The FTC proposed using its 6(b) authority to study the business methods of patent assertion entities (PAEs), said Commissioner Maureen Ohlhausen on Friday. The proposed PAE study, on which the agency will accept public comments for the next 60 days, would ask 25 of the entities to provide information on their corporate legal structure, the types of patents they hold and how they assert their patents. The FTC aims to “develop a better understanding of how [PAEs] impact innovation and competition,” it said in a Friday news release (http://1.usa.gov/1bMInLI).
Court of International Trade activity
GENEVA -- Talks on introducing a continuous timescale to stem the costly and error-prone process of inserting leap seconds are widening beyond the technical community in the hope of finding an acceptable solution before the 2015 World Radiocommunication Conference (WRC-15), which will decide on the matter, participants said during a two-day workshop held by the ITU and the International Bureau of Weights and Measures. The frequency and complexity of inserting leap seconds is expected to rise in the future, participants said. Currently a leap second is inserted about once every 18 months. The potential leapsecond pitfalls also appear bigger as communications and other systems grow in complexity, they said.
It would be “great” to abolish the U.S. International Trade Commission, curb ITC’s use of import injunctive power or remove the agency from the patent infringement process, said William Watson, a trade policy analyst with Cato’s Stiefel Center for Trade Policy Studies. Another “modest possibility,” he said, is to require that decisions whether infringement has occurred be made by a court, but then allow a victorious plaintiff to seek an import ban from the ITC. That proposal was considered by the U.S. Trade Representative decades ago but rejected by Congress, wrote Watson in a blog post Monday (http://bit.ly/17U5VZX). “But if federal courts are making infringement determinations, why not just give those courts the power to issue import bans?” The “most common argument in favor of ITC patent litigation is that the agency is quick and effective at making infringement determinations,” he continued. “Without that role, is there really anything left for the ITC?” Watson said it’s “quite likely,” given the Supreme Court’s clear warning regarding overuse of injunctions in patent infringement cases, that there will be an attempt through regulation or statute to create more precise rules for determining the basis for import bans in patent infringement cases. The White House also has said the ITC should follow the same standard as federal courts before issuing an import ban. A commission spokeswoman declined to comment on Watson’s blog post. “Maybe the trouble caused by the ITC would be worthwhile if the agency also provided some legitimate benefit, but it doesn’t,” Watson said: “No other country on earth has a specialized patent court for imports,” and “ITC import bans were condemned decades ago as inconsistent with international trade rules. Patent policy is complicated enough without the ITC’s purely disruptive influence.”
The International Trade Commission said it decided to review the final initial decision of the presiding administrative law judge that found no violation of Section 337 of the Tariff Act of 1930 in investigation No. 337-TA-800, involving wireless devices with 3G capabilities and components thereof. The ITC began the investigation Aug. 31, 2011, based on a complaint filed by InterDigital Communications alleging violations of the act in the import and sale of wireless devices with 3G capabilities and components. The gear allegedly infringed U.S. Patent Nos. 7,349,540 (terminated from the investigation); 7,502,406; 7,536,013; 7,616,970; 7,706,332; 7,706,830; and 7,970,127. Named respondents included Huawei Technologies, Nokia and ZTE. Later-added respondents included LG Electronics. On June 28, the ALJ issued his final initial decision, finding no violation by respondents, saying the accused products don’t infringe most of the various patents. The ALJ, however, said the respondents failed to establish by clear and convincing evidence that the asserted claims of the ‘830, ‘406 or ‘332 patents were invalid in light of the cited prior art references. The ALJ also said they failed to prove they hold licenses under the asserted patents and failed to prevail on their equitable/fair, reasonable and non-discriminatory defenses. On July 15, InterDigital filed a petition for review of the initial decision, as did the commission investigative attorney and respondents. In connection with its review, the ITC is particularly interested in responses to the following question, it said in a notice to appear in Tuesday’s Federal Register: “Discuss, in light of the statutory language, legislative history, the Commission’s prior decisions, and relevant court decisions ... whether establishing a domestic industry based on licensing under 19 U.S.C. 1337 (a)(3)(C) requires proof of “articles protected by the patent.” Written submissions on the issue are due Sept. 27 and are limited to 15 pages, said the notice (http://bit.ly/1akA8TU). Replies are due by Oct. 4, and are limited to 10 pages.
