The US Court of Appeals for the Federal Circuit affirmed a US International Trade Commission (Commission) decision that found no violation of Section 337 due to noninfringement. The Court disagreed with the Commission that the use of present-tense claim terms required actual operation to be shown to prove infringement, but nevertheless affirmed the Commission’s finding because the patentee failed to establish that the accused products were capable of carrying out the claimed functionality. INVT SPE LLC v. ITC, Case No. 20-1903 (Fed. Cir. Aug. 31, 2022) (Newman, Taranto, Chen, JJ.)

In 2018, INVT filed a complaint at the Commission alleging a Section 337 violation by various cell phone companies. INVT asserted that five of its patents were infringed by the 3G and LTE networking standards used by mobile devices (such as cell phones) to communicate with base stations (such as cell phone towers). INVT withdrew two of the asserted patents during the course of the investigation, and the Administrative Law Judge (ALJ) issued an initial determination holding that there was no Section 337 violation because none of the three remaining patents were infringed. The Commission did not disturb that decision on review, and INVT appealed on two of the three asserted patents in June 2020.

Briefing during the appeal was extended several times, and as a result, oral argument did not occur until November 2021. The Federal Circuit then asked for supplemental briefing regarding whether there could be any relief on one of the patents scheduled to expire in March 2022. The Court ultimately issued its decision at the end of August 2022, more than two years after the appeal was filed.

In its decision, the Federal Circuit first held that the appeal was moot as to the expired patent. For the remaining patent, the dispute over infringement resolved to the question of whether the claims required actual operation or could instead be met by mere capability. On that point, the Court reversed the ALJ’s determination that the claims required actual operation. According to the Court, the present-tense claim language used (i.e., “a data obtaining section that demodulates and decodes”) was not significantly different from the sort that is usually interpreted to merely require capability (e.g., “for demodulating and decoding”). But the Court then held that the actual operation of the base stations was relevant to determining whether the accused mobile devices were capable of performing one of the particular claimed functions. The Court thus affirmed the finding of no infringement because INVT had failed to show that the base stations actually operated in a way that would allow the mobile devices to be capable of carrying out the claimed functionality.

Alexander Ott appeared for respondent ZTE at the Commission in this matter.

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