Client:

Multinational Toy Company

Issue:

When our client was accused of patent infringement at the ITC by a non-practicing entity (NPE), the presiding administrative law judge (ALJ) was instructed to conduct the first-of-its-kind, 100-day hearing to determine within 100 days whether the economic requirements of a domestic industry existed with respect to the asserted patents or if the investigation should be immediately terminated.

The 100-day hearing procedure was created by the ITC as way to quickly address ITC complaints that appeared to lack substantial merit with respect to the domestic industry economic requirement or other issues.  

Challenge:

The ALJ adopted a dual-track procedural schedule to reach a determination on the domestic industry issue within 100 days while maintaining the longer-term deadlines on other substantive issues if he ruled in favor of the patent owner.

As a result, Perkins Coie had to develop a plan to quickly conduct discovery, draft briefs, prepare witnesses and participate in an early hearing limited to domestic industry issues while staying on track to litigate other issues, such as non-infringement and invalidity if the matter proceeded to its conclusion.  Because the 100-day hearing procedure had not been used previously, several unexpected issues arose relating to the application of the ALJ’s ground rules and whether claim construction was a necessary part of the 100-day hearing process.   

Solution:

Perkins Coie persuaded the ALJ to waive several of his ground rules in order to complete expedited discovery on domestic industry issues, including discovery from third parties.  We also convinced him to reject the NPE’s assertion that a costly claim construction determination was necessary to render the 100-day decision relating to the economic elements of a domestic industry.  We divided up responsibilities among the Respondents, completed the necessary long- and short-term discovery tasks, and prepared expert and fact witnesses for the hearing.

After the hearing, and within the 100-day schedule mandated by the ITC, the ALJ determined that there was no economic domestic industry as to the asserted patents.  However, he also ruled that the ITC lacked the procedural authority to conduct a 100-day hearing without engaging in new rule-making procedures first.  We successfully convinced the six ITC Commissioners that the ALJ’s finding of no domestic industry was correct but his determination that ITC lacked the authority to conduct the 100-day hearing procedure was not.  The ITC terminated the investigation with an early finding of no violation.  As a result of our successful navigation of this new process on substantive and procedural grounds, our client saved a substantial amount of litigation expenses.