Indecision at the ITC: Ramifications of the ITC’s First Stay of a Remedy Order

This article was first published in the ITC Trial Lawyers Association 337 Reporter, Volume XXXVIII, Summer 2014.

On June 11, 2014, the International Trade Commission (the “ITC” or “Commission”) ordered a stay pending appeal to the Federal Circuit of cease and desist orders that the Commission had previously entered against respondents in a 19 U.S.C. § 1337 (“Section 337”) investigation called Digital Models.[1] This marks the first time the Commission has stayed its own remedy orders.[2] In light of this unprecedented move, this paper will examine the standards governing a stay of an ITC-issued remedy order and consider the implications of the stay granted in Digital Models for litigants in future Section 337 cases.

Background on Digital Models

On April 3, 2014, the ITC released a final opinion in Digital Models in which it issued cease and desist orders against respondents ClearCorrect Operating, LLC and ClearCorrect Pakistan (Private), Ltd. (collectively, “ClearCorrect”), prohibiting ClearCorrect from sending over the Internet dental models that it designed in Pakistan and subsequently 3D-printed in Texas for customers in the United States.[3] The Commission held that electronically transmitted information was an “article” within the meaning of Section 337,[4] thereby reaffirming the Commission’s jurisdiction over electronic transmissions.[5] Previously, in a cease and desist order in Hardware Logic, the Commission had included a brief parenthetical notation prohibiting electronic transmissions.[6] The Commission included a similar parenthetical notation prohibiting electronic transmissions in Viruses.[7]

In Incremental Dental, an investigation separate from Digital Models but that involved the same respondents and patents at issue, the Commission cited Hardware Logic in holding that “it has jurisdiction and authority to reach digital data that are electronically transmitted to a recipient in the United States,” before finding that the consent order entered in that investigation did not expressly prohibit electronic transmissions.[8]

On May 2, 2014, during the presidential review period following the Commission’s decision, ClearCorrect filed a motion with the ITC to stay the Commission’s cease and desist orders pending appeal to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”).[9] In an unprecedented move, the Commission agreed to stay its remedy orders, noting that admittedly difficult legal issues in the investigation justified temporarily halting the order.

Background on Stays

Effects and Importance of Staying  an ITC Remedy Order

A stay is a postponement of an order pending judicial review by an appellate court, which in the ITC context is the Federal Circuit. Stays maintain the status quo with respect to a Section 337 dispute, generally until the Federal Circuit issues a final ruling on the stay-applicant’s appeal.[10] Over the last decade, the median time to disposition in Federal Circuit appeals of ITC rulings that were terminated after hearing or submission is over 14 months.[11]

Although stays are by definition temporary, they are of value to accused patent-infringers who otherwise face immediate exclusion and cease and desist orders.[12] The value of a stay is greater for an accused patent-infringer whose product has a short life cycle because stays can provide sufficient time for a producer or importer to recoup its investment, or for a producer to redesign the infringing component so that it does not infringe the patent at issue. If a stay of an order is granted and the Federal Circuit ultimately reverses or remands the Commission’s determination and remedial order, obtaining the stay pending judicial review will have effectively neutralized the Commission’s original remedy order.

Mechanics of Obtaining a Stay of an ITC Remedy Order

The Commission derives its authority to stay its remedy orders from Section 705 of the Administrative Procedure Act (“APA”), which provides that “[w]hen an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review.”[13] Rule 18 of the Federal Rules of Appellate Procedure states that a “petitioner must ordinarily move first before the agency for a stay pending review of its decision or order.”[14] However, a motion for a stay may be made to the appropriate federal court of appeals if the respondent can “show that moving first before the agency would be impracticable” or if “the agency denied the motion or failed to afford the relief requested.”[15] This effectively allows respondents in Section 337 disputes to petition both the Commission and the Federal Circuit for stays.

In practice, many respondents do not wait for the ITC to reject their request for a stay before moving for the same relief before the Federal Circuit. In fact, some respondents simultaneously ask for stays from the ITC and the Federal Circuit.[16] In theory, respondents can bypass requesting the Commission for a stay if they can demonstrate before the Federal Circuit that doing so would be “impracticable.”

While the ITC has never before stayed its own remedy orders, the Federal Circuit previously has stayed enforcement of the Commission’s exclusionary remedies in some cases upon finding a substantial question concerning the Commission’s determination that a violation of Section 337 had occurred.[17] While these cases show that the Federal Circuit has indeed stayed ITC remedy orders in the past, stays of ITC remedy orders are rare.

