Using an IPR in the ITC: It’s All About Timing

On January 20, 2023, the ITC in Certain Wearable Electronic Devices with ECG Functionality found a violation of Section 337 and issued an exclusion order along with a cease-and-desist order. But because the Patent Trial and Appeal Board (PTAB) had issued decisions invalidating all of the claims at issue just six days before the original ITC final determination target date, the ITC suspended enforcement of its remedy orders pending appeal of the IPR decisions.[1]

Given the relative speed of ITC investigations compared to IPRs, situations like Certain Wearable Electronic Devices—where the PTAB’s decision issues before an ITC remedy order—are rare.[2] Yet with the PTO’s recent guidance that institution of IPRs will not be denied because of an ongoing ITC investigation on the same patent,[3] parallel IPRs and ITC investigations are more likely. This article summarizes the ways in which litigants can expect a concurrent IPR—and an eventual finding of invalidity—to impact their ITC investigation.

The Impact of an IPR on an ITC Investigation

ITC respondents will often consider filing IPRs challenging the patent(s) asserted against them in the ITC, since an invalid patent cannot be infringed. However, unless an ITC respondent has advance notice that it will face an ITC investigation on certain patents, they likely cannot file an IPR until after an ITC complaint is filed. Even if an IPR is filed promptly, given the speed of ITC proceedings, the ITC will often reach its final determination (and potentially issue a remedial order) before the PTAB can make a final decision on invalidity.

As Certain Wearable Electronic Devices demonstrates, the timing of an IPR decision is critical to whether a Respondent can use that decision to delay or avoid remedies in the ITC. The ITC has historically been loath to grant stays, since the statute requires that investigations conclude at “the earliest practicable time.”[4] For example, the ITC will not stay an investigation on the grounds that an IPR on the same patent claims has been filed or instituted.[5] But what if the PTAB finds all the claims at issue in the ITC invalid? As discussed below, an IPR decision may justify suspension of an ITC remedial order if the PTAB decision issues before the ITC’s final determination.[6] By contrast, IPR decisions have not resulted in a suspension if entered after the issuance of an ITC final determination.

a. IPR Decision Before ITC Final Determination: Stay/Suspension More Likely

In a few early cases, the Commission agreed to suspend its remedial order as to the claims at issue in an IPR decision, but only because the accused products would be excluded regardless (e.g., because a violation was found on claims not at issue in the IPR).[7] In another case, an ALJ granted a joint motion to stay an investigation in light of an IPR ruling.[8]

Recently, the ITC has looked more favorably upon suspensions of remedial orders based on IPR decisions. Explicitly recognizing that the PTO is “the lead agency in assessing the patentability, or validity, of proposed or issued claims,” the ITC in Certain Unmanned Aerial Vehicles suspended enforcement of remedial orders relating to the PTAB-invalidated patent “pending resolution of the PTAB’s Final Written Decision.”[9] There, the IPR decision issued while the parties’ requests for review of the Initial Determination (ID) were pending with the Commission. The Commission went on to review and affirm the ID’s finding of violation, but suspended enforcement of its remedial orders. In doing so, the Commission found that suspension is warranted where “a PTAB final written decision [was] issued prior to the Commission’s determination,” but not when “the Commission issued its remedial orders before the PTAB issued its final written decision of unpatentability.”[10] Later investigations suspended remedial orders in similar circumstances.[11]

Certain Wearable Electronic Devices emphasizes the importance of timing. There, respondent initially requested a stay in light of instituted IPRs on the asserted patents.[12] ALJ Elliott denied the request as it was based on “the mere institution of an IPR.” The PTAB then found all challenged claims unpatentable on December 6, 2022, just six days before the ITC final determination was due.[13] Respondent immediately filed an emergency motion for the ITC to suspend any remedial orders or, in the alternative, extend the target date of the ITC’s final determination.[14] The ITC extended the target date twice before determining to suspend its remedial orders pending appeal of the IPR decisions.[15] Citing its opinion in Unmanned Aerial Vehicles, the Commission reasoned that “suspension of remedial orders is within the Commission’s discretion over the form, scope, and extent of its remedy and may be appropriate where, as here, the PTAB issues final written decisions of unpatentability concerning certain claims before the Commission issues remedial orders based on those same claims.”

