Patently Strategic - Patent Strategy for Startups
Patently Strategic - Patent Strategy for Startups
Keeping Patent Pirates at Bay: ITC Portfolio Proofing Strategies
For inventors, the promise of the patent system is the right to exclude others from making, using, importing, and selling their patented innovations for a limited period. But how do patent holders actually enforce those rights, particularly when the copycat product is being manufactured outside of domestic jurisdiction? In an otherwise challenging time for rights assertion, the ITC – or International Trade Commission – can be one of the most impactful long-range weapons an inventor has in their arsenal for stopping patent pirates.
The ITC has the authority to grant exclusion orders, which are enforced by U.S. Customs and Border Protection to block the importation of infringing products at U.S. ports of entry.
But how can you access the ITC, what are its requirements, how can you afford it, and what should you be thinking about now to help future proof your patent portfolio for the most effective use later at the ITC? We’re answering all of these questions in an episode that is part of our ongoing series on patent quality – aimed at not just getting a granted patent but in having one that will hopefully be valuable and stand the test of time.
** Guest Host: Evan Langdon **
Because experience is the best teacher, we’ve enlisted the help of Evan Langdon to guest host this month’s episode. Evan is a partner at Fabricant LLP and the Chair of its ITC practice. Evan has been focused on ITC litigation for the past 15 years, both offensively and defensively, having represented clients in more than thirty Section 337 cases at the ITC. Evan is recognized among the nation’s top ITC practitioners by Chambers USA and Chambers Global.
** Episode Overview **
⦿ What is the ITC and what are its advantages over court-based litigation to stop infringers?
⦿ Requirements for filing an ITC Action
⦿ Litigation financing options for the ITC
⦿ Offensive and defensive strategies at the ITC
⦿ Patent drafting and portfolio strategy tips for increasing your odds at the ITC
⦿ Masimo v. Apple and the ITC's import ban of the Apple Watch
⦿ The recent Lashify case and what it means for the domestic industry requirement
** Discussed Links **
⦿ Quality Patents Part 1: https://www.aurorapatents.com/blog/quality-patents
⦿ Quality Patents Part 2: https://www.aurorapatents.com/blog/ptab-survival-guide
⦿ Quality Patents Part 3: https://www.aurorapatents.com/blog/continuation-practice
⦿ Patent Anatomy: https://www.aurorapatents.com/blog/new-podcast-patent-anatomy
⦿ RESTORE Act: https://www.aurorapatents.com/blog/restoring-injunctive-relief
** Follow Aurora Patents **
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[00:00:00] Josh: G'day and welcome to the Patently Strategic podcast where we discuss all things at the intersection of business, technology, and patents. This podcast is a monthly discussion among experts in the field of patenting. It is for inventors, founders, and IP professionals alike, established or aspiring. And in this month's episode, we're talking about ITC proofing your patent portfolio to help increase your odds of keeping knockoff products literally at bay.
For inventors, the promise of the patent system is the exclusive right to exclude others from making, using, importing, or selling their patented innovation for a limited period of time. But how do patent owners actually enforce those rights, particularly when the copycat product is being manufactured outside of domestic jurisdiction?
In an otherwise challenging time for rights assertion, the ITC, or International Trade Commission, can be one of the most impactful long range weapons an inventor has in their arsenal for stopping patent pirates. The ITC is an administrative agency tasked by Congress with protecting domestic [00:01:00] industries from unfair trade practices, such as patent, trademark, and copyright infringement that's connected with foreign imports.
Born under Section 337 of the Tariff Act of 1930, the ITC has the authority to grant exclusion orders, which are enforced by U. S. Customs and Border Protection to block the importation of infringing products at U. S. ports of entry. Given that so many products in today's economy are manufactured abroad and then imported into the United States, the ITC can be an incredibly effective venue for patent owners to stop knockoffs from entering the world's largest marketplace.
Much like its executive branch sister agencies at the Patent, Trial, and Appeal Board, Federal Trade Commission, and Securities and Exchange Commission, the ITC is a quasi judicial, non Article III entity with court like functions that resemble judicial proceedings. Powers include the ability to conduct hearings, issue rulings, and provide legal remedies in resolving disputes to carry out laws passed by Congress.
Unlike its evil sibling at the PTAB, however, the ITC has been a champion for innovation and property rights. The exclusion order remedy that the [00:02:00] ITC can apply upon finding of infringement is a form of injunctive relief. As regular listeners of the podcast and anyone who's tried to obtain injunctive relief themselves will know, this is immensely useful to inventors and patent owners because it can provide what courts no longer can provide in the wake of eBay, which is injunctive relief to stop infringers.
And it's really fast. Whereas court based patent infringement disputes can take several years to resolve, ITC investigations take about 12 months to reach an initial decision, finish in 16 to 18 months, and will not be stayed due to an IPR at the PTAB. You may recall from the news around last Christmas that the Or even from the Mossoff minute where we covered it, that a much smaller company, Massimo, was able to leverage the ITC to prevent Apple from importing its newest Series 9 and Ultra II Apple Watches, which contain pulse oximetry tech invented by Massimo.