The ITC Has Other Options for Tempering its Remedy Orders

Digital Models is the first time the Commission approved a request for a stay of its own remedy order; however, the Commission has arguably granted relief similar to a stay by “tailoring” its remedy orders. For example, in Personal Data, the ITC delayed the implementation of its exclusion order as it related to a major customer of the respondent, to allow the customer to transition to other products.[18] Similarly, in Digital Models, the Commission’s original cease and desist orders included a temporally unlimited exemption for respondent’s activities related to the treatment of existing patients in the U.S.[19] In both of these examples, the Commission carved out exceptions to its remedy orders that preserved the status quo for certain customers. For those customers, the effect of the Commission’s “tailored” remedy order had a similar effect to a stay. Interestingly, in Digital Models, the Commission stayed the remedy order despite the exemptions that it had already carved out of the remedy order.

Standards for Obtaining a Stay of a Remedy Order Issued by the ITC

In reviewing requests for stays, the ITC and the Federal Circuit apply the same standard, which “is governed by the four-part preliminary injunction test.”[20] The four-part test considers:

(1) [W]hether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.[21]

Each factor “need not be given equal weight.”[22] In particular, a strong showing on the last three factors—collectively, the equities of the case—may reduce the showing that the moving party needs to make with respect to the likelihood of success on the merits.[23]

Furthermore, the Federal Circuit has explained that “[t]o prevail, a movant must establish a likelihood of success on the merits or, failing that, must demonstrate that it has a substantial case on the merits and that the harm factors militate in its favor.”[24] Recognizing the futility of asking an agency to find that its own decision is likely to be overturned on appeal, the D.C. Circuit has stated that a stay may be appropriate when the agency has “ruled on an admittedly difficult legal question and when the equities of the case suggest that the status quo should be maintained.”[25]

First Prong: An “Admittedly Difficult Legal Question”

The Commission has repeatedly used the “admittedly difficult legal question” test in investigations in which stays were sought pending appeal.[26] Although the Commission has not expressly stated what constitutes an “admittedly difficult legal question,” prior investigations where it has considered issuing a stay provide clues as to what the Commission means.

An Issue of First Impression

In Agricultural Tractors, the Commission indicated that for the Commission to deem an investigation to have raised admittedly difficult legal questions, the investigation must raise legal questions of “first impression.”[27] Agricultural Tractors centered around whether the importation of a product that was produced and sold abroad by the owner of a United States trademark, but not authorized for sale in the United States, infringed the United States trademark (a so-called “grey market” case). The Commission found that this case did not raise an admittedly difficult legal question even though it presented “unusual facts” because the “legal principles involved are well-established in the case law of the federal courts.”[28]

In contrast, the Commission found an admittedly difficult legal question in Digital Models because Section 337 did not expressly define the term “articles” and thus did not instruct the Commission whether it covered digital models of corrective dental positioning appliances that were sent electronically from Pakistan and printed within the United States. Although the Commission stated in the final determination on violation that this issue raised a difficult legal question,[29] the Commission previously had encountered the issue of electronic transmissions, and had asserted jurisdiction over them.[30] In light of these prior cases, the legal questions presented in Digital Models could hardly be considered issues of first impression for the ITC.

One possible way to reconcile the Commission’s decision to grant a stay in Digital Models yet deny one in Agricultural Tractors is to look at whether the issue is one of first impression for the Federal Circuit, not the Commission. Whereas in Agricultural Tractors, the Commission noted the federal courts’ “well-established” case law regarding grey market issues, the Commission could not point to a Federal Circuit decision regarding the ITC’s jurisdiction over electronic transmissions.[31] In fact, after the Commission stayed its orders in Digital Models, the Federal Circuit held, in a separate but related action involving ClearCorrect, that it takes no position on whether Section 337 permits the Commission to exclude electronic transmissions.[32] Indeed, in ordering a stay in Digital Models, the Commission noted that the legal question being disputed would “benefit from the guidance provided by the court.”[33]

Disagreement Within the Commission

A lack of consensus among the Commissioners on the merits of a case also may serve as an indicator that the case presents admittedly difficult legal questions; however, it is not determinative. In Digital Models the Commission majority pointed to Commissioner Johanson’s dissent on the remedy order as evidence that the case raised admittedly difficult legal questions that were sufficient to warrant a stay of the remedy order.[34] On the merits, Commissioner Johanson had issued a lengthy dissent, disagreeing with the majority’s interpretation of “article” under Section 337.[35]

