Be Careful What You Agree To – Invalidated Patent Claims May Not Erase Violation of Consent Order

In DeLorme Publishing Company, Inc., v. International Trade Commission, No. 14-1572 (Fed. Cir. Nov. 12, 2015), the Federal Circuit affirmed the ITC’s finding that DeLorme violated a consent order by selling infringing devices and upheld the ITC’s civil penalty even though a district court subsequently invalidated the claims.

At the ITC, DeLorme agreed to a consent order not to import, sell, or offer for sale two-way satellite communication devices that infringed certain claims of U.S. Patent No. 7,991,380. After the ITC found that DeLorme violated the consent order, it imposed a civil penalty of more than $6.2M. DeLorme appealed, arguing that an intervening district court decision invalidating the claims prevented it from violating the consent order.

The Court disagreed, finding the consent order’s language “unambiguous” that it barred DeLorme’s sales and importations “until the expiration, invalidation, and/or unenforceability of the [patent]” became “final and non-reviewable.” The Court explained that the order applied until one of these events occurred and did not apply retroactively. Because DeLorme’s actions occurred prior to the district court’s invalidity finding and because the invalidity finding was not yet final and non-reviewable, the ITC did not err in finding a violation or imposing a civil sanction.

Judge Taranto dissented-in-part, explaining that he would have remanded to the ITC to determine the effect of the district court’s invalidation.