Why mobile companies like running to the ITC



Why mobile companies like running to the ITC

Are you wondering why a host of mobile companies are running to the U.S. International Trade Commission (ITC) to remedy their patent disputes rather than duking it out in district court?

The obvious answer is Broadcom's success in June to get the ITC to ban the import of certain mobile phones containing 1xEV-DO and WCDMA chips. The commission ruled that the chips infringed on a Broadcom patent.

But the onslaught of ITC complaints from a variety of companies began well before that and accelerated last summer, when the Supreme Court, through the eBay Inc vs. MercExchange LLC ruling, made it harder for patent owners to win a permanent injunction against infringers. As such, using Section 337 of the Tariff Act of 1930, which was originally enacted to protect U.S. domestic industries from unfair competition abroad, has significantly evolved into the primary means for companies to protect their intellectual property rights in cases involving infringing imports. Section 337 investigations are done by the ITC, and since a growing number of U.S.-based high-tech companies are moving their manufacturing operations outside of the U.S., their products are subject to ITC jurisdiction because they are being imported back into the U.S.

According to law firm Bingham McCutchen, a number of advantages exist using Section 337. The ITC usually issues a reasonably quick decision compared with a typical court case since the commission is required by law to complete investigations by set dates. In addition, an ITC ban on products has teeth because it is enforced by U.S. Customs. A court injunction is difficult to enforce. As such, an ITC ban makes the likelihood of a settlement all the greater.

Today, the ITC is scheduled to hear Qualcomm's petition to ban the import of Nokia GSM phones. And last week we saw the ITC agree to investigate Nokia's 3G handsets, which InterDigital claims infringes on two of its patents. Meanwhile, Nokia has asked the ITC to ban imports of certain Qualcomm chipsets and handsets that it claims infringe on five of its patents. Nokia says Qualcomm's recent patent setbacks with other companies is giving the handset vendor an advantage since it is filing similar complaints.

The advantages of the ITC's involvement coupled with Broadcom's success against Qualcomm means we can continue to see the IP legal drama unfold. -Lynnette

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