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09.07.18

ITC is Serving Patent Trolls Now

Posted in America, Patents at 4:41 pm by Dr. Roy Schestowitz

Going under the bridge

Under the bridge

Summary: The US International Trade Commission (ITC) was supposed to guard American firms from knockoffs and the likes of that; but now it’s being misused as a tool of extortion for firms that produce nothing at all

THE ITC is problematic; now the bullies, instead of saying “pay us ‘protection’ money or we’ll sue you and cost you in legal bills (so you lose either way),” are threatening to have your products literally embargoed. Earlier this year and again a few weeks ago we cited the new example of Hytera. It doesn’t seem like justice is the goal here; blackmail and financial strangulations are being encouraged (before the facts are even known and legal proceedings are concluded). It’s what we call a “shoot first, ask questions later” approach, which should be considered totally unacceptable in a society that values due process.

Here’s the latest on the Hytera case, as covered just before the weekend by WIPR:

Hytera received good news this week when the US International Trade Commission (ITC) agreed to review in-part a final initial determination that had gone in favour of Motorola Solutions, amid a global war between the two companies.

In July, the ITC upheld allegations of patent infringement against radio manufacturer Hytera in an initial determination.

Motorola had initially accused Hytera of infringing seven US patents which cover two-way radio equipment systems and related software. It later withdrew three of the patents asserted against Hytera.

[...]

Tom Wineland, vice president of Hytera Communications America (West), said: “We are particularly pleased at the forecast scope of the review, which includes the ITC’s reviewing why Motorola would have asserted patents as infringed that Hytera had previously licensed from Motorola on fair, reasonable, and non-discriminatory terms.”

In July, Motorola secured a victory over Hytera in Germany as the Regional Court of Mannheim granted an injunction against the radio company.

Hytera is being fought against using injunctions. It’s tempting for the ITC to take the side of the US giant (almost an order of magnitude greater than Hytera). To make matters worse, based on this new post from CCIA’s Patent Progress, the ITC is now serving patent trolls rather than actual firms in the US:

After the Supreme Court’s TC Heartland decision made it harder to file suit in the notoriously NPE-friendly Eastern District of Texas, Patent Progress predicted that NPEs might try to shift venues to the ITC. This appears to be an example of exactly that. While SIPCO claims not to be an NPE, their website focuses on their patent licensing business; the ‘products and consulting services’ they claim to offer are not described in detail (unlike their patent list and licensing structure.)

The ITC is a desirable venue both because it can grant an exclusion order (effectively an injunction against any products manufactured outside of the U.S.) and because the ITC has a highly compressed case schedule, making ITC trials expensive for defendants. The combination of these two factors means that an ITC case carries more expense and more risk for defendants—making them more likely to want to settle.

Patent Progress correctly notes that the ITC is now being emasculated for purposes of blackmail; no such thing should be allowed to happen before or until the Patent Trial and Appeal Board (PTAB) through inter partes reviews (IPRs), in addition to the district courts and the Federal Circuit (potentially higher), get to have their say on the underlying patents and the claims (as applied — if applicable at all — in infringement allegations). We have already seen the ITC arrogantly ignoring the PTAB’s decisions to void underlying patents (a case of Cisco against a relatively small rival). As if PTAB does not exist…

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