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Appeal of Infringement Not Moot Where There Exists Live Controversy Regarding Scope of General Exclusion Order

07-1311
July 31, 2008

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Last Month at the Federal Circuit - August 2008

Judges: Michel, Schall (author), Dyk

[Appealed from: ITC]

In Yingbin-Nature (Guangdong) Wood Industry Co. v. International Trade Commission, No. 07-1311 (Fed. Cir. July 31, 2008), the Federal Circuit affirmed the ITC’s determination of validity of certain patent claims and declined to review as moot the ITC’s determinations with respect to infringement of other patent claims.

Unilin Beheer B.V. Flooring Industries, Ltd. and Unilin Flooring N.C. LLC (collectively “Unilin”) filed a complaint with the ITC under section 337 of the Tariff Act of 1930, alleging that thirty-two companies imported and sold laminate panels that infringed certain claims of U.S. Patent Nos. 6,490,836 (“the ’836 patent”), 6,874,292 (“the ’292 patent”), and 6,928,779 (“the ’779 patent”). The asserted patents are directed to a mechanism for coupling adjacent panels of laminate flooring without requiring permanent attachment, such as with nails or adhesive. Among those thirty-two companies were the parties to the appeal to the Federal Circuit: Power Dekor Group Co., Ltd.; Yingbin-Nature Wood Industry Co., Ltd.; and Jiangsu Lodgi Wood Industry Co., Ltd. (collectively “Power Dekor”).

Following an investigation into infringement and validity of the asserted claims, the ALJ concluded (1) that each of the Power Dekor products under investigation did not infringe the asserted claims of the ’836 and ’292 patents (collectively “the lower lip claims”); (2) that the asserted claims of the ’779 patent (“the clearance claims”) were invalid under 35 U.S.C. § 112, first paragraph, for lack of written description; and (3) that each of the Power Dekor products under investigation infringed certain claims of the ’836 patent (“the snap action claims”).

The ITC reversed with respect to the first two issues, concluding (1) that Unilin had proven that Power Dekor’s products infringed the lower lip claims; and (2) that the clearance claims satisfied the written description requirement and, therefore, were not invalid. Based on these conclusions and the ALJ’s finding that the Power Dekor products infringed the snap action claims, which was not reviewed, the ITC determined there was a violation and issued a general exclusion order excluding all of Power Dekor’s accused products from importation into the United States.

On appeal, Power Dekor challenged the ITC’s determinations with respect to infringement of the lower lip claims and validity of the clearance claims. Power Dekor did not, however, appeal the determination that its products under investigation infringed one or more of the snap action claims.

As a threshold question, the Federal Circuit asked the parties whether the issues raised on appeal were moot because all of the accused products infringe at least one of the snap action claims of the ’836 patent and the general exclusion order is supported by the infringement of those claims. The Federal Circuit concluded that Power Dekor’s challenge to the validity of the clearance claims of the ’779 patent was not moot, recognizing that “a case is moot when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” Slip op. at 11 (quoting Powell v. McCormack, 395 U.S. 486, 496 (1969)). The Court found that, because the term of the ’779 patent was extended by 108 days under 35 U.S.C. § 154(b), the ’779 patent expired later than the ’836 patent. Under the current general exclusion order, Power Dekor would be prohibited from importing any of the accused products until the ’779 patent expires, 108 days after the expiration of the ’836 patent. The Court explained that, because a successful challenge to the validity of the clearance claims of the ’779 patent would allow Power Dekor to begin importation of its infringing products upon expiration of the ’836 patent, the issue on appeal was not moot.

The Court held, however, that Power Dekor’s appeal with respect to the infringement of the lower lip claims of the ’836 and ’292 patents was moot, since any injury caused by the exclusion of Power Dekor’s products would not be redressed by a determination that the products do not infringe those claims. In its holding, the Court noted that the live controversy on appeal cannot be the exclusion of the Power Dekor products under investigation because that exclusion is fully supported by the ITC’s determination that the products infringe the snap action claims, which was not appealed.

The Court also rejected Power Dekor’s contention that it will be collaterally estopped by the ITC’s present rulings from arguing in future proceedings that products similar to those found to infringe the lower lip claims do not infringe the lower lip claims. The Court noted that the ITC’s findings with respect to infringement of the lower lip claims can give Power Dekor no reasonable concern about preclusive effect because (1) the factual findings of infringement that were adverse to the other parties in the investigation would not bind Power Dekor in future proceedings, and (2) the ITC’s determinations of infringement with respect to the Power Dekor products under investigation should not have a preclusive effect against other products presented by Power Dekor for importation at a future date. With respect to its second point, the Court further noted that proof of infringement by collateral estoppel is only appropriate “where it is shown that a close identity exists between the relevant features of the accused device and the device previously determined to be infringing.” Id. at 17. The Court noted that, although infringement of the unappealed snap action claims appears related in part to infringement of the lower lip claims, there had been no showing that Power Dekor’s products will be “essentially the same” as those previously determined by the ITC to infringe the lower lip claims; therefore, the Court found that collateral estoppel would not apply.

The Court next reviewed for substantial evidence the ITC’s conclusion that the clearance claims were not invalid for lack of adequate written description. The Court found that substantial evidence supported the ITC’s determination that those claims were adequately described in the originally filed disclosure and, therefore, were not invalid under 35 U.S.C. § 112, first paragraph. The Court was not persuaded that the patentee’s various amendments to the specification—e.g., the introduction of the generic term “clearances” (used to encompass the terms “recesses,” “chambers/dust chambers,” and “spaces/ intermediate spaces”) and addition of labels to certain figures—during prosecution were of such significance as to demonstrate a prior lack of possession with respect to the claimed subject matter. Further, the Court did not find the patentee’s attribution of two related meanings to the term “clearance” problematic, since Power Dekor merely referred to the use of the term as “inconsistent,” but did not argue that either claim using the term was indefinite. Finally, the Court distinguished its holding in Purdue Pharma L.P. v. Faulding Inc., 230 F.3d 1320, 1323 (Fed. Cir. 2000), where it found inadequate written description, noting that in Purdue Pharma, nothing in the patent disclosure suggested that a specific numerical ratio was an important feature of the invention. The Court found that in this case, the importance of the later-claimed chambers was clearly described in the originally filed disclosure. Accordingly, the Court affirmed the ITC’s determination that the clearance claims of the ’779 patent are valid.