar entry of an exclusion order.  The Commission emphasized that Toshiba’s infringing products had only a minor market share, and there were over ten competing manufacturers that in total provided four times the product volume that Toshiba supplied.  Similarly, the Commission did not find a significant effect on U.S. consumers because it reasoned that any market void could be filled by Toshiba’s competitors.

Interestingly, Dell, a non-party, made a submission to the Commission as a customer of Toshiba’s.  Dell contended an exclusion order against Toshiba would impact Dell’s product lines since Toshiba was Dell’s largest supplier of solid state drives.  The Commission, however, was unpersuaded.  The Commission noted that neither Complainant nor Respondent disputed Dell’s assertion of impact on its product lines, but the magnitude of the impact was unclear from Dell’s submission.  Furthermore, the submission did not provide any evidence as to the impact on the statutory public interest factors.  In the end, the Commission ruled that the public interest factors did not weight against the issuance of remedial orders.

Takeaway

This Commission opinion is a reminder to litigants of the public interest analysis conducted by the ITC before determining whether to issue remedial orders against a respondent.  It also highlights that third-party submissions may be considered by the ITC but will likely to be most effective when tied closely to the statutory public interest factors.

[1] As a result of a settlement agreement between the parties, the Commission later agreed to rescind the remedial orders because “the conditions justifying the remedial orders no longer exist[ed].”  337-TA-1046, Notice Of Commission Determination To Rescind Remedial Orders (November 13, 2018).

The following two tabs change content below.
Vishal Khatri is an intellectual property lawyer with more than 15 years of experience representing clients in high stakes, bet-the-company patent litigation and procurement matters around the world. He routinely represents clients in matters before U.S. district courts, the United States International Trade Commission (ITC), and the United States Patent and Trademark Office (USPTO), including Inter Partes Review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB).