Section 337 prohibits the “importation” of “articles that infringe” a patent.  By adopting highly expansive interpretations of these terms, the ITC found in Digital Video Receivers I (Inv. 1001) that Comcast violated Section 337 even though the company did not import the accused articles and the accused articles did not infringe the asserted patent.  The agency’s interpretations were upheld on appeal by the Federal Circuit, and now Comcast is seeking review by the Supreme Court.

R Street joined with the Innovation Defense Foundation and the Lincoln Network to file an amicus brief in support of the petition.  We urged the Supreme Court to take up the case, noting that the ITC’s “convoluted interpretation of [its] statutory authority” would subject a great swath of purely domestic enterprises to trade litigation contrary to Congressional intent.  We also stressed how the ITC’s interpretation effectively positions the agency to assume an out-sized role in the adjudication of patent disputes at the expense of Article III courts:

[T]he questions presented implicate at least two especially pressing questions of the constitutional structure of the federal government. First, by adjudicating domestic patent infringement disputes in an independent agency, the ITC steps into a role that ought to be the exclusive province of the Article III judiciary. Patent infringement by domestic firms has always been remediable in district court, and it ignores separation of powers to have an administrative agency conduct such proceedings untethered to importation. Second, it is highly uncertain that the ITC’s expansive interpretation of its jurisdictional statute, despite any clear grant of rulemaking authority, merits the level of deference that the Federal Circuit has given the agency so far. The especially strained reading of the ITC’s jurisdictional limits in this case highlights the risks of leaving agencies to police the scope of their own authority.

One complicating factor in the case is that Comcast is also arguing that the ITC’s decision should be vacated as  moot, because the patents at issue in the case have expired and the exclusion orders issued by the ITC are therefore no longer in effect.  (Before they expired, the patent claims were also deemed invalid by the Patent Trial and Appeal Board, but the ITC has a policy of ignoring PTAB decisions until they have been affirmed on appeal.  That appeal was, like the ITC outcome, still pending when the patents expired.)

The ITC originally argued against vacatur.  At the Federal Circuit, the agency argued that even though the asserted patents had expired, the ITC’s determination in DVR I still had “collateral consequences” for subsequent Section 337 investigations.  That is, the ITC wanted appellate review of legal questions that were also relevant in other investigations between the same parties.  The Federal Circuit agreed and upheld the ITC’s determination against all challenges.

The agency has now, however, changed its mind.  The ITC’s brief in opposition to Comcast’s petition for Supreme Court review argues that “[t]he prospect that a judgment may have precedential or preclusive effects in future litigation, standing alone . . . does not prevent mootness.”

Why the flip-flop?  One possibility is that the Commission’s previous position was opposed by the U.S. Solicitor General’s office, which wasn’t involved in the case until now.  And the ITC’s argument against vacatur may have been stronger under Federal Circuit precedent than at the Supreme Court.

The change in position also corresponds, however, with the ITC’s likelihood of success on the merits.  Just as the ITC is a friendlier venue for patent holders than district court, the Federal Circuit is likely a friendlier venue for the ITC than the Supreme Court.  So it seems possible the ITC welcomed appellate review when it knew it would get the outcome it wanted but jumped on the mootness bandwagon once the odds changed.

Image Credit: Lauren Kennedy

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