ITC Brings 'Domestic Industry' Issue to Patent Case
In a closely watched case, the International Trade Commission has ruled that a complainant failed to show that it has a domestic industry in need of patent protection—the first such ruling coming under a new ITC program in which the agency has pledged to resolve key issues earlier in patent investigations.
An ITC judge ruled Friday that Lamina Packaging Innovations LLC failed to meet the domestic industry requirement in a suit against Pernod Ricard USA LLC, Beats Electronics LLC, Diageo North America Inc., and others. If affirmed by the full Commission, the ruling means Lamina’s suit alleging that companies are infringing on its packaging patents will not proceed before the ITC. The Commission, which is able to bar imports of products that it deems harm a domestic industry, requires that a company filing a suit must have domestic industry.
Lamina “failed to satisfy the economic prong of the domestic industry requirement and has failed to show that a domestic industry is in the process of being established,” Administrative Law Judge Theodore R. Essex wrote in an ITC notice [PDF].
In March, the full ITC ordered Judge Essex to conduct an expedited review of whether Lamina, based in Longview, Texas, had a domestic industry and asked that he issue a ruling within 100 days. Usually the domestic industry requirement is examined as part of the overall case.
Lamina objected to the expedited proceeding, saying it had no prior notice of the expedited proceeding as the ITC’s new pilot program had not yet been announced, and it therefore violated the Administrative Procedure Act. The company, represented by Gregory Love of the Longview law firm Stevens Love, told CorpCounsel.com he will ask the full ITC to review the ruling on procedural grounds and, if necessary, on the merits; he also said that, if necessary, he would appeal to the U.S. Court of Appeals for the Federal Circuit.
John Mancini, co-leader of the Intellectual Property Group at Mayer Brown, told CorpCounsel.com that his client, Pernod Ricard, is pleased with the ALJ’s decision, “and we look forward to the full Commission’s review,” he said.
Lamina said in its complaint that it had satisfied the domestic industry requirement because it has an extensive domestic licensing program related to the patents it alleges are being infringed, and its licensees have a significant investment in plant and equipment.
Expedited proceedings such as the one in the Lamina investigation could become commonplace at the ITC, as the agency announced in June it was launching a pilot program based on its order in the Lamina case. The ITC plans to begin identifying investigations “likely to present a potentially dispositive issue, such as the existence of a domestic industry, importation, or standing.” It said for selected investigations, it would “direct the presiding Administrative Law Judge (ALJ) to expedite discovery and fact finding (including an evidentiary hearing), and issue an early determination on the potentially dispositive issue within 100 days.”
The Commission said the purpose of the pilot program is to provide “fair and speedy adjudication of complex intellectual property and effective relief against unfairly traded imports, while reducing costs for all participating parties.” Attorneys say the new program will discourage nonpracticing entities (NPEs, also known as “patent trolls”), which acquire and license patents, from bringing cases before the ITC because it will be difficult for them to prove the existence of a domestic industry.
The respondents in the case are represented by Mayer Brown; Ropes & Gray; Ratner Prestia; Perkins Coie; Adduci, Mastriani & Schaumberg; Steptoe & Johnson; Neal, Gerber & Eisenberg; Tannenbaum Helpern Syracuse & Hirschtritt; and Osha Liang.