ITC Shines Light on DI: Complainant Can’t Aggregate Investments Across Patents, Prongs | McDermott Will & Emery
Addressing a determination by its chief administrative law judge (CALJ) finding a violation of § 337, the US International Trade Commission reversed and held that the complainant had not satisfied the economic prong of the domestic industry (DI) requirement by aggregating its investment across multiple asserted patents. Certain Replacement Automotive Lamps (II), Case No. 337-TA-1292 (USITC Mar. 22, 2024).
In late 2021, Hyundai filed a complaint seeking an investigation under 19 U.S.C. § 337 based on alleged infringement of 21 design patents, each covering a different automotive headlamp or taillamp. In response, two of the proposed respondents filed a request seeking early disposition of the economic prong of the domestic industry under the Commission’s 100-day program. Hyundai filed a response opposing the 100-day program request based on the complexity of the issues. The Commission instituted the investigation and denied the 100-day program request, but when setting the procedural schedule, the CALJ scheduled an early evidentiary hearing on the economic prong of the domestic industry pursuant to the Commission’s pilot program for interim initial determinations. Following that initial hearing, the CALJ issued an interim initial determination finding that Hyundai had satisfied the economic prong of the domestic industry requirement. After the full evidentiary hearing, the CALJ issued a final initial determination finding a violation of § 337 by the respondents based on infringement of all asserted patents. The Commission decided to review both the initial and final determinations.
On review, the Commission reversed the finding that the complainant had satisfied the economic prong of the domestic industry requirement. As the Commission explained, where DI products do not have overlapping protection across common asserted patents, a complainant must treat each product as requiring a separate DI showing. The Commission cannot aggregate investments in articles covered by one patent with investments in articles only covered by a different patent. Here, because each DI product practiced only one of the asserted design patents, to satisfy the economic prong Hyundai was required to demonstrate that the investments in each product were independently significant. The Commission also held that investments in plant and equipment (§ 1337(a)(3)(A)) cannot be combined with employment of labor or capital (§ 1337(a)(3)(B)) and concluded that Hyundai had mistakenly aggregated its investments from both prongs.
Commissioner Schmidtlein filed an opinion concurring with the outcome but declining to join the majority opinion based on her view that it went beyond what was necessary to dispose of the investigation.
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