In the past, however, significant disagreement among the Commissioners has not always been sufficient for the Commission to grant a stay of its orders. The Commission previously denied a request for a stay in Baseband Processor, a similarly contentious case where there was significant disagreement among the Commissioners regarding whether to issue remedy orders and whether to stay the issuance of those orders.[36] In denying respondents’ motions for a stay, the Commission majority noted the dissents of Commissioner Pinkert and Chairman Pearson regarding staying the remedy orders; however, the majority did not discuss their reasoning for denying the stay.[37]

When analyzing whether a case presents an admittedly difficult legal question, the Commission generally confines its analysis of disagreement on the legal question to disagreement within its own agency.  For example, in at least two investigations, stay-applicants have pointed to seeming discrepancies between the Commission’s final determination on violation and concurrent determinations on the patents at issue by the United States Patent and Trade Office (“USPTO”). [38] In both of these instances, the Commission has rejected these seeming discrepancies as sufficient evidence of the presence of difficult legal questions for purposes of granting a stay. In both Semiconductor Chips and Digital Television, the Commission determined that differing opinions between the USPTO and the Commission were not necessarily inconsistent because the two use different standards of review and do not decide the exact same issues.[39]

Extensive Public Comment

Extensive public comments on proposed remedy orders can provide evidence of an admittedly difficult legal question. The Commission normally solicits comments from the public on potential remedy orders in pending Section 337 cases. In Digital Models, the Commission cited the “extensive public comments on both sides of the issue” as evidence that the legal question was difficult.[40] Given the potential impact of the decision in Digital Models with regard to infringement via electronic transmissions from abroad, groups like Google, the MPAA and Nokia submitted comments on both sides of the issue.[41] The Commission, in reaching its final disposition of the investigation, dedicated a significant portion of the opinion to addressing the concerns raised by these companies.[42]

Deference Issue

The fact that the Commission, as a federal agency, is accorded Chevron[43] deference by the judiciary, in interpreting its organic statute (section 337) does not, in and of itself, “obviate the fact that the question ruled upon by the Commission [is] a difficult one.”[44] In its response to respondent’s motion to stay the Commission’s remedy order in Digital Models, the complainant argued that the investigation did not raise a difficult legal question because “the Commission ha[d] issued a comprehensive opinion based on a careful analysis of its governing statute, and its statutory interpretation is entitled to deference.”[45] The Commission acknowledged that the “difficulty of the question presented counsel[ed] in favor of judicial deference to an agency’s interpretation of its organic statute,” however, it still chose to stay its order, effectively punting the question to the Federal Circuit.

Second, Third, and Fourth Prongs: “Equities of the Case Suggest the Status Quo Should Be Maintained”

In evaluating a motion for a stay of a remedy order, the Commission must also consider whether the “equities of the case suggest the status quo should be maintained.”[46] The equities part of the test comprises prongs two through four of the preliminary injunction test, which account for the harm that the respondent will suffer in the absence of a stay, the harm that the complainant will suffer if the stay is granted, and the public interest.

The Harm Factors

The harm factors, which comprise the second and third prongs of the stay analysis, weigh the harm that the opposing parties will suffer as a result of the Commission’s decision to stay the remedy order. The language governing the stay analysis seems to disfavor the moving party because the moving party has to demonstrate that it will suffer “irreparable harm[]” in the absence of a stay and that the stay will not “substantially harm” the opposing party.[47] Establishing irreparable harm sufficient to warrant a stay requires an injury that is “both certain and great; it must be actual and not theoretical.”[48] To succeed, therefore, respondents must provide “proof indicating that the harm is certain to occur in the near future.”[49] When considering the harm that a respondent would suffer in the absence of a stay, the Commission considers all respondents, not just the principal respondent.[50] The Commission also takes into consideration respondents’ overall economic viability and alternative product lines when considering the harm that the remedy order may inflict.[51]

In Digital Models, the Commission found that the equities tipped in the respondents’ favor because the stay would sever ClearCorrect Pakistan (Private), Ltd. from its only customer, its U.S. counterpart, and would not substantially harm the complainant, whom the Commission found serves a different customer base.[52] Furthermore, the Commission held that having a parallel action in district court regarding the merits of the case tilted the balance of the hardships in the respondents’ favors because the complainant could seek damages for past infringement in the district court.[53]

