Final Written Decision Not So Final in Eyes of The ITC

By Christian Damon

The ITC recently continued its trend of giving little deference to parallel PTAB IPR proceedings.  In Certain Network Devices, Related Software and Components Thereof (II), Inv. No. 337-TA-945, the ITC denied a request to suspend or rescind a limited exclusion order (LEO) and a cease and desist order (CDO) pending appeal of recent PTAB final written decisions finding all claims of the asserted patents unpatentable.

In the ITC investigation, Cisco Systems, Inc. accused Arista Networks, Inc. of infringing six patents including U.S. Patent Nos. 7,224,668 (“the ’668 patent”) and 6,377,577 (“the ’577 patent”).  As part of its defense against the infringement allegations, Arista petitioned the PTAB for IPR of the ’668 and ’577 patents.  The Commission ultimately found that Arista violated § 337 as to both the ’668 and ’577 patents.  The ITC entered the remedial orders on May 4, 2017.    Soon thereafter, the PTAB issued separate final written decisions finding all claims of the ’668 patent and the ’577 patent unpatentable. (IPR2016-00309 and IPR2016-00030, respectively.)  Arista filed emergency petitions with the ITC requesting suspension or rescission of the remedial orders pending appeal of the final written decisions.  The Commission denied the request.

When requesting suspension or rescission of a remedial order, the requesting party must demonstrate to the Commission that there has been a change of circumstances in satisfaction of the requirements of 19 U.S.C. § 1337(k) and 19 C.F.R. § 210.76.  The Commission determined that a PTAB finding of unpatentability does not become final until the USPTO issues a certificate cancelling the claims.  Such a certificate does not issue until all available appeals have been exhausted or the time to appeal has passed with no appeal being filed.  Even though, once filed, exhaustion of all available appeals could take over a year, during which time Arista would be remain subject to the remedial orders, the Commission was unwilling to suspend or rescind its remedial orders during the pendency of the appeal from the PTAB decisions.

Takeaway

Though IPR remains an effective tool for defending against infringement allegations in district court, this may no longer be true for ITC actions.  Unless they file an IPR before being sued in the ITC, it is unlikely that a respondent in an ITC action would be able to obtain a final written decision from the PTAB in a parallel IPR proceeding before the ITC issues a remedial order.  Furthermore, as this case demonstrates, even if the respondent is able to obtain a final written decision from the PTAB, the Commission may refuse to suspend or rescind the remedial orders until all appeals of the PTAB decision have been exhausted and the Director of the USPTO issues a certificate cancelling the unpatentable claims.  Given how long these appeals can take, the damage to respondent’s business by the remedial orders may already be done unless the respondent has a design-around.