This ban is still in place and proof that the ITC can level the playing field for startups Even against trillion dollar giants with billion dollar legal budgets. But how can you access the ITC? What are its [00:03:00] requirements? How can you afford it? And what should you be thinking about now to help future proof your patent portfolio for the most effective use later at the ITC?
We're answering all of these important questions in an episode that is part of our ongoing series on patent quality. Aimed at not just getting a granted patent, but at having one that will hopefully be valuable and stand the test of time. Because experience is the best teacher, we've enlisted the help of Evan Langdon to guest host this month's episode.
Evan is a partner at Fabricant LLP and the chair of its ITC practice. Evan has been focused on ITC litigation for the past 15 years, both offensively and defensively, having represented clients in more than 30 Section 337 cases at the ITC. Evan is recognized among the nation's top ITC practitioners by Chambers USA and Chambers Global.
Evan is joined today by our always exceptional group including Dr. Ashley Sloat, President and Director of Patent Strategy at Aurora, Kristen Hansen, Patent Strategy Specialist at Aurora, Marie Smith, Patent Agent at Hughes Bellarmine LLP, and [00:04:00] In addition to answering the questions mentioned earlier, Evan will also be breaking down the recent Lashify case and what it means for smaller startups, as well as unpacking the related domestic industry requirement and what it critically translates to for your business in terms of domestic and offshore spending and asset allocation, should you someday need to assert your rights at the ITC.
Whether you're a solo inventor, small startup, licensing university, or even a giant in the making, the ITC is an approachable venue, and the insights Evan shares today could make all of the difference for future self. Now before jumping in with the panel, we'd like to take you to the Mossoff Minute. A monthly segment that builds on our Patent Wars episode and features short conversations with Professor Adam Mossoff, providing updates and quick takes on movements in patent reform, significant court rulings, innovation policy happenings, and occasional Star Wars references.
In this month's minute, we're doing something we've never done before, and that's resharing a prior installment because some things are worth repeating, because this one is so very on point for today's topic, and because if there's something we can do to help address one of [00:05:00] the major plagues of the patent industry That's a drum we'll keep beating.
This amazing tool of injunctive relief that you're going to learn more about today is fortunately available to some patent owners via the ITC, but is no longer available to most all patent holders and courts since the eBay decision. The proposed Restore Act is a potent new patent reform bill that aims to reverse this outcome in courts by restoring the rebuttable presumption that patent holders are entitled to injunctive relief upon finding of infringement.
The ITC is still a favorable venue for patent holders to obtain injunctive relief via exclusion orders in the post eBay world, partially because the Section 337 statute that governs it essentially says, that patent holders are entitled to the presumption of the injunctive relief of an exclusion order provided that blocking the import of the infringing product wouldn't cause public harm.
In other words, the default framework for the ITC is a rebuttable presumption of injunctive relief. As a model, this rebuttable presumption has worked very well for inventors at the ITC, and Restore would [00:06:00] be a very close analog for Article III courts. So, for anyone who says Restore won't work because the presumption is not enough, all you have to do is look to the ITC for a functioning example of why it will.
[00:06:12] Professor Mossoff: The big news in patent policy, uh, is that the Restore Act was introduced in Congress on July 29th. Restore brings back, it restores. the original doctrine that had existed in this country from 1790 until 2005 that a patent owner receives an injunction on finding of infringement of their property rights, continuing ongoing infringement that can have defense is applied against it, um, but that the general presumption in the law, it's called a rebuttable presumption, is that you receive an injunction for continuing infringement.
This was changed in 2006 by the Supreme Court in eBay decision, a very famous decision or infamous. eBay has a result of changing the law, creating a new [00:07:00] four factor test, has made it much harder for patent owners to obtain injunctions. New research shows that well over 90% of infringement for patent owners who license their patents and even patent owners who manufacture their patents.
Two thirds of them are unable to obtain injunctions. This has devalued patents as an asset class in the innovation economy. It has made it much harder to To commercialize one's innovations in the innovation economy, because people now know that they can take your inventions and they can use them without being held accountable.
This is the same problem that you would imagine if you own a house and someone could sleep in your bedroom and you couldn't kick them out because that's what an injunction gets you. Of course, that would devalue your house if you tried to sell your house or to use your house for other purposes. And the same problem has, uh, has been facing patent owners since 2006.
And the Restore Act will change this law restoring us back to the original doctrine that drove our innovation economy that made the [00:08:00] United States a global tech leader and secured us against global competitors like China.
[00:08:06] Josh: Thanks, Adam. We're also publishing clips from the Mossoff Minute and short form videos on Instagram Reels, YouTube Shorts, and TikTok.