The Public Interest

The Commission’s public interest analysis when assessing whether to order a stay is generally limited because the Commission has already considered the statutory public interest factors when it considered whether to issue a remedy order in the first place.[54] Nevertheless, the Commission recognizes that the “public interest factor in the stay analysis is broader than the statutory analysis under section 337.”[55] Furthermore, the Commission acknowledges that the public interest generally weighs against ordering a stay because “[t]he public interest generally favors the protection of intellectual property rights. One of the principal purposes of Section 337 is to afford [intellectual property rightsholders] with expeditious relief.”[56]

Ramifications of the ITC Stay and Outlook for the Future

The Recent Decision Is an Outlier, Not the New Norm

The implications of the Commission’s stay order in Digital Models on future Section 337 litigation will depend partially on whether this case is an outlier or the beginning of a change in the Commission’s approach to implementation of its own remedy rulings. There is ample basis to conclude that the facts and legal questions presented in Digital Models are exceptional, and the decision does not represent a departure from the ITC’s tradition of denying requests for stays of its remedy orders.

From the start, before the issue of a stay was raised, the Commission acknowledged the particularly difficult nature of the question being raised in Digital Models.[57] Indeed, the Commission stated that its decision “should not be viewed as a sharp departure from prior determinations denying stays.”[58] The Commission stated that its jurisdictional assertion over electronic transmissions may significantly impact the legal strategies pursued in future investigations and acknowledged that this decision would “benefit from the guidance provided by the court.”[59]

The Recent Decision May Increase Stay Requests But Appears Unlikely to Change the ITC’s Implementation of its Remedy Orders

Even if Digital Models is an outlier and does not signal a change in the frequency with which the Commission stays its remedy orders, the fact that the Commission did issue a stay sets an important precedent that may affect the proper procedure for requesting stays. The Federal Circuit generally has taken a relaxed attitude toward the requirement that petitioners first ask the Commission for a stay before petitioning the Federal Circuit Court for a stay, since the Commission, until now, had never granted a stay. The recent decision at least calls into question the widely accepted belief among practitioners that it is futile to seek a stay from the ITC.  It may also encourage the Federal Circuit to reexamine its treatment of F.R.A.P. Rule 18 when handling requests to stay ITC remedy orders. Nevertheless, given the urgency of motions for stays and the severity of the remedy orders that parties in Section 337 face, the Federal Circuit may not drastically change how it rules on motions for stays of ITC remedy orders.

While the recent decision in Digital Models potentially may affect procedures for requesting stays, the decision does not diminish the expedited relief available to patent owners in the ITC, as compared to other venues for litigating patent cases. Parties in patent infringement cases often pursue their claims simultaneously in district court or the ITC. Many prefer to litigate their cases in the ITC because of its speedy proceedings and the ITC’s ability to issue broad exclusion and cease and desist orders.[60] The recent stay order may worry litigants in ITC cases because there now exists a precedent for the Commission halting a remedy order when a case involves difficult legal questions. The decision could reduce the attractiveness of the ITC complaints for patentholders covering products with short life-cycles. However, given the continued rarity of the ITC stays, and the substantial potential benefits of pursuing a patent infringement case in the ITC, the ITC remains an attractive venue for litigating patent infringement disputes.

The Recent Stay Order May Reflect a More Cautious Commission

The Commission’s decision to stay its order pending a decision by the Federal Circuit may be a sign of a more cautious and deferential Commission. Recently, the Commission has seen some of its decisions reversed by the Federal Circuit on increasingly fundamental issues of law regarding the Commission’s authority in Section 337 cases.[61] Given the admittedly difficult questions posed in Digital Models, the Commission appears to have concluded that it was prudent to postpone its determination by issuing a stay to allow the Federal Circuit to examine its decision regarding the status of digital transmissions under Section 337.

Relatedly, in one of the Commission’s recent investigations regarding Apple and Samsung, the United States Trade Representative disapproved the remedy orders granted by the Commission, marking the first time the Executive Branch had exercised this veto power since 1987.[62] Although the Executive Branch did not act during the presidential review period in Digital Models, and although the facts of the Apple-Samsung case were arguably unique, the sting of having its remedy order vetoed may have also influenced the Commission’s decision to stay the remedy order in Digital Models given the jurisdictional significance, and arguably controversial nature of the decision.