ALJs will not always stay an investigation in light of a PTAB invalidity determination, however. In Certain Memory Modules, for example, Chief Judge Bullock refused to grant a stay where the PTAB invalidated only one of the two patents at issue.[16] Judge Bullock found that the first factor of Certain Semiconductor Chips, “the state of discovery and the hearing date,” weighed heavily against a stay as discovery had been completed and trial had begun. Further, although the PTAB had invalidated one of the two patents, complainant represented that they would appeal, and the second IPR was ongoing. The Commission in Unmanned Aerial Vehicles appeared to endorse Judge Bullock’s denial of a stay, explaining that “the ALJ found there was little to be gained by staying the investigation because it had already reached an advanced stage, discovery had been completed, and the evidentiary hearing would commence by the time the PTAB issued its other two final decisions.”[17] The upshot is that complainants may be able to avoid a stay or suspension where IPRs on other asserted patents are still pending.

b. PTAB Determination After ITC Final Determination: Stay Unlikely

If the PTAB finds the ITC claims invalid after an ITC Final Determination has been entered, a respondent likely cannot use that finding to immediately rescind the earlier ITC remedial order. For example, in Certain Network Devices (II), the ITC had issued remedial orders against respondent Arista on May 4, 2017.[18] A month later, the PTAB invalidated relevant claims of the asserted patents, and Arista filed petitions at the ITC to suspend the ITC’s remedial orders. The ITC distinguished these facts from Three-dimensional Camera Systems, where a suspension was granted, specifically because “the Commission has already issued the remedial orders.” The ITC in Certain Road Construction Machines and Certain Tobacco Heating Articles, citing Certain Network Devices (II), likewise denied motions to suspend remedial orders based on IPR decisions issuing after a final determination was entered.[19]

Once a remedial order is in place, it will likely stay in effect until the conclusion of the IPR appeal. The ITC has said that respondents “may seek redress from the Commission” when “the PTO issues certificates cancelling [asserted] claims, which it cannot do until exhaustion of any appeals.”[20] From filing the notice of appeal to issuance of an opinion, a Federal Circuit (CAFC) appeal typically takes between 14 and 18 months. If the CAFC affirms the PTAB’s invalidity determination, the ITC typically rescinds or suspends remedial orders within a few months.[21] As a result, an ITC remedial order providing injunctive-type relief could be in place for a year or more after the PTAB has found the underlying patent claims invalid.[22] 

Takeaways

Litigants at the ITC should be mindful of the timing of ITC investigations when considering filing an IPR. A typical IPR takes approximately 12–18 months, while an ITC investigation averages 16–18 months. 

Complainants should be prepared for more IPR challenges to patents asserted at the ITC in light of the PTO’s recent guidance. Complainants should be prepared to defend against IPRs and do what they can to delay a final PTAB decision. On the other hand, complainants should avoid delays at the ITC, as this increases the risk of a PTAB determination issuing before an ITC Final Determination. Finally, complainants should consider asserting more patents, since a respondent’s failure to invalidate all patents in IPRs may be a basis under Certain Memory Modules to avoid a stay.

Respondents should file IPRs promptly to maximize the chance that the PTAB’s determination is issued before the ITC’s final determination. Indeed, it may be prudent to prepare IPRs proactively if a respondent has any indication it may be sued in the ITC. Further, respondents should endeavor to file all IPRs at the same time to avoid the split IPR issue in Certain Memory Modules, which could result in a denial of a stay notwithstanding a PTAB invalidity determination on one of the patents. Once the PTAB has issued an invalidity determination, respondents should immediately petition for a stay or suspension of remedial orders, as was done in Certain Wearable Electronic Devices. 

[1] Certain Wearable Elec. Devices with Ecg Functionality & Components Thereof (“Certain Wearable Elec. Devices”), Inv. No. 337-TA-1266, Comm’n Op. at 85–87 (Jan. 20, 2023).

[2] See, e.g., Philip Morris Prods. S.A. v. Rai Strategic Holdings, Inc., IPR2020-00919, Paper 9

(PTAB Nov. 16, 2020).