You can check out these shorts and follow us at Aurora Patents on all three platforms. And now, without further ado, take it away, Evan.
[00:08:20] Evan Langdon: Uh, well, welcome everyone. Uh, we're going to be talking about the ITC and, uh, some strategic, uh, avenues to getting there, um, and being successful, um, at the ITC. Um, just by way of background, my name is Evan Langdon from Fabrikant LLP.
Um, uh, I've been practicing in this area of IT litigation for well over 15 years, uh, and litigated dozens and dozens of cases, both, uh, offensively and defensively. Um, so we're going to kind of walk through some of the things that smaller companies to midsize companies, uh, should be thinking about and looking for, um, also some tips [00:09:00] for patent prosecutors.
Uh, in crafting patents, uh, to make them a little bit more friendly and advantageous, uh, for your clients, uh, to utilize the ITC. So, I'd like to start off with a little bit of example, kind of just to, uh, uh, Homeless in here, uh, and if you're an inventor or have been in the patent world or have turned on the news, uh, starting anytime from last Christmas till now, uh, you'll likely have heard of the dispute between Massimo and Apple, uh, involving Apple's newest watches, the, the Series 9 and the Ultra 2.
And the reason I'm bringing that up here is because it's relevant to our discussion today. That dispute took place and was litigated before the International Trade Commission, which I've introduced as commonly known as the ITC. Um, I'll just give you just a brief overview here to what we're going to be discussing today.
Um, I'd like to get into what is the ITC, some of the advantages of it, and spend some time talking about the domestic industry [00:10:00] requirement, which is really kind of the barrier to entry, if you will, uh, to bringing your case to the ITC and taking advantage of all those, um, or all those advantages to, to the complainant.
And if we have some time, we'll just briefly touch on a little bit of litigation financing, which has found its way. litigation space and also into the ITC. Uh, that makes it a little more reachable for a lot of entities. Um, so before we go any further, just a little background on the ITC, it is an administrative agency.
It is tasked by Congress with protecting domestic industries from unfair competition and unfair acts. Which are connected to foreign in in parts, which is a bit of a mouthful. But predominantly, it is a forum for patent litigation. Um, that is the unfair act that is litigated almost 90 percent of the time.
And a lot of products in today's economy are imported from abroad. A lot of men, not a products are manufactured [00:11:00] abroad. Uh, and import United States. So it. Those factors are, are not to say easily satisfied, but are satisfied in a large majority of cases. Now, like I said, uh, it is a trade remedy, um, it is not an Article III court, and so it is a, by statute, it is trade, uh, related.
Um, and that means that the primary relief that you're seeking isn't, isn't money award, isn't monetary damage, it's injunctive relief. Um, so practically speaking, the ITC is useful to patent holders and inventors because it provides what the district court no longer can provide. In the wake of eBay, and that is injunctive relief to stop the infringer from importing infringing goods.
You know, a lot of big tech, and we'll pick on Apple because we have that as an example going back to the Masma Apple case, have been kind of coined or called willing infringers. The catch me if you cans. [00:12:00] Um, they can go to district court, drag out that case for years, and if you catch them, they may owe monetary damages, but you can't stop them.
You can't truly enforce what you should have, which is a monopoly on your patents for a limited period of time. Uh, And we go back to this example because the reason it garnered so much attention, um, is because that injunctive relief. Mossimo prevailed and obtained an order preventing Apple from importing its infringing watches.
Huge win for a smaller company compared to Apple, almost any company is a small company compared to Apple. But the two Apple watches that issued there were found to have blood oxygen sensors that infringe Mossimo's patents. And we can get into the details if we want, but the bottom line is that smaller company Mossimo is successful against a tech giant.
And it was able to use the ITC to hear his dispute. Um, that isn't to say that throughout that litigation, Apple didn't pull out all the stops, because it definitely did. And even once it lost, uh, it petitioned to U. S. Customs and Border Protection, seeking a stay of an [00:13:00] exclusion order. It sought relief from the Federal Circuit.
Ultimately, uh, the Federal Circuit denied those stays in Customs. determined that Apple watches without the infringing features could be imported. And that is the ban that is currently in place today. You can get an Apple watch, but it does not have Massimo's technology on it. So what does this all mean?
It means that Massimo successfully enforced his right to a limited monopoly to enforce his patents and Apple can no longer use that technology unless under license for Massimo. So a huge win for patent holders and inventors. experience, uh, proves that patent protection can level the playing field and the ITC helps to do that, even against tech giants, um, such as Apple.
[00:13:51] Kristen: I have a quick question for you. If you, if you're bringing a litigation suit of some kind and you could get some sort of relief [00:14:00] with the ITC, do you bring a case in tandem, in parallel, before you start a litigation? How does ITC practice work?
[00:14:09] Ashley: That's a good question, Kristen. Good one.
[00:14:11] Evan Langdon: Yeah, that is a good question.