[1] Certain Digital Models, Digital Data, and Treatment Plans for Use in Making Incremental Dental Positioning Adjustment Appliances, the Appliances Made Therefrom, and Methods of Making the Same (“Digital Models”), Inv. No. 337-TA-833, Comm’n Op. Granting Stay (June 11, 2004) .

[2] Id. at 10.

[3] Digital Models, Comm’n Op. Finding Violation at 144 (Apr. 3, 2014).

[4] 19 U.S.C. § 1337(a)(1)(B) states: “The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that—(i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.” (emphasis added).

[5] Digital Models, Comm’n Op. Finding Violation at 34.

[6] Certain Hardware Logic Emulation Systems and Components Thereof (“Hardware Logic”), Inv. No. 337-TA-383, Comm’n Op. at 3 (Dec. 3, 1994) (prohibiting “transfer (including electronically)”).

[7] Certain Systems for Detecting and Removing Viruses or Worms, Components Thereof, and Products Containing Same (“Viruses”), Inv. No. 337-TA-510, Comm’n Op. at 3 (Aug. 8, 2005) (prohibiting “import (including electronically)”).

[8] Certain Incremental Dental Positioning Adjustment Appliances and Methods of Producing the Same (“Incremental Dental”), Inv. No. 337-TA-562, Comm’n Op. at 7 (Feb. 19, 2013), vacated, 2014 WL 3537066 (July 18, 2014).

[9] Digital Models, Respondents’ Motion to Stay Cease and Desist Orders (May 2, 2014).

[10] A stay should not be confused with bonding during the Presidential review period, which allows a respondent to post a bond and continue importing covered products during the sixty-day review period immediately following the ITC’s final determination on violation. The United States Trade Representative, who has been delegated authority by the President, can veto the ITC’s decision during this review period on policy grounds. 19 U.S.C. § 1337(j)(2). Occasionally, when ITC orders have been stayed by the Federal Circuit, the bonding requirement has been extended for the period of the stay.  See Order, Vizio, Inc. v. Int’l Trade Comm’n, 605 F.3d 1330 (Fed. Cir. April 10, 2009) (No. 09-1386) (granting an emergency stay of the remedy orders in Certain Digital Television Products and Certain Products Containing Same and Methods of Using Same, Inv. No. 337-TA-617). The type of stay discussed in this article is limited to remedy orders issued by the ITC, and does not include stays issued during the pendency of an ITC investigation prior to the remedy determination.

[11] Median Time to Disposition in Cases Terminated After Hearing or Submission, United States Court of Appeals for the Federal Circuit (July 1, 2014, 9:13 AM), http://www.cafc.uscourts.gov/images/stories/Statistics/med%20disp%20time%20merits_table.pdf.

[12] Remedy orders issued by the Commission are “immediate” to the extent that they survive the presidential review period.

[13] 5 U.S.C. § 705.

[14] Fed. R. App. P. 18(a)(2)(A).

[15] Fed. R. App. P. 18(a)(1).

[16] See, e.g., Certain High-Brightness Light Emitting Diodes, and Products Containing Same, Inv. No. 337-TA-556, USITC Pub. 4011, 2008 WL 2556199, at *3 (June 5, 2008).

[17] E.g., Broadcom Corp. v. Int’l Trade Comm’n, 542 F.3d 894 (Fed. Cir. 2007); Dynatec Int’l, Inc. v. Int’l Trade Comm’n, No. 99-1504, 1999 U.S. App. LEXIS 38842 (Fed. Cir. Sept. 24, 1999); Jazz Photo Corp. v. Int’l Trade Comm’n, No. 99-1431 (Fed. Cir. July 6, 1999); Vizio, Inc. v. Int’l Trade Comm’n, 605 F.3d 1330 (Fed. Cir. 2010) (granting an emergency stay pending determination of a motion for a stay pending appeal, which the Court ultimately denied 48 days later).

[18] Certain Personal Data and Mobile Communications Devices and Related Software (“Personal Data”), Inv. No. 337-TA-710, USITC Pub. 4331, Comm’n Op. at 79-83 (Dec. 29, 2011).

[19] Digital Models, Comm’n Op. Finding Violation at 151-52.

[20] Sierra Club v. Jackson, 833 F. Supp. 2d 11, 30 (D.D.C. 2012).

