ITC Litigation in the U.S. MIP Global IP Briefing August 26, 2015, Singapore

Transcription

1 ITC Litigation in the U.S. MIP Global IP Briefing August 26, 2015, Singapore

2 Presenters Shaobin Zhu ( 朱韶斌 ): Moderator Attorney at Law, Shanghai Representative Office Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Jason Loh Head of IP Group (ASEA) Panasonic Shang-Jyh Liu ( 劉尚志 ) Dean of Law School National Chiao Tung University, Taiwan Tony Piotrowski General Counsel MPEG LA, LLC 2 2

3 U.S. ITC: Statutory Authority 19 U.S. Code 1337 gives the ITC the power to stop importations into the U.S. of: Section (A) goods that are involved in unfair methods of competition that threaten to destroy or substantially injure a U.S. industry Section (B) goods that infringe a U.S. patent or registered copyright that is also used by a domestic industry in the U.S. Section (C) goods that infringe a U.S. registered trademark Section (D) semiconductors that infringe a registered mask work Section (E) goods that infringe a U.S. design 3

4 U.S. International Trade Commission (500 E Street SW, Washington D.C.) 4

5 Related Government Entities/Courts 5

6 337 Investigations: Institution by Year 6

7 337 Investigations: Accused Products 7

8 Perspectives from an Operating Entity 1. Since 2011 (69 investigations instituted), about 40 or less cases are instituted each year. What are the reasons causing the decreases? 2. What percentage of the ITC cases were filed by operating entities vs. NPEs each year? How can an NPE satisfy the domestic industry requirement? 3. Why would a company choose the ITC forum, instead of a federal district court, to stop IP infringement? 8

9 Some Empirical Findings of ITC Litigation: Perspective of Asian Enterprises 1. What are your findings of ITC litigations from the perspective of Asian enterprises? 2. In the past 5 years, more than 1/3 of the respondents in the ITC were Asian enterprises. Why were so many Asian enterprises sued at the ITC? 3. How can Asian enterprises change this trend? 9

10 Standard-Essential Patents and FRAND Defense at the ITC 1. What are the advantages and disadvantages to enforce SEPs in the ITC? 2. Since the ITC has no jurisdiction in determining damages, how can the ITC determine whether the patentee of a SEP meet the FRAND requirement, including the FRAND royalty? 3. How can a respondent assert a FRAND defense in the ITC? 10

11 Questions? Questions from the audience: 11

12 ITC Litigation in the USA Perspectives from an Operating Entity August 26, 2015 MIP Global Intellectual Property Briefing 2015 Marina Bay Sands, Singapore

13 Content Disclaimer Brief Overview of ITC Litigation Why choose ITC Litigation?

14 DISCLAIMER

15 Disclaimer The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of Panasonic Corporation.

16 BRIEF OVERVIEW OF ITC LITIGATION

17 Comparison between ITC and District Court Litigation Litigation Element Section 337 ITC Litigation District Court Patent Litigation Jurisdiction and Importation In Rem jurisdiction over products imported into the US Court must have personal jurisdiction over defendant and subject matter jurisdiction over the action. Parties Complainants and Respondents Plaintiffs and Defendants Judge Domestic Industry Applicable Procedural Rules One of six Administrative Law Judges (ALJs) assigned to the ITC All complainants must demonstrate domestic exploitation of the asserted IPR Commission Rules of Practice and Procedure and ALJ s Ground Rules. Article III judge or magistrate judge. Not required Response to Discovery 10 days 30 days Response to Motions 10 days Varies (2-4 weeks) Federal Rules of Civil Procedure, Local Rules Time Frame to Resolution months 2-3 years or even more Possible Remedies Exclusion order, cease-and-desist order Damages, injunction if ebay factors met Appellate Review Federal Circuit Federal Circuit

18 Comparison between ITC and District Court Litigation Average Litigation Cost ITC $1-10M: $1,967,000 $10-25M: $3,410,000 >$25M: $6,242,000 Fed. District Ct. $1-10M: $2,100,000 $10-25M: $3,554,000 >$25M: $5,911,000 Source : AIPLA Economic survey (2013)

19 Exemplary Cost Breakdown $700,000 $600,000 Typical ITC Patent Suit Budget Majority of litigation costs are incurred in Discovery $800,000 $700,000 Federal Court and ITC Budget Comparison Front end loaded Costs $500,000 $600,000 $500,000 $400,000 $400,000 $300,000 $300,000 $200,000 $200,000 $100,000 $100,000 $0 $0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 ITC suit duration Source : AIPLA Economic survey (2013)

20 ITC Remedies Two types of remedies available upon a finding of violation: exclusion orders and cease-and-desist orders. Both are injunctive in nature and prospective in scope. Money damages are not available at the ITC, although civil penalties may be assessed in certain narrow circumstances. Remedy 1. Exclusion 2. Cease-anddesist 1a. General exclusion 1b. Limited exclusion Note: Remedies at ITC can be both Ceaseand-Desist Order and Exclusion Order. ITC orders are enforced by the U.S. Customs and Border Protection (CBP), a component of the Department of Homeland Security.

