An International Guide to
Patent Case Management for Judges

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10.12.5 Interplay with district court enforcement

Patent holders often seek relief before the USITC and U.S. district courts simultaneously. Section 337 provides, at the request of a party who is a respondent at the USITC and a defendant in the district court, for an automatic stay of the district court proceeding with respect to any claim that involves the same issues. But even though that means that the USITC will typically resolve its handling of the patent claim before the district court proceeds, the USITC resolution is not binding on the district court in patent cases.368 Nonetheless, it can be and often is informative. Furthermore, the USITC litigation can lead to settlement of the parallel district court action. Conversely, prior district court determinations can affect USITC investigations, should the requirements for claim preclusion or issue preclusion be satisfied. Stays

Under 28 U.S.C. § 1659(a), parties to a civil action that are also respondents in a parallel proceeding before the USITC can move for a stay of the district court action as a matter of right:

at the request of a party to the civil action that is also a respondent in the proceeding before the [USITC], the district court shall stay, until the determination of the [USITC] becomes final, proceedings in the civil action with respect to any claim that involves the same issues involved in the proceeding before the [USITC], but only if such request is made within –

  1. (1) 30 days after the party is named as a respondent in the proceeding before the [USITC], or
  2. (2) 30 days after the district court action is filed,

whichever is later.

The stay remains in effect until the determination of the USITC becomes final. After the dissolution of the stay, 28 U.S.C. § 1659(b) allows the parties to use the USITC investigation record in the stayed district court proceeding. A district court must also decide whether to stay its proceedings as to all of the claims at issue, even if only a few of those claims are involved in a Section 337 investigation.

Thus, despite the statutory mandate of 28 U.S.C. § 1659(a), a respondent may still be required to make out a clear case of hardship or inequity before a stay will be entered. But, where the patent before the district court is a continuation of a patent before the USITC, a court might enter a stay to narrow complex issues and avoid duplicative discovery. Effects of prior district court rulings and prior USITC determination

After the dissolution of a stay, a district court must still decide what deference to afford to a USITC determination. The ALJ and the USITC must similarly determine what standard of deference should be given to a prior district court ruling. Claim preclusion at the United States International Trade Commission

The Federal Circuit has declared that, where a claim “which is the basis for the [Section 337] investigation is a claim which would be barred by a prior judgment if asserted in a second infringement suit, that infringement claim may also be barred in a § 1337 proceeding.”369 Thus, prior U.S. district court decisions have a preclusive effect on subsequent Section 337 investigations. That said, preclusion might not exist where the specific product at issue in the investigation is materially different from the product at issue in the preceding district court litigation.370 Issue preclusion at the United States International Trade Commission

The general standard for issue preclusion requires the party seeking to foreclose relitigation of an issue to prove that (1) the issue sought to be precluded is identical to the issue decided in the prior action, (2) the issue was actually litigated in that action, (3) the party against whom collateral estoppel is sought had a full and fair opportunity to litigate the issue in the prior action, and (4) the determination was essential to the final judgment of the prior action.371 Courts apply the collateral estoppel standard of the regional circuit because issue preclusion is a procedural matter.372

The AIA specifies several post-grant proceedings that have preclusive impacts on patents at the USITC. A final decision in PGR or IPR bars a petitioner from raising issues that it had raised or could have raised during subsequent USITC, district court, and USPTO proceedings. If the parties settle, however, there is no estoppel effect. United States International Trade Commission patent determinations have no res judicata effect on district courts and do not invalidate patents

The Federal Circuit has established that the USITC’s determinations on various patent issues (i.e., validity and infringement) are not entitled to preclusive effect in subsequent district court litigation.373 This holding also encompasses patent-based defenses. When authorizing the USITC to consider patent issues and defenses, Congress made clear that “any disposition of a [USITC] action by a Federal Court should not have a res judicata or collateral estoppel effect in [infringement] cases before such [district] courts.”374 Accordingly, “Congress did not intend decisions of the [US]ITC on patent issues to have preclusive effect.”375 In practice, however, USITC determinations are often given persuasive, if not binding, weight. If district courts reach different conclusions on the same facts as the USITC, the source of the difference generally must be explained. This may be why relitigation of the issues in district court after a full adjudication in the USITC – though perfectly legal – is rare.