Speaker 1  0:00  
Good afternoon. Welcome to a comparative analysis of litigation in the International Trade Commission and District Court presented by Autumn. My name is Holly Lundgren. autumns online professional development manager and I'll be your staff host for today. All lines have been muted to ensure high quality audio, and today's session is being recorded. If you have a question for the speaker, we encourage you to use the q&a feature rather than the chat feature. If you have a technical question or comment, please do feel free to use the chat feature for that. Today's session may be eligible for CLE credit. Throughout the webinar, you will see pop up surveys that are simply asking for a yes or no answer. If you do not intend to apply for CLE credits, you may simply dismiss the poll by clicking on the X in the top right corner of the pop up window. If you do intend to apply for CLE credit, you must answer the question as it is answered. You'll have about 20 seconds to answer it once it pops up. For more information about CLE eligibility for the session, or what states have already pre approved this program, please contact me at h Lundgren at autumn dotnet. I'd like to briefly take a moment to acknowledge and thank autumns 2020, online professional development sponsors. We appreciate the ongoing support. And now I'll introduce today's speaker, Thomas L. Dustin is a partner in the IP litigation group of Marshall Gerstein and Borun LLP. For more than 30 years, he has been lead counsel for clients in patent infringement litigation, trade secret disputes, enforcement of non competition agreements, trademark and unfair competition actions and contract and negligence claims relating to technology failures. He is praised by clients and adversaries alike for both his creativity and tenacity as a trial. As a trial attorney. His experience includes injunction proceedings, trials, post grant proceedings, arbitrations, mediations, and appeals before judges juries, various appellate courts, and the Patent Trial and Appeal Board. Thomas received his JD from the University of California, Hastings College of Law, and his BA from Columbia University. So without any further ado, I'll go ahead and turn it over to our distinguished speaker. Welcome, Tom.

Speaker 2  2:22  
Thank you, Ollie. Appreciate it. And welcome to everyone online. Let me see if I can get this to work. And it will be off and running.

Speaker 2  2:42  
So how are you? We should be having the slides up right now. Yep, it

Unknown Speaker  2:46  
looks great, Tom. Okay, great.

Speaker 2  2:50  
All right. Good morning, everyone. As Holly mentioned, I'm going to be speaking on recent developments in the International Trade Commission and its use as an alternative or in conjunction with district court litigation, that has to do with patent infringement claims and other IP related allegations. And I'm at various points, I will take an opportunity to point out how the ITC may have particular application or importance for the tech transfer community. What I'm gonna be talking about is first off

