Yesterday the U.S. International Trade Commission (ITC) issued a Notice that it was terminating the investigation of whether certain LSI 802.11 and H.264 alleged standard essential patents were infringed by Realtek and others given various circumstances that mooted the investigation as to most patents and a finding of no liability for the remaining patent.  In terminating the investigation, the ITC “determined to take no position on the ALJ’s determination with respect to the Respondents’ RAND and equitable defenses.”

The ITC terminated the investigation as to the four patents at issue for different reasons, many not related to the merits:

  • Terminated investigation as to the ‘087 and ‘663 Patents due to settlement.
  • Terminated investigation as to ‘867 Patent because it recently expired and the ITC can only give prospective relief.
  • Terminated investigation as to remaining ‘958 Patent because asserted patent claims were not infringed, the claims were invalid and there was no domestic industry based on LSI’s licensing activities.

Our Oct. 21, 2013 post discussed the ITC’s decision to review ALJ Shaw’s determination in its entirety and had requested briefing on RAND-related issues in the event liability were found.  The ITC sought such RAND-related information given U.S. Trade Representative Froman’s prior disapproval of the Samsung-Apple exclusion order that counseled  the ITC to proactively develope a factual record on RAND issues (see our Aug. 6, 2013 post).  The ITC’s decision to terminate the investigation without addressing the RAND issues is a somewhat anti-climatic end of an investigation in which much ink was spilled (see our various posts on this Inv. No. 337-TA-837).  Whether and to what extent the RAND issue may and will be briefed in any appeal to the Federal Circuit is questionable.  But they will be front and center with any appeal from the parallel district court litigation (though there may be an issue similar to the Microsoft v. Motorola case whether the case premised on breach of RAND obligation should be appealed to the Federal Circuit or regional circuit).

Recall from our Feb. 27, 2014 post last week that the parallel district court case between Realtek and LSI before Judge Whyte led to a jury determined RAND rate for the ‘867 Patent (which the ITC dismissed because it expired) and the ‘958 Patent (which the ITC found not infringed).  The ITC’s decision is not inconsistent with the jury verdict for a few reasons.  First, procedurally, the ITC decision itself is not binding on the district court.  Second and more important substantively and practically, the jury was asked to determine a RAND rate for the two patents without deciding whether the patents were infringed and under the assumption that both patents are essential to the IEEE 802.11 WiFi standard.  The jury’s verdict thus is not inconsistent with the ITC’s determination, which did not decide whether the ‘867 Patent is infringed and found no infringement of the ‘958 Patent (an issue the jury was not asked to decide).