ITC throws out first case under pilot programme
A US company that sued several others for patent infringement has had its case thrown out by the International Trade Commission (ITC) after failing to prove the ‘domestic industry’ requirement.
On Friday, July 5, the ITC ruled that Lamina Packaging Innovations, which sued companies including toy-maker Hasbro, failed to show that it manufactures sufficient goods in the US to bring an ITC claim.
It is the first time that new ITC measures to target patent trolls have been put into action.
The commission announced last month it was launching a pilot scheme under which it would rule on the domestic industry requirement (as well as others) within 100 days of a case beginning.
A ruling on domestic industry, one of several existing standards in ITC cases, has typically been made several months into a case. Under the pilot scheme, the ITC is therefore insisting that it rules on domestic industry within 100 days in order to weed out patent trolls early on.
If affirmed by the full commission, Friday’s ruling would mean Lamina’s claims that companies were infringing on its packaging patents will not proceed before the ITC.
Steven Auvil, partner at Squire Sanders LLP, said the result of the case showed the ITC’s pilot plan was working.
He said: “Practically speaking, a complaint filed in the ITC that does not provide a clear basis for the existence of a domestic industry (or for satisfying other requirements such as standing or importation) could be subject to the 100-day expedited procedure.”
An ITC notice on the ruling from administrative law judge Theodore Essex ruled Lamina “failed to satisfy the economic prong of the domestic industry requirement and has failed to show that a domestic industry is in the process of being established”.
Despite the ruling, Auvil said there was “no reason” for genuine companies to fear going before the ITC under the new model.
“Real companies that sell products and non-practising entities that have legitimate licensing programmes have no reason to fear the ruling. By contrast, companies formed for the purpose of bringing lawsuits to extract hold-up payments have a lot to fear in the ruling and the 100-day procedure,” he said.
The remaining respondents in the case brought by Lamina include headphone maker Beats Electronics and liquor makers Remy Cointreau.