Uh, that is the general strategy, uh, is to bring a parallel case in district court. And you typically want to file that simultaneously or within a short period of time after the ITC. And I say after, uh, because this is where some strategy comes in with the PTAP. You know, you don't want to get involved in IPRs.
When you have a district court case, The number one move is to file an IPR. Get that clock going. A lot of times you can then petition to, to stay the district court and let the PTAB, you know, hear out the invalidity, invalidity side of the case. And typically, you know, the, the numbers are pretty high in favor of petitioners in that case.
At the ITC, once you file that case at the ITC, you file a parallel district court. The ITC will not stay at [00:15:00]receding. in view of a parallel PTAB case or parallel IPR. It'll, they'll both continue on parallel courts on parallel paths. The ITC typically will finish first. So it effectively neutralizes the threat of an IPR or the effect of a PTAB.
If you're at the ITC, it moves too quickly. District court case Because obviously if you file two lawsuits, you're worried about costs. In most cases, predominant number of cases, the district court case is stayed in view of the ITC. And the reason I say predominant and not 100 percent of the time is it is statutory and it is automatic, but it's controlled by the defendant.
Whoever is a defendant in the district court and respondent in the ITC. They're the ones that can move the automatic stay so as not to drag them into two for a and multiply the costs entered into most of the time, some of your [00:16:00]multinational multijurisdictional cases that already have multiple components going on.
Sometimes, you know, there's, they, maybe they like the form they're in for district court. I want to keep things moving in parallel. Um, so there, there's a small personification that do that, but that's a great question. Um, and that's, that's the typical strategy.
[00:16:18] Kristen: Okay. Thank you.
[00:16:19] Evan Langdon: So that brings us into, well, what are the advantages and, and why, why do complainants want to use the ITC other than, you know, I wanna be like Mossimo.
Uh, and the reasons, you know, I have, you know, our, our, about four of them, the primary reason for bringing a case to the ITC is speed. Um, in fact, speak could probably be listed as, uh, reasons one, two, and three. Uh, the primary measure in determining leverage in any IP litigation is time to trial. Uh, the primary measure, um, in, uh, success rate is time to trial.
And the ITC time to trial is about nine months, nine to ten months. Uh, this is faster than virtually any district court. [00:17:00] So because of that speed and, you know, following your question, Kristen, that does avoid the PTAB. And so the interplay between the ITC Um, and not only that, the commission generally prefers to reach its own decision on patent validity.
So, in a rare instances with TPAP, you know, PTAP does come out first, um, the ITC will sometimes defer to them and stay their enforcement, but not their ruling on the case. Um, so, it is an interesting interplay, but it still favors, uh, bringing the case to the ITC. The other, uh, another, uh, factor that is, uh, Uh, which we touched on is that injunctive relief, again, going back to the eBay factors, which are not required here.
I mean, no, no need to show reputable harm at getting out in the district court. Uh, the ITC remains the only forum where injunctive relief is readily obtainable upon a finding of violation of the statute, which here would be patent infringement. Um, the other reason is flexibility, uh, to [00:18:00] address. and name, um, foreign entities where sometimes it's hard and difficult to drag them in district court.
A lot of times you have foreign entities that don't show up. You can't, you can't attach the claim to them. There's nothing to collect, but you can prevent them from importing the product into the country. I can tell you in my experience as an ITC practitioner, I, unless it's a very small foreign entity that has, you know, minute, minute sales, it's going to default.
Most of those show up. Most of them do not want to have the United States barred as a, an area where they can make their sales, right? The market is just too big for the United States. Uh, and finally, one that is, uh, It's not often overlooked, but I think it's getting a lot more attention, is the jurisdiction and joiner rules.
A complainant can name as many parties as it wants in an ITC proceeding. I've seen up to a hundred. Not advocating that, it starts getting a little bit, a little bit crazy with, uh, uh, [00:19:00] logistics and costs and moving parts. Um, but it does provide you, if, if you have, you know, five, 10, 15 defendants that, that are, are infringing, they all have pretty good market share.
You typically run into the problem in district court of what jurisdiction? Am I going to be spread across the country? And I have two in Texas, California, Delaware, New York. Florida, you can provide, you can consolidate and name all of these parties in one ITC action, um, and you don't, you don't, you remove the ability to get transferred, there's nowhere to transfer to, there's only one ITC, there's no venue disputes, no transfer motions that allow us experience to Northern District of California where a lot of, uh, tech companies are related.
And there's no equivalent to rule 12 at the I. T. C. Um, so there is a lot of advantages procedurally, uh, to put the I. T. C. It's one of the predominant, um, for you should be considering and I can't stress this enough. This is one of those things that. You know, if there's only one thing that is taken [00:20:00] away from our discussion here today is bottom line, you know, the U.
