On February 29, 2012, the Federal Circuit issued a precedential opinion in General Electric Co.  v. ITC (2010-1223).  This was an appeal from the Commission’s final determination of no violation of Section 337 in Certain Variable Speed Wind Turbines and Components Thereof (Inv. No. 337-TA-641).  See our October 29, 2009 and March 5, 2010 posts for more details.

By way of background, the Complainant in this investigation is General Electric Co. (“GE”) and the Respondents are Mitsubishi Heavy Industries, Ltd., Mitsubishi Heavy Industries America, Inc., and Mitsubishi Power Systems Americas, Inc. (collectively, “MHI”).  GE alleged a violation of Section 337 with respect to U.S. Patent Nos. 7,321,221 (the ‘221 patent), 5,083,039 (the ‘039 patent) and 6,921,985 (the ‘985 patent) with respect to MHI variable speed wind turbines and the specialized power circuits that allow them to safely adapt to modern power grids.  The patents-in-suit are generally directed to how the turbines are connected to the power grids.

On August 7, 2009, former ALJ Carl C. Charneski issued the initial determination finding that a violation of Section 337 had occurred with respect to claim 121 of the asserted ‘039 patent, and claim 15 of the asserted ‘985 patent.  Additionally, ALJ Charneski determined that there was no violation of Section 337 by any party with respect to the ‘221 patent. 

In its opinion, the Commission reversed the ALJ’s determination of violation of Section 337 with respect to the ‘039 and ‘985 patents, and affirmed the ALJ’s determination of no violation with respect to the ‘221 patent.  The Commission also found no infringement of the ‘039 and ‘221 patents, and that GE failed to satisfy the domestic industry requirement with respect to the ‘985 patent.

GE appealed the Commission’s decision with respect to claim construction, infringement, and domestic industry, as discussed below.  Issues relating to the ‘039 patent were ruled moot by the Federal Circuit since the ‘039 patent expired on February 1, 2011.

Claim Construction

According to the opinion, infringement of the ‘221 patent was determined based on the construction of the crucial phrase “predetermined value” in claim 5 of the ‘221 patent in relation to when turbine operation can be resumed.  GE argued that the term “predetermined value” includes “not only a value of current, but also a predetermined period of time, for the ‘221 patent states that the turbine operation can be resumed under consideration of a predetermined time constant.”  The Commission did not agree with GE, and found that the portions of the specification relied on to show that the predetermined value also included time were in relation to an increase in plant safety, and that “the ‘221 specification’s only description of the operation of the invention shows recoupling upon measurement of a predetermined value of current, not upon passage of a pre-set period of time.”  The Federal Circuit agreed with the Commission that the ‘221 claims are directed only to resuming the turbines after a predetermined value of current or a proxy for current has been reached, as this “stays true to the claim language and most naturally aligns with the patent’s description of the invention.”

Infringement

As described above, the ‘221 patent claims were held to be directed to resuming action after a predetermined value in current, rather than time, was reached.  Since “it is not disputed that the [MHI] turbines do not measure current or voltage in determining when to resume the feed-in connection after decoupling has occurred,” but rather, after a pre-set period of time, the MHI turbines were held not to infringe the ‘221 claims either directly or under the doctrine of equivalents.  Thus, the ruling that MHI’s turbines do not violate Section 337 because they do not infringe was affirmed.

Domestic Industry

Since the Federal Circuit determined that there was no infringement of the ‘221 patent and no Section 337 violation, it declined to consider whether or not GE’s turbines met the domestic industry requirement in relation to the ‘221 patent.

Regarding the ‘985 patent, the Commission found no domestic industry because it construed claim 15, the only claim at issue, in a manner that excluded the GE turbines from the scope of the claim.  The point of contention in claim 15 was that it included a converter controller “to shunt current from the inverter and generator rotor” in response to a control signal.  According to the opinion, the issue of claim construction with respect to that phrase was “whether claim 15 requires that the circuit that shunts current on signal from the converter controller is located entirely outside of the inverter.” 

Although the Commission held that the shunt circuit must be separate from the inverter, the ALJ felt differently and held that “the claim does not contain the additional requirement that the shunt circuit is located entirely outside of the inverter.”  The Federal Circuit reversed the Commission’s construction and agreed with the ALJ, noting that although claim 15 “requires that the circuit is coupled with the input of the inverter and the converter controller, whereby the current is shunted from the inverter and the rotor; this requirement does not limit the placement of the shunting circuitry to a location entirely external to the inverter.”  The Federal Circuit pointed to other cases that similarly hold that a construction to adopt a specific structure is inappropriate when the claimed elements “must only perform their stated functions.”  Therefore, the Federal Circuit’s construction of claim 15 allows for GE’s turbines to be covered, meeting the domestic industry requirement.  Thus, the ruling that there is no domestic industry corresponding to the ‘985 patent was reversed.

Other ‘985 Patent Issues

Based on the Commission’s determination of the domestic industry question, it took no position on the ALJ’s initial determination that the MHI turbines infringe the ‘985 patent, that the patent is valid, and that no inequitable conduct had been shown.  According to the opinion, the Commission stated that these other issues decided by the ALJ “are not subject to judicial review because they are not a Commission determination.”  In other words, the Commission held “that when the full Commission does not review an issue that it noticed for review, that issue is removed from access to judicial review.” 

Significantly, the Federal Circuit noted that “this interpretation conflicts with the statutory right of judicial review of Commission determinations” in 19 U.S.C. § 1337(c), which also specifies that issues of an initial determination that are “noticed” but not reviewed become the Commission’s determination unless the Commission orders review, and would thus be appealable.  As such, “issues not selected for review by the full Commission may be appealed to the Federal Circuit.”

The Federal Circuit dismissed the case law and rules the Commission attempted to rely on to support its contrary position, pointing out that “the consequences of this practice are illustrated in this case, for all contested issues concerning the ’985 patent were investigated by the commission, tried to the ALJ, decided by initial determination, yet nearly all were held unavailable for judicial review…thus we are obliged to remand to the commission for undefined further proceedings, for which one may be confident only of further time and cost in the commission and upon reappeal to this court.”  In keeping with this statement, the case was remanded for further proceedings with respect to the ‘985 patent.