Update: Dan Lang, who commented on this post below, has provided an expansion of the thoughts in his comment. His detailed comments can be found here.
The International Trade Commission (ITC) is supposed to protect U.S. industries from unfair foreign competition. They’re supposed to consider the interests of the U.S. public. But recently, it seems more like the ITC is interested in the ITC’s own power, not the interests of U.S. industry or the public.
Setting aside problems with their procedures that would be solved by adopting the Trade Protection, Not Troll Protection bill proposed by Reps. Cardeñas and Farenthold, the ITC is now banning products—based on patents that the USPTO has declared invalid.
Can You Exclude Imports Based On Invalid Patents?
Cisco and Arista have been skirmishing with one another over patents on networking products for a while now. Earlier this year, Cisco won an exclusion order in the ITC, with the ITC finding that certain Arista products violated a Cisco patent. While the ITC case was ongoing, Arista filed inter partes review petitions challenging the validity of the Cisco patents at the PTAB. A few weeks after the ITC found the patents valid and infringed, issuing an exclusion order, the PTAB found the patents invalid.
Now, when the PTAB finds a patent invalid, it doesn’t officially rescind the invalid claims until after the patent owner has had a chance to appeal the PTAB’s determination. So, until Cisco exhausts its appeals (or opts not to appeal), the claims remain in the patent, even though the Patent Office has determined them to be unpatentable.
This isn’t the first time this situation has happened. Last year, the ITC issued an exclusion order (an order preventing importation of the allegedly infringing products) based on patents the PTAB had recently invalidated. The ITC then stayed enforcement of the exclusion order until the courts of appeal resolved the issue of validity. (Ultimately, the patent owner bought the company they’d sued, mooting the exclusion order, but it appears that the challenged patents will remain invalid.)
But this time it’s different. The ITC isn’t staying enforcement of the exclusion order. It’s going to go ahead and enforce an import ban on Arista products, even though the PTAB found the patents to be invalid, and even though the Federal Circuit upholds the PTAB on appeal on more than 75% of all issues appealed.
What’s Going On At The ITC?
This is just one more example of a recent ITC trend of ignoring the public interest and failing to protect U.S. industries.
A few weeks ago, the ITC decided to investigate Apple based on Qualcomm’s complaints. They did this even though Qualcomm’s complaint was part of a clear strategy to maintain their baseband processor monopoly, an issue briefed to the Commission by numerous third parties (including in my own comments filed at the ITC.) Instituting Qualcomm’s request harms the public interest, a direct contradiction of the ITC’s mission.
And now the ITC is going to exclude importation of products designed and sold by Arista Networks (headquartered in Santa Clara, California), because they don’t want to recognize the PTAB’s authority to determine that a patent should be withdrawn from issue. They’re going to bar the import of a U.S. company’s products because they don’t want to wait to see if the PTO’s decision will be upheld on appeal, even though most PTO decisions are.
What’s the point in telling the ITC to consider the interests of U.S. industry and the U.S. public if they aren’t going to bother doing so?