[21] Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 512 (Fed. Cir. 1990) (quotation omitted).

[22] Id.

[23] Id. at 513; Agricultural Tractors Under 50 Power Take-Off Horsepower (“Agricultural Tractors”), Inv. No. 337-TA-380, Comm’n Op. at 14 (Apr. 24, 1997).

[24] Spansion, Inc. v. Int’l Trade Comm’n, Nos. 2009-1460, 2009-1461, 2009-1462, 2009-1465, 2009 WL 2876448, at *1 (Fed. Cir. Sept. 8, 2009).

[25] Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 844-45 (D.C. Cir. 1977); see also Agricultural Tractors, Comm’n Op. at 10.

[26] E.g., Agricultural Tractors, Comm’n Op. at 10; Digital Models, Comm’n Op. Granting Stay at 6; Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same (“Semiconductor Chips”), Inv. No. 337-TA-605, 2009 WL 2350644, at *2-4 (July 29, 2009).

[27] “Even under the less burdensome requirement that they raise ‘admittedly difficult legal questions,’ respondents have failed to satisfy the first prong of the four-part test. While this case presents some unusual facts, the legal principles involved are well-established in the case law of the federal courts and do not, in our view, present any issues of first impression.” Agricultural Tractors, Comm’n Op. at 13.

[28] Id.

[29] Digital Models, Comm’n Op. Finding Violation at 36 (“We acknowledge that the construction of the term ‘articles’ is a difficult question . . . .”).

[30] See Hardware Logic, Comm’n Op. at 3; Viruses, Comm’n Op. at 3; Incremental Dental, Comm’n Op. at 7.

[31] Agricultural Tractors, Comm’n Op. at 13; In Hardware Logic, respondents appealed the Commission’s decision to the Federal Circuit, but by agreement, the appeal turned only “on the proper construction of certain disputed terms in the three asserted claims.” The Federal Circuit affirmed the Commission’s decision in a brief opinion and did not issue an opinion on the issue of whether the Commission could prohibit electronic transmissions. Mentor Graphics Corp. v. Int’l Trade Comm’n, 124 F.3d 226 (Fed. Cir. 1997). Respondents in Viruses did not appeal the Commission’s decision.

[32] Align Tech., Inc., v. Int’l Trade Comm’n, Nos. 2013-1240, 2014-1363, 2014 WL 3537066, at *8 n.8 (Fed. Cir. July 18, 2014).

[33] Digital Models, Comm’n Op. Granting Stay at 9.

[34] Id. at 6 n.6.

[35] Digital Models, Comm’n Op. Finding Violation at 1-16 (Johanson, dissenting). Moreover, a review of the vote sheet regarding the final determination in Digital Models indicates that only Commissioner Johanson voted to approve the recommendation of the ITC’s Office of General Counsel (“GC”), while the other Commissioners voted to disapprove the recommendation and find a violation of section 337.

[36] See Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular Telephone Handsets (“Baseband Processor”), Inv. No. 337-TA-543, USITC Pub. 4258, Comm’n Op. Denying Mots. for Stay at 5-6 & n.2 (June 21, 2007) (summarily denying respondents’ request for a stay despite Commissioner Pinkert and Chairman Pearson’s dissenting opinions on both the issuance of a remedy order and the decision to deny the stay). The Federal Circuit subsequently granted a stay of the Commission’s order. See Broadcom, 542 F.3d 894.

[37] There may have been an additional factor at play in Digital Models that may explain the Commission’s decision to issue a stay in that investigation but deny one in Baseband Processors. Specifically, there is reason to believe that the ITC’s Office of General Counsel (“GC”) recommended that the Commission grant a stay in Digital Models and deny a stay in Baseband Processors.

In Digital Models, the Commission’s decision to stay the remedy order was not unanimous. See Digital Models (Commissioner Broadbent voting to deny a stay). Interestingly, if one looks at the Commission Action Jacket Approval Record—a public vote sheet on which the Commissioners indicate whether they will support or reject adopting positions suggested by the GC—Commissioner Broadbent disapproved the GC’s recommendation regarding the stay while all the other Commissioners involved in the investigation approved the GC’s recommendation. See Digital Models, Action Jacket Approval Record (June 2, 2014). Although the Action Jacket Approval Records are phrased so as to reveal the topic being voted on without revealing the GC’s recommendation on the matter, the Commissioners’ voting pattern, when compared to their final votes on whether to issue a stay, suggests that the GC recommended issuing a stay in Digital Models.