S. market is still leading market, uh, and with the leverage the provides to complainants, if you're able to establish domestic industry, which we will talk about, and the U. S. market is a primary importance to your client, which it. Typically is in the should should almost always be a part of your overall litigation strategy, if not the predominant force, um.
In your litigation strategy.
[00:20:29] Josh: Evan, in terms of that second point there around, uh, you know, injunctive relief being automatic, we've been talking a lot lately around, you know, injunctive relief being broken, um, really since the, since the eBay decision, why, why don't the four factors apply in this context?
[00:20:46] Evan Langdon: The four factors don't apply because, again, it's a trade statute, and the remedy is to provide, um, relief to the U. S. consumer. You're trying to protect the U. S. consumer. And it does have, uh, statutorily, um, [00:21:00] public interest factors. And once a decision is found by the judge, uh, the administrative, uh, law judge, that there has been a violation, um, at that time, typically at that time, but it may also be throughout the case, evidence is taken on a public interest.
And with the termination is whether or not. The imposition of the importation ban is going to have a negative effect on U. S. consumers at large, right? So, um, and also, I mean, there's a couple of factors that have to look at in there. Is there going to be some sort of negative impact on consumers, such as, Uh, in the medical industry, and one of the most common examples of this, and this is probably 30 years ago, 25 years ago, there was a case that involved, um, hospital beds for burn, burn victims, and it helped, you know, to move the burn victims, which obviously are in a lot of pain, and you don't really want to touch them, but, you know, you don't want to develop ulcers and things of that nature, and, and the wounds.
So it was a mattress that helped [00:22:00] move the burn bed victims. Well, there was. In the ITC case, the product was found in violation, however, there were no replacements on the market. This would just be taken out of hospitals and the consumer, uh, or, you know, burn victims to be, to be exact, because that would be, that was a consumer that was defined, uh, would have been harmed.
Uh, so that was overturned, uh, or not necessarily overturned, but not enforced. Um, and so you have some examples like that. So the public interest factors at that stage when a violation has been determined are evaluated. Um, and then, um, there also is a presidential review. So, if it makes it through a violation, uh, and the public interest factors are found that if, if enforced, it's not going to harm the public at large.
Um, then, uh, the president via the U. S. trade representative can also look at that 60 days after all that is done to take a look if there's any policy concerns, uh, in, in terms of overturning or not enforcing the, the order. [00:23:00] Um, so those, those are the things, that's why eBay, uh, is not a player because, uh, Congress via the statute is kind of already outlined a way to protect the U.
S. Consumers,
[00:23:11] Josh: right? So, like, under under under 3 37, then the, you know, the default presumption is infringement is proven that, um, you know, an exclusion order is warranted. How
[00:23:23] Kristen: do you get out of this if you are importing something that has an objective relief come out from an ITC case? Um, other than like Apple did, Apple removed a couple of features so that they could still import part of their product.
Um, how would one get out of this? Or get this reversed or overturned without going back to the initial case in the initial ITC, uh, setup, who makes these decisions and says, well, you know, it's not, it's public interest to allow this to still import. How else could you get out of that?
[00:23:59] Evan Langdon: You mean via the [00:24:00] litigation?
Like how, how strategically defendants or respondents in this case work through the, work through the case?
[00:24:07] Kristen: Either work through the case or, or work around the, the import ban.
[00:24:13] Evan Langdon: So a couple things. Um, one, you could not import. So that would be reshoring. If you're manufacturing abroad, um, then you could reshore.
Now that isn't available to most entities, because a lot of them that are, Considering this have some sort of contract manufacturer. One would be reassuring. Um, two would be a design around, uh, and one of the, one of the strategies, uh, you have about five, five and a half, sometimes six months of discovery.
Is to design around and get that design a new design in the case So the judge can rule that it's not infringing and you have a path for that's typically depending upon, you know What the product is and if it's possible to do that, you'll see that In consumer goods cases depending upon [00:25:00] how the patent is written.
How narrow can we change a feature? What is that? How fast can we get that done and i've been successful with some of our clients and before discovery is over Um, sometimes even before the judge needs to rule on it, the other side says, okay, yeah, we'll, we'll settle out as long as you only go forward with your new design, something along those lines.
So design around is definitely a key and you definitely want to do that during the case. If you fight the case, and here's why, if you fight the case on your current design, you're going to win. And then afterwards go, okay, we lost. Let's design around. Well, you're now no longer in front of the ITC and the judge.
You're before customs. And it's a much more difficult avenue to, and much more expensive. To take that design, bring it before customs, you know, have, have them look at it, decide a ruling, then modify the exclusion order and all, all the while you're not importing any product. And that process can take as long as an ITC case.
Sometimes you're looking at nine, 10 months. So you really want to, if that's when you're having is. [00:26:00] It's not saying you have to admit infringement. You're just putting in another product. I'd always say, Hey, you got two products. Let's make it a third product and make it a design around and see. Hopefully we have a path forward.
