Why Is The ITC Instituting Investigations On Expiring Patents?

EXPIRED stamp

Yesterday, the ITC published the Federal Register notice of the initial determination of an ITC administrative law judge (ALJ).  The ALJ determined that the investigation, instituted in January based on a complaint filed last year, shouldn’t go further forward and terminated the case for good cause.

I’m going to totally set aside the merits of the (questionable) patent involved in this case, U.S. 7,930,340.  (I will note that the plaintiff has previously been sanctioned by the Federal Circuit for trying to evade word count limits by deleting spaces between words.)  I’m going to focus on one thing—expiration.

The patent was filed claiming priority to an application filed August 5, 1996.  It was given 577 days of extra patent term due to time in prosecution. That means that it expires 20 years and 577 days after August 5, 1996—on March 6, 2018.

The ITC just forced the defendants to spend several months paying to defend themselves against a patent that everyone involved knew would expire before the ITC acted.

Exclusion and Expiration

The ITC, unlike a district court, can only grant one remedy—exclusion.  They can order that products that violate a patent can’t be imported into the United States.  But that remedy can only be applied if the patent hasn’t expired—like an injunction, an exclusion order can’t be based on an expired patent.

The ITC Is Fast—But Not That Fast

One reason patent plaintiffs are drawn to file cases in the ITC is because ITC cases are fast and impose a lot of work on defendants very quickly.  Combined with the threat of exclusion, an ITC case imposes a lot of risk and cost, and therefore a lot of settlement pressure, on a defendant.

But fast is relative.  The timeline of an ITC case is around 16 months, start to finish.  If you file in, say, October of 2017, you can expect a case resolution in 2019.  To make the obvious point, 2019 is after 2018; there was no way the ITC would render a decision before the ‘340 patent expired.  And, as mentioned above, the ITC can’t grant relief on an expired patent.

That means that the ITC decided to take a case where there was no realistic way they could have granted any relief.

This Wasn’t A Mistake

This wasn’t the ITC allowing the complaint and figuring they would fix it later.  In fact, the complaint was originally filed on October 3, 2017.  Then it was supplemented on October 24, October 30, and November 3.  Then an amended complaint was filed on November 7. Then supplements were filed on November 7, November 13, and December 21.

The very first response from a defendant was to note that the patent would expire before relief could be granted.  The Chairman of the ITC, Rhonda Schmidtlein, noted that the patent would expire long before the Commission could take any action.

But on January 9, 2018, the Commission still voted to institute an investigation based on the complaint.  The Office of Unfair Import Investigations had to staff the case, the Commission had to spend time on it, and the multiple defendants involved had to hire lawyers to respond.

In a case where everyone involved (except the plaintiff, judging from their filings) knew the case couldn’t actually go forward, the ITC still decided to move forward with the case.

The ITC Terminated The Investigation, So Why Does It Matter?

The ITC eventually terminated the investigation.  But in the interim, lawyers likely spent tens and hundreds of hours (at hundreds of dollars an hour) responding to this nonsense.  The company’s internal counsel had to spend time coordinating a response. They had to prepare for the possibility it would go forward by telling engineers and other personnel to retain relevant documents so they wouldn’t be accused of destroying relevant evidence.

There’s better ways to spend that time.  When institutions charged with guarding American trade—like the ITC—allow this kind of case to move forward, it becomes questionable whether they’re actually accomplishing their mission.

Joshua Landau

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

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