U.S. Trade Agency Lets Foreign NPE Refile Complaint to Avoid Expedited Review
Back in October, the ITC initiated an investigation into Active Matrix OLED Display Devices and Components Thereof (Inv. 1225) based on a complaint filed by Solas OLED, an Irish patent-licensing company. As a non-practicing entity, Solas planned to establish the existence of a domestic industry by subpoena, hauling in a third party licensee to satisfy Section 337’s domestic industry requirement. But that license agreement (with U.S.-based eMagin) was very recent, and respondents (Apple, Dell, LG, Motorola, Samsung, and Sony) requested an early ruling from the ITC on Solas’s domestic industry claims.
The ITC’s early disposition program can be a very effective way to weed out abusive Section 337 complaints or to quickly handle investigations that hinge on a single dispositive issue that doesn’t require 18 months to resolve. If the ITC designates a case for the program, it instructs the administrative law judge to conduct early hearings and issue a determination on the chosen issue within 100 days of institution.
Considering that one of the main benefits of ITC litigation for patent owners is the agency’s rapid timeframe compared to federal district court, it’s perfectly reasonable to accord some of that benefit to respondents. Especially because complainants commonly abuse the availability of Section 337 for the sole purpose of imposing extra litigation costs.
Unfortunately, the Commission rarely agrees to designate a case for early disposition. It was a welcome surprise, therefore, when the ITC agreed to conduct early proceedings in the Active Matrix OLED on whether Solas could satisfy the domestic industry requirement. And it was no surprise when Solas withdrew its complaint, a common response when the ITC designates defective cases for early disposition.
But then Solas refiled its complaint in late December asserting the same patents against most of the same respondents. The only significant difference between the two cases is that the second one includes four months of post-license investments by eMagin that Solas hopes will enable it pass the domestic industry test.
Despite this minimal difference, the Commission instituted the second investigation—Active Matrix OLED Display Devices and Components Thereof (Inv. 1243)—without designating it for early disposition.
It remains frustratingly unclear what criteria the Commission considers when deciding whether to designate a case for early disposition. The only discussion of their decisions is a brief explanation provided in the denial order, which as I’ve discussed before, are both vague and inconsistent. This time, the Commission did not even issue a denial order responding to the request for early disposition.
The most recently introduced ITC reform bill—the Advancing America’s Interest Act—would promote the use of the program by making it a permanent part of the statute. Perhaps Congress should also consider mandated more complete explanations from the agency when it decides whether or not to use the program.