As we’ve previously reported here, 2016 saw a significant increase of ITC Section 337 investigations over prior years. The last complaint of the year was filed on December 30, 2016, by Lifetime Products, Inc. (“Lifetime” or “Complainant”) against Russell Brand LLC d/b/a Spalding (“Russell”) and Reliable Sports Equipment (Wujiang) Co. Ltd (“Reliable”) (collectively, “Respondents”). In the Matter of Certain Basketball Backboard Components and Products Containing the Same, Complaint 337-TA-____ (Dkt. 3191). Lifetime is asking ITC to issue a Limited Exclusion Order (LEO) and permanent cease and desist orders against the Respondents.

According to the Complaint, Lifetime is a privately held Utah corporation, employing about 2,000 people mostly in Utah. Russell is a Delaware corporation with its principal place of business in Kentucky. Reliable is a Chinese company that is a supplier to Russell. Lifetime alleges that certain of Russell’s basketball backboard components infringe U.S. Patent No. 7,749,111 (“’111 Patent”), U.S. Patent No. 8,845,463 (“’463 Patent”), and U.S. Patent No. 8,852,034 (“’034 Patent”) (collectively, the “Asserted Patents”). The Asserted Patents generally relate to a bead of robotically applied liquid adhesive sandwiched between the backboard and frame that replaces manually prepared and applied tape. Lifetime alleges that this automation results in significant cost-savings in the manufacturing process.

Lifetime previously asserted the same patents against Russell in district court litigation. See Lifetime Products, Inc. v. Russell Brands, LLC, d/b/a Spalding, Case No: 1:12-cv-00026-DN (D. Utah, February 10, 2012). The discovery in that case is completed, and the court issued a claim construction order. See Complaint 337-TA-3191 at ¶¶66-68. In response to that case, Russell petitioned the USPTO for ex parte reexamination of the ’111 Patent. The USPTO reaffirmed the patentability of some original and some amended claims, and allowed several new claims. That case is currently stayed pending appeals of USPTO decisions related to family member patents that are not at issue in this investigation. Id. at ¶66.

In its comments to the ITC, Russell explained that Lifetime’s and Russell’s residential basketball backboards collectively comprise 85-90% of the U.S. market and that Lifetime does not offer articles directly competitive with several of Russell’s accused products. Russell’s Comments Pursuant to the Commission’s Solicitation of Comments Relating to the Public Interest (337-TA-3191, January 17, 2017). Therefore, Russell argued that the requested remedial orders requested by Lifetime would be detrimental to the public interest because those orders would destroy competition and severely restrict U.S. consumer choice in the basketball backboard market. Id. Furthermore, Russell requested that, if the Commission determines to institute an investigation, the Commission direct the Administrative Law Judge to take evidence, allow argument, and issue a recommended determination regarding the public interest. Id.

Takeaway

Two leading U.S. basketball backboard manufacturers are posed to extend their longstanding patent dispute to the ITC. If the ITC opens an investigation in this matter, it will offer an opportunity for further refinement of ITC jurisprudence in the areas of public interest and deference to opinions of the USPTO and district courts.