Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

Articles Posted in Antitrust & Trade Regulation
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The Federal Circuit affirmed the U.S. Court of International Trade's decision sustaining the U.S. Department of Commerce's final results in the fifth administrative review of the antidumping duty order on large power transformers from the Republic of Korea. This case involves two categories of information that Commerce requested from Hyundai, namely product-specific cost information and cost-reconciliation information.The court held that Commerce's determinations to rely on facts otherwise available, to cancel verification, and to draw an adverse inference in selecting from among the facts otherwise available are supported by substantial evidence and otherwise not contrary to law. In this case, Hyundai's repeated disclosure of partial, aggregate, or sample information rather than complete and itemized information establishes that Commerce's decision to rely on facts otherwise available was reasonable and supported by substantial evidence. Furthermore, Commerce articulated sound reasons for seeking more detailed information regarding Hyundai's cost-shifting in this administrative review than in prior reviews, including its observation that cost shifting had a larger impact on this administrative review. The court explained that such concerns support the reasonableness of Commerce's requests for a greater amount of detail in this administrative review. Finally, to the extent that the shortcomings of Hyundai's responses are attributable to its record keeping, that alone does not avoid an adverse inference. Here, Commerce clearly and repeatedly requested the information and identified the defects in Hyundai’s responses, and the information that was ultimately missing from the record was foundational to Commerce's ability to perform the antidumping duty calculations in a sound manner. The court considered Hyundai's remaining arguments and found them unpersuasive. View "Hyundai Electric & Energy Systems Co., Ltd. v. United States" on Justia Law

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In 2006 Heat On-The-Fly began using a new fracking technology on certain jobs. Heat’s owner later filed a patent application regarding the process but failed to disclose 61 public uses of the process that occurred over a year before the application was filed. This application led to the 993 patent. Heat asserted that patent against several parties. In 2014, Phoenix acquired Heat and the patent. Chandler alleges that enforcement of the 993 patent continued in various forms. In an unrelated 2018 suit, the Federal Circuit affirmed a holding that the knowing failure to disclose prior uses of the fracking process rendered the 993 patent unenforceable due to inequitable conduct.Chandler filed a “Walker Process” monopolization action under the Sherman Act, which required that the antitrust-defendant obtained the patent by knowing and willful fraud on the patent office and maintained and enforced that patent with knowledge of the fraudulent procurement, and proof of “all other elements necessary to establish a Sherman Act monopolization claim.” The Federal Circuit transferred the case to the Fifth Circuit, which has appellate jurisdiction over cases from the Northern District of Texas. The court concluded that it lacked jurisdiction because this case does not arise under the patent laws of the United States. View "Chandler v. Phoenix Services LLC" on Justia Law

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The Intellectual Ventures (IV) patents are directed to tracking and storing information relating to a user’s purchases and expenses; methods and systems for providing customized Internet content to a user as a function of user-specific information and the user’s navigation history; and methods of scanning hardcopy images onto a computer. IV unsuccessfully sued Capital One for infringement in the Eastern District of Virginia and in the District of Maryland. Capital filed antitrust counterclaims, alleging monopolization and attempted monopolization (Sherman Act, 15 U.S.C. 2) and unlawful acquisition of assets (Clayton Act, 15 U.S.C. 18), claiming that IV is principally engaged in the business of acquiring patents and asserting them in litigation. IV acquired approximately 3,500 patents relating to commercial banking and attempted to obtain large licensing fees from banks by threatening infringement suits. Capital alleged that IV concealed the identity of its patents and insisted that banks license IV’s entire portfolio of financial services patents, knowing that many were invalid, unenforceable, and not infringed. The Virginia court dismissed the antitrust counterclaims for failure to state a claim on which relief could be granted. The Maryland district court granted summary judgment against Capital on all the antitrust claims. The Federal Circuit affirmed the Maryland holding, citing collateral estoppel. The Virginia decision that Capital failed to plausibly allege a proper relevant antitrust market and failed to plausibly allege that IV wields monopoly power within that market was conclusive in the Maryland action. View "Intellectual Ventures I LLC v. Capital One Financial Corp." on Justia Law

