One of the notable differences between ITC and district court litigation is that the ITC will not delay its proceedings if the asserted patents are under review at the Patent Trial and Appeal Board.  Because waiting for a PTAB review to conclude can greatly simplify the issues at trial, district court judges usually opt to delay their own cases until any reviews are finished.  The ITC, however, generally refuses to stay its proceedings in such cases, pointing to Section 337’s mandate that the agency complete investigations “at the earliest practicable time.”

A recent ITC decision in Road Construction Machines (Inv. 1088), shows how the agency’s aversion to delay and disregard for PTAB can lead to conflicting judgments and unjust remedies.

On June 27 of last year, the ITC found that respondent Wirtgen had violated Section 337 and issued an exclusion order against some of Wirtgen’s construction machines.  Then on December 13, PTAB issued a Final Written Decision deeming the patent claim at issue in the ITC investigation to be invalid.  The ITC’s Section 337 violation determination and PTAB’s invalidity determination are both currently under appeal at the Federal Circuit.

Wirtgen then filed a request to the Commission seeking a temporary stay of the exclusion order in light of the PTAB’s invalidity determination.  The ITC denied Wirtgen’s request in an order issued on January 31.  In the order, the Commission argues that “final written decisions of the PTAB are neither final nor binding” if they are still under appeal.  The Commission continues:

Wirtgen has failed to demonstrate that the balance of harms tips in its favor.  The Commission finds that a stay of the remedial orders during appeal would substantially harm Caterpillar because it would be deprived of the only relief available under section 337 during the pendency of the appeal. The complete deprivation of any relief to the injured complainant here outweighs Wirtgen’s weak showing of alleged harm, particularly given Wirtgen’s continued ability to sell non-infringing road construction machines and certain components in the United States.

So according to the Commission, PTAB decisions under appeal are meaningless but ITC decisions under appeal must be enforced immediately to prevent “complete deprivation” of relief. This is an impressively self-serving analysis.

What we have here are two conflicting decisions from different federal agencies that cannot both be correct.  That conflict will necessarily be resolved by the Federal Circuit, and Caterpillar will have to win both appeals in order to justify an exclusion order.

In the meantime, the ITC is deliberately imposing injunctive relief to enforce a patent that PTAB has deemed invalid.  In balancing the harms from this decision, the Commission doesn’t consider at all that an exclusion order based on an invalid patent would necessarily harm the respondent and the public without promoting innovation, upholding intellectual property rights, or preventing unfair trade practices.

As a policy matter, the Commission’s approach to this issue threatens to disrupt the effective functioning of the patent system.  It is not uncommon for parties in a patent dispute to be in district court, at the ITC, and at PTAB all at the same time.  By obstinately enforcing its own judgments until the Federal Circuit has resolved any inconsistencies, the ITC is offering patent owners a way to bypass district court and PTAB to secure temporary exclusion orders based on invalid patents.  In order to avoid the harm caused by an exclusion order, a respondent may very likely choose to settle the dispute, ending all appeals and leaving the complainant free to assert its PTAB-invalidated patent against others.