High Court Nixes Nokia Appeal in InterDigital Patent Fight
The U.S. Supreme Court declined Tuesday to hear arguments that the International Trade Commission should close its doors to certain kinds of nonpracticing entities.
In a one-sentence order, the justices refused to consider whether an NPE called InterDigital Inc. should have been allowed to bring a patent case at the ITC against Nokia Corporation. Nokia asserted in its cert petition that the ITC has overstepped its authority by hearing cases brought by companies like InterDigital that derive all their revenue from licensing patents.
In order to bring a patent infringement case at the ITC, petitioners must establish that there is "domestic industry" for the supposedly infringed patent. In 1988 Congress clarified that companies don't have to manufacture products to meet the domestic industry requirement, but they do need to show "substantial investment" in "articles protected by the patent." That investment can include "engineering, research and development, or licensing."
Parsing that statutory language, Nokia and other gadget-makers have set their sights on persuading the courts that licensing activity in and of itself isn't enough to show domestic industry. They contend that here must also be proof that the patented technology is being put to practical use—a hurdle that many NPEs couldn't clear.
InterDigital holds about 2,000 U.S. patents relating to wireless technology, and the company employs 200 engineers. It brought an ITC case against Nokia in 2007, alleging violations of patents relating to 3G wireless technology.
The ITC dismissed InterDigital's infringement claims in 2009. But the U.S. Court of Appeals for the Federal Circuit revived the case in 2012, finding that the ITC erred during the claim construction phase of the case. Siding with two titans of the IP bar who signed on to represent InterDigital—Donald Dunner of Finnegan Henderson Farabow Garrett & Dunner and Seth Waxman of Wilmer Cutler Pickering Hale and Dorr —the appeals court also rejected Nokia's argument that InterDigital's licensing activities don't amount to a domestic industry.
Nokia's lawyers—Paul Clement of Bancroft PLLC and Patrick Flinn of Alston & Bird, among others—appealed to the Supreme Court in May, arguing that the Federal Circuit's ruling distorted the ITC's mission. "By dramatically diluting the domestic industry requirement, the decision improperly expands the ITC's authority by transforming it from a specialized trade forum into an all purpose patent court," they wrote.
InterDigital urged the high court to reject InterDigital's petition in September, arguing that the Federal Circuit "simply gave effect to the intent of Congress to enlarge the domestic industry requirement to cover licensing activities—when those activities are substantial and connected to exploitation of the patents at issue." For the cert petition, InterDigital brought on a team from Latham & Watkins including Gregory Garre and Richard Bress. Latham is also representing InterDigital in a separate ITC case against Nokia, Huawei Technologies Co Ltd, and ZTE Corp.
An InterDigital spokesperson said Tuesday that the the company was "obviously very pleased" that the Supreme Court took a pass. "We see it as another step in having our ongoing research and development and significant contributions to the industry recognized, and being able to secure licensing agreements with leading device manufacturers," he said.
Nokia counsel Patrick Flinn of Alston & Bird did not return a call seeking comment.