Speaker 2  3:42  
forgot how to get the slides to move. There we go. Alright, so first, I'll talk a little bit about what the EITC is. I'll then address how an ITC investigation compares the district court litigation. I'll talk a bit about the timing, remedies and elements of an ITC 337 or 337 investigation. And then we have some statistics that show some comparison comparisons of the outcomes in the EITC versus the District Court. First of all, why is why is the it is it important particularly to tech the tech transfer community, the university community. In today's day and age, supply chains are global. products that incorporate IP are often produced outside the United States and imported into the US. IP protection therefore is sometimes difficult to extend into those foreign jurisdictions. And universities and research institutions have a powerful tool against those Types of infringing importations by means of the International Trade Commission. This is also particularly important I think for what would be broadly characterized as non practicing entities all of that sometimes has a pejorative ring to it, but in in the context of universities and research institutions. We are talking about IP generators innovators, who may not themselves practice the invention might therefore be in a poor position since the Supreme Court's 2006 decision in eBay versus merch exchange, to enforce their intellectual property by means of injunctions, which is often the method that gives a IP owner the greatest leverage in licensing negotiations, potential that an injunction may issue to prohibit the defendant from producing and selling infringing article. These importers who knock off IP belonging to universities and research institutions, have had the effect of undermining the licensing strategies and licensing programs of those institutions by devaluing the intellectual property by flooding the market with knock offs that a university or research institution might have difficulty prohibiting, other than through the EITC. Now in 1988, with this in mind, Congress amended section 337, which is the section that gives the ITC the authority to investigate unfair competition with respect to imports, that section was broadened to explicitly address universities and research institutions and to extend ITC protections to those sort of non commercial entities. And in fact, the ITC has been used by research and university universities to provide the kinds of leverage I'm talking about, by means of exclusion order that the ITC is empowered to issue when it finds a violation of US patent law. For example, more recently, the University of California has embarked on a campaign with respect to their Edison filament lights, their LED technology suing in the ITC, a number of domestic retailers such as Amazon, Walmart, Target, IKEA, Bed Bath and Beyond, but also targeting the overseas manufacturers or the companies that manufacture the products sold by those retailers and manufacture those products overseas, such as those products have to be imported across US borders, which is what gives you the opportunity to make use of the ITC proceedings. And so, universities and research institutions are already well on their way to making use of this relatively powerful instruments to gain leverage over those who would infringe their intellectual property. So, basically, the ITC is an administrative body within the executive branch of the US government was established as the US Tariff Commission all the way back in 1916, and change his name in 1974 to the EITC. And it addresses the impact of imports on us industries, and directs actions against unfair trade practices that include subsidies, dumping, as well as patent trademark, copyright infringement and trade secret misappropriation. The ITC derives its authority from the Tariff Act of 1930, empowering it to resolve these violations of section 337 that prohibits the importation or sale of important articles that would, among other things, infringe valid and enforceable US patents. Now, the ITC is not a judicial tribute tribunal. Like the US district courts, it's not an Article Three court as a consequence of decisions, did not have the same preclusive Or race judicata effect and subsequent proceedings in in district courts as a district court decision right. Now, the ITC itself consists of six commissioners, no more than three of whom They can be drawn from the same political party. The commissioners are appointed by the president confirmed by the Senate and have nine year terms that are staggered, to end 18 months apart. The chairman and vice chairman of the Commission themselves, commissioners serve for two years, and they have to switch parties. No, no, the same party cannot hold that position in two successive two year periods. Now, the Commission makes the initial decision whether or not the institute a 337 investigation, and they rely in doing so upon the recommendations received from government attorneys with the Office of unfair import investigations who review ITC complaints that determine their compliance with the requirements of the statute. And the ITC has ruled out the unfair competition, as I mentioned, that is encompassed within the jurisdiction of the ITC is broad goes beyond simply IP infringement. It covers all forms of IP infringement as well as trade secret misappropriation, false advertising, antitrust claims, FDA related issues surrounding the importation of unapproved drugs, dumping unfair subsidies, etc. So quite quite an extensive list of activity that the ITC addresses. But despite that breadth of ITC act, despite the breadth of the activity the ITC covers, there is a narrowness to the IC ITCs jurisdiction and that is they they have jurisdiction only over articles imported into the United States. In contrast, district court litigation can involve activity that is wholly internal to the US.

Speaker 2  12:12  
Now while importation is a prerequisite to a section 337 investigation, it's been liberally construed so importation of a single sample in a case has been deemed sufficient to invoke the jurisdiction of the ITC. And and in fact, importation in some circumstances may not even have been required to have actually occurred. A contract for the future importation of goods can sometimes suffice. But the miracle offer to sell for important the United States would not be enough. The imported articles Moreover, need not be recorded need not be intended for sale or resale in the United States. Articles that are imported solely for use and research clinical trials have been relied upon to institute section 337 investigations. Nor is it necessary that the importation in fact be occurring as of the date that the complaint with the ITC is filed. Import importation has ceased, the ITC may instigate an investigation if there is a likelihood that the importation might resume. Now, there's been some debate over the meaning of the statutes, reference to articles that are imported and whether those that definition of articles would extend to electronic transmissions, for example of software and communication signals into the US. And at one point in early decisions, there was a trend to treat those things as articles subject to ITC investigation. But more recently, the Federal Circuit has has dialed back that scope to more material things that are imported into the US.

Speaker 2  14:25  
Now we have a slide here that shows the subject matter or technologies that are have been involved in ITC actions over the years. And as you can see, the predominant technology or predominant product that that finds itself involved in ITC actions are computer and telecommunications products. That's followed by pharmaceuticals and medical devices and then consumer electronics products are the third most popular tech now oggi to find their way into ITC investigations. And then as you can see, there's a variety of other technologies that are also the subject of various ITC actions. And so the, the range of technologies involved in ITC proceedings is broad, but not surprisingly, it tends towards things that are manufactured in bulk or volume and are imported into the United States and that rely largely on foreign manufacturers.

