uPI Semiconductor Corp. v. Int’l Trade Comm’n, ___ F.3d. ___ (Sept. 25, 2014) (NEWMAN, Moore, Chen) (ITC: Shaw) (3 of 5 stars)

Federal Circuit affirms-in-part, reverses-in-part, and remands ITC rulings in proceedings to enforce a consent order relating to alleged trade secret misappropriation and infringement of three patents.

Third-Party Importation: The Federal Circuit held that the ITC had authority to impose civil penalties against uPI based on products imported by third parties incorporating uPI technology that infringed Richtek’s patents or used Richtek’s trade secrets. The Federal Circuit rejected uPI’s argument that under Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340 (Fed. Cir. 2008), the ITC lacked authority to impose penalties based on third-party importations, holding that the ITC has “statutory authority to assess a civil penalty” for violating the consent order, which specifically includes “aiding or abetting” importation.  Slip op. at 13. The Federal Circuit also affirmed the ITC’s reliance on evidence relating to the typical “lag time” between a sale by uPI and subsequent importation by its customers in calculating the number of days uPI was in violation of the consent order. The Federal Circuit further rejected uPI’s argument that the ITC erred in finding that uPI directly infringed one patent, holding that the relevant issue was whether the imported products were infringing, “which constituted a violation under the knowingly aiding or abetting provision” of the consent order.  Id. at 14. Finally, the Federal Circuit reduced the penalty against uPI to the extent that it was based on a patent that had been invalidated in reexamination.

Post-Consent Order Products: The Federal Circuit reversed the ITC’s determination that products subsequently designed by uPI did not contain Richtek’s trade secrets and therefore were not in violation of the consent order, emphasizing evidence of continued trade secret use, including the similarity between the pre- and post-consent order products, 23 lines of code from Richtek’s trade secrets that had been provided verbatim to outside design firms, and the duplication of “extraneous markings, notations, and purported design errors from Richtek’s trade secrets.”  Id. at 18.