926 F.3d 1353
Fed. Cir.2019Background
- Diebold sued Hyosung at the ITC, alleging imported ATMs infringed Diebold patents '616 and '631; the ITC found infringement, issued a limited exclusion order and cease-and-desist orders.
- The '616 patent covers an ATM rollout tray with a service opening enabling tool access to service points; key dispute involved claim construction of "service opening" and whether trays have a position where the opening is inaccessible from outside the housing.
- Hyosung redesigned its ATMs and obtained a Customs ruling that the redesigned products do not infringe the '616 patent; the '616 patent expired during appeal.
- The '631 patent claims a method for sensing MICR data on checks by moving one of two magnetic read heads so the MICR line is aligned regardless of check facing (orientation); Hyosung argued obviousness based on prior art (Yasuhiko, Kim) and evidence of skill-level knowledge (Volpa).
- The ITC found Hyosung infringed both patents, that asserted claims were not invalid, and that Diebold met the domestic-industry requirement for both patents based on R&D and ongoing exploitation.
Issues
| Issue | Plaintiff's Argument (Hyosung) | Defendant's Argument (Diebold / ITC) | Held |
|---|---|---|---|
| Claim construction and infringement of '616 ("service opening") | "Service opening" requires an opening designed to enable servicing; Hyosung's products lack such designed openings and do not meet the second-position limitation | ITC construed "service opening" broadly and found openings inaccessible in second position; orders enforce infringement finding | Appeal as to '616 is moot due to patent expiration; ITC decision vacated and orders amended (dismissed on mootness) |
| Continued viability/enforcement after redesign and Customs ruling re: '616 | Redesigned ATMs cleared by Customs as noninfringing; no violation occurred; appeal should be vacated | Diebold suggested hypothetical removal of covers after import could violate orders; speculative enforcement possible | Court found no evidence of violation, speculation insufficient; vacatur and remand to amend orders as to '616 |
| Obviousness of '631 asserted claims | Prior art (Yasuhiko + Kim) and Volpa (to show skill-level knowledge) render claims obvious, including reading MICR regardless of facing | ITC found prior art did not teach reading when check inserted upside-down and rejected applicability of combination | Hyosung failed to show clear-and-convincing evidence of obviousness; ITC affirmed |
| Domestic industry (economic prong) for '631 | Diebold's R&D investments from 2005–2010 are too remote to count; investments must be recent/connected | ITC relied on past R&D plus ongoing exploitation, service and assembly expenses showing nexus to asserted claims | Substantial evidence supports ITC: past R&D linked to ongoing qualifying expenditures; domestic industry requirement satisfied |
Key Cases Cited
- Honeywell Int’l, Inc. v. Int’l Trade Comm’n, 341 F.3d 1332 (Fed. Cir.) (standard of review: factual findings substantial evidence; legal review de novo)
- Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83 (U.S. 1993) (party claiming mootness must show subsequent events producing that result)
- Tessera, Inc. v. Int’l Trade Comm’n, 646 F.3d 1357 (Fed. Cir.) (vacatur appropriate when mootness occurs through happenstance)
- Texas Instruments Inc. v. U.S. Int’l Trade Comm’n, 851 F.2d 342 (Fed. Cir.) (expiration of patent can render ITC appeal moot)
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (U.S.) (speculative chain of possibilities insufficient for Article III controversy)
- Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167 (U.S.) (standing and mootness principles; causal connection and redressability)
- Bio-Tech Gen. Corp. v. Genentech, Inc., 80 F.3d 1553 (Fed. Cir.) (ITC determinations do not have preclusive effect on later litigation)
- Motiva, LLC v. Int’l Trade Comm’n, 716 F.3d 596 (Fed. Cir.) (timing and relevance of investments in domestic industry analysis)
- InterDigital Comm’cns, LLC v. Int’l Trade Comm’n, 707 F.3d 1295 (Fed. Cir.) (domestic-industry technical and economic prongs)
- Lelo Inc. v. Int’l Trade Comm’n, 786 F.3d 879 (Fed. Cir.) (quantitative analysis required for economic-prong showing)
- Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir.) (use of prior art to show knowledge of a person of ordinary skill)
- United States v. Munsingwear, Inc., 340 U.S. 36 (U.S.) (duty to vacate lower-court judgment that became moot through happenstance)