United States: ITC Concludes Early Disposition Program Not Appropriate For Subject Matter Eligibility And Domestic Industry

On April 2, 2019, the Commission issued an order denying Respondents' requests to use the Early Disposition Program. Certain Data Transmission Devices, Components Thereof, Associated Software, and Products Containing the Same, Inv. 337-TA-1150. The Commission concluded that it was not clear an early ruling on subject matter eligibility would be dispositive with respect to all of the asserted claims and that the issue of domestic industry was too complex to be resolved within 100 days.

The Early Disposition Program under 19 C.F.R. § 210.10(b)(3) formalizes the 100-Day Pilot Program. The program is intended to provide for rulings within 100 days on certain dispositive issues in an attempt to limit unnecessary litigation, saving time and costs for all parties involved. If ordered by the Commission, the ALJ is required to issue an initial determination within 100 days of institution of the investigation. The ALJ is permitted to hold hearings on the designated issue and to stay discovery of any remaining issues during the pendency of the proceeding.

In this investigation, Data Scape Ltd. and C-Scape Consulting Corp. filed a complaint against a number of entities, including Apple, Amazon, and Verizon ("the Respondents"), alleging infringement of certain patents. On March 15, 2019, the Respondents each submitted a Request for Early Disposition under 19 C.F.R. § 210.10(b)(3), in which they argued that the asserted claims of the asserted patents are invalid under 35 U.S.C. § 101. Apple also argued that the Complainant, Data Scape Ltd., was a non-practicing entity and therefore unlikely to satisfy the economic prong of the domestic industry requirement based on investments by its licensees.

The Commission denied the requests for entry into the Early Disposition Program. They indicated "it is not clear from the Respondents' Requests that the issue [of patent eligibility] is likely to be dispositive with respect to all (and not just some) of the asserted claims of the Asserted Patents," and that "[t]he same issue may also be more appropriately resolved via an early motion for summary determination." They also concluded that the domestic industry issues were too complex and not suitable for resolution under the program.

Takeaway

Parties at the ITC should be aware of the Early Disposition Program and that the Commission will look carefully at requests to utilize this program. As this order highlights, in determining whether to utilize the program, the Commission will focus on the complexity of the issues at hand and whether resolution of the issue will be dispositive. Merely labeling a Complainant as a non-practicing entity and asserting a lack of domestic industry based on investments by its licensees are not likely to influence the Commission's view regarding the complexity of the issues.

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