I keep your options open as you responded. Um, the other obviously is reach out, you know, try to find a way to settlement. That's in any case. Um, you can unilaterally get out of a case by taking a consent order or voluntary default, but what you're doing is saying, I'm not going to participate in this with this product in the United States market.
So you can get out of the case. Um, and if you're a small party, uh, or depending upon how large, you know, we're, we're talking, we started talking up with Massimo V. Apple, there's a lot of cases out there where the complainant names 10 people. There's two or three main targets, there's, you know, five or six that are small and two or three really small, um, that happen to get swallowed up in it because they make an infringing product.
Maybe on a, Uh, lower margin or, or inferior in terms of quality that get [00:27:00] wrapped up into it. And they said, Hey, I just know Moss. I just want to get out. How do I do that? And that, that is an avenue for that to do that as well. Uh, obviously the last one is to invalidate or, or to actually litigate the case and validate it or approve non definitional of a product.
Um, but the, the, it's tough to get out unless you're willing to take one of those. Okay, um, so we've kind of covered some other points and I just want to make sure we've hit them all. And 1 of the questions that I receive from clients or potential clients is, you know, with the absence of damages, the, 1 Why do I want to read a case here?
Like what, you know, how does that, and I get other practitioners or sometimes on these panels, like how does that affect client decision making on whether or not to, to utilize the ITC? And the short answer is it really doesn't. And if anything, we have the discussion we've had here today about injunctive relief and the absence of obtaining that [00:28:00] in district court.
And at the sole remedy of the ITC offers is that injunctive relief in a shorter period of time. And from a strategic ability, it allows you to apply a real pressure, um, that you can't get any other place. So it's not really an absence of damages issue, but rather the fact that the ITC provides that injunctive relief.
And if anything, you may realize those damages via settlement or license sooner than you would if you brought it to the district court. Um, so, and we, and, you know, like we said, Kristen, following your question earlier, general strategy is to file that parallel district court action. So in the back of their mind, they know that, you know, if I decide to take a consent order, you know, or unilaterally get out, I reshore, I get, I, I, I get a redesign approved.
I still have a parallel district court action that, that are going to come after me for past damages. Right? And so if you are successful at the ITC, um, you can port over the [00:29:00] record to the district court and it's not, uh, it's persuasive, it's not controlling, but for the most part, most district court judges are not going to re litigate a case that has a claim construction and finding of infringement, um, in it on the same products.
So it's strongly persuasive and district courts can follow it. Uh, via the federal circuit ruling that they can't they're not obligated to, but they can use that as as a basis of the ruling. So that is the general strategy. And typically it doesn't get that far. Once you have a once you have a violation and import ban in place.
Um, oftentimes that discussion takes place, right? So, in the example of Apple, when you have a software case. Um, and their software implemented on a product, and they can remove the infringing software. You know, You've won, you've got your junk to relief, you can then go after the past damages for using that.
Um, but if they're willing to, you know, continue like Apple is bringing that product without [00:30:00] the infringing software, you know, then they can do that. So I guess that's one way of getting out depending upon the product at issue, technology at issue.
So we've talked a lot about the benefits of going there, and that all sounds great, but it's probably time we start talking about how do we get there, right? Um, how does a patent holder bring a case to the ITC? You know, there's a lot of nuances to everything we're going to talk to today, but at a high level, there are three main components.
Uh, one, there must be an unfair act, right? Common example, patent trademark infringement. Like I said before, about 90 percent of cases are patent. Um, there's trade secret now taking up a good number of cases. And trademark is in there. Typically trademark or, um, some of these other Lanham Act cases are in addition to the patents that are right.
Not usually as a standalone Lanham Act case, but you have your patent infringement. Sometimes you'll have false [00:31:00] advertising, trademark infringement. you know, on top of the patent infringement claims. Um, the second component is that the infringing product, or the accused product must be imported into the United States.
Uh, this includes the product being imported, uh, if the entity is selling for importation, that would fall within section 337. If it somehow was imported and another party is selling it after it's imported, uh, they're subject to 337 and it, this is a relatively, I don't want to call it a low hurdle, but relatively because it only needs to be one sample of importation.
You don't need to sell a certain volume. Um, the product should be manufactured here. Exported for whatever reason. Software gets put on abroad, a component is added, and then re imported. Once it's been imported, in any way, shape, or form, it's under the jurisdiction. Um, I've seen contract, or I haven't seen, there's case law on contract for importation.
Um, and you're probably wondering why you [00:32:00] want to bring a case where there's only one product imported or, Or just even a contract of importation. Think of large products. Think of tractors. Um, you know, you know, large, uh, machinery that there's not typically large volumes of sales per year. Um, those are, those are more these types of kind of nuanced importation arguments come up.
Um, recently. And it is, and it is still not, I shouldn't say it's still, but recently the, the commission and the Federal Circuit has affirmed, it's been recently challenged the Federal Circuit is the time of importation. That was a, that was a big deal five, six years ago, uh, and the commission and the Federal Circuit, um, has blessed this, that they've now separated it.
