FWDs Issue in the Nick of Time to Suspend ITC Orders

By Steve Bradley, Emily Tait, and Marc Blackman –

After finding that Apple infringed certain AliveCor patents related to wearable devices capable of monitoring a user’s cardiac activity, the International Trade Commission (“ITC”) entered a limited exclusion order and a cease and desist order against various Apple Watch devices – only to suspend enforcement of those orders pending resolution of PTAB Final Written Decisions (“FWD”) that had found the asserted claims unpatentable.  See Certain Wearable Electronic Devices With ECG Functionality And Components Thereof, Inv. No. 337-TA-1266, Comm’n Op. (Jan. 20, 2023).

By way of background, the parties are embroiled in an ongoing, multijurisdictional dispute involving over a dozen patents, infringement contentions by both sides, and an antitrust claim.  The ITC investigation centered on asserted claims from three AliveCor patents.  After instituting the investigation on May 26, 2021, the ITC set a target date of October 26, 2022.  Two weeks after institution, Apple filed IPR petitions challenging the claims of the three asserted patents, creating parallel proceedings before the two administrative bodies.  The PTAB instituted all three IPRs on December 8, 2021.  Consequently, pursuant to 35 U.S.C. §316(a)(11), the PTAB’s FWDs were due by December 8, 2022—after the target date of the ITC investigation.

On June 27, 2022, the ALJ issued a final initial determination (“ID”) finding a violation of section 337 as to two of the three asserted AliveCor patents.  On September 22, 2022, the ITC decided to review certain findings of the ID and requested additional briefing from the parties.  In doing so, the ITC extended the target date to December 12, 2022—after the deadline for the PTAB’s FWDs.

On December 6, 2022, the PTAB issued FWDs in all three IPRs, finding all challenged claims unpatentable.  With the ITC due to issue its opinion by December 12, Apple promptly filed an emergency motion with the ITC to suspend any remedial orders or to stay the proceedings pending final resolution of any appeal of the PTAB’s FWDs.  AliveCor’s vigorous opposition argued that it would be “unprecedented” to grant Apple’s requested relief at the advanced stage of the ITC proceedings, and would provide a “blueprint” for respondents who seek to delay enforcement of the ITC’s orders at the “eleventh-hour” after months of extensive and time-consuming work by the parties and the Commission.

Over AliveCor’s protests, the ITC first agreed to move the target date back to consider the motion and the effect of the FWDs.  After further review, the ITC issued an opinion affirming, with modifications, the ID’s finding of a violation and issued a limited exclusion order and a cease and desist order against various Apple Watches having ECG functionality.  The ITC, however, suspended enforcement of its orders pending final resolution of the PTAB’s FWDs.

While the ITC has been willing to suspend its orders where a FWD in an IPR proceeding is issued before a Final Determination, see e.g., In the Matter of Certain Laparoscopic Surgical Staplers, Reload Cartridges, and Components Thereof, Inv. No. 337-TA-1167, Final Determination (Int’l Trade Comm’n Oct. 14, 2021), in the present case it was unclear whether the Commission would be willing to do so given the late stage of the proceedings.  As AliveCor argued, Apple’s request sought to bring the Commission’s independent investigation to a “screeching halt on the eve of the Final Determination elevat[ing] the FWDs above the Commission’s own work.”

The ITC’s decision in this case underscores that it may consider IPR decisions issued at any time prior to a Final Determination, and may modify its orders accordingly.

Notably, this decision comes on the heels of a June 2022 guidance memorandum issued by USPTO Director Katherine Vidal directing the PTAB to refrain from denying IPR petitions on the basis of a parallel ITC proceeding.  This guidance will likely lead to an increase in situations in which both the USPTO and ITC review the same patents in parallel.  Parties to an ITC investigation should  consider how the timing of any related IPR proceedings may affect the outcome of the investigation.

Takeaway: The ITC may consider Final Written Decisions issued at any point prior to issuance of a Final Determination and may suspend enforcement of remedial orders in light of these decisions.  Respondents confronted with an ITC investigation should consider petitioning for IPR as early as possible in the hopes of obtaining a favorable decision that can postpone enforcement of remedial orders.  Complainants to the ITC should similarly be aware of this decision and seek to avoid any delay in proceedings.