administrative law judge/ALJ Archives

Section 337 Doesn’t Require Article III Standing for Claimant but Claimant Must Be “Patentee”

Addressing an initial determination by an administrative law judge (ALJ) granting summary determination and terminating a Section 337 investigation for lack of Article III standing, the US International Trade Commission reversed and held that Section 337 does not require claimants to have Article III standing. Certain Active Matrix Organic Light-Emitting Diode Display Panels and Modules for Mobile Devices, and Components Thereof, Inv. No. 337-TA-1351, Commission Opinion (May 15, 2024).

In late 2022, Samsung Display filed a complaint seeking to institute a Section 337 investigation based on its infringement allegations regarding four patents and seeking an exclusion order against replacement displays sold by various companies. In late 2023, on the eve of the evidentiary hearing, the ALJ granted the respondents’ motion for summary determination that the complainant lacked constitutional standing because Samsung Display had granted its parent company, Samsung Electronics Co., an implied license to the asserted patents with an unrestricted right to sublicense. Samsung Display petitioned for Commission review. On review, the Commission reversed.

The Commission first noted that because it’s an administrative tribunal and not an Article III court, the “case or controversy” requirement does not apply to parties before it and standing is instead based on its governing statute. The Commission acknowledged its previous decisions where it had applied a constitutional standing requirement and expressly overruled those decisions. It further noted that its statute does not include the “patentee” requirement of 35 U.S.C. § 281 that applies to plaintiffs in district court actions but reiterated its long-standing practice of requiring a complainant be the owner or exclusive licensee of the asserted patent(s) at the time of filing the complaint.

The Commission held that there were genuine issues of material fact as to whether Samsung Display was a “patentee” when it filed the complaint. The Commission found there was an open question as to whether Samsung Electronics actually had a right to sublicense without Samsung Display’s explicit or implicit authorization. The Commission thus remanded the investigation to the ALJ to conduct further proceedings to develop the factual record.

Threat of ITC Exclusion Order Is Too Speculative to Constitute Irreparable Harm

The US Court of Appeals for the Federal Circuit affirmed a decision by a federal district court denying a defendant’s motion for a preliminary injunction seeking to enjoin a parallel International Trade Commission (ITC) investigation against it. The Federal Circuit agreed that the defendant’s alleged irreparable harm (a “cloud” over its business) was too conclusory and speculative to support relief. Koninklijke Philips N.V. v. Thales Dis Ais USA LLC, Case No. 21-2106 (Fed. Cir. July 13, 2022) (Moore, C.J., Dyk, Chen, JJ)

Koninklijke filed a complaint at the ITC requesting a Section 337 investigation based on alleged infringement by Thales of four patents designated essential to the 3G and 4G telecommunications standards. Koninklijke simultaneously filed a parallel district court action against Thales in the Delaware district court based on those four patents. At the district court, Thales moved for a preliminary injunction seeking to enjoin Koninklijke from pursuing an exclusion order at the ITC because of an alleged breach of contract. The district court denied that motion, and Thales appealed to the Federal Circuit.

Meanwhile, the ITC investigation continued, and the administrative law judge (ALJ) issued an initial determination finding no violation of Section 337 with respect to any of the four patents. Subsequently, the Federal Circuit held oral arguments on the district court appeal, during which the judges questioned whether there could be irreparable harm if the ITC were to adopt the ALJ’s determination and consequently not issue an exclusion order. Thales argued that the threat of an exclusion order had left a “cloud” over its business and cited customer concerns that Thales might not be able to deliver products in the future. The ITC subsequently affirmed the ALJ’s finding of no violation and terminated the investigation without issuing any exclusion order.

A week later, the Federal Circuit issued a decision affirming the district court’s denial of the preliminary injunction motion. The Court held that Thales had failed to meet its burden to establish irreparable harm because it had not presented any evidence that it had actually lost any customers, that any customers had delayed purchases or that it had struggled to gain new customers because of the threat from the ITC investigation. The Court also found that the cloud over Thales’ business and the potential loss of business were too speculative to justify a preliminary injunction.

Practice Note: While the ITC investigation was ongoing, Thales filed a civil action in France against Koninklijke—a fellow European company—alleging that Koninklijke’s attempt to obtain injunctive relief in the United States for standard essential patents constituted an anti-competitive act that violated French civil law. Thales sought EUR 13.5 million in damages for the legal fees that it had incurred in defending the ITC investigation.

Section 337 Doesn’t Require Article III Standing for Claimant but Claimant Must Be “Patentee”

Threat of ITC Exclusion Order Is Too Speculative to Constitute Irreparable Harm

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