Speaker 2  15:40  
All right, so let's talk a little bit about a comparison between the ITC a district court litigation and where where there are advantages to the ITC and where there may be disadvantages to the ITC. Let me skip down first to the element here trier of fact once an ITC investigation is instituted is conducted by an administrative law judge. Now it precedes much in the way that a case would proceed before a federal district court judge. But as as is probably obvious, there is no jury. And at the end of this, the Al J will issue a final initial determination of violation, which is provided to the Commission who may accept or rejected in whole or in part. Like the commission there are six al J's. But unlike the district courts, these ALG J's have specific experience in patent matters and in the relevant technologies, whereas judges in the district courts tend to be more generalists. And it's, it's more rare that a judge assigned to your pan case will have the same technology background and patent experience as an Al j in the ITC. One of the considerable advantages to the ITC proceeding is its speed. Set section 337. investigations in the ITC are comparatively fast concluding generally within 18 months, compared to two to three years that is often required for cases to reach trial in the District Court. Also, the jurisdictional requirements of the ITC are more generous than they may be in the District Court. Because the ITC proceeding is imagined as a case against the goods that are entering the United States. The jurisdiction that the ITC has is what's called in rim. district court litigation is against the party responsible for the importation or the party responsible for the infringement as a consequence for the district court to act it has to have personal jurisdiction over the defendant. And that can often be difficult when we're talking about foreign manufacturers who may not have any presence in the US and whose activities are entirely outside the borders of the United States. Gaining personal jurisdiction over such a party gaining Service of Process on such a party can often be exceedingly difficult. Those problems don't exist in an ITC action because because the action is against the goods, there is no service required or personal jurisdiction requirements with respect to the respondents in these matters. Discovery in ITC actions is, in contrast, a district court litigation very broad there are large numbers of interrogatory that are permitted. Limits on depositions tend to be higher than they are under the Federal Rules of Civil Procedure that govern district court actions. And in addition to having more opportunities to take discovery, the discovery places considerable burdens on particularly the respondents but certainly even the claimant themselves who has filed the IDC complaint. Because these actions move quickly. The rules require responses to these discovery requests and and more than just placeholder responses but full fulsome responses to discovery requests in as little as 10 days after they receive. That can be a considerable burden on both sides and an ITC proceeding. Particularly on the respondent who is probably unprepared for the ITC proceeding, the claimant has the opportunity to put all of their ducks in a row well in advance of filing the complaint. So these These requests as they come fast and furious will not be a surprise to them, but but to the respondent trying to play catch up, the short deadlines and these extensive requests can be quite challenging for them to respond to. Another thing about the discovery process that that should be mentioned is it puts a real premium on early identification of expert witnesses, much of the ITC trial, when it eventually occurs, will be devoted to issues of infringement and invalidity. And much of that will be coming in into evidence through experts. And because contentions in the like have to be developed very early on. And the petition as I note here, in the institution of the ITC proceeding requires a very detailed complaint, far more than the notice pleading that's allowed in the District Court. It's important that you have identified and involved experts in your action very early in the process. Unlike District Court litigations where those decisions may often be six 812 18 months out, there is no such luxury in an ITC proceeding. The vast majority of patent infringement litigation in the US is settled or disposed of prior to trial. It's actually estimated that less than 3% of patent cases ever reached verdict. But once instituted, virtually half of the ITC actions are eventually tried before and Al j. So, again, if if you pull the trigger on one of these things, you will need to be sure that you are prepared to carry it forward because the likelihood is that you will have to take it all the way to the end. Let me let me also stop here and mention another interplay between ITC actions and and in this instance, the Patent Trial and Appeal Board, as we all know, I PRs inter parties. Review proceedings have become very popular since the since they were established in 2013. Oftentimes, those actions in the district court context are initiated and then used to stay the district court litigation while the patent office addresses the validity of the patents. In an ITC proceeding, however, that general predisposition towards stays, does not exist. Because the ITC puts a premium on resolving these matters quickly, when it evaluates requests for stays of this type. It it generally, if ever, rarely enters a state of the ITC proceeding while the patent office considers the invalidity of the patent and so that that can be very important, because you will not have in the ITC, the luxury of derailing that proceeding if you're a defendant with a motion to stay as you would in a district court and so that obviously has certain benefits to the complainant in an ITC proceeding, which, which gives them you know, leverage perhaps to use the ITC proceeding to negotiate a resolution or license before having to reach the trial before the Al J. One thing I should also say, however, is more recently, the IGC has been giving greater consideration to P tab proceedings if they have already resulted in a final written decision of invalidity. So in other words, if if the ITC is being asked to address a violation with respect to patents that have already been declared invalid, by the patent office through an IPR the IDC is increasingly looking at those circumstances and deciding whether or not for example, if the ITC has already issued remedial remedial orders that exclude importation for example, they are looking at whether or not they should rescind those orders in light of the patent office's decision. Now, on institution, let's talk a bit about institution. As I mentioned, the ITC requires an onerous complaint that essentially sets forth all the details necessary Sorry to establish

