by Emi Ito Ortiz, Adduci, Mastriani & Schaumberg, L.L.P.
On May 13, 2013, in Motiva, LLC v. U.S. Int’l Trade Comm’n, No. 12-1252 (Fed. Cir. May 13, 2013), the Federal Circuit affirmed the International Trade Commission’s determination that a complainant failed to satisfy the domestic industry requirement of Section 337 based on litigation expenses allegedly related to licensing. The case was an appeal from ITC Investigation No. 337-TA-743, Certain Video Game Systems and Controllers. Section 337 requires a complainant to prove it has “an industry in the United States, relating to the articles protected by the patent . . . [that] exists or is in the process of being established.” 19 U.S.C. § 1337(a)(2). Such an industry can be based, inter alia, on a substantial investment in exploitation of the patent through licensing. See 19 U.S.C. § 1337(a)(3)(C). In Motiva, the Federal Circuit agreed with the ITC that litigation expenses can count towards the establishment of a domestic industry only if the litigation encourages the adoption and development of articles that incorporate the asserted patents.
Underlying Investigation. In the underlying investigation, Motiva accused Nintendo of violating Section 337 by importing, selling for importation, or selling after importation its Wii game system, which allegedly violated two Motiva patents. Nintendo asserted that Motiva had no domestic industry because it did not have commercialized products incorporating the asserted patents nor activities aimed at creating such products. Instead, Motiva’s sole activity relating to the patents at issue was litigation against Nintendo, which was insufficient to establish a domestic industry. The ITC sided with Nintendo, finding no domestic industry. Continue reading