[3] Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation, Memorandum at 9, USPTO (June 21, 2022).

[4] 19 U.S.C. § 1337(b)(1); Certain Semiconductor Chips with Minimized Chip Package Size & Prod. Containing Same (“Certain Semiconductor Chips”), Inv. No. 337-TA-605, Comm’n Op. at 4–6 (May 27, 2008) (reversing stay, noting “Commission policy that . . . investigations be conducted expeditiously to avoid delay.”).

[5] See, e.g., Certain Automated Storage & Retrieval Sys., Robots, & Components Thereof, Inv. No. 337-TA-1228, Ord. No. 6: Denying Respondents’ Motion for A Stay, (Mar. 9, 2021).

[6] In such cases the ITC will make its determination based on the five factors outlined in Certain Semiconductor Chips: (1) the state of discovery and the hearing date; (2) whether a stay will simplify the issues and hearing of the case; (3) the undue prejudice or clear tactical disadvantage to any party; (4) the stage of the PTO proceedings; and (5) the efficient use of Commission resources. Certain Semiconductor Chips, Comm’n Op. at 2 (May 27, 2008). Other ALJs have considered a sixth factor, the availability of alternative remedies in federal court. See, e.g., Certain Microelectromechanical Sys. (Mems Devices) & Prod. Containing the Same, Inv. No. 337-TA-876, Order No. 6 at 7–8 (May 21, 2013).

[7] See, e.g., Certain Three-Dimensional Cinema Sys. & Components Thereof, Inv. No. 337-TA-939., Comm’n Op. at 60 (Aug. 23, 2016); Certain Magnetic Tape Cartridges & Components Thereof, Inv. No. 337-TA-1058, Comm’n Op. at 62–63 (Apr. 9, 2019).

[8] Certain Integrated Cirs. with Voltage Reguls. & Prod. Containing Same, Inv. No. 337-TA-1024, Order No. 57 (July 29, 2019).

[9] Certain Unmanned Aerial Vehicles & Components Thereof (“Certain Unmanned Aerial Vehicles”), Inv. No. 337-TA-1133, Comm’n Op. at 37–38 (Sept. 8, 2020).

[10] Id. at 35.

[11] See, e.g., Certain Laparoscopic Surgical Staplers, Reload Cartridges, & Components Thereof, Inv. No. 337-TA-1167, Comm’n Op. at 64 (Dec. 20, 2021); Certain Wearable Elec. Devices, Comm’n Op. at 3 (Dec. 22, 2022).

[12] Certain Wearable Elec. Devices, Corrected ID at 190 (June 27, 2022).

[13] IPR2021-00971, Patent 10,595,731, Final Written Decision (Dec. 6, 2022); IPR2021-00972, Patent 10,638,941, Final Written Decision (Dec. 6, 2022).

[14] Certain Wearable Elec. Devices, Respondent’s Emergency Motion (Dec. 7, 2022).

[15] Certain Wearable Elec. Devices, Comm’n Det. to Extend Target Date (Dec. 9, 2022); id., Comm’n Det. to Extend Target Date (Dec. 20, 2022); id., Comm’n Op. (Jan. 20, 2022).

[16] Certain Memory Modules & Components Thereof, Inv. No. 337-TA-1089, Order No. 49 (Apr. 11, 2019).

[17] Certain Unmanned Aerial Vehicles, Comm’n Op. n.16 (Sept. 8, 2020).

[18] Certain Network Devices, Related Software & Components Thereof (II) (“Certain Network Devices”), Inv. No. 337-TA-945, Comm’n Opinion at 12 (Aug. 16, 2017).

[19] Certain Rd. Constr. Machines & Components Thereof, Inv. No. 337-TA-1088, Comm’n Order at 5–6 (Jan. 31, 2020).

[20] Certain Network Devices, Comm’n Op. at 7–8 (Aug. 16, 2017).

[21] See, e.g., Certain Network Devices, Comm’n Not. at 2–3 (Apr. 5, 2018) (Rescinding remedial order two months after CAFC affirmed PTAB invalidity finding).

[22] See Certain Network Devices, Comm’n Not. at 2–3 (Apr. 5, 2018) (Rescinding remedial order 11 months after issuance).