Speaker 2  25:02  
your entitlement to the relief that you're seeking. Whereas in the district court, you can get away with a very bare bones notice pleading, although, admittedly, those rules are tightening but still in comparison, much less as required in the district court to state of cause of action. This front loads the costs of ITC actions compared to district court litigation, which is something always to consider when pursuing this. The burdens are somewhat offset by the amount of assistance that's available from government attorneys with the Office of unfair import investigations are able to review complaints before submission and provide guidance to the complainant, who is attempting to set forth what's required to initiate an investigation.

Speaker 2  25:56  
One thing that probably bears mentioned is claim construction in the process of an ITC action sometimes differs from what once experience has been in the district courts, particularly those district courts that have adopted patent local rules that set forth detailed procedures relating to the exchange of terms and then leading ultimately to a pre trial Markman hearing. In the ITC. Those decisions are made on an Al j by Al J basis. Each a LJ has their own guidelines in this regard. And in many instances, the Markman proceedings are folded into the trial itself, which presents some difficulties, some complexities for both the complainant and the respondent who need to prepare their cases. dependent, they need to anticipate, in other words that that a claim construction might be the one proposed by their opponent or the one that they proposed with no clear guidance of which construction, the court is going to adopt. One needs to sort of prepare almost two cases and be ready to address the claim limitations under either construction at the time that you try the case before the Al j. Now, I mentioned at the outset, remedies under the ITC, and the remedies under the ITC are limited, but powerful. No damages are recoverable in the ITC proceeding, which is, which is a clear contrast with district court proceedings. The ITC can issue general and limited exclusion orders which prevent goods from entering the United States. They can also issue cease and desist orders which are addressed to activity, which may have occurred in connection with products that have already reached United States and enter the United States but have now been found to be a violation of Section 337. But no damages are recoverable in an ITC action, and so if damages are important, the ITC will not suffice to provide you with that relief, although the exclusion orders can be leveraged into a negotiated settlement. If if that injunctive relief that the ITC affords is significant enough to the to the alleged infringer to warrant some substantial monetary arrangement. The public interest is also involved or wrapped up in ITC proceedings in ways that it is not in a district court proceeding. So, for example, the parties in an ITC action are not limited only to the complainant and the respondent. But arguably the public has a seat at that table, as well. And most often, that public element is represented by the staff attorneys of the of the Trade Commission who participate in the investigation and can file and advocate file papers and advocate positions that may favor the respondent or the complainant or neither. One example I'll give of where that became particularly significant was in the case Sony Corporation versus Fujifilm holdings. Back in 2016, Sony filed a complaint in the ITC challenging Fujis important ation of certain products under one of Sony's patents now, Fuji had challenged that patent in the patent office through an IPR, which they lost. So under the rules governing IPR practice, who would you would have been prohibited a stopped from asserting those same grounds of invalidity again, in the ITC. But in this particular instance, the ACLJ allowed arguments to be advanced on that those invalidity assertion assertions that had been rejected by the P tab were those arguments were not advanced by Fuji, but advanced by the Commission's staff attorneys. And the ACLJ concluded that while Fuji might have been stopped from advancing those unsuccessful arguments, again, the staff attorneys were not similarly a staff that the public interest attached to these proceedings and, and in part, the decision that the LJ ultimately rendered, that the patents were invalid was based on the same art combinations that had unsuccessfully been advanced by Fuji at the patent office.

