International Trade Commission (ITC) Administrative Law Judge McNamara issued a Notice of Issuance of Initial Determination today, explaining that, based on a complaint from Qualcomm, she had found that Apple infringed claim 1 (but not claim 8) of U.S. Pat. No. 8,063,674, and that the claim was valid. Based on that, she stated that she would recommend issuing an exclusion order banning the importation of Apple iPhones using Intel baseband processors.
The only problem? Two months ago, three judges from the U.S. Patent and Trademark Office (USPTO)—the agency whose entire purpose is to determine whether patents are valid or not—determined that claim 1 is reasonably likely to be proven invalid.
The ITC has been reticent to defer to the USPTO’s expertise in the area of patent validity, refusing to stay exclusion orders to allow the USPTO to complete its work, and in some cases refusing to lift an exclusion order already imposed until after all appeals are exhausted regarding the USPTO’s decision. Ultimately, the ITC is a trade court and deep technical issues of validity are outside of its core competence. Deference to the competence of the USPTO in this arena would be appropriate, given the ITC’s statutory mandate to consult with other agencies in the course of its investigations. It would also prevent the ITC from ending up in a situation like this—a situation that harms the public interest that the ITC is also statutorily required to consider.
When the ITC excludes products based on patents that the USPTO says shouldn’t have issued, it can significantly—and negatively—impact the U.S. economy. In this case, ordering exclusion based on an invalid patent would give Qualcomm the ability to cause significant financial harm to Apple and potentially force Intel (Qualcomm’s sole major competitor) to exit the baseband processor business entirely. This, in turn, would raise prices for consumers, delay new advances in cellular technology, and potentially create threats to cybersecurity and national security.
All of that, because of a single claim of a single patent that the experts at the USPTO believe shouldn’t have been issued to begin with.
Shortly after publication, the full Commission issued its notice of determination in the other Qualcomm-Apple ITC case, finding that the sole remaining claim was invalid—overturning the ALJ’s determination, and agreeing with the USPTO. Hopefully, when the time comes, the ITC will do the same here.