Context: The United States International Trade Commission (USITC, or just ITC) has recently handed down preliminary decisions (called final initial determinations (FIDs), which are not truly final as various steps remain). Two months ago, an Administrative Law Judge (ALJ) did not consider Lenovo to infringe two non-standard-essential patents (non-SEPs) asserted by Ericsson (November 16, 2024 ip fray article). Another ALJ, however, held Lenovo to infringe four Ericsson SEPs (December 18, 2024 ip fray article), but has yet to issue a recommendation on whether an import ban should issue and, if so, of what scope. That recommendation faces an unprecedented delay and is currently scheduled for Februar 21, 2025 (December 31, 2024 ip fray article). An import has already been recommended by an ANL in a case in which certain Amazon streaming devices were deemed to infringe four out of five Nokia SEPs-in-suit (January 9, 2025 ip fray article).
What’s new: There is a transparent attempt by Amazon to stall, which raises a fundamental question for the ITC especially when deep-pocketed defendants hire countless law firms only so some ITC commissioners cannot (or think they cannot) vote. More generally, both Lenovo and Amazon have filed petitions asking the Commission (the normally six-member, currently only four-member decision-making body at the top of the U.S. trade agency) to review and overturn (or at least narrow) the ALJs’ decisions. The Office of Unfair Import Investigations (OUII, commonly referred to as “the ITC Staff”) opposes Lenovo’s motion, however. Ericsson apparently decided to focus on where it is winning and did not even seek a review of the FID clearing Lenovo of two non-SEPs, and the Commission has closed the matter on that basis.
Direct impact: Amazon’s stalling attempt will likely fail as the ITC Staff notes that the Commission can make decisions even in the present circumstances. More generally, it is an uphill battle, if not a long shot, for Amazon and Lenovo to avoid import bans in cases where they have been held to infringe four valid SEPs each, short of a surprising “get out of jail free card” that would resolve an entire case but which will hardly be found. Meanwhile, the next Nokia-Amazon decision may still come down this month.
Wider ramifications: Amazon’s stalling attempt is centered around extreme gamesmanship. They brought in, at a late stage, yet another lawyer (from Morgan Lewis & Bockius, though they already had four other firms involved), only to ensure that Commissioner David Johanson would not rescind his prior recusal, and argue now that the Commission lacks a sufficient quorum to decide. On that basis, Amazon hopes to delay resolution of the matter by four months. As discussed further below, this tactical maneuvering raises serious issues for the functioning of the ITC as it amounts to gaming the system.
You can click on any of the items below to skip directly to the respective section:
- Ericsson-Lenovo I: non-SEP case closed
- Ericsson-Lenovo II: Staff opposes Lenovo’s petition for review
- Ericsson-Lenovo III: Lenovo’s attempt to increase page limit through backdoor
- Nokia-Amazon I: Amazon’s petition for review effectively tells ITC to defer to UK court
- Nokia-Amazon II: Amazon’s recusal-centric gamesmanship threatens functioning of ITC
1. Ericsson-Lenovo I: non-SEP case closed
It appears that Ericsson prioritized “goodwill” over optimization. Ericsson could have petitioned the Commission to review the ALJ’s determination that there was no violation by Lenovo with respect to either of the two non-SEPs in investigation no. 337-TA-1376. It probably would not have changed the outcome for both patents-in-suit at the same time, but maybe they could have prevailed on one. And they could have preserved arguments for an appeal to the United States Court of Appeals for the Federal Circuit. Instead, Ericsson elected not to exercise its right to bring a petition for review. Lenovo obviously wanted the acquittal to be affirmed, and filed only a contingent petition for review in the event the Commission would have decided sua sponte to conduct a review. The latter did not happen. Case closed.
2. Ericsson-Lenovo II: Staff opposes Lenovo’s petition for review
In investigation no. 337-TA-1375, Ericsson is asserting four SEPs at this stage and has prevailed on all four. But Lenovo’s FRAND arguments and license-based defenses (which have failed elsewhere already) have yet to be addressed in the recommended determination on remedy and bonding, as there is nothing about those questions in the FID.
The ITC Staff petitioned for a review, but one that would not change the outcome. They just believe that the same result, with respect to one particular patent claim, should have been reached on different grounds as they view the record differently than the ALJ did. And the ITC Staff opposes Lenovo’s petition for review. Here is a key passage from the Staff’s opposition brief:
“Lenovo devotes its petition largely to highly fact-intensive issues. Lenovo’s request for Commission review should be rejected for the simple reason that at bottom, Lenovo is ultimately asking the Commission to reweigh the evidence. But the ALJ carefully considered and rejected Lenovo’s arguments and evidence. Therefore, OUII respectfully submits that the issues raised by Lenovo’s petition do not merit further review.”