Speaker 2  31:26  
Now, it's not a requirement that one choose to either pursue their action in the ITC or instead pursue it in the District Court. But one thing that should be kept in mind is that if one were to file in both the ITC and in the District Court, the ITC action would have preference and there is a section of the US Code 1659 Title 28. That mandates a stay of the district court action in favor of an ITC action where the issues are the same in both proceedings. Now, let's talk a little bit I emphasized previously the speed of the ITC action and the advantages of that early determination over the lengthier proceedings of a district court but let's talk a little bit about the specific timeline which we've laid out here. So, so initially, a complaint is filed. Public Interest requests are solicited, and the public interested parties are allowed to file statements with the EITC either in favor or against the institution of the investigation, primarily emphasizing the public impact the impact on the public, that an exclusion order might have. The relief that saw it might have on the on the public investigation is then instituted. Within 30 days of that institution, the HJ is given the opportunity to sever the investigation. If there are multiple patents and multiple products and maybe not perfectly overlapping respondents, there may be an opportunity for the Al J to divide the initial complaint into one or more actions. After the parties have had an opportunity to perform discovery, we reached the hearing stage about seven and nine months out and then fall following that post hearing filings. And then the ACLJ issues its decision roughly four months after the hearing. That decision is either one that recommends the institution of the investigation or or does not and that that decision goes to the full commission who reviews that decision and may adopt it, modify it, reverse it, and may do so in whole or in part. And then we're looking at maybe 14 to 16 months out. And if a violation is affirmed by the Commission. The Commission then forwards that recommend its recommendation to the President or his designee which in which has been for many years now the US trade representative who is delegated to act on the President's behalf with respect to recommendations by the Commission and the President has 60 days to Due to veto, essentially the Commission's recommendations, based on policy reasons that the Commission may not have addressed in its in its more narrow investigation regarding the existence of a violation. Now, the disapproval of the commission is by the president or His representative is fairly rare. It has happened during the Obama administration in an ITC proceeding between Apple and Samsung, that involved standard essential patents. The Commission's recommendation was vetoed by the President's representative based in part on the concern that the the alleged infringer had not been given an adequate opportunity to enter into fram negotiations with the owner of the patent, and that to exclude the products of the alleged infringer based upon the Commission's recommendation, would have provided holders of standards essential patents, an undue amount of leverage with respect to the negotiation of friend royalties. So what are the elements of an ITC actual obviously there's importation is a prerequisite. infringement is the foundation of the violation. But in addition to infringement, and the importation, the ITC has some particular requirements that you wouldn't find applicable in a district court litigation, for example, namely that the alleged violation has to concern a domestic industry. The ITC is concerned with protecting American industry. And the alleged violations have to somehow haven't be shown to have an impact on a domestic industry. And there's both a technical prong and a economic prong. And as I mentioned, the economic prom, more recently, back in 1988, was expanded to include folks who, like research institutions and universities invested in the development of technology, but maybe not as much in its commercialization. Those investments were now declared to be relevant to determining whether or not there was a sufficient economic component to the intellectual property that was being enforced to warrant the ITCs involvement. Now, I mean, there are the usual ways in which one goes about establishing this economic element significant investments in US plant equipment, employment, that explores the patented technology can can evidence the existence of a domestic industry, non manufacturing investments can also qualify technical support for call centers repair facilities in the US, for example, provided that those investments involve the exploitation of the patented technology, the investments need not be those of the owner so licensees can also their investments and their domestic activity, can be cited as the patent owner in support of this requirement of a domestic industry. Now, investments that are have to do however, with marketing or sales, or which are simply related to patent ownership, maintenance fees, etc. don't qualify. industries that are in the process of being established, but perhaps may not have been established just yet, can also qualify if they've made significant investments, licensing activities, can also be used to establish a domestic industry, however, needs to be said that you have to examine carefully what the nature of that licensing activity is. So for example, if if we're talking about licenses that are generally portfolio licenses that cover a broad range of patents and not simply the patent that is involved in this ticular ITC proceeding, then those licensing activities might not qualify because they lacked that necessary Nexus. Let's talk for a minute about the remedies that the ITC has available to it. There are two forms of exclusion orders. And then there is this separate category called the cease and desist order. And there's also temporary relief that is sometimes afforded prior to the Al J's determination that a violation exists through the trial that, as we saw, you know, was expected seven or eight months out. The two forms of exclusion orders, let me just briefly touch on those. The limited exclusion order is fairly straightforward. It is an order directed to the respondent in the ITC action and the specific products that were addressed by the A LJ who has determined that those products infringe upon the claimants intellectual property. That order excludes the importation of those items in the United States. A general exclusion order, in contrast

