Final ITC Terminations In Favor Of Arbitration Under Section 1337(C) Are Appealable To The Federal Circuit

In InterDigital Communications, LLC v. International Trade Commission, No. 12-1628 (Fed. Cir. June 7, 2013), the Federal Circuit reversed the ITC's order terminating an investigation as to LG Electronics, Inc., LG Electronics USA, Inc., and LG Electronics Mobilecomm USA, Inc. (collectively "LG") in favor of arbitration per a prior patent license agreement between InterDigital Communications, Inc. (formerly InterDigital Communications, LLC) ("InterDigital") and LG, and remanded to the ITC for further proceedings, explaining that "there is no plausible argument that the parties' dispute in this case arose under their patent license agreement." Slip op. at 2.

InterDigital and LG entered into a patent license agreement ("Agreement") in which InterDigital granted LG for the term of the Agreement a license to certain InterDigital patents with respect to devices designed to operate according to both second ("2G") and third ("3G") generation wireless standards. According to its terms, the Agreement terminated on December 31, 2010. A "survival" clause included in the Agreement provided that at the end of the term of the Agreement, LG will have a "fully paid-up" license for the life of InterDigital's patents for 2G products. The Agreement also permitted either party to submit to arbitration any dispute arising under the Agreement.

The following year, InterDigital amended its complaint with the ITC, asserting that LG violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by importing wireless devices that infringed patents relating to its 3G wireless technology. LG subsequently moved to terminate the investigation, arguing that its accused 3G products were still covered under the Agreement and that InterDigital's infringement claim was subject to arbitration because it arose under the Agreement. Despite InterDigital's arguments that LG did not have an ongoing license for 3G products under the plain text of the Agreement, the ALJ issued an initial determination granting LG's motion to terminate the investigation as to LG based on the framework for analyzing a motion to stay pending arbitration outlined in Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (Fed. Cir. 2006). Under that framework, the ALJ determined that "the parties clearly intended to delegate the question of arbitrability to an arbitrator" and that LG's request for arbitration was not "wholly groundless." Slip op. at 7. The ITC declined to review the ALJ's decision. InterDigital...