Litigation at the International Trade Commission (ITC) of Washington, DC requires the patentee to have a domestic industry [in the U.S.] to block the importation of infringing products into the United States. The ITC is a trade forum and not an intellectual property forum. The ITC is concerned with protecting the U.S. economy from harm from imported products.
Under Section 337, it is unlawful to import articles that infringe a valid and enforceable United States patent if “an industry in the United States, relating to the articles protected by the patent … exists or is in the process of being establish.” 19 USC 1337(a)(2).
Section 337 further states that a domestic industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned:
(A) significant investment in plant and equipment;
(B) significant employment of labor or capital; or
(C) substantial investment in its exploitation, including engineering, research and development, or licensing.
In Motiva v. ITC and Nintendo, Motiva, the patentee owns two patents directed to a system for testing and training a user to manipulate the position of transponders while being guided by interactive and sensory feedback. Nintendo is the owner of the Wii.
Prior to the introduction of the Wii into the U.S. market, Motiva attempted to introduce a high end, expensive tool designed for exercise, athletic performance training, and physical therapy and research. In contrast, the Wii is a relatively inexpensive video game system for home consumers that had games for exercising but would not compete with the expensive and sophisticated fitness product envisioned by Motiva. Simply put, Nintendo and Motiva were in two different markets.
Motiva attempted to use two activities to show that they had a domestic industry or was in the process of establishing a domestic industry. The first is the manufacturing activities for the high end tool which occurred between 2003 and 2007. The court held that Motiva and Nintendo were in two different markets. As such, removal of the Wii, a home video game system, from the U.S. by blocking importation would not protect Motiva’s industry for high end training tools.
Second, Motiva attempted to use the current litigation as evidence that the domestic injury was in process of being created. The court held that Motiva’s investment in the litigation (i.e., $17,000) against Nintendo could indeed satisfy the economic prong of the domestic industry requirement if it was substantial and directed toward a licensing program that would encourage adoption and development of articles that incorporated Motiva’s patented technology.
First, the court found that the current litigation was not being directed to promote adoption and development of the high end training tool of Motiva. Rather, based on emails and witness testimony, Motiva was motivated by the potential royalties or financial settlement if the Wii was found to be infringing Motiva patents.
Second, the presence of the Wii had no impact on Motiva’s commercialization of its high end tranining tool.
Third, Motiva never asked for a preliminary injunction from prior district court litigation.
Fourth, Motiva never offered a license.
As such, the Court found substantial evidence that Motiva’s litigation against Nintendo was not an investment in commercializing Motiva’s patented technology to develop a licensing program to encourage adoption and development of articles that incorporated Motiva’s patented technology.
Based on the foregoing, the plan to implement Motiva’s technology heavily influenced whether Motiva had a domestic industry worthy of protection. The domestic industry of Motiva was defined by its initial product development of a high end training tool which wouldn’t have competed with the inexpensive home video gaming system (Wii). As such, removing the home video gaming system (i.e., Wii) wouldn’t have helped Motiva protect its domestic injury.
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