Former ITC Judge Brings Wealth Of Experience To Private Practice

Thursday, September 1, 2011 - 01:00
Carl C. Charneski

Carl C. Charneski

The Editor interviews Hon. Carl C. Charneski , Chair of the ITC practice at Brinks Hofer Gilson & Lione.

Editor: Congratulations on joining Brinks Hofer Gilson & Lione (Brinks) in its U.S. International Trade Commission (ITC) practice. Please tell us about your background and experience.

Charneski: Before joining Brinks, I was an ITC judge for four and a half years, though I often refer to this experience in dog years - closer to eight years of practical experience - because ITC work is 24/7. Prior to that, I was an EPA judge for 12 years, and before that I did trial and appellate work for the Department of Labor, with a focus on occupational safety and health. Overall, I spent more than 34 years with the federal government before moving over to private practice.

Editor: Why is the ITC the venue of choice for companies pursuing intellectual property challenges?

Charneski: The prevailing reasons are the speed of ITC proceedings and the experience of ITC judges and the commission in handling intellectual property matters. For example, nine or ten months after the commission institutes a notice of investigation, the trial will begin, which means that all discovery, expert reports and motions practice will have been completed. The judge reaches a decision within another two months, and four months after that, the commission reaches its decision. Thus, it takes roughly 16-18 months to get a final answer, which offers great certainty. Speed is especially important in the technological areas, where products and devices change so rapidly.

Editor: What are the key litigation strategies for ITC matters? Does it help to have your insider's perspective?

Charneski: The strategies I valued as an ITC judge have not changed since moving to Brinks, but my experience on the bench does help me stay focused on the most effective game plan. For example, from a judge's perspective, a key strategy is intellectual honesty. Given that time is always of the essence, a judge appreciates being able to trust that parties will aggressively pursue relevant arguments without stretching this process to the point of being frivolous. If parties can capture the judge's attention this way, then the judge considers it time well spent to pursue consideration of those arguments.

Focus is another key litigation strategy. Parties should try only the issues needed to achieve the client's goal and avoid unprofessional or distracting claims of mistreatment by the other side. All issues presented should articulate the basis for either your complaint or your defenses.

On the private side, communication is a critical strategy, both in understanding the client's goal and in identifying the critical issues for your argument. This strategy respects the judge's concern regarding intellectual honesty and enables you to present your case properly and clearly. Another key item to discuss is your client's financial resources. ITC proceedings can be very expensive; thus, particularly during the discovery phase, it is important to stay focused and avoid needless expense for unnecessary or ineffective discovery paths.

In the end, these litigation strategies are surprisingly fundamental. The key for counsel is to stick to a basic plan - meeting the client's needs and the judge's expectations - even during the heat of an ITC battle.

Editor: What remedies are available from the ITC in Section 337 investigations?

Charneski: A general exclusion order bars the universe of infringing products from entering into the U.S., and it is difficult to get. The more typical relief is a limited exclusion order, which targets the infringing products of named respondents in the proceedings. In addition, a successful complainant may obtain a cease-and-desist order, usually directed toward commercially significant inventories of infringing products already in the U.S.

To obtain a general exclusion order, the complainant must show that a limited exclusion order would not provide adequate relief, that it can be circumvented, that there is a pattern of violation and that it is difficult to identify the infringing parties. Because a general exclusion order is so extensive, the Federal Circuit has noted in the Kyocera decision that there are heightened requirements for a general exclusion order; thus, most parties seek limited exclusion orders with related cease-and-desist orders.

Editor: Apparently the Kyocera decision had quite an impact on the ITC administrative judges.

Charenski: Kyocera affirmed that general exclusion orders are not for the asking, and it was a good reminder by the Federal Circuit as to the difference between limited and general exclusion orders. Kyocera identified a high evidentiary bar for obtaining this very powerful remedy and, since then, I heard requests almost exclusively for limited exclusion orders.

There was one default proceeding, called the Hair Irons case, in which all the respondents defaulted. The complainant presented substantial evidence in pursuit of a general exclusion order. The commission followed my recommendation and ultimately issued the requested order. Thus, Kyocera didn't signal the end of general exclusion orders, but it did send the message that you better have the evidence if you want to get one.

Editor: How are these orders enforced?

Charneski: They are enforced by the U.S. Customs and Border Protection (Customs). When the commission issues a limited exclusion order, for example, it notifies Customs as to the infringing products, and then Customs prevents their entry into the U.S. Under certain circumstances, parties can request a modification of the exclusion order. They may ask for an advisory opinion on items they designed around the devices or products that are covered by the exclusion order, or they may explain to Customs why their products don't fall within the exclusion order.