By comparison, in Baseband Processors, the Commission denied a stay, but it was also not a unanimous decision. See Baseband Processors (voting to stay the remedy orders).  Looking at the Commission Action Jacket Approval Record, Commissioners Pinkert and Pearson disapproved the GC’s recommendation regarding the stay, while the all other Commissioners approved the GC’s recommendation. See Baseband Processors, Action Jacket Approval Record (June 21, 2007). Again, by comparing the Commissioners’ votes on the Action Jacket Approval Record to how the Commissioners ultimately voted on whether to issue a stay, it is reasonable to infer that the GC recommended denying a stay in Baseband Processors.

At the very least, comparing splits among the Commissioners in their final determinations to their votes on the corresponding Action Jacket Approval Records may help litigants discern the GC’s recommendations to the Commission, which are generally not public.

[38] Semiconductor Chips, 2009 WL 2350644, at *2-4; Certain Digital Television Products and Certain Products Containing Same and Methods of Using Same, Inv. No. 337-TA-617, 2009 WL 2598777, at *2-3 (Aug. 21, 2009).

[39] Id.

[40] Digital Models, Comm’n Op. Granting Stay at 6.

[41] Digital Models, Reply Written Submission of Non-Party Nokia Corp. to the Submissions in Response to the Commission’s Request for Public Comments (Feb. 10, 2014); Digital Models, Submission of Non-Party Google Inc. in Response to Commission’s Request for Public Comments (Feb. 3, 2014); Digital Models, Reply Comments Filed on Behalf of Motion Picture Association of America, Inc. (Feb. 10, 2014).

[42] Digital Models, Comm’n Opinion, at 50-55.

[43] Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

[44] Digital Models at 6.

[45] Digital Models, Complainant Align Technology, Inc.’s Opposition to Respondents’ Motion to Stay Cease and Desist Orders at 3 (May 14, 2014).

[46] Holiday Tours, Inc., 559 F.2d at 844-45; see also Agricultural Tractors, Comm’n Op. at 10.

[47] Agricultural Tractors, Comm’n Op. at 9 (citing Holiday Tours, 559 F.2d at 843).

[48] Digital Television, 2009 WL 2598777, at *4 (quoting Wisconsin Gas Co. v. Fed. Energy Regulatory Comm’n, 758 F.2d 669, 674 (D.C. Cir. 1985)).

[49] Id. (quoting Wisconsin Gas, 758 F.2d at 674).

[50] See Agricultural Tractors at 14 (finding respondents did not establish they would suffer irreparable harm because they only offered evidence of alleged irreparable harm to one respondent).

[51] See id. at 15 (finding that respondents did not establish they would suffer irreparable harm because they sold or were selling other brands of the same product line).

[52] Digital Models, Comm’n Op. Granting Stay at 7.

[53] Id. at 8.

[54] See 19 U.S.C. § 1337(d)(1); Spansion, Inc. v. Int’l Trade Comm’n, 629 F.3d 1331, 1358 (Fed. Cir. 2010).

[55] Digital Models, Comm’n Op. Granting Stay at 9.

[56] S. Rep. No. 100-71, at 128-29 (1987).

[57]  “We acknowledge that the construction of the term ‘articles’ is a difficult question . . . .” Digital Models, Comm’n Op. Finding Violation at 36.

[58] Digital Models, Comm’n Op. Granting Stay at 10.

[59] Id. at 9.

[60] See Sapna Kumar, The Other Patent Agency: Congressional Regulation of the ITC, 61 Fla. L. Rev. 529, 536-38 (2009).

[61] E.g., Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340, 1358 (Fed. Cir. 2008) (finding that the ITC has no statutory authority to issue a limited exclusion order against downstream products of non-respondents); Suprema, Inc. v. Int’l Trade Comm’n, 742 F.3d 1350 (Fed. Cir. 2013) (rehearing en banc granted) (finding that the ITC’s authority does not extend to acts of underlying direct infringement that occur after an article has been imported).

[62] Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers, Inv. No. 337-TA-794; Letter from Michael B. G. Froman, U.S. Trade Representative, to Irving A. Williamson, Chairman, U.S. Int’l Trade Comm’n (Aug. 3, 2013).

Summer associate Sergio Broholm was also an author of this article.