On December 1, 2015, the International Trade Commission (“Commission”) issued an opinion in Certain Vision-Based Driver Assistance System Cameras and Components Thereof, 337-TA-907 (“Vision-Based System Cameras”), finding no violation of Section 337. The opinion puts to rest the question of whether a complainant can rely upon practice of an invalid claim to satisfy the technical prong of the domestic industry requirement – the Commission held that domestic industry cannot be based on an invalid claim. The opinion also contains significant rulings regarding importation and infringement issues raised in the investigation.

Background

In Vision-Based System Cameras, complainant Magna Electronics Inc. (“Magna”) contended (after withdrawing other patents asserted in the original complaint) that respondent TRW Automotive U.S., LLC (“TRW”) infringed two patents – U.S. Patent Nos. 8,686,840 (the “’840 Patent”) and 8,692,659 (the “’659 Patent”). These patents claim systems for mounting accessories (such as cameras) in a vehicle.

TRW manufactured mounting systems and cameras (“S-Cam” cameras), but Magna admitted that TRW’s mounting systems were non-infringing and only accused the S- Cam cameras of indirectly infringing the asserted patents. TRW imported components (Mobileye EyeQ2 image processors) into the United States for use in the accused S-Cams. As discussed further below, many of these S-Cams were installed in GM vehicles that were later imported into the U.S.

On April 27, 2015, Administrative Law Judge Theodore Essex issued a final Initial Determination (“ID”) finding no violation of Section 337. Specifically, Judge Essex found that TRW did not indirectly infringe the ’840 and ’659 Patents and that the ’840 Patent was invalid. Judge Essex also found that the domestic industry requirement had been met for the ’659 patent, but not for the ’840 patent, and that the importation requirement of Section 337 had been satisfied. Magna petitioned the Commission for review of only the ALJ’s adverse findings regarding the ‘659 Patent; it did not challenge the invalidity determination regarding the’840 Patent. TRW similarly petitioned for review of various issues.

On July 31, 2015, the Commission determined to review in-part the final ID. This review included issues regarding infringement and validity, importation, and the technical prong of the domestic industry requirement. Although the Commission took review of the domestic industry issue, none of the questions posed in the Notice

of Review focused on that issue. On December 1, 2015, the Commission affirmed Judge Essex’s finding of no violation, although it reversed and vacated portions of the final ID. As discussed below, the Commission clarified its position on the use of an invalid claim to meet the domestic industry requirement.

Domestic Industry Cannot Be Based on an Invalid Patent Claim

As noted in our prior post concerning Certain Soft-Edged Trampolines and Components Thereof, Inv. No. 337-TA-908 (“Certain Soft-Edged Trampolines”) (which can be found here), Commission decisions have been inconsistent on whether a complainant can rely on an invalid patent claim to prove the existence of a domestic industry. In Vision-Based System Cameras, the Commission clarified that an invalid claim cannot satisfy the technical prong of the domestic industry requirement:

The Commission granted review of this issue solely to clarify any inconsistency in our precedent. The Commission affirms the ID’s findings that there is no domestic industry because the claim asserted to show domestic industry (claim 30) is invalid. Section 337 requires that each complainant prove a domestic industry exists for “articles protected by the patent.” . . . Section 337 requires that the domestic industry is related to an “article protected by the patent,” and an invalid patent cannot protect any articles.

Vision-Based System Cameras, Comm’n Op. at 36. The Commission noted that its regulations require the Judges to determine whether the asserted domestic industry claims are practiced by the domestic industry products, even if those claims are found to be invalid. But this requirement is only to ensure that the Commission has a complete set of findings. Id. at 36-37.

Infringement Determinations

With respect to claim construction for the ’659 Patent, the only dispute between the parties was whether the asserted claims required a camera. The ’659 Patent claims are drawn to an “accessory mounting system” that is “configured to accommodate a forward facing camera”. Id. at 12 (emphasis added). In concluding that a camera was not required, the Commission explained that “Federal Circuit precedent is clear that when a first structure is ‘capable of’ or ‘configured to’ interact with a second component, the claim may be infringed even in the absence of the second component.” Id. at 13 (citing Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358, 1363 (Fed. Cir. 2009)) (emphasis in original). Given that the patent describes other components that could be mounted using the accessory system (such as a tire pressure gauge), and in light of other patents filed by the inventors which more specifically claimed a camera as a claim limitation, the Commission found no camera limitation in the asserted claims of the ’659 Patent. Moreover, the Commission opined that inclusion of a camera limitation “would substantially read out the “‘configured to’ and ‘when’ limitations” in the claims.” Id. at 16.

