From Preclusion to Exclusion? ITC Staff Supports Paice Summary Judgment Motion

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In two previous posts (here and here) I discussed the patent infringement case between hybrid drivetrain technology company Paice LLC (Paice) and Toyota in the U.S. International Trade Commission (ITC).

In September of last year, Paice filed a complaint in the ITC asking the agency to investigate whether Toyota’s importation of the third generation Prius, the Camry hybrid and two Lexus models (Accused Products) infringed U.S. Patent No. 5,343,970 (‘970 Patent).

After the ITC agreed to open an investigation, Paice moved for summary determination of infringement, validity and enforceability of the ‘970 Patent. 

Specifically, Paice contended that Toyota was barred from asserting a defense of non-infringement of the ‘970 patent and from challenging the validity or enforceability of the ‘970 patent under the principles of claim preclusion and issue preclusion because of a prior federal district court and appeals court ruling against Toyota.

In a  issued in December and made public earlier this month, the ITC staff agreed with Paice and supported its motion.   The response noted that, although the Accused Products are different from those at issue in the federal court case, Toyota admitted that the hybrid drivetrains are materially the same as the vehicles found to infringe in that lawsuit.

Compounding Toyota’s troubles was a last week in the same case in which the ITC staff opposed the automaker’s cross-motion for summary judgment that claim preclusion should bar Paice from obtaining any remedy in the investigation. 

The response rejected Toyota’s argument because claim preclusion applies only to the cause of action and does not include the ensuing remedies.

Assuming the administrative law judge follows the recommendations of the ITC staff, the only remaining issue would be whether Paice meets the “domestic industry” requirement. 

19 U.S.C. 1337 requires that there be an industry in the U.S. relating to the products at issue, which includes both an economic prong (demonstrated investment in plant/equipment, labor/capital, research and development or licensing) and a technical prong (demonstrated practice of the asserted intellectual property right).

Now the big question is whether Toyota will continue to fight or decide to fold and pay royalties to Paice.  If the case moves forward, it will be interesting to see whether the ITC finds Paice’s engineering, R&D and licensing activities in the U.S. suffice to meet the domestic industry requirement.

Considering what is at stake in this case – Paice has requested a permanent exclusion order barring entry into the U.S. of the Prius, Camry hybrid and the two accused Lexus models – I wonder if and when the mainstream media will start to pay attention.

Eric Lane Avatar

Eric Lane

Eric Lane, the founder and principal of Green Patent Law, is an intellectual property lawyer and registered U.S. patent attorney in New York and is a member of the bar in New York and California. Eric has more than two decades of experience working with wind, solar PV, CSP, biofuels, and geothermal, energy storage technologies, carbon capture and sequestration, medical devices, data communications, mechanical, chemical, internet and software.