There is one part of the decision that the Commission has decided sua sponte to review: the FID’s findings on the economic prong of the domestic industry requirement (i.e., there must be an “industry” in the U.S. that practices the patents, which in this case comes down to Ericsson licensees like Apple and Samsung). Lenovo had actually waived, by means of a stipulation, its right to challenge that part. But the Commission wants to take another look. The most likely outcome there is that the Commission will provide some clarification that will not dispose of the case.
3. Ericsson-Lenovo III: Lenovo’s attempt to increase page limit through backdoor
Some litigants go beyond what constitutes a vigorous defense of their rights or legitimate attempts to move the goal posts of the case law. In any jurisdiction where Lenovo defends itself against patent infringement assertions and/or brings offensive counterclaims, it presents wild legal theories that are highly unlikely to work. Litigants may legitimately decide to leave no stone unturned, and sometimes one has to try the impossible to achieve what is actually possible, but there comes a point where some litigants make themselves ridiculous and their behavior becomes an annoyance that leads to a waste of resources.
Besides the three ITC investigations of Ericsson complaints against Lenovo (nos. 337-TA-1375 (cellular SEPs), 337-TA-1376 (non-SEPs) and 337-TA-1387 (multimedia SEPs)), there are also two investigations of countercomplaints by Lenovo (nos. 337-TA-1388 and 337-TA-1397).
In investigation no. 337-TA-1388, Lenovo brought a November 14, 2024 “Motion for Leave to Refile a Corrected Reply Post-Hearing Brief.” The wording is already nonsensical: they had filed their reply post-hearing brief the previous day, and nothing in between. They could either have asked for leave to refile the brief, or to file a corrected brief, but it doesn’t make sense to refile a corrected brief when there was no prior “corrected brief” of which they would file a new version.
ALJ MaryJoan McNamara entered a December 23, 2024 order denying that motion. What Lenovo did was a transparent attempt to get around a page limit. They first filed based on a reasonable interpretation of the ground rule governing the page limit. ALJ McNamara had increased the total page limit for a party’s two post-hearing briefs (either party gets to file an initial post-hearing brief and a reply post-hearing brief) from 150 to 175. That was also Ericsson’s and the Staff’s understanding. But Lenovo then came back to the ITC the next day and said it “misunderstood” the rule and it actually had another 25 pages (meaning that the increase by 25 pages should apply not to the total of both post-hearing briefs, but to each brief).
The ALJ found Lenovo’s argument “not persuasive” and noted the following (Motorola means Lenovo’s Motorola Mobility subsidiary in this case:
“As both Ericsson and Staff point out, Motorola’s Post-Hearing Briefing, i.e., Initial Post-Hearing Brief and Original Reply, exceeds the 175-page limit by 118 pages. […] Motorola’s Corrected Reply of 69 pages, along with
its Initial Post-Hearing Brief, still exceeds the 175-page limit by 50 pages.” (emphases in original)
On that basis, ALJ McNamara told Lenovo to bring down its post-hearing reply brief from 69 pages to 19.
What was Lenovo trying to accomplish? They may have just hoped that the judge would read their longer version anyway, even if it is formally deemed replaced. And they may also have hoped that in the end they would be granted, even officially, more pages than Ericsson.
4. Nokia-Amazon I: Amazon’s petition for review effectively tells ITC to defer to UK court
Amazon’s petition for review challenges all of the findings on the merits, and Nokia is trying to prevail on even the fifth patent-in-suit.
Besides the technical merits, Amazon also attacks ALJ Cameron Elliot’s holding that (in other words) Amazon has no one to blame but itself for not having a license yet (January 9, 2025 ip fray article).
Amazon’s SEP-related push for a review of the FID has three parts:
- Amazon says the ALJ should have found an implied waiver because “standards body participants like Nokia have a duty to disclose their patents prior to approval of a standard . . .” If Amazon was right, it appears that everyone asserting multimedia patents would be denied remedies.
- Amazon says it is a willing licensee simply because “it has unconditionally agreed to be bound by the RAND rate set by the U.K. High Court in expedited proceedings . . .”
- Then there are also some arguments regarding allegedly comparable license agreements, but those terms are obviously confidential.
