Context: Three months ago to the day, ip fray concluded from a U.S. International Trade Commission (USITC, or just ITC) document that Lenovo faced a significant risk of being held to infringe four valid standard-essential patents (SEPs) held by Ericsson (September 18, 2024 ip fray article), normally resulting in the ITC’s sole remedy, a limited exclusion order (LEO) (i.e., U.S. import ban). Lenovo also failed to convince Administrative Law Judge (ALJ) MaryJoan McNamara (profile page) that one of those four patents was invalid because it referenced the 5G NR (New Radio) standard prior to the latter’s finalization (October 20, 2024 ip fray article). A different ALJ found in a parallel investigation involving HEVC video codec SEPs that Lenovo had no license defense with respect to its Motorola Mobility-branded products, which we described as Lenovo’s single most important defense in this dispute (December 1, 2024 ip fray article).
What’s new: Late on Thuesday (December 17, 2024), ALJ McNamara handed down her final initial determination (FID) in investigation no. 337-TA-1375 (Certain Mobile Phones, Components Thereof, and Products Containing Same). In accordance with that the Office of Unfair Import Investigations (OUII, commonly referred to as the “ITC Staff”) had also believed to be the case, the trade judge held all four SEPs-in-suit valid and infringed, and threw out any other defenses, thereby holding Lenovo in violation of Section 337, the statute governing the ITC.
Direct impact: “A recommendation on permanent relief, bonding and the public interest will be forthcoming in another document,” the notice says. The ITC is a U.S: trade agency with quasi-judicial powers. It cannot order damages. Its sole remedy is an import ban, provided that it is not against the public interest to order one after a finding of a violation of valid patents (or other wrongdoings that raise “unfair import” issues). In this case, considering that Lenovo’s products are far from irreplaceable and FRAND defense failed to impress the ITC Staff as well as judges in other jurisdictions, an import ban appears the most logical next step. What is 100% certain is that Lenovo will ask the Commission (the political appointees at the top of the U.S. trade agency) to review and reverse the decision. Despite its name, a FID is not truly final as it can be reviewed by the Commission and appealed to the Federal Circuit. If the Commission affirms ALJ McNamara with respect to all four patents or a subset thereof, there will be a 60-day Presidential review period due to a veto power delegated to the United States Trade Reprentative (USTR). In 2013, the Obama Administration’s USTR vetoed a SEP-based import ban Samsung had won against Apple, but the facts were distinguishable from the ones in this case as Samsung was making far supra-FRAND royalty demands in an effort to force Apple to give up its own intellectual property rights.
Wider ramifications:
- Lenovo has been trying to torpedo Ericsson’s patent enforcement in different ways. For example, a UK appeals court declined to give Lenovo antisuit-like leverage against Ericsson’s SEP enforcement in Latin America (October 1, 2024 ip fray article). The High Court of Justice for England & Wales denied Lenovo an interim-license declaration (November 19, 2024 ip fray article), which theoretically could also have derailed the ITC investigation.
- The United States Court of Appeals for the Federal Circuit revived a Lenovo motion for an antisuit injunction (October 24, 2024 ip fray article). Lenovo would not be the first litigant to seek antisuit relief against an ITC import ban, but it would be a long shot.
- In a parallel case involving a couple of Ericsson non-SEPs, a different ALJ did not hold Lenovo in violation (November 16, 2024 ip fray article), a preliminary finding that is also subject to potential review.
Here’s the text of the notice, as the full 208-page document is sealed for the time being:
NOTICE: ISSUANCE OF INITIAL DETERMINATION ON VIOLATION OF SECTION 337
(December 17, 2024)
The Final Initial Determination (“ID”) on Violation of Section 337 of the Tariff Act, as amended, 19 U.S.C. § 1337 (“Section 337”), has been issued today.
It is a finding of this ID that Complainant Telefonaktiebolaget LM Ericsson (“Complainant” or “Ericsson”) has proven by a preponderance of evidence that Respondents Motorola Mobility LLC, Lenovo (United States) Inc. and Motorola (Wuhan) Mobility Technologies, Communication Co., Ltd. (collectively, “Respondents”) have violated subsection (b) of Section 337 of the Tariff Act of 1930, in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain mobile phones, components thereof, and products containing the same.
It is a finding of this ID that Respondents have infringed asserted claims 10 and 13-15 of U.S. Patent No. 10,426,817 [note: that number is incorrect] (“the ’817 patent”). It is also a finding of this ID that the asserted claims of the ’817 patent are valid.
It is a finding of this ID that Respondents have infringed asserted claims 8, 9, 15, and 17 of U.S. Patent No. 10,306,669 (“the ’669 patent”). It is also a finding of this ID that the asserted claims of the ’669 patent are valid.
It is a finding of this ID that Respondents have infringed asserted claims 34 and 39 of U.S. Patent No. 11,317,342 (“the ’342 patent”). It is also a finding of this ID that the asserted claims of the ’342 patent are valid.
It is a finding of this ID that Respondents have infringed asserted claim 4 of U.S. Patent No. 11,515,893 (“the ’893 patent”). It is also a finding of this ID that the asserted claims of the ’893 patent are valid.
It is a finding of this ID that one or more of Ericsson’s domestic industry products have satisfied the technical industry prong of the domestic industry requirement for the ’817, ’669, ’342, and ’893 patents.
Respondents did not dispute that Ericsson has satisfied the economic prong of the domestic industry requirement under Section 337(a)(3)(A) and (B), which was addressed in an Initial Determination granting Ericsson’s unopposed Motion for Summary Determination on this issue. (See Order No. 50 (Dec. 16, 2024).).
A recommendation on permanent relief, bonding and the public interest will be forthcoming in another document that will be filed pursuant to 19 C.F.R. 210.42(a)(1)(ii).
SO ORDERED.
MaryJoan McNamara
Administrative Law Judge
These are the four patents again:
- U.S. Patent No. 10,425,817 (as opposed to the number in the notice, where the 5 was accidentally replaced with a 6) on a “subscription concealed identifier”; on September 26, 2024, Lenovo notified the ITC of the institution of of an inter partes review (IPR) by the Patent Trial & Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO)
- U.S. Patent No. 10,306,669 on “physical uplink control channel (PUCCH) resource allocation”; with respect to this one, the PTAB denied an Apple petition (on the merits as opposed to a discretionary denial) in 2022
- U.S. Patent No. 11,317,342 on “transmission and reception of system information in parts” (no PTAB activity)
- U.S. Patent No. 11,515,893 on “shift values for quasi-cyclic LDPC codes” (no PTAB activity)
There are now essentially two directions in which the dispute can go:
- There could be a settlement, at a similar time of the year as Ericsson’s 2022 settlement with Apple.
- Lenovo being Lenovo, it is also possible that they will keep pushing for a U.S. antisuit injunction (on remand) and an interm license from a UK court (on appeal), request a Commission review of ALJ McNamara’s FID and, if all else fails, lobby the Trump Administration for a Presidential veto. In parallel, Lenovo will try to get leverage over Ericsson through its own patent enforcement in different jurisdictions.
The next important news will be the recommended remedy.
And while it involves different parties and different jurisdictions, there are (at least) two more major SEP events this week with today’s scheduled Unified Patent Court (UPC) decision in Huawei v. Netgear (WiFi 6) and tomorrow’s Huawei v. Netgear trial in the Munich I Regional Court.