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Federal Circuit Affirms Findings Of The International Trade Commission With Respect To Media Device Patent
02/13/2024On January 19, 2024, the United States Court of Appeals for the Federal Circuit (“CAFC”) issued an opinion affirming the final determination of the International Trade Commission (“ITC”), which found that: (i) intervenor Universal Electronics, Inc. (“Universal”) had ownership rights to assert the ’196 patent in the investigation, (ii) Universal satisfied the domestic industry requirement of 19 U.S.C. § 1337 (Section 337) and (iii) appellant Roku failed to establish the ’196 patent was obvious over prior art.
Under Section 337, a party may seek an exclusion order to prevent the importation of infringing goods into the United States. To file a complaint under the statute, one must show—inter alia—that it has an economic domestic industry in the United States, which can be established by showing “substantial investment in [a patent’s] exploitation, including engineering, research and development, or licensing.” This is also known as the economic prong of the domestic industry requirement.
Universal Electronics, Inc., owner of the ’196 patent, developed a set of technologies called “QuickSet,” which it claimed practice the teachings of the ’196 patent. Relying on QuickSet to satisfy the economic prong of the domestic industry requirement, Universal filed a complaint with the Commission against Roku for importing TV products that allegedly infringe the ’196 patent under Section 337.
At the ITC, the Commission affirmed the administrative judge’s ruling that Roku violated Section 337 by importing infringing articles and further found that (i) Universal had ownership rights to assert the ’196 patent, (ii) Universal satisfied the economic prong of the domestic industry requirement and (iii) the asserted claims were not invalid as obvious. On appeal, Roku raised several arguments.
Roku’s first appellate contention was that Universal did not have ownership rights to assert the ’196 patent in this investigation. Specifically, it argued that the Commission erred in ruling Universal had ownership rights because a 2004 agreement signed by Mr. Barnett, a Universal employee, was not a conveyance of present intellectual property rights. The CAFC was unconvinced, noting that the Commission’s determination was based on a separate 2012 agreement by which Mr. Barnett explicitly sold and assigned his “entire right, title, and interest” with respect to the invention described in the provisional application associated with the ’196 patent, including “all divisions and continuations thereof, including the subject-matter of any and all claims which may be obtained in every such patent.”
Regarding the domestic industry requirement, Roku argued that the Commission erred in finding that Universal satisfied the economic prong because it did not require Universal to allocate its domestic industry expenses to a specific domestic industry product. The CAFC disagreed, emphasizing that the standard is not to require expenditures in whole products themselves, but sufficient investment in the exploitation of the intellectual property. Specifically, the economic prong can be satisfied based on expenditures directed to a subset of a product if the patent at issue only involves that subset. Here, since there was no dispute that the intellectual property at issue is practiced by QuickSet and its technologies—which are a subset of the Samsung TVs that constituted Universal’s domestic industry products—the CAFC affirmed the Commission’s decision.
With respect to obviousness, Roku argued, inter alia, that the Commission erred in finding that Roku failed to prove that the combination of prior art references Chardon and Mishra discloses claim limitation 1[e] of the ’196 patent. The CAFC found that Roku’s briefing failed to directly address or dispute any of the Commission’s findings, respecting the prior art’s failure to disclose limitation 1[e]. The CAFC also rejected Roku’s challenge to Universal’s evidence of secondary considerations. Specifically, the CAFC rejected Roku’s assertion that news articles relied on by Universal lacked a nexus with the claimed invention merely because they discuss certain features in addition to Quickset.
Finding Roku’s arguments unpersuasive, the CAFC affirmed the Commission’s ruling on all three contentions.
