The United States International Trade Commission (ITC) recently granted remedial orders in the hotly contested, and widely followed, Section 337 investigation involving Masimo Corp. and Apple. Certain Light-Based Physiological Measurement Devices and Components Thereof, Inv. No. 337-TA-1276. In that investigation, Masimo sought to exclude Apple’s Apple Watch from importation to the U.S. on the basis that it infringed Masimo patents relating to pulse oximetry. As is typical in cases in which a violation is found, the ITC granted an exclusion order, which directs United States Customs and Border Protection to bar importation of infringing Apple Watches, and a cease-and-desist order, which carries penalties for importation and/or sale of imported, infringing Apple Watches. This article is the first in a likely series tracking the procedural and substantive developments regarding the appeal and the enforcement of the ITC’s remedial orders stemming from that investigation.
The ITC Finds that Apple Violated Section 337
The ITC made its final determination and issued the remedial orders on October 26, 2023. See Notice of the Commission’s Final Determination Finding a Violation of Section 337. Pursuant to the statute governing Section 337 investigations, the orders did not go into full effect until after a 60-day period in which the United States Trade Representative (on behalf of the President) reviews the orders to determine whether to disallow the orders for policy reasons. See 19 U.S.C. § 1337. Pursuant to that statutory provision, Apple was permitted to import and sell its watches subject to a bond “sufficient to protect [Masimo] from any injury[.]” Id. The ITC, however, set a bond rate of zero, effectively permitting importation and sale during the 60-day period. See Notice at 4. That 60-day period ended without Presidential disapproval of the orders on December 26, 2023, whereupon the orders went into effect.
Apple Asks Federal Circuit to Stay ITC Orders
That same day, Apple filed for a stay pending appeal of the remedial orders at the United States Court of Appeals for the Federal Circuit, which hears appeals of ITC decisions. Apple previously requested a stay of the orders from the ITC, which denied that request on December 20, 2023. Notice of Comm’n Decision to Deny Respondent’s Motion to Stay Remedial Orders Pending Appeal and/or in Light of Potential Gov’t Shutdown (Dec. 20, 2023). Apple also requested an interim stay of the orders while the Federal Circuit considered whether to grant the stay pending appeal.
On December 27, 2023, the Federal Circuit granted: (1) Apple’s request for an interim stay of the remedial orders, pending the court’s consideration of Apple’s request for a stay pending the appeal thereof; and (2) the ITC’s request for an extension, to January 10, 2024, of time to respond to the requests. Apple Inc. v. Int’l Trade Comm’n, Case No. 2024-1285, Order (Dec. 27, 2023). The Federal Circuit also ordered that Apple be subject to “the same bond requirements set forth by the Commission in the Remedial Orders[,]” which, as noted above, imposed no bond. Apple, therefore, is free to import and sell Apple Watches subject to the ITC’s remedial orders without bond during the pendency of the interim stay.
Impact of Interim Stay on ITC Orders
It is too soon to tell the impact the interim stay will have on Masimo’s efforts to enjoin further infringing sales by Apple. In addition to its request for a stay pending appeal, Apple has also filed for a ruling from United States Customs and Border Protection that its redesigned Apple Watch does not infringe the patent claims that are the subject of the remedial orders. A decision on that ruling request is expected in mid-January. If Apple obtains a ruling of non-infringement, the Federal Circuit may determine that a full stay pending appeal is not necessary due to Apple’s ability to import its redesigned Apple Watch.
If Apple is unsuccessful in demonstrating non-infringement of its redesign, the Federal Circuit will need to determine whether this case presents the rare—and, indeed, unprecedented—scenario in which an importer found to be in violation of Section 337 is permitted to import and sell products determined to be infringing for the pendency of the appeal to the Federal Circuit, a time period that is typically a year or more. The Federal Circuit granted a similar, interim stay of the ITC’s remedial orders in Allergan, Ltd. et. al v. International Trade Commission, Case No. 2021-1653 (Feb. 15, 2021) (corrected Feb. 16, 2021); the Federal Circuit denied a stay pending appeal, but allowed importation of a redesigned product pending Commission determination of infringement regarding that product, in the combined appeal styled Cisco Sys., Inc. v. Int’l Trade Commission, Case No. 2017-2289 and Arista Networks, Inc. v. International Trade Commission, Case No. 2017-2351 (Sept. 22, 2017). Patentees, importers, and litigators should be keenly interested in whether the Federal Circuit grants a full stay pending appeal. The issuance of such a stay—if routinely issued—would have the effect of eliminating the main benefit of bringing patent enforcement actions at the ITC, i.e., the relatively short period of time until a patentee obtains relief for patent infringement.
Paul’s practice focuses on Section 337 litigation before the International Trade Commission. A registered patent attorney, Paul combines technical knowledge with vast experience in Section 337 litigation to give clients the legal advice they need to achieve their goals.
Paul began his career practicing patent litigation at a large law firm. Paul then served as an attorney in the Office of the General Counsel at the U.S. International Trade Commission, where he represented the Commission in multiple appeals of Commission cases before the Court of Appeals for the Federal Circuit and participated in Commission decision-making. After gaining that experience, Paul re-entered private practice by joining an ITC boutique Adduci, Mastriani & Schaumberg, where he focused his practice on patent litigation at the ITC and related matters. Paul founded Bartkowski PLLC in January 2021.
Paul’s intimate understanding of the ITC and its procedures and practices allows him to analyze clients’ options to determine the best legal path to achieve their goals.
I suggest helping grow the bigger beast to come and swallow the little beast that is a bully!
Schumann
I’d like to. The best sword is a pen. These people writing these laws should not be considered credible. Gadfly will show that, and in doing so, will take down the beast.