Turning to infringement, the Commission found no infringement by TRW of the ’659 Patent either directly, contributorily, or by inducement. With regard to the S-Cam 2 camera, while the GM vehicles were equipped with an infringing accessory mounting system (not made by TRW) that was configured to hold the S-Cam 2, the S-Cam 2 itself did not directly or contributorily infringe because a camera was not a limitation of the ’659 Patent claims and the S-Cam 2, therefore, could not be a material component of the claimed invention. Id. at 18, 21. With regard to the S-Cam 3 / 3.5, the Commission found that these products were merely in development at the time of the hearing, that no element-by-element analysis of direct infringement had been provided, and that there was no evidence of an installation of an S-Cam 3/3.5 in an infringing mounting structure.

The Commission found no induced infringement because TRW collaborated with GM on the allegedly infringing S-Cam combination before the issuance of the ’659 Patent and because Magna could not prove that TRW’s post-issuance activities resulted in direct infringement. The Commission also concluded that the evidence was insufficient to establish that TRW had the requisite knowledge and intent to induce GM to infringe.

The invalidity arguments raised by TRW included a challenge under the America Invents Act (“AIA”), Section 33(a), which provides: “Notwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing a human organism.” TRW argued that the claims of the ’659 Patent were directed to patent-ineligible subject matter because they required a “viewer” to look through a windshield. The Commission rejected this argument, finding that “a person” was not a limitation of the claims.

Importation

On the issue of importation, the Commission rejected the Judge’s conclusion that the importation requirement had been met for the ’659 Patent. (The Commission did not consider the importation issue for the ’841 patent because of the invalidity finding regarding that patent.)

In the final ID, the Judge found that TRW imported components into the U.S. for use in its U.S.-manufactured S-Cam 2 cameras and that TRW sold these cameras to GM for importation into the U.S., “as GM, with guidance and assistance from TRW, installs the S-Cam 2 into its vehicles in Mexico, which are then imported into the United States.” ID at 14-15.

The Commission’s opinion focused upon three types of alleged importations: “(1) sale to GM of the S-Cam 2; (2) importation of the Mobileye Q2 chips for use in the S-Cam 2; and (3) the importation of the vehicle having the S-Cam 2 installed.” Comm’n Op. at 11. In reversing the ID’s finding of importation, the Commission concluded that Magna had not proven, as required by Section 337(a)(l)(B)(i), that TRW – the only respondent in the investigation – was “involved in the importation of the GM vehicles as the owner, importer, or consignee” of the accused vehicles, “[n]or has Magna established that the importation of the vehicle by GM meets the statutory importation requirement.” Id. at 11-12. Moreover, the Commission found that, because TRW’s S-Cam 2 does not infringe the ’659 Patent either directly or indirectly, Magna had not shown that TRW’s sale of the S-Cam 2 to GM constituted a sale for importation of an article that infringes a valid and enforceable patent. Magna had also not shown that the importation of a non-infringing component (the Mobileye EyeQ2 image processors) used in the S-Cam 2 satisfies the importation requirement of Section 337.

Lessons Learned

The Commission’s holding that practice of an invalid patent claim cannot satisfy the domestic industry requirement serves as a reminder that complainants should exercise care in choosing appropriate claims to rely upon for domestic industry purposes. Additionally, the Commission’s reversal of the ID’s finding of importation highlights the fact that, while importation is rarely a seriously contested issue, the issue can be significant when dealing with respondents that supply components for imported downstream products. Vision-Based System Cameras further demonstrates some of the difficulties that complainants may encounter in establishing a Section 337 violation where the producer and importer of the accused downstream product are not included as respondents and the named respondent is only an alleged indirect infringer.