Patent Watch: InterDigital Commc'ns, LLC v. Int'l Trade Comm'n

Alerts / August 9, 2012

[S]ubstantial licensing activities related to the asserted patent [must be shown] in order to support a finding as to the existence of a domestic industry based on licensing [but] the licensed product [need not] be manufactured in this country.

On August 1, 2012, in InterDigital Commc'ns, LLC v. Int'l Trade Comm'n, the U.S. Court of Appeals for the Federal Circuit (Newman, Mayer, Bryson*) reversed and remanded the Commission's order finding that Nokia did not infringe U.S. Patents No. 7,190,966 and No. 7,286,847, which related to wireless cellular telephone technology. The Federal Circuit stated:

Claim terms are generally given their ordinary meaning as understood by persons skilled in the art in question at the time of the invention. The plain meaning of claim language ordinarily controls unless the patentee acts as his own lexicographer and provides a special definition for a particular claim term or the patentee disavows the ordinary scope of a claim term either in the specification or during prosecution. Neither of those exceptions applies in this case. Neither the specification nor the prosecution history contains a restrictive definition of "code," and the patentee did not at any point disavow the broader interpretation of that term. Nor is there any other persuasive justification for construing the claim term "code" to include only a spreading code. The normal rule giving claim terms their ordinary meaning therefore governs here. The record reflects that the plain meaning of "code" to one of skill in the cellphone communications art is a sequence of bits (if the ones and zeros are transmitted at the "data rate") or chips (if the ones and zeros are transmitted at the faster "chip rate"). Thus, by its plain language the term "code" is broad enough to cover both a spreading code and a non-spreading code.

Besides the nonrestrictive nature of the ordinary meaning of the claim term "code," the doctrine of claim differentiation provides a powerful argument against construing the term "code" restrictively, to mean "spreading code." Independent claim 1 of the '966 patent uses the term "code," and dependent claim 5 recites, in full, "The subscriber unit of claim 1 wherein the same code is a spreading code." The clear implication of narrowing the term "code" in dependent claim 5 by limiting the claim scope to cases in which the claimed code "is a spreading code" is that the term "code" in the independent claim is not limited to a spreading code.

The doctrine of claim differentiation is at its strongest in this type of case, "where the limitation that is sought to be 'read into' an independent claim already appears in a dependent claim." Although the doctrine of claim differentiation creates only a presumption, which can be overcome by strong contrary evidence such as definitional language in the patent or a clear disavowal of claim scope, neither type of contrary evidence is present here. To the contrary, the presumption is "especially strong" in this case, because "the limitation in dispute is the only meaningful difference between an independent and dependent claim, and one party is urging that the limitation in the dependent claim should be read into the independent claim." The administrative law judge's construction of the term "code" in claim 1 as meaning "spreading code" renders claim 5 superfluous, a result that counsels strongly against that construction.

The logic of the situation is as powerful as it is simple: if the term "code" means "spreading code," then claim 1 recites a device in which the signals are "generated using a same [spreading] code," and claim 5 covers exactly the same subject matter. If the claim drafter had intended to limit claim 1 to spreading codes, as the administrative judge concluded, it would have been much simpler for the drafter to explicitly recite the "spreading code" limitation in claim 1 and omit dependent claim 5 altogether.

Nokia argued to the administrative law judge, and argues to us, that InterDigital's patent licensing activities did not satisfy the "domestic industry" requirement of section 337, 19 U.S.C. § 1337(a)(2) and (3). The administrative law judge held that InterDigital's activities satisfied the domestic industry requirement, and we agree.

Paragraph (2) of subsection (a) of section 337 provides that the portion of paragraph (1) of that subsection that bars the importation of articles that infringe a U.S. patent or are made by a process covered by the claims of a U.S. patent applies "only if an industry in the United States, relating to the articles protected by the patent . . . exists or is in the process of being established." 19 U.S.C. § 1337(a)(2). . . . Nokia argues that in order to satisfy section 337(a)(2), InterDigital had to establish that there is a United States industry "relating to the articles protected by the patent," and that proof of licensing activities alone is not sufficient to satisfy that requirement. The problem with that argument, as the administrative law judge noted, is that section 337(a)(3) makes clear that the required United States industry can be based on patent licensing alone; it does not require that the articles that are the objects of the licensing activities (i.e., the "articles protected by the patent") be made in this country. That is, the domestic industry requirement is satisfied if there is a domestic industry based on "substantial investment in [the patent's] exploitation" where the exploitation is achieved by various means, including "licensing."

That interpretation of the statute is strongly supported by the legislative history that gave rise to the "licensing" language in section 337(a)(3). [T]he Commission has consistently ruled that a domestic industry can be found based on licensing activities alone. [T]he Commission has held that subparagraph (C) requires a showing of substantial licensing activities related to the asserted patent in order to support a finding as to the existence of a domestic industry based on licensing; it has not, however, required that the licensed product be manufactured in this country. If there were any ambiguity as to whether the statute could be applied to a domestic industry consisting purely of licensing activities, the Commission's consistent interpretation of the statute to reach such an industry would be entitled to deference.

Nokia has not challenged the administrative law judge's findings as to that nexus. Nor has Nokia questioned whether the scope of InterDigital's licensing activities was sufficient to constitute a domestic licensing industry, a point on which the administrative judge made extensive affirmative findings. Accordingly, we reject Nokia's "domestic industry" argument.

Because the Commission erred in construing the claim terms "code" and "increased power level" and in finding, based on those claim constructions, that Nokia's products do not infringe InterDigital's patents, we reverse the administrative law judge's determination of non- infringement and remand for further proceedings.

If you have questions about the material presented above, please contact Dr. Lawrence M. Sung (lsung@bakerlaw.com or 202.861.1537) or any member of our Intellectual Property Team.

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