ROCKWELL AUTOMATION, INC. v. RADWELL INTERNATIONAL, INC.
1:15-cv-05246
D.N.J.Sep 26, 2019Background
- Rockwell sued Radwell alleging Radwell sold unauthorized "gray market" products bearing Rockwell trademarks in the U.S., asserting trademark infringement (15 U.S.C. §1114), NJ statutory unfair competition, tortious interference, and aiding/abetting fraud.
- Rockwell filed a §337 petition with the ITC; the ITC instituted an investigation and this district court stayed discovery pending ITC proceedings.
- Before an ALJ issued an initial determination on the merits, Radwell entered a consent order with the ITC agreeing to stop importing/selling goods bearing Rockwell marks; the ITC accepted the consent order and terminated the investigation as to Radwell.
- Rockwell moved for summary judgment in district court, arguing the ITC consent order is a final determination that has claim preclusive effect over Counts I, V, and VII–IX in the Second Amended Complaint.
- Radwell argued the consent order was entered before any ALJ factual or legal findings, so it cannot have preclusive effect; the ITC regulation expressly provides termination by consent "need not constitute a determination as to violation of section 337."
- The district court denied Rockwell's motion, holding that a consent order issued before an ALJ makes findings identifying unlawful harm to U.S. industry cannot have claim-preclusive effect in a later adjudication; whether a consent order has preclusive effect depends on whether there is an ALJ/ITC finding that is necessarily final.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the ITC consent order precludes district-court adjudication of Counts I, V, VII–IX | The ITC consent order is a final determination of the same claims and therefore preclusive | The consent order was entered before any ALJ findings, so it cannot be a final determination and is not preclusive | Denied preclusion: consent order issued before any ALJ finding cannot preclude later adjudication absent an ALJ/ITC final finding |
| Which precedent governs preclusive effect of ITC determinations | Third Circuit rules on consent orders should apply | Federal Circuit precedent and ITC regulations govern §337 finality and preclusion questions | Federal Circuit jurisprudence and ITC regulations control questions of ITC finality and preclusion |
| Whether ITC regulations allow termination by consent to be treated as a final finding | A consent order should be afforded preclusive effect under Third Circuit law and equitable considerations | 19 C.F.R. §210.21(c) states termination by consent "need not constitute a determination"; thus not always final | The regulations allow consent termination without a determination; absent an ALJ/ITC finding of unlawful harm, the consent order lacks preclusive effect |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary-judgment standard: genuine issue for trial exists when reasonable jury could return verdict for nonmoving party)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (moving party's initial burden on summary judgment and allocation of proof)
- San Huan New Materials High Tech, Inc. v. Int'l Trade Comm'n, 161 F.3d 1347 (Fed. Cir. 1998) (ITC may issue and enforce consent orders and enforce them by penalties even where no determination of violation was made)
- Swagway, LLC v. Int'l Trade Comm'n, 923 F.3d 1349 (Fed. Cir. 2019) (Federal Circuit discussion left the preclusive effect of non-patent ITC determinations for district courts to assess; procedural handling of consent-order motions reviewed)