United States: Commission Holds Section 337 Oral Argument

Following up on our previous post, on November 17th, the ITC held an oral argument in front of a packed hearing room in Certain Lithium Metal Oxide Cathode Materials, Lithium-Ion Batteries For Power Tool Products Containing Same, And Power Tool Products With Lithium-Ion Batteries Containing Same, Inv. No. 337-TA-951. The oral argument was notable in that it was the first the Commission has held for a Section 337 investigation in nearly a decade.

The Case

On February 29, 2016, the ALJ issued his ID finding a violation of Section 337 based on the importation of products that infringe U.S. Patent Nos. 6,677,082 and 6,680,143. The ALJ found that the respondents, Umicore N.V. and Umicore USA, Inc., did not induce infringement because there was insufficient evidence of specific intent to infringe. However, with respect to contributory infringement, the ALJ held that intent is presumed as the accused products did not have any substantial non-infringing uses. On the defense of laches, the ALJ found that, given the prospective relief available in the ITC, a laches defense fails as a matter of law in Section 337 investigations. The ALJ further held that even if laches was a viable defense, that the facts in the case did not merit a finding of laches. On May 11th, in response to the parties' various petitions for review, the Commission requested briefing on the viability of a laches defense in Section 337 proceedings and whether a good faith belief negates a finding of contributory infringement where the accused products have no substantial non-infringing uses. The Commission also granted a request to hear oral arguments concerning the issues on review—the first time the Commission has done so since 2007.

The Oral Argument

The Commission bifurcated the hearing into two panels. The first panel was limited to the parties (i.e., complainants, respondents, and Staff), who were given an opportunity to present opening remarks on contributory infringement, laches, and the public interest not lasting more than 10 minutes. After the opening remarks, the Commissioners engaged in a question and answer session with the panelists. Unlike Title VII hearings before the Commission, wherein each Commissioner is ordinarily allotted 10 minutes to ask questions, the question and answer session here was free form.

Commissioner Kieff opened the questioning with remarks on how oral arguments not only aid in the communication between the parties and the Commission, but also allow for the Commissioners to exchange ideas while complying with the Sunshine laws. He then delved into the issue of contributory infringement and laches with each of the parties. Commissioner Broadbent followed up with probing questions concerning the public interest and remedy.

The second panel was open to interested members of the public to make oral presentations on the issues of remedy and the public interest. More than a dozen interested parties both for and against the imposition of an exclusion order presented testimony to the Commission on these issues.

Takeaway

The hearing's focus on the factually-intensive issues of intent for contributory infringement and the defense of laches provided a good backdrop for the Commission to examine the potential benefits of oral argument during review of Section 337 initial determinations. The insight gleaned from the oral argument together with the transparency it provides to the parties may result in the Commission granting more requests for live hearings in the future.

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