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ITC cannot enter limited exclusion order against non-parties

October 21, 2008
Post by Blog Staff

In a decision last week, the Federal Circuit vacated a limited exclusion order issued by the International Trade Commission in the most recent dispute between Qualcomm and Broadcom. The case involved alleged infringement of one of Broadcom's patents relating to chips for wireless communication, specifically directed toward power saving technology. Although Qualcomm was the only respondent in the proceeding, the ITC issued a limited exclusion order ("LEO") prohibiting downstream products from being imported if they contained the accused technology. On appeal, the Federal Circuit affirmed various findings of the ITC, including the finding that the patent was not invalid and that Qualcomm did not directly infringe the patent. However, the court vacated and remanded on the issue of induced infringement because the ITC applied the pre-DSU Medical standard for induced infringement. Also, the Federal Circuit held that the ITC exceeded its authority in issuing an LEO for downstream products against parties who are not brought as respondents in this case.More on Kyocera Wireless Corp. v. Int'l Trade Comm'n after the jump.Broadcom initially filed a complaint with the ITC alleging violation of 19 U.S.C. § 1337. Broadcom alleged that 13 of Qualcomm's chips and chipsets infringed three of its patents. The case was split into two separate proceedings, one for liability and one for remedies. The liability decision on two of the three patents was subject of a recent appeal (blogged here). The current appeal deals with infringement of U.S. Patent 6,714,983, directed to "modular, portable data processing terminal for use in communication network." At issue in the ITC hearing was claim language including the phrase "communication circuitry comprising of reduced power mode and being adapted to use a first wireless communication and a second wireless communication different from the first wireless communication to transmit data to access points, the communication circuitry reducing power by controlling the frequency of scanning for the access points . . ." The ITC construed the term "different" as "referring to two different methods of communication." Under this construction, the ITC held the patent not invalid, and that Qualcomm induced third parties to infringe the patent. The ITC used the old standard for the necessary intent to prove inducing infringement, namely that a general intent to cause the infringing acts was sufficient. As a result of these findings, the ITC issued an LEO that precluded the importation of devices incorporating the chips that enabled power saving features covered by the '983 patent. Qualcomm and various third party device manufacturers (who were only a part of the proceedings in the remedy phase) appealed.The Federal Circuit affirmed the ITC's claim construction, but ultimately vacated the holding of infringement and the LEO. On the issue of claim construction, the Federal Circuit noted that while the term "different" in the claim did not suggest any limitation on the degree of difference, but in looking at the claim language as a whole, relating to wireless communication, and the specification to determine what differences could be applicable, the court agreed with the ITC that "differences" referred to the method of communication. As a result of the narrow interpretation of the term "different," the Federal Circuit also held the patent not anticipated by three patents cited by Qualcomm in the proceedings.

The Federal Circuit then addressed Qualcomm's invalidity contentions in the context of a collection of technical specifications referred to as the Global System for Mobile Communications (GSM) standard. The ITC held the documents comprising the GSM standards were not printed publications because they were not "publicly available," and therefore held they could not invalidate the patent. The Federal Circuit disagreed, holding the GSM standard documents to be sufficiently disseminated to the public that "persons interested and ordinarily skilled in the subject matter" could locate it with reasonable diligence. Notwithstanding this fact, the court held the GSM standards could not anticipate because they were not a single reference under § 102, because they comprise "hundreds of individual specifications drafted by approximately ten different subgroups," and each stands as its own separate document. Accordingly, the GSM standards could not anticipate. Unfortunately for Qualcomm, it did not timely raise an obviousness defense before the ITC, so it was precluded from asserting the patent invalid as obvious, so the Federal Circuit affirmed the finding of no invalidity. The court then addressed the issue of infringement. The court had little trouble affirming the ITC's finding of no direct infringement by Qualcomm, as there was no evidence that Qualcomm itself used devices in a low power mode.On the issue of inducing infringement, the Federal Circuit held the ITC applied an improper standard for intent. After the ITC made its infringement findings, the Federal Circuit decided DSU Medical, where the court en banc clarified the intent required for inducing infringement. Because the ITC's determination was based on a lesser requirement for intent (namely general intent to cause the infringing acts) rather than a "specific intent to encourage another's infringement," the indirect infringement finding was in error. The court vacated and remanded for a redetermination under the proper standard. Finally, the Federal Circuit addressed the scope of the ITC's LEO. After numerous hearings, the ITC issued a LEO covering both Qualcomm's processor chips and any handheld wireless device that contain such chips that are import for sale after the date of the LEO. The issue on appeal was whether the ITC acted outside of its statutory authority in issuing an LEO excluding imports for parties not named in the original proceeding. The Federal Circuit held that the LEO may not extend beyond the named parties in the dispute (which was a strategic decision of Broadcom not include the various parties incorporating Qualcomm's chips into products). As a result, this issue was also vacated and remanded for the ITC to consider its enforcement options.To read the full decision in Kyocera Wireless Corp. v. Int'l Trade Comm'n, click here.


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