Speaker 2  41:23  
covers products of a particular design regardless who who, regardless of who may have manufactured them, or who may have sought their importation. So it allows a patent owner to address infringement by a large number of possible parties in a single investigation, even if those parties are not, in fact joined in the investigation itself. If they are making or importing the same product or products of similar design, the general exclusion order may be awarded to the claimant and serve to bar importation of those products, even though those respondents didn't have a seat at the table during the IBC. Proceeding. But there are requirements for that, obviously, since it's such a broad remedy available to patent owners, the patent owner must show a widespread I'm just gonna skip back for a second general exclusion order has two additional requirements, they must show a widespread, difficult to identify source of the products that are involved. And they have to show that a limited exclusion order would be inadequate to address the violation the abuse of the claimants intellectual property. Lastly, the cease and desist order. This order has application unlike the exclusion orders, which essentially apply at the borders of the United States. The cease and desist orders reach internally into the US, and they address conduct that may be occurring with regard to resellers of infringing articles that have passed through customs and are now in warehouses around the US ready to be sold to customers and shipped to them. ITC can enter orders that require the seizure require the parties holding those items to refrain from reselling them. Items that are in the US already can be addressed by a cease and desist order provided the Al j and the Commission agree that there's been a violation. Now, the number of these orders is not large. And as you can see, the general exclusion orders are far more rare. And they eliminate the exclusion orders that have been entered over the years.

Speaker 2  44:08  
Now, what's probably of particular importance to the research and university communities is this public interest element that enters into all ITC investigations. These institutions can oftentimes be third party submitters of public interest statements in connection with other investigations based upon their particular needs, for example, for materials that are coming from overseas that are critical to research and development that they they may be conducting. And so oftentimes, they are third party submitters of public interest statements. These public interest statements can affect not only the decision to institute an investigation, but it can also affect the remedies that are made available if an infringement is found, so for example, in a case not too long ago called certain microfluidic devices before the ITC BioRad laboratories, and Lawrence Livermore National Security LLC filed a complaint against a company called 10x. Genomics alleging infringement of their patents. The ACLJ concluded that the 10x genomic products infringed on these pads but in entering a limited exclusion order. In connection with that determination, they carved out an exception based upon the public interest statements that were submitted, that permitted certain research institutions to consider continue to receive importation of what were effectively research tools, provided that they were able to document a need to continue to receive these devices for current ongoing research projects for which the need cannot be met by alternatives. And the order directed that the that the respondent circulate a questionnaire to customers in the US, requiring those customers to complete that questionnaire and answer these questions about their need and the lack of alternatives to the to the products that had been found to infringe.

Speaker 2  47:02  
Now, as you could probably gather from that list of the number of exclusion orders limited in general that we put up on screen not too long ago, you will also see that the number of ITC proceedings pales in comparison to the number of district court cases or even for that matter, the number of P tab. IPR is in CPMs and have been filed over the years. district court litigation in the last several years has hovered between 30 504,000 cases per year, whereas the ITC, in contrast, is receiving only a handful of complaints each year. And, as I said, with roughly half of them reaching trial, we have even fewer actual decisions and ITC matters then than we have in district court cases.

Unknown Speaker  48:05  
We can talk a bit about comparative statistics as between ITC proceedings and District Court outcomes. On this slide, we have some data drawn from docket navigator that

