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Article analyses “pitfalls” in IP cases

Article analyses “pitfalls” in IP cases

September 5, 2016

The piece by a law firm analysed IP infringement cases at the United States International Trade Commission (USITC).

The USITC's headquarters in Washington D.C.

The USITC’s headquarters in Washington D.C.

The article, on Lexology and written by law firm Morrison and Foerster LLP, noted that there were “four pitfalls to avoid when seeking to terminate” a section 337 investigation at the USITC “by consent order”, with cartridge cases affecting the remanufacturing industry most often coming under a 337 investigation. The piece notes that lawyers “should seek to avoid” the four mistakes “when drafting consent orders and stipulations” while terminating such cases.

Morrison and Foerster points out that “the preparation of motions for termination based on consent orders” – or cases that are terminated by consent between the defendants and accuser – “should be undertaken with great care”, because “even slight deviations from the numerous requirements” involved “often result in rejection”, and require “the redrafting and re-execution of the necessary papers to effect termination even when there is no opposition to the motion by the litigants”.

The consent orders are “generally based” on an agreement that those accused “will cease further importations of accused goods during the remaining term of an asserted patent”, and may state that the order “is for settlement purposes only and does not constitute admission that an unfair act has been committed”. Most of the time, the accuser “joins in the motion to terminate”, but sometimes respondents can, under the law, secure termination “not withstanding a complainant’s opposition”.

The article warns that the stipulation “must contain a series of statements” such as all “jurisdictional facts”, identification of the IP, and an acknowledgement that the order will be enforced, alongside statements from respondents to agree they will “not import or sell after importation” the products affected. Some judges have rejected terminations that have been supported by the Office of Unfair Import Investigations, and the USITC has even reversed judge decisions granting terminations.

In this case, many cases see respondents terminated by consent orders, but others are “rejected with some frequency”, so new orders need to be written. The first “pitfall” to avoid is “deviating from the language” required, with some judges rejecting orders for “failing to include a verbatim, or near-verbatim” recitation of the standard text. Others have also rejected motions where there has been deviation from the “requirements for consent orders”, again through language use.

The second meanwhile was “omitting statements required”, where judges have rejected orders “for failing to explicitly acknowledge” the USITC has “subject matter jurisdiction”; while third was “ambiguity regarding the terms of the consent”, where orders need to identify the “articles” at the centre of the case, as well as the allegation statements.

Finally, “inconsistencies among the consent order, stipulation, and notice of investigation” concerned orders being rejected when judges found inconsistencies, with particular reference to the Canon “twisted prism” case: 337-TA-829. In this case, a motion to terminate was “denied based on the presence of inconsistent provisions in the stipulation and consent order”, because the stipulation said that “without any disclaimer” respondents could “not challenge the validity” of the order.

However, the proposed order stated these provisions were “subject to” other paragraphs relating to patent expirations and invalidity, therefore offering an inconsistency.

Categories : Around the Industry

Tags : IP Legal USA

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