The importation requirement from the infringing, um, analysis before it had to be, it must be infringing at the time of the importation. Well, that brings in a lot of issues of if [00:33:00] two things are combined, once they're imported, software is added, once it's imported, sold to a client and they turn it on and it wasn't, it wasn't infringing at the time of importation.
Now it's, those are two separate inquiries. Where's the product date? Where's the product imported? Or was a component of the product imported? At the end of the day, the product being accused doesn't infringe. Um, that is currently being challenged, uh, at the federal circuit in a number of different ways in cases.
Um, but I, uh, largely under the, the Lauper decision that, uh, has kind of opened the door, um, for, for some new appeals, uh, in terms of, of, uh, whether the commission has authority to interpret its own statute and things of that nature. Um, but, you know, I, I think it's, The cases up there aren't the right cases to change that law.
So right now that, in my mind, that's going to stand as the standard there for importation and timing of infringement and importation. The third element, uh, is the domestic interest requirement. And this means, [00:34:00] and we can, we'll spend a little bit of time talking, because I know it's of importance to a lot of inventors out there.
And it really is the, the biggest hurdle to, to coming into the ITC is, do you have patents? Um, that your product, your own products practice. So domestic violence crime is one of those procedural nuances unique to 337 and, you know, it can be a major speed bump. Uh, I'm sorry, minor speed bump or a major hurdle to a complainant.
Most, most of the time it's a minor speed bump. Um, if you have, uh, products and you have IP, uh, that you've developed in house, you're trying to drop that IP to protect your products. Uh, there are essentially two main components. Um, the first is called the tech prong, which requires the complainant to show that it has a product or products or products.
That practice the patents they are serving. So in other words, a complainant must show, as I said, that its own [00:35:00]product practices, and for lack of a better term, they show, they basically do an infringement analysis of their own product, um, to show that they have products in the United States that practice their IP, right?
That's the first hurdle. Uh, and this is where we're kind of get a, just want to throw out a note here for patent prosecutors, um, and where you can kind of come in on an ITC strategy for. Asserting patents, the ITC, you need to show, like I said, your patent practices, your product practices, the patents you're asserting.
It does not need to be the same claims that you're asserting for infringement. So you could have 25 claims, 20 claims, whatever. One, two, you can show that you're a product practice and the other ones are directed towards, you know, broad reading and some maybe are directed towards specific products. So. As a strategy, you want to have claims that are narrowly read on [00:36:00] only your product.
So the idea is, you know for certain you have at least one or two claims that read on your product, right, to rely on, to satisfy the domestic industry requirement of the ITC. Also by narrowly drafting it, you're going to avoid invalidity, right, or hopefully avoid invalidity. So it's kind of twofold. You, you gotta, you have a direct avenue to the ITC.
And you're trying to strategically avoid that claim being invalid. Typically, you're thinking, well, if it's that narrow, it's not going to infringe where I'm going. That's not what you want it for here, right? You want to set aside a couple of claims just for the ITC. So after you've overcome that hurdle, the second is known as the economic problem, which focuses on complainants economic investments in the United States.
In those same products that were shown to practice your patents, and this is where it gets mirrored up Um, so you you have your products and you may have 10 products But maybe only half of those practice those patents practice the patents that you're [00:37:00] asserting in this case You've done your analysis and you've shown that now you need to show your united states investments only in those five products right that uh Practice the assertive patents To show the economic investments United States to satisfy the economic prong.
And this is where some respondents and actually, uh, I've spoken a few panels about this about the interplay between the technical prong and the economic prong. Um, because it's, it sounds simple and it is, but when you have multiple products and multiple patents. And not all patents practice the products or not all products are practicing each of the assertive patents that you're asserting.
You can get into, you can get into kind of a crazy Venn diagram if you will, of which of your investments can count towards this patent versus that patent, um, and you, you know, you got to keep things straight. We've. Um, there is a recent case, uh, Lashify, uh, at the ITC, and, and, and it was appealed, it's being currently appealed at the, [00:38:00] uh, Federal Circuit.
And that is one of those cases where it had multiple products and actually had, um, I guess systems of products, or, or they, they sold products individually and they sold, they sold them as a, as a kit, Lash kit, an application kit, and things of that nature. But the patents were, Weren't drawn to all the all the pieces of the kit and they weren't drawn to all the other components So you start separating things out um, they started having to discount but Allocate their investments Only to certain portions of products that that they were claiming, um, and ultimately were unable to do so.
Um, I do believe that if they had found a way to, uh, track the investments by products, a little more closely tied into specific patents that can't that that is a case that. Um, has provided a roadmap for smaller entities, um, a lot of entities that work out of their [00:39:00] garage, small companies, um, ventures like to say put a lot of sweat equity into their case before it kind of, or into their product before, or their company before it takes off.
