ITC’s Assessment of Failed Economic Prong of Domestic Industry Requirement Affirmed by the Federal Circuit

In Zircon Corp. v. ITC, No. 2022-1649 (Fed. Cir. May 8, 2024), the Federal Circuit affirmed the ITC’s finding that Zircon failed to satisfy the economic prong of the domestic industry requirement of § 337.

At the ITC, the ALJ and the Commission found that the economic prong of the domestic industry requirement was not satisfied with respect to any of the asserted patents. Zircon argued that it satisfied the economic prong by an aggregation of its investments across all 53 of its domestic industry products. The Commission explained that by aggregating its investments across domestic industry products that practiced different patents or groups of patents, Zircon failed to provide the Commission with an adequate basis to evaluate the investments and the significance of those investments with respect to each asserted patent. Zircon disagreed and appealed.

At the Federal Circuit, the Court determined that the Commission did not err in finding that Zircon failed to meet its burden when it relied on aggregated evidence of its investments in all domestic industry products. While the Court agreed that investments do not always need to be broken down on a patent-by-patent basis, the Court found that Zircon failed to meet its burden when it relied on aggregated evidence without allocating those investments among products or product groups relating to each asserted patent, or product groups relating to all the asserted patents.