Interdigital Commc'ns, LLC v. Int'l Trade Comm'n

• Decision Date: 10 January 2013
• Docket Number: No. 2010–1093.,2010–1093.
• Citation: 707 F.3d 1295
• Parties: INTERDIGITAL COMMUNICATIONS, LLC and InterDigital Technology Corporation, Appellants, v. INTERNATIONAL TRADE COMMISSION, Appellee, and Nokia Inc. and Nokia Corporation, Intervenors.
• Court: U.S. Court of Appeals — Federal Circuit

707 F.3d 1295

INTERDIGITAL COMMUNICATIONS, LLC and InterDigital Technology Corporation, Appellants,

v.INTERNATIONAL TRADE COMMISSION, Appellee,andNokia Inc. and Nokia Corporation, Intervenors.

No. 2010–1093.

United States Court of Appeals,

Federal Circuit.

Jan. 10, 2013.

Patrick J. Flinn, Alston & Bird LLP, of Atlanta, GA, filed a combined petition for panel rehearing and rehearing en banc for intervenors. With him on the petition were John Haynes, of Atlanta, GA, and Ross R. Barton, of Charlotte, NC. Of counsel on the petition was Paul D. Clement, Bancroft PLLC, of Washington, DC.

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, filed a response to the petition for appellants. With him on the response were Allen M. Sokal, Don O. Burley, Smith R. Brittingham IV, and Houtan Khalili Esfahani, of Washington, DC, and Christopher P. Isaac, of Reston, VA. Of counsel on the response were Seth P. Waxman and William G. McElwain, Wilmer Cutler Pickering Hale and Dorr LLP, of Washington, DC, and Mark C. Fleming and Lauren B. Fletcher, of Boston, MA.

Megan M. Valentine, Attorney Advisor, Office of General Counsel, United States International Trade Commission, of Washington, DC, filed a response to the petition for appellee. With her on the response were Dominic L. Bianchi, Acting General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

Daryl Joseffer, King & Spalding LLP, of Washington, DC, filed a response to the petition for amici curiae Hewlett–Packard Co., et al. With him on the response were Jeffrey Telep and Adam Conrad.

Before RADER, Chief Judge, NEWMAN, MAYER, LOURIE, BRYSON, DYK, PROST, O'MALLEY, REYNA, and WALLACH, Circuit Judges. ^*

ORDER

PER CURIAM.

A combined petition for panel rehearing and for rehearing en banc was filed by Intervenors, and responses to the petition were invited by the court and filed by Appellants and Appellee. By leave of court, a response to the petition was filed by Hewlett–Packard Co., et al., as amici curiae. The petition for rehearing and responses were considered by the panel that heard the appeal, and thereafter the petition for rehearing en banc and responses were referred to the circuit judges who are in regular active service.

Upon consideration thereof,

It Is Ordered That:

(1) The petition for panel rehearing is denied, and a panel opinion and dissent are attached herewith.

(2) The petition for rehearing en banc is denied.

(3) The mandate of the court shall issue on January 17, 2013.

Before NEWMAN, MAYER, and BRYSON,^** Circuit Judges.

Opinion for the court filed by Circuit Judge BRYSON. Dissenting opinion filed by Circuit Judge NEWMAN.

ON PETITION FOR REHEARING

BRYSON, Circuit Judge.

Intervenors Nokia Inc. and Nokia Corporation (collectively, “Nokia”) have petitioned for rehearing on one of the issues presented in this case: whether InterDigital's patent licensing activities satisfied the “domestic industry” requirement of section 337 of the Tariff Act of 1930, 19 U.S.C. §§ 1337(a)(2) and 1337(a)(3). Because Nokia has made a much more detailed argument with respect to that issue on rehearing than it did in its brief on the merits, a response to Nokia's expanded submission is appropriate.

1. In its textual argument, Nokia focuses on the phrases “relating to the articles protected by the patent” and “with respect to the articles protected by the patent” in paragraphs 337(a)(2) and 337(a)(3). Paragraph 337(a)(2) provides that the bar to importation of infringing goods established by section 337 applies “only if an industry in the United States, relating to the articles protected by the patent ... exists or is in the process of being established.” Paragraph 337(a)(3) then states that an industry in the United States “shall be considered to exist if there is in the United States, with respect to the articles protected by the patent” significant investment in plant or equipment, significant employment of labor or capital, or “substantial investment in its exploitation, including engineering, research and development, or licensing.” The parties agree that the word “its” in the last clause of paragraph 337(a)(3) refers to the intellectual property at issue.