21 Xx Date xx Date ITC Can go in Parallel with DC Litigations ITC (US) 337-TA-xxx 337-TA-xxx (SEPs) DC (US) 2:15-cv-xxx (SEPs) 2:15-cv-xxx 2:15-cv-xxx 2:15-cv-xxx 2:15-cv-xxx 2:15-cv-xxx 2:15-cv-xxx Germany Both SEPs and Non-SEPs UK Both SEPs and Non-SEPs Netherlands Both SEPs and Non-SEPs

22 WHY CHOOSE ITC LITIGATION?

23 When to Choose ITC for Litigation? Any importation to the U.S.? Owns a valid U.S. patent, copyright or trademark? Complainant satisfy Domestic Industry requirement? Against multiple parties over multiple jurisdictions? Nation wide or worldwide discovery necessary? Is time of essence?

24 Why to File Cases at ITC? Extremely expedited proceedings Single case, multiple respondents, different Jurisdictions In Rem jurisdiction over foreign manufacturers Potentially Stronger Injunction Equivalent Immediate and significant threat (60-day after presidential review) No Jury concerns

25 Limitations of ITC Litigation Front-end loaded costs ITC s decisions are not binding on a US district court Domestic Industry requirement for the complainant Significant public interest issues considerations Stricter in finding violations of NPE complainants Very rare SEP related remedial orders

26 THANK YOU

27 USITC IP Litigation: Some Empirical Findings & the Perspective of Asian Enterprises LIU Shang-Jyh National Chiao Tung University, Taiwan 劉尚志國立交通大學 ( 台灣 )

28 28 Section 337 ITC District Court Length 18 months Average of 3 years Parties Discovery Judges Confidentiality Remedy multiple parties without joinder restrictions; ITC Office of Unfair Import Investigations may participate Broad; nation-wide subpoena power; short discovery deadlines 6 Administrative Law Judges handling only IP cases Strictly policed, one-level (highest) protective order Automatic injunction ( exclusion order ) barring infringing imports if successful AIA new joinder rules apply Federal Rules apply; limited subpoena power; slow discovery 677 judges with diverse caseload Inconsistent enforcement of protective orders Injunction potential, but must first satisfy ebay factors Review/Appeals Federal Circuit Federal Circuit (patents) Other Circuits (trademarks, etc.)

29 The Increasing Use of Section

30 30 Kyocera, ebay (S.Ct. 2006) & NPEs 1/3

31 31 Domestic Industry July 2011,ITC 337-TA-694 Investigation Pioneer v.honeywell & Garmin FD v. ID Industry-Creating, Production Driven Oct., 2011 John Mezzalingua Associates, Inc. v. ITC, 2011 WL (Fed. Cir. 2011). Patent Portfolio Licensing Negotiation before Litigation

32 Dispositions Complaint Withdrawn 13% No Violation 19% No Violation Violation Settled 47% Violation 20% Terminated Due to Arbitration Settled Complaint Withdrawn Terminated Due to Arbitration 1%

33 Geographic Distribution of Respondents ( ) 33 16% EUROPE 69% ASIA Details for Asia Data: China 24% Taiwan 15% Japan 12% Korea 9% 2% Other Hong Kong 6% Malaysia 2% Singapore 1% Macao <1%

34 Section 337 Usage by Non-U.S. Based Complainants Non-U.S. Based Complainants U.S. Complainants % 36% 39% 30% 35% 20% 28% 27% 33% 15% 5% 12% 17% 0% 0

35 Representative Usage ( ) Non-U.S. Based Complainants Australia ResMed Ltd (2013) Belgium Federal-Mogul S.A. (2013) Canada Neptune Technologies & Bioresources Inc., Acasta Pharma Inc. (2013) China Fellowes Office Products (2012) Finland Nokia (2012 and 2013) Germany MT.Derm GmbH (2012), Linear Actuators and Dewert Okin GmbH (2013) Israel Human Eyes Technologies, Ltd. (2012) Japan Canon Inc., Hitachi Metals, Ltd., (2012), Toyo Tire & Rubber Co., Ltd. (2013) Korea Samsung (2012) Norway Navico Holding AS (2013) Singapore Avago Technologies Fiber IP, Avago Technologies General IP (2012) Switzerland Merck & Cie (2012) Taiwan ITRI, Realtek Semiconductor (2012) UK Mondis Technology, Ltd. (2012) 35

36 ITC Adjudications 36 Favorable American Firms Respondents Complainants Equally with foreign firms Winning Rate: 2 times

37 37 Intellectual Property Rights The key is ownership and use of IP Establish a domestic industry Domestic Industry Standard for IP-Based Investigations 19 U.S.C. 1337(a)(3) A. Significant investment in plant and equipment; B. Significant employment of labor or capital; or C. Substantial investment in its exploitation, including engineering, research & development, or licensing

38 38 Early Planning to Avoid Adverse Impact Products at risk likely to be broader than model numbers accused in the Complaint Notice of Investigation controls scope of potential remedial order o Caption of case reveals products at risk Request Complainant to Disclose Contentions of Products at Risk Products under development at risk

39 39 Remedial Orders General Exclusion Order Cease and Desist Order Limited Exclusion Order Seizure or forfeiture

40 Enforcement of Exclusion Orders 40 U.S. Customs & Border Protection - (formerly Customs Service) within the U.S. Department of Homeland Security Office of International Trade o Regulations & Rulings; IPR Branch Educate Customs o o Provide samples of infringing goods Provide patent excerpts, technology tutorial Provide industry intelligence to Customs - e.g., preferred ports, likely means of importation

41 41 Alternative Strategies Settlement o o o License Joint venture Technology exchange Prepare to Withdraw from U.S. Market Default Fight the charges to stay in the U.S. market Prepare a counter offensive using your IP o Cross-licensing