On October 15, Unwired Planet (Nasdaq: UPIP) announced that it was abandoning the pending International Trade Commission (ITC) investigation it initiated against Apple and Research-in-Motion. According to the company’s announcement, on Thursday, October 11, 2012, Administrative Law Judge (“ALJ”) Gildea declined to stay the pending investigation despite a joint motion filed by all of the parties.
It seems that Unwired Planet came out on the short end of a claim construction order, which dealt a fatal blow to the company’s infringement assertions. According to the company, “the ALJ made an unfavorable, and in our view, erroneous construction of a set of closely-related terms – the mobile device terms – in three of our patents. The error was that the ALJ limited the invention of the patents to mobile devices that do not contain a ‘computer module.’”
Thus, rather than go through with a trial, Unwired Planet decided to throw in the towel in favor of its pending case in the Federal District Court of Delaware, which was initially filed in August 2011 and has been conducted in parallel with the ITC investigation. This federal district court proceeding deals with the same patents and, according to Unwired Planet, will provide the opportunity to seek different claim construction in the federal court.
This second bite of the apple (pun intended) is due to the fact that there are no estoppel provisions that would prevent either a defendant or plaintiff in an ITC action from again challenging the exact same issues and claims in a subsequent (or simultaneous) federal court proceeding. This duplicative nature of patent infringement litigation is a justifiable area of concern. Something needs to be done to correct this. If Congress can put estoppel provisions into the America Invents Act relative to post-patent challenges, why shouldn’t those same provisions be put into the law with respect to what is referred to as parallel or concurrent litigation?
Unlike many, I am not in favor of stripping the ITC of its jurisdiction. Frankly, the ITC works exceptionally well and very quickly. That is what we should strive for. Having said this, why allow a district court a second look at the same exact issues? Everyone knows the Federal Circuit will eventually decide these cases that don’t settle, so what other than needless cost does a district court proceeding add with respect to issues already fully and fairly litigated at the ITC? Nothing!
On the Unwired Planet blog, which has been set up to inform the interested public of the events of this dispute, the company explained:
The trial, which would have covered all other matters besides infringement (such as validity and domestic industry), would have been futile for Unwired Planet in view of the indication from the ALJ that he intended to find no infringement.
But would the ITC proceedings have been futile? Perhaps from the perspective of Unwired Planet. If there would be no infringement found, then the issues of validity and domestic injury could only potentially harm the company. For example, if the ITC were to find that the domestic injury requirement have been unsatisfied that could potentially influence future attempts at using the ITC. Similarly, it is never a good thing to have one’s patent claims found invalid, even though the district court would still have to take an independent look at the claims in its proceeding.
Ultimately, Unwired Planet gave in at the ITC. “It would have required the parties to bear the considerable expense of trial which could not possibly result in a victory for Unwired Planet,” explained the company on its blog. “In view of the cost of the trial and the length of time before appeal, the Company decided to withdraw the ITC case and proceed in district court on these patents.”