Keeping Up With The ITC

Tuesday, September 23, 2014 - 09:07

The Editor interviews Michael J. McKeon, a Principal at Fish & Richardson in Washington, DC about his active patent litigation practice before the International Trade Commission (ITC) and emerging trends at this popular forum that companies need to know about. 

Editor: You’ve been litigating at the ITC since the early-90s and have handled over 30 cases, which is a staggering number. How has the forum changed over the years, and do you think its popularity will continue to grow?

McKeon: When I started litigating cases in the ITC there were under 10 complaints filed each year with just two judges handling them. In 2011, filings at the ITC peaked with a record 69 complaints filed with five judges handling them. The forum also used to be uniquely American – in the early years, you would only find U.S. companies filing complaints there – but that has all changed. Some years I’ve seen over 30 percent of the complaints filed by foreign-based companies, and it is not uncommon to see two foreign companies litigating against one another in the ITC.

The forum has become so popular because it’s fast and furious, and you can get powerful relief in about 18 months, which is nearly impossible in district court. The world’s most contentious patent disputes usually have components that are litigated in the ITC, and I expect this trend to continue well into the future.

Editor: What is the most challenging ITC case you have worked on recently, and what made it challenging?

McKeon: Many of the cases I handle involve mobile device technologies – cases that have proliferated in recent years. All of my ITC cases are challenging because there is typically so much at stake, and we must have perfect coordination and execution in these oftentimes complex, multi-forum fights. A case I handled recently for Samsung against Ericsson is a good example of that. When a client has billions of dollars of commerce at risk, I can tell you there are many sleepless nights.

Editor: What are some of the biggest “hot button” issues at the ITC right now?

McKeon: One issue that continues to evolve is the statutory requirement of domestic industry. Generally speaking, section 337 is not available to mere importers of products, and if you just own a patent without any domestic activities you cannot pursue a section 337 action. Although the language of the statue reflecting the domestic industry requirement has been the same since 1988, it is only recently getting a lot of attention.

What’s behind this increased interest in the domestic industry requirement? First, with more foreign-based companies filing complaints in the ITC, the boundaries are being pushed regarding the scope and extent of activities that constitute domestic industry. Second, more and more non-practicing entities (NPEs) are relying on licensing activities to satisfy the domestic industry requirement section 337. This raises the question of where the line is for satisfying the domestic industry requirement – is an office with two guys creating claim charts and PowerPoint presentations enough? The Commission and the Federal Circuit are trying to figure this all out, and there are varying viewpoints.

Editor: Last year, the White House issued an historic veto of an ITC exclusion order on products found to infringe a standard essential patent. How has this impacted these types of cases at the ITC, and are there still ways that patent owners can seek an injunction with respect to standard essential patents that are under a FRAND commitment?

McKeon: That really was quite historic. The last time that happened Ronald Reagan was President, and he disapproved an exclusion order obtained by Texas Instruments against Samsung relating to DRAMs. Last year, an exclusion order obtained by Samsung against Apple relating to wireless technology was disapproved. Ironically Samsung has been on both sides of this issue.

The presidential veto is not binding authority on the ITC per se. Technically the ITC could continue to consider cases involving standard essential patents. But as a practical matter, the veto was the death knell to ITC cases involving patents that are subject to a FRAND commitment. That means the district court will be the only avenue for relief for holders of standard essential patents, and there will always be challenges to obtaining injunctive relief for patents in which an owner has committed to a standard body to license under fair, reasonable and nondiscriminatory terms.

Editor: The government and courts are increasingly trying to reign in the growing number of patent cases brought by NPEs. How are these NPEs faring at the ITC, and what is the ITC doing to reduce NPE litigation?

McKeon: Let me just say that I worry about the assault on patents that we are seeing. We need to be careful on how far we go in balancing the interest in a robust patent system that undeniably is good for innovation with frivolous lawsuits that are nothing more than money grabs having little to do with protecting investment and encouraging innovation. Whenever politicians get involved with “fixes,” that really worries me. These things always have unintended consequences.

Generally speaking, the ITC has been dealing with this issue very well. As I noted earlier, one barrier for NPEs is the domestic industry requirement, and the ITC is putting these NPEs to their proofs. More established NPEs like InterDigital and Rambus have been generally OK getting through this. The lesser-known NPEs will continue to be put to the test, but the ITC has a lot of flexibility under the governing standards, and there will always be a fact-intensive inquiry. But beyond the domestic industry issues, if NPEs bring dubious claims of infringement in the ITC, it will not end well for them. The ITC is well-equipped at ferreting those issues out, which means at least some NPEs will continue to struggle at the ITC since it is not a friendly forum for weak cases.

Editor: The ITC has evolved a lot over the years in its approach to injunctive-type relief against infringing products, including “downstream” products. How does this continue to play out at the ITC?

McKeon: I played a part in the evolution of the law with respect to downstream products. I represented LG Electronics, which was caught up in the fight between Broadcom and Qualcomm. The exclusion order issued by the Commission in that case was a doozey. The impact of the Kyocera decision is certainly seen today. So any time we are dealing with cases that involve a component that is used in a larger product, there will always be parties named in the complaint that are customers of the main target. The only reason these parties are named is to ensure that the exclusion remedy will be effective. The customers are collateral damage. It is not uncommon to see a dozen or more respondents in these types of ITC cases, and this isn’t going to change anytime soon.  

Editor: Many ITC cases are brought as part of multiple concurrent cases involving the same parties. How do you manage these very complex cases, and why is the ITC component often so important?

McKeon: I often handle cases that involve multiple fronts, not only within the ITC but also in district court and even in courts in other countries. This requires close coordination of the teams to be sure we are taking consistent positions across all cases and we are maximizing pressure against our adversary. Fish is well equipped to handle this type of battle, but we also work well with other firms to get all this done.

Editor: You developed and teach a class at George Washington University Law School with ITC Judge Theodore R. Essex that is the first law school class in the country dedicated to Section 337 cases at the ITC. Is there a lot of interest in the class, and do you think it might be replicated at other law schools in the country, given the popularity of the ITC?

McKeon: I am so thrilled about the ITC class. It’s an incredible opportunity to give back and help shape the next generation of ITC lawyers. The class is very popular with about 25 to 50 students taking the course every year. Judge Essex and I have a blast teaching it. There was no curriculum or text book. We created the course from scratch. It was very important to me not to have just a CLE on ITC practice. I wanted a course that really got into the historical origins of section 337 going back to WWI, and allowed us to dive into issues relating to the scope and authority of the ITC over IP cases. We make it very interesting and really challenge the students to think about the statute and the policy issues relating to enforcement of IP in the ITC. I understand that George Mason University recently started an ITC course, and I hope other schools will follow. The interest is certainly there.  

Editor: You’ve been named a “Visionary” by the National Law Journal; tell us your vision on what the ITC will look like five years from now? Ten years?

McKeon: I worked on my first ITC case in 1993. The world, and the work at the ITC, has changed dramatically since then. Five years from now, use of the ITC by entities from all over the world will continue to grow. We will also continue to see fluctuations in the number of ITC cases filed, but the growth trend will continue. We are not going back to the previous decades of little action at the ITC. There is no question that the ITC will remain a go-to forum for resolving patent disputes. The high-tech industry in particular will remain very active, but the ITC will also be an important place to adjudicate IP disputes as new technologies and industries develop. The future is definitely bright for the ITC, and I am truly humbled and honored to be a part of the ITC’s ongoing growth and evolution.

 

Please email the interviewee at mckeon@fr.com with questions about this interview.