InterDigital Communications, LLC v. International Trade Commission
718 F.3d 1336
Fed. Cir.2013Background
- InterDigital appeals a ITC order terminating the 337 investigation as to LG in favor of arbitration under a patent license agreement.
- The 2006 Wireless Patent License Agreement grants LG a license under InterDigital patents for 2G/3G products; the grant clause is Section 2.1 and the term ends December 31, 2010.
- The agreement contains a survival clause (Section 6.19) preserving certain provisions, including the last sentence of Section 2.1 for GSM 2G products.
- Article V of the Agreement provides dispute resolution; disputes not resolved via non-binding negotiations may be submitted to AAA arbitration in Washington, D.C.
- The ITC investigation 337-TA-800 involved 3G devices; LG moved to terminate arguing the dispute lies under the Agreement and is arbitrable; ALJ granted termination in June 2012; the ITC declined review, making it final.
- The Federal Circuit addresses jurisdiction and merits, reversing the ITC and remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has jurisdiction to review the ITC termination. | InterDigital argues jurisdiction exists under 28 U.S.C. § 1295(a)(6) and § 1337(c). | LG/ITC contend termination under §1337(c) is not a final determination and not appealable. | Yes; jurisdiction exists under 28 U.S.C. § 1295(a)(6) and §1337(c). |
| Whether ITC termination based on arbitration is a final determination under §1337(d)-(g). | Terminating by arbitration basis can be the equivalent of a final determination. | Termination under §1337(c) is not a final merits determination. | Arbitration-based termination can be appealable as the equivalent of a final determination. |
| Whether the ALJ erred by not evaluating whether LG's license defense was plausibly tied to the Agreement. | ALJ should construe the Agreement to assess plausibility of LG's defense. | ALJ applied a narrow “wholly groundless” inquiry. | ALJ erred; LG's license defense was not plausibly grounded; surviving terms do not extend 3G license. |
| Whether LG's arbitrability claim was “wholly groundless” under Qualcomm framework. | LG's argument could be resolved by arbitration; not wholly groundless. | The argument was wholly groundless given the survival terms. | LG's claim was not plausibly grounded; but the court still concluded as to jurisdiction and remanded. |
Key Cases Cited
- Import Motors, Ltd. v. U.S. Int'l Trade Comm'n, 63 CCPA 56, 530 F.2d 940 (1976) (framework for appealability of ITC orders under §1337(c))
- Block v. U.S. Int'l Trade Commission, 777 F.2d 1568 (Fed. Cir. 1985) (termination not on merits may be non-appealable; prejudice analysis)
- Farrel Corp. v. U.S. Int'l Trade Comm'n, 949 F.2d 1147 (Fed. Cir. 1991) (arbitration termination may be final if dismissal is with prejudice)
- Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 121 S. Ct. 513 (2000) (FAA arbitration appealability as final decision; district court dismissal may be appealable)
- Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (Fed. Cir. 2006) (two-step arbitrability inquiry: who decides arbitrability; then if not wholly groundless)
- Allied Corp. v. U.S. Int'l Trade Comm'n, 850 F.2d 1573 (Fed. Cir. 1988) (review reach; not always determined by statute text alone)
- Dream Theater, Inc. v. Dream Theater, 124 Cal.App.4th 547, 21 Cal.Rptr.3d 322 (Cal. Ct. App. 2004) (limits of arbitrability under state law referenced in Qualcomm context)