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Organik and Dow both manufacture opaque polymers, hollow spheres used as additives to increase paint’s opacity. Dow has maintained its worldwide market-leader position through a combination of patent and trade-secret protections. Dow filed a complaint with the International Trade Commission requesting an investigation into whether Organik’s opaque polymer products infringed four Dow patents. The Commission granted Dow’s request, and the parties began discovery. During the proceedings, Dow amended its complaint to add allegations of trade secret misappropriation when it discovered that Organik may have coordinated the production of its opaque polymers with the assistance of former Dow employees. As Dow attempted to obtain discovery relating to the activities of those employees, Dow discovered spoliation of evidence “on a staggering scale.” The Federal Circuit affirmed the Commission’s imposition of default judgment and entry of a limited exclusion order against Organik as sanctions for the spoliation of evidence. Organik’s “willful, bad faith misconduct” deprived Dow of its ability to pursue its trade secret misappropriation claim effectively. The record supports the limited exclusion order of 25 years with the opportunity for Organik to bypass that order at any time if it can show that it has developed its opaque polymers without using Dow’s misappropriated trade secrets. View "Organik Kimya v. International Trade Commission" on Justia Law

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Lexmark makes and sells printer toner cartridges, for which it holds patents. Lexmark buyers may purchase a “Regular Cartridge” at full price, not subject to any terms restricting reuse or resale of the cartridge, or may purchase a “Return Program Cartridge” at a discount, subject to a single-use/no-resale restriction. Impression acquired restricted cartridges for resale in the U.S. after a third party physically modified them to enable re-use. Impression’s actions infringe under 35 U.S.C. 271, unless Lexmark’s initial sale of the cartridges constitutes the grant of authority that makes later resale and importation non-infringing under the doctrine of exhaustion. The Federal Circuit, en banc, held that a patentee, when selling a patented article subject to a single-use/no-resale restriction that is lawful and clearly communicated to the purchaser, does not thereby give the buyer, or downstream buyers, the resale/reuse authority that has been expressly denied. Such resale or reuse, when contrary to known, lawful limits on the authority conferred at the original sale, remains unauthorized, infringing conduct under section 271. Under Supreme Court precedent, a patentee may preserve its 271 rights through such restrictions when licensing others to make and sell patented articles; there is no basis for denying the same ability to the patentee that sells the articles itself. View "Lexmark Int'l, Inc. v. Impression Prods., Inc." on Justia Law

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3M and TransWeb manufacture respirator filters, consisting of “nonwoven fibrous webs.” 3M sued Transweb for infringement of several patents. TransWeb sought a declaratory judgment of invalidity and non-infringement. A jury found the patents to be invalid based on TransWeb’s prior public use of the patented method. In accordance with an advisory verdict from the jury, the district court found the patents unenforceable due to inequitable conduct. An inventor for the patents and a 3M in-house attorney acted with specific intent to deceive the patent office as to the TransWeb materials. The district court awarded approximately $26 million to TransWeb, including trebled attorney fees as antitrust damages. The Federal Circuit affirmed, finding sufficient corroborating evidence to support the finding of prior public use by TransWeb, and that attorney fees are an appropriate basis for damages under the antitrust laws in this context. TransWeb’s attorney fees appropriately flow from the unlawful aspect of 3M’s antitrust violation and are an antitrust injury that can properly serve as the basis for antitrust damages. View "Transweb, LLC v. 3M Innovative Props. Co." on Justia Law

