Federal Circuit Affirms ITC's Limits on the Use of Litigation Costs to Establish Domestic Industry
Over the past five years, the number of complaints filed in the ITC has grown exponentially, rendering the ITC as a forum of choice to assert patent claims. This trend is largely due to the Appellate Courts' heightened burden on a patentee to obtain injunctive relief, treble damages due to willful infringement or high royalty rates. As a result of these recent appellate opinions, patentees, especially nonpracticing entities, began seeking a new forum—one that would provide automatic injunctive relief and thereby, provide an incentive for large settlements more in line with previous damages calculations. Until recently, the ITC seemed to be a perfect fit as this "new forum," despite the ITC's requirement that all patent holders show the existence of a domestic industry as part of their infringement claim. However, in its recent decision in John Mezzalingua Assoc. v. Int'l Trade Comm'n, --F.3d--, 2011 WL 4552462 (Fed. Cir., Oct. 4, 2011), the Federal Circuit has given this requirement some added teeth. The Court affirmed the ITC's determination that expenses associated with ordinary patent litigation are not per se evidence of a "substantial investment in...licensing" to satisfy the domestic industry requirement for bringing a patent infringement case in the ITC.
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