Yesterday we covered InterDigital’s opposition to Huawei, Nokia, and ZTE’s efforts to stay the ITC’s investigation into InterDigital’s latest Section 337 complaint pending a potential FRAND determination in the District of Delaware.  We also noted that the other respondent, Samsung, did not join the motion but stated that it did not oppose such a stay.    The ITC Investigative Staff from the Office on Unfair Important Investigations (a third party that participates in many ITC investigations as a representative of the public interest) also filed its own response to the motion yesterday.  The Staff opposes the motion to stay for a variety of reasons, which we will get into below.

The Staff argues that the traditional factors used by the ITC in determining a whether to grant a motion to stay do not warrant a stay here.  Principally, the Staff argues that motion to stay should be denied for three reasons: (1) a FRAND-based affirmative defense is not a basis for terminating or delaying an ITC investigation; (2) a FRAND determination in Delaware would not necessarily moot the case; and (3) a stay pending final resolution of Inv. No. 337-TA-800 would not simplify the case.  Much of the Staff’s arguments regarding the traditional stay factors and (2) and (3) above parallel the arguments made by InterDigital, so we won’t delve into them here.  But the Staff’s views regarding FRAND-based affirmative defenses at the ITC are worth a closer look.

The Staff identifies numerous prior ITC investigations that have involved FRAND issues, but notes that “none have resulting in a finding that the Commission should not conduct an investigation or award relief merely because the asserted patent is allegedly subject to FRAND obligations.”  The Staff’s position is that because FRAND obligations are relevant to affirmative defenses, this is an issue to be explored over the course of an investigation — not a basis to stay an investigation.  The Staff also takes issue with Huawei/Nokia/ZTE’s arguments about the propriety of seeking exclusionary orders on FRAND-encumbered standard-essential patents — arguing that the ITC “has not yet held that a patent-holder may not (or even should not) seek exclusionary relief in the first instance where a FRAND-related defense is asserted.”  The Staff distinguishes between injunctions in federal courts — an equitable remedy — with the statutory-based remedy of an exclusion order that is issued by the ITC.  The Staff notes that the Federal Circuit has held that the decision whether to grant or deny an exclusion order is based on statutory public interest factors, not the equitable principles as recited in the eBay v. MercExchange case — and states that it is “unaware of any court that has held that the statutory remedy of an exclusion order is (or should be unavailable where a respondent in a section 337 investigation has asked a federal district court to set a FRAND royalty rate.”

The Staff’s position is not binding on the Administrative Law Judge, of course — but it can sometimes tip the scales one way or another.