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Between 2001 and 2004, Nitek Electronics, Inc. entered thirty-six shipments of pipe fitting components used for gas meters into the United States from China. U.S. Customs and Border Protection (“Customs”) claimed that the merchandise was misclassified and issued Nitek a final penalty claim stating that the tentative culpability was gross negligence. Customs then referred the matter to the United States Department of Justice (“Government”) to bring a claim against Nitek in the Court of International Trade to enforce the penalty. The Government brought suit against Nitek to recover lost duties, antidumping duties, and a penalty based on negligence under 19 U.S.C. 1592. Nitek moved to dismiss the case for failure to state a claim. The court denied dismissal of the claims to recover lost duties and antidumping duties but did dismiss the Government’s claim for a penalty based on negligence, concluding that the Government had failed to exhaust all administrative remedies under 19 U.S.C. 1592 by not having Customs demand a penalty based on negligence, instead of gross negligence. The Federal Circuit affirmed, holding that the statutory framework of section 1592 does not allow the Government to bring a penalty claim based on negligence in court because such a claim did not exist at the administrative level. View "United States v. Nitek Elecs., Inc." on Justia Law

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The Department of Commerce determined that utility scale wind towers from the People’s Republic of China and utility scale wind towers from the Socialist Republic of Vietnam (together, the subject merchandise) were sold in the United States at less than fair value and that it received countervailable subsidies. The International Trade Commission made a final affirmative determination of material injury to the domestic industry. The determination was by divided vote of the six-member Commission. The Court of International Trade upheld the Commission’s affirmative injury determination. Siemens Energy, Inc., an importer of utility scale wind towers, challenged the determination. The issues on appeal concerned the interpretation and effect of the divided vote. The Federal Circuit affirmed, holding that the Court of International Trade properly upheld the Commission’s affirmative injury determination. View "Simens Energy, Inc. v. United States, Wind Tower Trade Coalition" on Justia Law

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In 1994, Sukumar began caring for his aging father and noticed that rehabilitation fitness machines used by his father did not adequately suit frail seniors. To learn more about rehabilitation for seniors, he attended trade shows where he met Nautilus representatives. In 1998-1999, Sukumar ordered Nautilus machines and asked for modifications to meet elderly users’ needs. When Nautilus delivered the custom fitness machines, Sukumar was dissatisfied and filed a breach of contract action. In 2004, Sukumar founded Southern California Stroke Rehabilitation Associates (SCSRA) to operate senior rehabilitation facilities in which Sukumar would use modified Nautilus fitness machines. SCSRA has acquired over 100 Nautilus fitness machines and, according to Sukumar, has twice attempted to negotiate a patent license from Nautilus. As of 2010, when Sukumar filed a false marking claim, 35 U.S.C. 292(b), SCSRA had no business plan, no employees, no office space, and no prototype designs. The district court found that many of the patents marked on six Nautilus machines did not cover the machines, but concluded that Sukumar had not suffered “competitive injury” necessary to have standing to assert a claim. The Federal Circuit affirmed. Sukumar had not taken sufficient action to enter the market for fitness machines. View "Sukumar v. Nautilus, Inc." on Justia Law

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Rapid-prototyping “additive technology” creates parts by building layer upon layer of plastics, metals, or ceramics. Subtractive technology starts with a block and cuts away layers. Additive technology include SL, fused deposition modeling, laser sintering, 3D printing, direct metal laser sintering, and digital light processing. 3DS is the sole U.S. supplier of SL machines, which use an ultraviolet laser to trace a cross section of an object on a vat of liquid polymer resin. The laser solidifies the resin it touches, while untouched, areas remain liquid. After one cross-section has solidified, the newly formed layer is lowered below the surface of the resin. The process is repeated until the object is completed. Users of SL machines often own many machines with varying sizes, speeds, and accuracy levels. 3DS began equipping some of its SL machines with wireless technology that allows a receiver to communicate with a transmitter on the cap of a resin bottle. A software-based lockout feature shuts the machine off upon detection of a resin not approved by 3DD. 3DS has approved two of Desotech’s resins and entered into negotiations for approval of additional resins. After negotiations broke down, Desotech sued, alleging tying, unreasonable restraint of trade, and attempted monopolization under the Sherman Act; tying under the Clayton Act; patent infringement; and violations of the Illinois Antitrust and Uniform Deceptive Trade Practices Acts. The district court granted 3DS summary judgment on the antitrust claims and certain state-law claims. The parties stipulated to dismissal of the remaining claims. The Federal Circuit affirmed. View "DSM Desotech Inc. v. 3D Sys. Corp." on Justia Law