Speaker 2  48:25  
shows the number of patent claims in district court proceedings that have been found infringed as compared to the number of claims that have not been found infringe in those proceedings. And as you can see, on a on the basis of the number of claims addressed by district courts, over these years, the overwhelming prevalence is or preference or strike that the overwhelming result trend in these cases is in favor of the infringer. Now, I should caution these these statistics are on a patent claim by patent claim basis. So for example, if in a particular case, there is a patent involving 20 claims and all 20 claims are found to be infringed. And then there is a case where there's two or three claims, which are in the patent, which are then not found to be infringed and the infringer in the second case prevailed and the the patent owner prevailed in the first case that has a tendency to skew these statistics, because these statistics, I think, we would all agree, tend to show a higher level of success by infringers in district court then, if we were looking at statistics that are based on on the entire case whether the infringer was able to display prove infringement as to every claim or whether the patent owner was able to claim infringement as to as to each one claim. But for an apples to apples comparison based on the way in which dock navigator breaks this down, we have these statistics against in the next slide, statistics from ITC proceedings, which as you can see, don't differ that markedly from the results achieved in district court proceedings, at least with respect to infringement. Now, how does this translate into actual cases in terms of how many cases are won by the complainants and ITC proceedings? And how many are won by the respondents? Well, roughly speaking from the stats that are provided on that question by the ITC itself, over the last few years from 2018 19, and through 2020, currently, the number of violations found in these cases has run about somewhere between 32 and 40 41% of the time, the ITC finds a violation, and in the remaining cases, it doesn't. So these numbers that we see on these charts are probably a little bit inflated in terms of the reality if we were looking at it on a case by case basis, but they're, the fact is that the view of the ITC relative to infringement in the view of the district courts relative to infringement, appears to be very comparable. That's true also of invalidity outcomes, again, on a claim by claim basis, we can see that, generally speaking, and the district court claims are found not invalid, more often than they are found invalid. And similar stats, similar trends hold in the IPC as well. Now, that's that's a little surprising, I guess, initially, because one would, one would expect that the number of patent claims invalidated in the district courts would be would, would be on the lower side, District Court. determinations of invalidity are judged by a clear and convincing evidence standard. That is, the challenger has to prove by clear and convincing evidence that the patent is invalid. And in the District Court. Many times those determinations are made by juries, which anecdotally, we perceive as favoring patent owners over patent challengers and invalidity determinations. However, the ITC does not have that, that jury component to it. These are decisions that are being made by the LGA who you might expect would be a bit more demanding in the determination of the validity of these patents. And I think perhaps the reason why the explanation for why the experience in the ITC regarding validity, and the experience in the district court is similar, perhaps has less to do with the trier of fact. And the differences in those two venues as it does with the fact that in the ITC, the respondent is often at a disadvantage, I think, in terms of mounting a challenge to the validity of the patent given the very short period of time, the respondent has to gather prior art, assemble experts and put together defenses of invalidity given the very accelerated timeframe of the ITC proceeding. So I think I think some of the reason why the ITC experiences similar outcomes in invalidity proceedings to those jury determinations is it's just that the respondent may find itself in a poor position to mount challenges and develop evidence through discovery, you know, sufficient sufficiently sufficiently quickly to put those cases to the to the HJ effectively. Just as a comparison statistics, which many of us are familiar with, looking at the P tabs, experience with invalidity determinations, you can see that in the P tab, patents are found invalid. Far more frequently, patent claims are found invalid far more frequently in the P tab than they are found to be patentable. And that really is as you can see from these two graphs, pretty much the exact reverse of the experiences that one has in either the district court or the ITC. So for that reason, the ITC has this advantage since it will not stop more more often than not, it will not stop for P tab proceedings so that you can get a determination out of the ITC well before the P tab might have acted on your claims, you can move things more quickly to a to a decision that has significant repercussions in connection with negotiations, etc, with your opponent in the ITC, then in the District Court, and so, you may be able to reach a point in the ITC, where you have that exclusion order in hand well, before the P tab has has had a chance to issue its final written decision putting you in a stronger position. Now, as I said earlier in the discussion, the ITC has begun to take more notice of final written decisions made by the P tab with respect to patents that have been before the ITC, even in connection with decisions that remedies that the ITC has already issued reconsidering those remedies, withdrawing those remedies or terminating those remedies in light of the subsequent decisions by the patent office. So I guess the lesson there is even if you're a respondent in the ITC, don't neglect the p tag even if it's not going to have the effect of immediately staying the ITC proceeding because a final written decision and validating the patents eventually could still be something that you could return to the ITC with, to to gain relief from an exclusion order that was previously entered. Looking at unenforceability as well, and the defense of unenforceability. I think, not much needs to be said here. It's a fairly infrequent or infrequently successful defense in the district courts, as you can see, only a small number of cases. And only a small number of claims has the claim been declared unenforceable as a result of inequitable conduct or otherwise. And a very similar low number of successful results have had been achieved in the EITC as well. So while it's an off pled defense, it's rarely successful. And that holds true both in the district court and in the EITC. So what are some practical tips, if you're before the ITC? Well, what is you should make sure that you use the mechanisms and the and the infrastructure available to you, particularly with the attorneys that the ITC makes available for a pre review of your complaint to make sure that it meets the requirements that will be necessary to initiate an investigation.

Speaker 2  58:15  
You should also pay attention to the ITC specific discovery objections. Parties are entitled to assert in response to the discovery particularly given that these discovery deadlines are very, very fast, you need to stay on top of your schedule. A claimant party filing a complaint the patent owner should do all that they can to prepare their case in advance of filing the complaint, because they will not get a lot of opportunity once the complaint is filed. To put that case together things will move very quickly. So, work in advance is critical. Every deadline is accelerated. So you need to plan ahead and anticipate and you need to be aware that the public will have a role in your proceeding will be able to weigh in and possibly affect the decision to institute

Speaker 2  59:24  
and the public aspect of that will also mean that there will be opportunities for disclosure of information that parties may deem confidential. So special attention needs to be paid to ensuring that that information remains confidential subject to an appropriate protective order.

