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Federal International Trade Agency Hears Patent Dispute Between Fitness Tracker Manufacturers

runners-silhouettes-athletes-635906Patent protection can be the key to many business’ success, giving them the exclusive right to use a particular invention or process, or to license its use to others. The federal government has exclusive jurisdiction over patent law in the U.S. In the event of a patent dispute that crosses international borders, a patent owner in the U.S. has several options, including objecting to the importation of allegedly infringing products. The U.S. International Trade Commission (ITC) is authorized to investigate alleged intellectual property infringement under § 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. A recently-closed matter involving rival wearable technology manufacturers demonstrates this process. In re Certain Activity Tracking Devices, Systems, and Components Thereof, Inv. No. 337-TA-963, notice (ITC, Oct. 20, 2016); see also 81 Fed. Reg. 74479 (Oct. 26, 2016).

Congress created the ITC in 1930, giving it responsibility to report on issues involving customs laws to both the White House and Congress. See 19 U.S.C. § 1332. The ITC’s investigative jurisdiction includes alleged import injuries and intellectual property disputes involving imports. This latter category includes patent, trademark, and copyright infringement.

Section 337 prohibits the importation of items that infringe a patent or copyright issued under U.S. law, as well as the sale of such items after importation. The ITC may initiate an investigation of alleged infringement on its own, or in response to a complaint. If it concludes that infringement has occurred, or is occurring, it can order the exclusion of the articles at issue from importation. This typically only applies to individuals or businesses found to have violated the law, but it can also be a general exclusion.

On July 7, 2015, the ITC received a complaint from a San Francisco-based company that manufactures wearable devices used to track users’ activities, commonly known as fitness trackers. 80 Fed. Reg. 50870 (Aug. 21, 2015). The complaint alleged infringement of six patents by the respondent, which is also a manufacturer of fitness trackers. It also claimed theft of trade secrets. The respondent filed its own complaint with the ITC, alleging infringement of three patents and other § 337 violations. 80 Fed. Reg. 68876 (Nov. 6, 2015); 80 Fed. Reg. 76040 (Dec. 7, 2015). Both complaints sought limited exclusion orders and cease and desist orders.

Over the following months, the parties dismissed several claims, and administrative law judges (ALJs) dismissed several more. An ALJ issued a final initial determination (ID) in August 2016. The judge found no trade secret misappropriation by the San Francisco company, but also found that the company had failed to prove its trade secret misappropriation claims, and that it had failed to establish the “threat of substantial injury to a domestic industry” element required by § 337(a)(1)(A)(i). The ITC affirmed the ID in October 2016. This January, an ALJ dismissed the remainder of the claims.

Business and commercial attorney James G. Schwartz has spent the past four decades advocating on behalf of Bay Area businesses and business owners, helping them assert their rights and protect their interests in both transactional and litigation matters. Please contact us online or at (925) 463-1073 today to schedule a free and confidential consultation to see how we can help you.

More Blog Posts:

Federal Circuit Rules on What Constitutes Use of a Trademark in Commerce, Pleasanton Business & Commercial Law Blog, February 15, 2017

Fair Use Doctrine Applies to Google Books, According to Federal Appellate Court, Pleasanton Business & Commercial Law Blog, July 29, 2016

Jury in California Federal Court Rules for Google in Software Copyright Dispute, Pleasanton Business & Commercial Law Blog, June 15, 2016

Photo credit: skeeze [Public domain], via Pixabay.