New Section 337 Investigations Target Tobacco, Televisions, and More Televisions
Like many other agencies and courts right now, the ITC’s patent docket is not operating as normal. All agency staff have been working from home since March 17, and the Commission has extended the postponement of all in-person hearings until at least July 10. It is no surprise, therefore, that relatively few new Section 337 complaints have been filed so far in 2020. As we approach the end of May, the agency has received only 13 complaints since the beginning of the year—a 40% decrease compared to the 22 complaints filed by this time last year.
The three most recently instituted investigations all appear to be patent licensing disputes between large international companies that are also litigating in federal district court.
Heated Tobacco E-Cigarettes
On May 11, the ITC instituted Tobacco Heating Articles and Components Thereof (Inv. 1199), part of a dispute between two global tobacco giants. The complainant in this case is R.J.Reynolds (currently owned by British American Tobacco) and the respondents are Philip Morris USA (a subsidiary of Altria) and Philip Morris International. The respondents sell iQOS brand e-cigarettes that compete with complainant’s Vuse brand and are accused of infringing a series of patents related to e-cigarette technology.
The case has attracted a large number of public interest comments from organizations concerned about the availability of smoking alternatives.
Curiously, this is not the first tobacco-related Section 337 complaint filed this year. The ITC is also litigating a patent dispute between two companies that sell snus in Nicotine Pouches and Components Thereof and Methods of Making the Same (Inv. 1192). And the agency recently completed two investigations filed in 2018 involving Electronic Nicotine Delivery Systems (Invs. 1139 & 1141), finding that a number of small importers infringed e-cigarette patents owned by Juul. Less recently, the ITC adjudicated two cases against gray market cigarette imports—both titled Cigarettes and Packaging Thereof (Invs. 424 & 643)—each brought by companies currently owned by the parties in Tobacco Heating Articles. Both investigations resulted in general exclusion orders that are still active today.
In an investigation titled Electronic Devices, Including Streaming Players, Televisions, Set Top Boxes, Remote Controllers, and Components Thereof (Inv. 1200), the ITC will adjudicate a complaint filed by Universal Electronics accusing Roku, TCL, Hisense, and Funai of infringing six patents related to setting up a universal remote. The accused products are Roku’s streaming devices and Roku TVs made by the other respondents that run the Roku operating system and include a Roku remote.
Before the investigation was instituted, Roku revealed its intention to challenge two of the asserted patents as directed to ineligible subject matter. Noting that those patents describe having a computer look up different device codes so the consumer doesn’t have to search through the instructions, Roku argued that the patents “fail to claim patent eligible subject matter because they merely use a computer to automate a well-known manual process for setting up a remote control, and because they are directed to mere information gathering, analysis, and presentation.”
Roku asked the Commission to sever the complaint into two investigations and designate the one with the challenged patent for early disposition. The Commission chose not to sever the complaint and denied the request for early disposition “because the suggested issue for resolution is not investigation dispositive.”
The ITC instituted Liquid Crystal Display Devices, Components Thereof, and Products Containing the Same (Inv. 1201) on May 21. The complaint filed by Sharp accuses Vizio and its suppliers, particularly TPV (the OEM company that actually makes Vizio’s televisions), of infringement of various patents that describe different ways to make LCDs easier to see from the side. LCD-related patent cases used to be very common at the ITC, accounting for a significant share of the agency’s docket about ten years ago. As a result, the main parties in this case have all been both complainants and respondents in previous Section 337 investigations.
To show the existence of a domestic industry, Japan-based Sharp points to its U.S. operations that provide “product development, quality control, product support and technical services, marketing, sales, customer support, and after-sales services related to the Domestic Industry Products.” Considering that Sharp’s products are designed abroad and sold globally, it’s possible the company’s customer support-related U.S. investments may ultimately be deemed insignificant even under the ITC’s increasingly lax standards. Perhaps recognizing this possibility, the complaint explicitly “reserves the right to rely on investments” of “third party licensees”—potentially transforming this case into an example of domestic industry by subpoena. In any event, it appears this dispute is about licensing negotiations between two importers and not about unfair import competition harming a U.S. industry.
Image Credit: SimonDes