Comcast Corp. v. ITC and Rovi Corp. (Fed. Cir. 2020)

Rovi complained to the US International Trade Commission (ITC) that Comcast’s customers directly infringe Rovi’s U.S. Patents 8,006,263 and 8,578,413 when they use the X1 system. The ITC agreed and found Comcast in violation.

Three issues to talk about here: (1) Importing “articles that infringe”; (2) Importation by third parties; (3) Patents are now expired.

Articles that Infringe: The ITC statute provides for action based upon “importation … of articles that (i) infringe a valid and enforceable US patent.” 19 U.S.C. § 1337(a). Comcast argues that the set-top boxes do not infringe the patent at the point of importation, but rather only become infringing once in use by the customer. On appeal, the Federal Circuit held that this issue was already decided in Suprema, Inc. v. U.S. Int’l Trade Comm’n, 796 F.3d 1338 (Fed. Cir. 2015) (en banc) (ITC still can take action to block imports even though direct infringement is post-importation). Note here that Comcast hired former US Solicitor General Donald Verrilli as its appellate counsel — in part to potentially push this issue up to the Supreme Court.

Third Party Importation: The Comcast X1 boxes are actually imported by ARRIS and Technicolor. On appeal, the Federal Circuit confirmed that Comcast counts as the importer for Section 337 purposes because Comcast caused the articles to be imported and because the articles are particularly tailored to Comcast’s system so as to have no other use.

Expired Patents: The patents at issue here have expired. As such, the ITC exclusion order has no further prospective effect. Since the ITC is not authorized to award damages, Comcasted that the patent expiration rendered the entire case and appeal moot. On appeal, however, the Federal Circuit chose to decide the issues — finding that “appellate finality” is warranted based upon “collateral consequences” that may stem from its outcome. In particular, the court noted two additional ITC actions involving Rovi patents asserted against the same Comcast X1 box in which ALJ noted that the present appeal will impact the outcome of the ongoing investigation. “We conclude that there are sufficient collateral consequences to negate mootness.”

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The case also involves parallel district court litigation that was originally filed in E.D. Tex. but moved to S.D.N.Y. That case has been stayed pending outcome of the ITC litigation under 28 U.S.C. § 1659. Although the ITC upheld the asserted claims, the USPTO cancelled the claims of the asserted patents as part of an IPR proceeding. Those final decisions are now being appealed by Rovi to the Federal Circuit.

One of the appeals included the following interesting colloquy at oral from Judge Lourie associated with the patent’s listing of 1,500 cited references.

Judge Lourie: You are presumably registered to practice in the Patent Office? Attorney: I am Judge: What do you understand the purpose of citing prior art references to be? Attorney: During prosecution? Judge: During prosecution, yes. Attorney: So that the examiner may consider them in whether to allow the claims Judge: In other words, they are relevant to patentability Judge: This patent, I’m sure you didn’t draft it, but you are standing here. This patent has 22 columns of cited references; Probably between 1,500 and 2,000. It’s very difficult to escape the conclusion that the applicant was trying to bury — it didn’t even cite [the reference used in the IPR]. What can be the sound purpose in citing 1,500 – 2,000 references other than to bury the examiner. Attorney: The Rovi family of companies have a lot of different patent applications all related to similar technology. And I know that there is an obligation when you have multiple patents that are related to cite all of the prior art references. Judge: So five references; ten references; twenty references … Attorney: They do tend to accumulate when you have large patent portfolios. Because if you don’t cite all of the prior art references you cited for another patent that has your name on it then the implication is that well you purposefully didn’t cite it. … Judge: Well you’ve given a pretty good defense and I commend you for that. But, it is not convincing as to the citation of 1,500 references. Will you filter back to the originators of this patent, at least with respect to one judge ‘it doesn’t sit very well.’? It doesn’t leave a good impression of patent prosecution.

Oral arguments in 2019-1188 available here: http://www.cafc.uscourts.gov/oral-argument-recordings