AmiCOUR IP Group News and Opinions

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August 2, 2012  - In a significant reversal of an agency decision by the International Trade Commission, the United States Court of Appeals for the Federal Circuit has ruled that InterDigital Communications, LLC has a right to the domestic industry relief provided by the agency's regulations, codified in section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. The Court found infringement of the InterDigital CDMA patents despite a previous ITC finding of non-infringement by its administrative law judge. In its opinion, the Court delivered an embarrassing description of bizarre and inconsistent claim construction cited by the agency's fact finder:

"He first defined the term 'code' to mean 'a sequence of chips,' i.e., a sequence of transmitted digital bits. He then ruled that the term 'code' as used in the patents in suit is limited to 'a spreading code or a portion of a spreading code.' In the claim construction portion of his order, the administrative law judge construed the term 'spreading code' to mean 'a sequence of chips.' In the infringement portion of his order, however, the administrative law judge elaborated on that definition. In discussing Nokia’s wireless communication initiation system, the administrative law judge found that the codes used in that system are not spreading codes because they are not 'used or intended to be used to increase the bandwidth of another signal' and because those codes do not spread data or perform channelization and are not generated from a spreading code."

The Court easily corrected the ALJ's unsupported claim construction to the proper engineering definitions found in code division and spread spectrum communications art by citing well settled case law, writing: "Claim terms are generally given their ordinary meaning as understood by persons skilled in the art in question at the time of the invention. See Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005) (en banc). The plain meaning of claim language ordinarily controls unless the patentee acts as his own lexicographer and provides a special definition for a particular claim term or the patentee disavows the ordinary scope of a claim term either in the specification or during prosecution. Id. at 1316." Neither the ITC attorney nor Nokia were able to convince the Court that the inventor intended his definitions to be consistent with the ITC's unique version.

Nokia presented two alternative arguments to support the ITC ruling, the second claiming InterDigital failed to meet the "domestic industry" requirement (an anti "patent troll" argument). Albeit moot in the face of its non-infringement determination, the ITC's administrative law judge found InterDigital met the domestic industry requirement. The Federal Circuit agreed, reversing the overall outcome.

Appellate courts have trended toward overturning agency decisions in recent years, especially when giving deference to an agency decision means the court must ignore statutory language and case law, or accept fundamentally misconstrued "substantial evidence." Irrespective of the ITC's errors, the Federal Court ruling in InterDigital also makes it clear that investment in technology and strategies using patents as licensable assets, irrespective of operating status, along with accurate claim element analysis to determine infringement, can trigger the remedies afforded by section 337. Don Dunner, who was part of the i4i team in last year's high profile MS v i4i case before the USSC, represented InterDigital Communications, LLC. Seth Waxman, who successfully argued MS v. i4i before the USSC, was of counsel to InterDigital in the case. Read the opinion.