DeLorme Publishing Co. v. International Trade Commission
805 F.3d 1328
| Fed. Cir. | 2015Background
- DeLorme entered a consent order (Apr 1, 2013) forbidding importation or sale "any two-way global satellite communication devices... that infringe" specified claims of BriarTek’s ’380 patent until expiration, invalidation, or unenforceability.
- Commission instituted enforcement proceedings alleging DeLorme sold InReach 1.5 and SE devices containing imported components and induced infringement despite the Consent Order.
- The ITC found DeLorme violated the Consent Order (induced infringement via sale + instructions) and assessed a civil penalty of $6,242,500 under 19 U.S.C. § 1337(f)(2).
- After the ITC decision, the Eastern District of Virginia granted summary judgment that the asserted claims were invalid; DeLorme appealed that invalidity ruling separately and this Court affirmed in a concurrent decision.
- DeLorme argued (1) the Consent Order did not bar sale of domestically assembled devices containing noninfringing imported components, (2) invalidation of claims retroactively nullifies the ITC enforcement and penalty, and (3) ePlus precedent requires vacatur of the penalty; the Court rejected these arguments.
Issues
| Issue | BriarTek (Plaintiff) Argument | DeLorme (Defendant) Argument | Held |
|---|---|---|---|
| Whether selling devices containing imported components violated the Consent Order | Consent Order bars sale/import of infringing devices; selling devices with imported components plus instructions to use them infringingly violates the Order | Consent Order only bars import/sale of imported components that themselves infringe; domestic assembly with noninfringing imported parts is permitted | Court: Violated Consent Order—sale of assembled devices containing imported components with instructions inducing infringement is barred |
| Standard of review for Consent Order interpretation and infringement findings | N/A | N/A | Court: Contract/consent-order interpretation de novo; factual infringement reviewed for substantial evidence; claim construction de novo (Teva principles) |
| Effect of subsequent district-court invalidation of patent claims on prior-enforcement and penalties | Consent Order language makes it inapplicable upon invalidation only when that invalidation is final and non-reviewable; pre-invalidity violations remain enforceable | Invalidation negates liability retroactively and thus vacates ITC enforcement and penalty | Court: Consent Order unambiguously applies until expiration/invalidation/unenforceability; invalidation applies prospectively only when final and non-reviewable; pre-final invalidation does not erase past violations or penalties |
| Whether ePlus requires vacatur of penalty after patent claim cancellation | ePlus concerned vacatur of contempt where underlying injunction was nonfinal; if underlying relief is invalidated while still reviewable, contempt may be set aside | DeLorme: ePlus mandates vacatur of penalty because patent claims were later invalidated | Court: ePlus is inapplicable here because the Consent Order was final and unappealable when violation occurred; civil penalty cannot be set aside on that basis |
| Whether the ITC abused its discretion in setting the penalty amount ($6,242,500) | Penalty properly based on EPROM factors, proportional and below statutory maximum | Penalty excessive; Commission misapplied EPROM factors; should consider only value of imported components | Court: No abuse of discretion — Commission applied EPROM factors, findings supported, and penalty below statutory cap |
Key Cases Cited
- UPI Semiconductor Corp. v. Int’l Trade Comm’n, 767 F.3d 1372 (Fed. Cir. 2014) (standards of review for ITC enforcement and consent-order interpretation)
- i4i Ltd. v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) (infringement as question of fact)
- Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (U.S. 2015) (claim construction de novo with deferential review of subsidiary factual findings)
- San Huan New Materials High Tech, Inc. v. Int’l Trade Comm’n, 161 F.3d 1347 (Fed. Cir. 1998) (authority to impose § 1337(f)(2) civil penalties for consent-order violations)
- Cornmill USA, LLC v. Cisco Sys., 135 S. Ct. 1920 (U.S. 2015) (good-faith belief in invalidity not a defense to induced infringement)
- ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349 (Fed. Cir. 2015) (vacatur of contempt where injunction was nonfinal and underlying claims later cancelled)
- United Mine Workers of Am. v. Gibbs (United Mine Workers), 330 U.S. 258 (U.S. 1947) (principle that remedial relief falls with an erroneously issued injunction)