On May 13, 2013, the Federal Circuit issued its opinion in Motiva, LLC v. Int’l Trade Comm’n (2012-1252).  This was an appeal by Motiva, LLC (“Motiva”) from the International Trade Commission’s (the “Commission”) final determination in Certain Video Game Systems and Controllers (Inv. No. 337-TA-743) that Nintendo Co., Ltd. and Nintendo of America, Inc. (collectively, “Nintendo”) had not violated Section 337 in connection with the importation into the U.S., sale for importation, or sale within the U.S. after importation of certain video game systems and controllers.  See our January 24, 2012 post for more details on the Commission’s final determination.

In the opinion, the Federal Circuit affirmed the Commission’s determination that Motiva had failed to satisfy the economic prong of the domestic industry requirement with respect to U.S. Patent Nos. 7,292,151 (the ‘151 patent) and 7,492,268 (the ‘268 patent).  In particular, the Federal Circuit found that substantial evidence supported the Commission’s finding that Motiva’s litigation against Nintendo was not an investment in commercializing Motiva’s patented technology that would develop a licensing program to encourage adoption and development of articles that incorporated Motiva’s patented technology.  The Court cited its decision in John Mezzalingua Assocs. v. Int’l Trade Comm’n, 660 F.3d 1322, 1327 (Fed. Cir. 2011) for the proposition that litigation expenses should not automatically be considered a substantial investment in licensing.  See our October 6, 2011 post for more details.

According to the Opinion, the Commission found—and Motiva did not dispute—that Motiva’s investments in developing a domestic industry for the ‘151 and ‘268 patents were limited after 2007 to litigation against Nintendo.  Thus, since the domestic industry requirement needed to be satisfied at the time the complaint was filed (in this case, September 2010), this meant that expenses associated with the litigation were the only relevant investments that could be used to try to satisfy the economic prong of the domestic industry requirement.

The Federal Circuit found that Motiva’s investment in litigation against Nintendo could satisfy the economic prong of the domestic industry requirement if it was substantial and directed toward a licensing program that would encourage adoption and development of articles that incorporated Motiva’s patented technology.  However, in this case, the ALJ had found that Motiva’s litigation against Nintendo was not directed at developing such a licensing program, and thus did not satisfy the domestic industry requirement.  The Commission adopted this finding, and the Federal Circuit affirmed because the finding was supported by substantial evidence.  The Federal Circuit also specifically affirmed the Commission’s use of the date that Motiva had filed its ITC complaint as the relevant date at which to determine if the domestic industry requirement was satisfied.

In view of the above, the Federal Circuit affirmed the Commission’s final determination of no violation of Section 337.