Nokia argues that the International Trade Commission and this court have not properly construed the phrases “relating to the articles protected by the patent” and “with respect to the articles protected by the patent” that appear in those two subsections. The Commission and the court construed those phrases to define the subject matter that is within the statute's protection. With respect to subparagraph (A) of paragraph 337(a)(3), the “significant investment in plant or equipment” that is required to show the existence of a domestic industry must exist “with respect to the articles protected by the patent” in question. That requirement will typically be met if the investment in plant and equipment is directed at production of articles protected by the patent. Similarly, with respect to subparagraph (B) of paragraph 337(a)(3), the “significant employment of labor or capital” that is required to show the existence of a domestic industry must exist “with respect to the articles protected by the patent.” That requirement will likewise typically be met by a showing that significant labor or capital is being expended in the production of articles protected by the patent. Applying the same analysis to subparagraph (C) of paragraph 337(a)(3) produces a parallel result that is consistent with the Commission's and this court's statutory construction: The “substantial investment in [the patent's] exploitation, including engineering, research and development, or licensing” must be “with respect to the articles protected by the patent,” which means that the engineering, research and development, or licensing activities must pertain to products that are covered by the patent that is being asserted. Thus, just as the “plant or equipment” referred to in subparagraph (A) must exist with respect to articles protected by the patent, such as by producing protected goods, the research and development or licensing activities referred to in subparagraph (C) must also exist with respect to articles protected by the patent, such as by licensing protected products. This accords with the common description of the domestic industry requirement as having two “prongs”: the “economic prong,” which requires that there be an industry in the United States, and the “technical prong,” which requires that the industry relate to articles protected by the patent. See Certain Stringed Musical Instruments and Components Thereof (“Stringed Musical Instruments”), Inv. No. 337–TA–586, USITC Pub. 4120, Comm'n Op., at 13–14 (Dec.2009); Certain Variable Speed Wind Turbines and Components Thereof, Inv. No. 337–TA–376, USITC Pub. 3003, Comm'n Op., at 14–18 (Nov.1996).

As noted in the panel opinion in this case, the Commission has consistently construed subparagraph (C) in that manner. See Certain Multimedia Display and Navigation Devices and Systems, Components Thereof, and Products Containing Same (“Multimedia Display and Navigation Devices”), Inv. No. 337–TA–694, USITC Pub. 4292, Comm'n Op., at 7–8 (Nov.2011) (to satisfy the domestic industry requirement by proof of investment in patent licensing requires a showing (1) that the investment relates to the exploitation of the asserted patent, (2) that it relates to licensing, (3) that it is domestic, and (4) that it is substantial). In addition to the cases cited in the panel opinion, earlier Commission decisions adopting the same statutory interpretation include Certain Digital Processors and Digital Processing Systems, Components Thereof, and Products Containing Same, Inv. No. 337–TA559, Initial Determination (May 11, 2007), 2007 WL 7597610, at *53–*57;Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Inv. No. 337–TA–432, Order No. 13 (Jan. 24, 2001), 2001 WL 1877710, at *6–*8;Certain Digital Satellite System (DSS) Receivers and Components Thereof, Inv. No. 337–TA–392, USITC Pub. 3418, Initial and Final Recommended Determinations, at 8–10 (Apr.2001); Certain Dynamic Sequential Gradient Compression Devices and Component Parts Thereof, Inv. No. 337–TA–335, USITC Pub. 2575, Initial Determination, at 58–61 (Nov.1992); and Certain Microcomputer Memory Controllers, Components Thereof and Products Containing Same, Inv. No. 337–TA–331, Order No. 6 (Jan. 8, 1992), 1992 WL 811299, at *3–*4 (“Where the patented products are manufactured is not relevant to the subsection (C) issue.”). The two Commission decisions from the 1990s cited by Nokia are inapposite, as they do not involve licensing, and they do not purport to interpret subparagraph (C). The two Commission decisions from the 1990s cited by the dissent are also inapposite, as they involve cases in which the complainants were not exploiting the asserted patents, contrary to paragraph 337(a)(2), which “requires that the domestic industry relate to the articles protected by the patent.” See Certain Integrated Circuit Telecommunication Chips and Products Containing Same Including Dialing Apparatus, Inv. No. 337–TA–337, USITC Pub. 2670, Initial Determination, at 99 n.87 (Aug.1993).

This is a classic case for the application of subparagraph (C). The evidence before the Commission showed that InterDigital is a large, publicly traded company (NASDAQ ticker symbol IDCC). Since 1993, the administrative law judge found, InterDigital “has been engaged in research, development, engineering, and licensing of Code Division Multiple Access (CDMA) technology in the United States which work later transitioned into research, development, engineering, and licensing of Wideband CDMA technology (WCDMA).” InterDigital's proprietary technology is incorporated in the communications standards referred to as 3G. InterDigital has engaged in some production of products, but it is principally...