The American Bar Association released an expanded antitrust handbook focusing on the telecom industry, it said Wednesday. It explores the “fundamental economic underpinnings of communications networks that make substantive analysis of antitrust issues in this sector unique and challenging,” the association said. It also examines mergers, joint ventures and restraint of trade as applied to the telecom industry. Consumer protection and net neutrality are also covered. The book sells for $199 (http://bit.ly/153rfd6). “Monopolization and immunity issues have become particularly challenging for the telecom antitrust plaintiff following the Supreme Court’s decision in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko,” said an ABA summary of the book. “These issues, and their evolution since the 2004 Trinko decision are dealt with extensively” in the chapters on monopolization and immunity, the summary said. In Trinko, the U.S. Supreme Court found that an ILEC’s failure to share its network with competitors does not constitute a Sherman Act antitrust violation. A chapter on international issues focuses on regulatory and antitrust developments in Canada and the EU. An appendix contains a “comprehensive and understandable discussion” of the net neutrality debate, the summary said.
The White House has until early October to decide whether to veto a U.S. International Trade Commission exclusion order that would ban the import of certain Samsung mobile devices because they violated two Apple patents: U.S. Patent Nos. 7,479,949 and 7,912,501 (CD Aug 15 p10). The exclusion order against Samsung is the latest episode in a yearslong series of legal battles at the ITC and federal courts between the top smartphone manufacturers as each seeks to gain market share. Patent attorneys and industry experts told us court-ordered sales bans typically have only a limited effect on the wireless carriers that have deals with the manufacturers to provide mobile devices to their subscribers.
The U.S. International Trade Commission issued an injunction after our deadline Friday on Samsung mobile devices that violated two Apple patents. The full details of the ban, which will take place within 60 days of Friday’s ruling, were not yet available. The ITC vote followed a hearing earlier Friday at the Court of Appeals for the Federal Circuit. There, Apple told a three-judge panel that upholding a lower court’s decision not to ban 26 Samsung mobile devices a San Jose federal jury found last year violated six Apple patents would be a “fundamental change” to U.S. patent law. Apple also faced a hearing at the U.S. District Court, Manhattan, in connection with the ruling last month that Apple violated antitrust laws by conspiring with publishers to “eliminate retail competition and raise the prices for e-books."
The U.S. Trade Representative’s (USTR) decision to overturn an International Trade Commission ruling this weekend surprised the patent litigation community, members of which told us the decision could have substantial implications for cases on standard essential patents (SEPs) at the ITC. But lawyers told us the case was unlikely to have a major impact on the bulk of the ITC’s caseload, or on its larger role in patent litigation. They said the ban would likewise not impact two connected patent disputes between Apple and Samsung that are set to advance Friday. Industry analysts told us the USTR decision would create more uncertainty in the industry, but wouldn’t overwhelmingly affect any one company’s business model.
The White House directed the departments of Commerce, Homeland Security (DHS) and Treasury Tuesday to publish reports they had submitted to the White House in June on the feasibility of incentives to encourage industry adoption of cybersecurity practices, including the Cybersecurity Framework being developed by the National Institute of Standards and Technology (NIST). DHS’s recommendations track with the results of a preliminary study of cybersecurity incentives the department conducted in late May (CD July 22 p10).
Rovi said it restarted patent licensing discussions with Netflix after an International Trade Commission administrative law judge ruled the video streaming service didn’t violate one of four patents at the heart of a 2012 case. But Rovi is prepared to take the case to a federal trial, said CEO Thomas Carson on an earnings call.