After the commission issues a final decision regarding the exclusion orders, there can be ancillary proceedings - a little give and take between the parties - as to whether products that respondents seek to import actually fall within the proscription of the exclusion order.

Editor: Are these orders issued by the commission itself or by the hearing judge?

Charneski: Within ten days of a judge's initial determination regarding infringement matters, the judge will recommend remedies to the commission - whether it should issue a general exclusion order, a limited exclusion order and/or a cease-and-desist order - including discussion of justification and citation to the record evidence. The commission actually issues the remedy and informs Customs as to the scope of its order.

Editor: And of course the commission's ruling can be appealed to the Federal Circuit Court.

Charneski: That is right. Given the high value of these cases, commission rulings very often are appealed to the Federal Circuit.

Editor: Can you give us a brief outline of your typical case?

Charneski: A typical ITC case involves patents. During my tenure, I handled one or two trademark cases, one trade secrets case and the rest were patent cases. A typical patent case involves an ever-increasing number of respondents, patents and claims, all of which need to be construed. Both the complainant and the respondent are conducting extensive discovery regarding products, facts and expert witnesses. Expert witness reports relate to the art, claim construction and the technical and economic prongs involved. The parties are engaged in a great flurry of complex and detailed discovery activity over a very condensed period of time - 10 weeks at most.

The judge's role in this typical case is to set and enforce a timetable, narrow the issues between the parties and moderate common discovery and procedural disagreements - often resorting to finger-pointing. The judge monitors the case, issuing orders, holding conference calls and pre-hearing conferences, keeping the parties focused on the patents and claims that are really important and, finally, ensuring the case is tried fairly.

Then, the judge will review roughly 3,000 pages of transcript, several hundred pages of deposition, hundreds if not thousands of exhibits and 500-600 pages of briefing. This is a typical patent case - it is a complex process that begins with the commission's notice of investigation and ends with the hearing. After all this, the judge has six weeks to issue a decision while simultaneously shepherding other cases toward trial and ruling on other discovery matters.

Editor: Is eDiscovery responsible for there being so much more documentation in patent cases?

Charneski: That may be so; however, good lawyers will always get the discovery they need, regardless of its format. Attorneys can really help their clients and ITC judges by adhering to litigation strategies I mentioned above, specifically by limiting discovery only to items needed to prove the client's case without redundancy. Some patent cases are so massive they can take on a life of their own; thus, it is important to stay focused on the most efficient way to prove your case. Sometimes less is better.

Editor: Are more foreign companies filing matters before the ITC?

Charneski: My general sense is yes, though I have not done a study. To provide a snapshot example, I printed out the first page of the commission's August 11, 2011 docket, and 10 of the 27 cases have foreign complainants.

Editor: Are certain technologies more likely to be the subject of ITC patent disputes?

Charneski: I've heard at bar conferences that attorneys for pharmaceutical matters feel that the district court is better suited for their type of technology or science, so they tend to stay away from the ITC. The commission sees many cases involving smart phones, computer science technology and electronics; for example, the last five commission investigations involved (1) electronic digital media devices, (2) video analytic software systems components, (3) electronic devices including wireless communication devices, (4) flat panel display devices and products, and (5) static random access memories and products. Technologies within ten recent investigations include integrated circuits, chip sets, digital televisions and GPS navigation products.

The prevailing opinion at bar conferences I have attended is that the ITC is the best alternative for disputes surrounding technologies that are constantly evolving because speed is of the essence. As always, the courts lag behind science to a certain degree, but ITC is becoming so popular that it runs the risk - as with the rocket docket districts - that its popularity may become the weight that slows it down.

Editor: What are some of the judicial standards used in high-tech IP cases?

Charneski: In ITC patent cases, the claim language governs, and every case invariably boils down to claim construction. Counsel may elect to draw upon industry standards to make an argument. In digital television and DVD cases I have handled, various industry standards were used by counsel to help develop the record.

Editor: Can you please discuss any matters involving green technologies?

Charneski: I had a major case involving wind turbines, in which the complainant was GE and the respondent was Mitsubishi. The commission reversed my original holding in favor of GE, finding there was no patent infringement, and the matter is still pending before the Federal Circuit. An intriguing aspect of this case was the public comment phase, which occurs when the commission takes a matter on review. There was considerable comment from various associations, entities and even members of Congress citing the significance of that investigation. The attorneys in the Federal Circuit case are among the best appellate litigators, and they presented excellent oral arguments. I am very interested to see how the Federal Circuit resolves this matter.

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