5. Nokia-Amazon II: Amazon’s recusal-centric gamesmanship threatens functioning of ITC
What Amazon appears to be trying to do is to leverage its vast financial resources to prevent the ITC from making its final decision (which contrary to its name is not the ALJ’s FID, but the Commission decision, and even that one is appealable).
Amazon’s argument is that the Commission is “inquorate” (it lacks the quorum to make decisions) in this investigation, so Amazon wants the Commission to push back the decision date by four months. In other words, the ITC should first wait until returning President Trump has appointed additional commissioners. But Amazon actually made a tactical move that was apparently just designed to complicate this for the Commission, by preventing a commissioner from rescinding a recusal. Here’s the story:
Normally, the ITC has six commissioners. But currently there are only four listed on the bios page:
It is irrelevant in this context (though in some others, such as in antitrust enforcement it would matter) that three of them are Democrats and only one of them is a Republican. The Commission is two commissioners short, and that is not going to change until the new Trump Administration has made appointments and they have been confirmed by the United States Senate.
Two of the four current commissioners (Commissioners Schmidtlein and Johanson) recused themselves from the Nokia-Amazon investigation in late 2023. As usual, they did not state reasons. In Commissioner Johanson’s case, there is a clear pattern: wherever the law firm of Morgan Lewis & Bockius enters an appearance, he recuses himself. We’ll get to that in a moment.
Amazon makes the argument that the statute governing the ITC requires a majority of the commissioners to make a decision:
A majority of the commissioners in office shall constitute a quorum, but the
Commission may function notwithstanding vacancies.
Now, at this point there are only two non-recused commissioners left, and that is not a majority of the four that are currently in office. Nokia argues that the ITC statute says the agency should function even in the event of vacancies, and makes other arguments. The ITC Staff did not take a firm position on Amazon’s petition, but noted that “the Commission has been taking action with two Commissioners for quite some time in this investigation (and other investigations).”
Let’s not focus on who is interpreting the statute correctly. The issue is how the current situation arose and, even more so, how Amazon does not want the problem to be solved:
As mentioned above, Commissioner Johanson appears to recuse himself whenever Morgan Lewis & Bockius becomes involved with a case. There must be some connection because of which he feels he could otherwise expose himself to allegations of a conflict of interest.
When he did so in this investigation, it presumably was because Morgan Lewis & Bockius represented HP. But Nokia settled with HP (October 30, 2024 ip fray article). So the presumptive reason for the recusal went away: Amazon was left as the sole defendant. Now, the other pattern is that after Morgan Lewis ceases to be involved with an investigation, Commissioner Johanson can and does rescind his recusal. Nokia gives an example: in investigation no. 337-TA-1402, he recused himself 15 days after Morgan Lewis’s appearance and rescinded the recusal 19 days after Morgan Lewis’s withdrawal.
When HP dropped out by virtue of its settlement, Amazon knew that this could bring Commissioner Johanson back. And Amazon was presumably already planning to make the argument that the Commission could not make a final decision. It only takes one commissioner to decide that a FID should be reviewed. But thereafter it takes the quorum.
Amazon already had four law firms involved at the time (Perkins Coie; Sheppard, Mullin, Richter & Hampton; Fenwick & West; and Edell, Shapiro & Finman). But in order to complicate things for the ITC, Amazon did this (quoting Nokia’s opposition brief):
“Julie S. Goldemberg—a new and separate Morgan Lewis attorney that had not previously participated in this investigation—entered an appearance solely on behalf of Amazon on October 15, 2024, after the hearing and the completion of post-trial briefs. Ms. Goldemberg is the only Morgan Lewis attorney to appear on behalf of Amazon and the only Morgan Lewis attorney still participating in this investigation. Ms. Goldemberg did not enter an appearance on behalf of HP at any time during this investigation.”
Think about it: why would they bring in a large and famous law firm only to get one lawyer involved who (unlike various other lawyers from that firm) had not previously been involve with the investigation? The only plausible motivation that comes to mind is that they wanted to ensure Commissioner Johanson would not rescind his recusal.
Nokia suggests the ITC should ask Amazon to explain why Morgan Lewis should not be disqualified from the investigation if its involvement “is indeed the cause for Commissioner Johanson’s continued recusal.”
There is U.S. case law against the strategic use of counsel only with a view to recusals. A multi-factorial test can be performed, and in this case it is really hard to see how this has anything to do with Amazon’s right to counsel. All of the factors point to a tactical game:
“Amazon is already represented by four other firms, Morgan Lewis joined well after the record closed, the injury to Nokia in a delay is massive, and the potential for manipulation or impropriety is present.”