Speaker 2  59:55  
So with that, I will be able to take anyone's question And I know that was a lot to cover in a short period of time. And if folks have specific questions about how ITC and district court proceedings interrelate, or how they're, how they compare in terms of the requirements or their outcomes, I'd be happy to address those.

Speaker 2  1:00:30  
I'll throw a couple out. Myself, if no one else has one. Um, one question would be in connection with research institutions or universities, we talked a bit about the need to meet the domestic industry requirement. That as we saw, that that is a requirement that can be met by evidence of research investment in research and development of the underlying technology. But sometimes the question rot arises, how recent and time does that investment need to be in relation to the filing of the ITC action? In other words, if if this was foundational research done five or 10 years ago, and it resulted in the patent, but the patent hasn't, since that time produced other types of commercial investment, or licensing activity that could be relied upon for the domestic industry requirement, then the issue might be that while there could have been substantial investment at one point in time, that substantial investment is too far removed, from the filing of the complaint to establish that there is a domestic industry being affected now. So that is one consideration that has to be addressed. If if we're talking about institutions that have not commercialized the product, or either themselves or through their licensees is if they intend to rely on research and development, you're going to want to ideally have that research and development fairly close in time, to the enforcement efforts. And you're going to want to be able to point to some aspect of the patent protection that continues to make a difference to your ongoing research and development activities or is important to research investments that your that you now may make making or maybe contemplating. Another question that gets raised to is great, I filed that ITC action, I've gone through the process I've gotten my exclusion order. What do I do with it? How do I how do I make use of an exclusion order? Well, that actually, the exclusion order is not necessarily the end of the process. In some respects, it's sort of the end of the beginning of the process, because at that point, you need to take that exclusion order to Customs and Border Patrol, folks, and you need to educate them on the scope of the order, provide them with information necessary for them to be able to enforce the order to be able to identify incoming shipments that are implicated by the order. And to to essentially make sure that they are in a position as well informed as they can be of the scope of the order and what their be what they're expected to do, how they're expected to enforce that order. You need to give them as much assistance and guidance as you possibly can. And even then, as the Customs and Border Patrol folks start to enforce this order disputes that arise over the order in its application. Now, we'll invoke a separate set of procedures that occur in the in the customs group, as opposed to things that will necessitate a return to the ITC for resolution so, so the enforcement of the of the exclusion order will now occur with the customs folks and that is going to be a whole nother kettle of fish that you're gonna have hoops that you will need to jump through in order to make sure that having this exclusion order in hand now actually mean something in terms of interdicting importation of these products.

Speaker 2  1:05:05  
Holly, I don't know if you're still on the line. But I think that is the end of the presentation and unless I missed any questions, which I haven't seen pop up on my screen I, I'm, although I'm happy to answer any that may have come your way they haven't made it my way. Yeah, it

Speaker 1  1:05:24  
looks like that was it for the questions. So I guess we can go ahead and wrap up. Did you have any parting comments or anything, Tom, before I close this out?

Speaker 2  1:05:32  
No, only that I think, I think serious consideration should be given to ICC proceedings because of their speed and particularly for institutions and may not be commercially exploiting their own inventions. It offers a way to navigate past the eBay decision that has severely restricted the availability of injunctions. And so it is sort of reinvigorated injunctions for folks that were after the eBay decision largely left out in the cold.

Speaker 1  1:06:13  
All right, thank you. So on behalf of autumn, I want to thank you, Tom, for this discussion. You had some really great information to share, and we appreciate it. I also want to thank all of you who attended today, we hope you found some good takeaway information here. Just a reminder, a recording of this webinar will be available for viewing within a few days of today's event. Access to this recording is included in your registration. And you can access that recording either through the autumn Learning Center or through the my Autumn section of the website, you can go ahead and visit that and also peruse any recordings from past webinars that you might have missed. If you will be claiming CLE. For this webinar, you'll need to log into the autumn Learning Center in order to complete your CLE survey and obtain your certificate. If you need any assistance claiming your CLE please feel free to reach out to me. When you close out of this zoom window, a pop up survey will come up please go ahead and fill that out. That really helps us plan future webinars. And with that, I'll go ahead and conclude our program for today. Thanks so much for joining us and enjoy the rest of your day.

Transcribed by https://otter.ai