Um, even though the last five complainant was unsuccessful with the ITC, the case let's come out has provided a nice roadmap, uh, for small entities to develop their case.
[00:39:21] Ashley: Evan, real quick on the, so remind me with the, it has to, your products need to practice your patent, and then you can then also assert then the ITC, that has to be the same patent though, so when you say like crafting claims, you should have claims that are broad enough to capture would be infringers at the ITC, but also some that are narrow enough to cover your own product, but all in one patent, right?
That one patent has to be able to do kind of double duty. Right.
[00:39:55] Evan Langdon: So if you have five patents, all five need to have a claim that you can, that you can [00:40:00]map to your own product. Right. Um, and then obviously all five have to have at least one claim that is found to infringe. Now it can be the same claim and oftentimes it is, it isn't requiring you to like, Hey, The only way to do this is to have some standalone claims that, you know, are drawn onto your product.
It's often the case that it's a complete overlap between infringing claims that are asserted for infringement and claims that are asserted for domestic industry. Just as a strategic note, if you are thinking ahead, Um, it does behoove you to have a narrower claim, uh, that can satisfy any potential and invalidity challenges, um, and that you know reads on your product.
And the reason it needs to satisfy invalidity challenges is because just like infringement, you can't have domestic industry on an invalid claim.
[00:40:45] Josh: Evan, with, with Lashify, um, you know, it's my understanding that You know, they successfully proved infringement, but one of the other, one of the other issues was that, you know, well, they had a successful product in the United States and they had like 100 [00:41:00] employees or something like that here.
All of the employees were engaged in marketing and sales activities and not in engineering, research and development or manufacturing, that they were doing all of their manufacturing. Overseas and that the the ITC sort of has like a present bias towards, you know, manufacturing and development that's happening onshore versus strictly importing with only sales and, you know, marketing activities onshore.
Is that like, is that is that an accurate read?
[00:41:27] Evan Langdon: Yes. And I'll, I'll speak to that. So the ITC has what they call a mere importer test, and it has, it's been around for a while, but with Lashify and a couple of subsequent cases, it's really garnered interest with the commission itself, and the case law has really kind of, uh, been refined.
And the mirror importer test at a higher level is if you're performing activities of only a mirror importer, you're not going to satisfy the domestic industry requirement. So at a higher level, a mirror importer would be someone who just [00:42:00] contacts, uh, uh, a manufacturer in let's say Asia and buys a product off the shelf already made, packaged.
Ships it into a warehouse and sells at a warehouse. You're doing nothing more than mere import. You didn't invent anything You didn't develop it research employees, etc So it's been broadened that all only your activities you have are that of a mere imports. That would be sales and marketing Advertising things that those those cannot count when I say I say cannot count because I typically try to cut those out, uh, to avoid the argument.
And like I said, the present by to the commission of including those because some commissioners are flat out. No. And some under the statute and legislative history. It says that they may be count, you may be able to count those, but typically you can count those when you have other factors, other investments in manufacturing, other investments in R and D.
And practically speaking, if you have those other investments, you [00:43:00] don't really need the sales and marketing investments. So for the most part, yes, that, that is a red flag. Um, if you only have sales and marketing investments, you need to have something else. What Lashify was their current investments. At the time they brought the case were largely, they didn't accurately capture some of their past R& D.
And so if you have a small company such as Lashify and you have R& D research development, Uh, sweat equity out of your garage. Maybe you hired, uh, an engineer who, who, you know, did some work for you here. Then you went and hired another one. It took you a long time. Then once the machine got going, right, the company got off the ground, you're that was, there's less R and D and more in sales and marketing.
That can be argued to be, uh, successfully a domestic industry. Cause you just need to show. In this industry, this is where the examples [00:44:00] of the marketplace that issue that they did the investment, they did the initial investment. And now it's like, what are the sustaining activities they're doing now? What are they relying on now?
And so it can, it can start swaying from a high level of R and D and low levels of sales and marketing and the kind of swing their days, low, low R and D and high levels of, uh, Of sales and marketing, as long as you're able to capture some of that in that previous, um, previous research and development, uh, activity.
So again, when that case. Uh, had, like I said, that uh, Venn diagram of various products, when you start cutting it down, some products had more sales and marketing than others. And so it looked like at the end of the day when you were all done, the ones that kind of made it through infringement, um, and were, were, those, those patents were found about the expenses that were left were largely sales and marketing.
And that's partially why that that case was, uh, unsuccessful from a di perspective. Um, but there are ways of putting it together. [00:45:00] Um, and capturing some of those past investments, uh, and showing the development of the company and what they're currently doing now, uh, to be successful at the ITC.
[00:45:11] Kristen: So Evan, I'm sure this is, is kind of subjective, but like when you say significant or substantial investments, uh, for like a startup, what would that look like?
Would that look like, you know, tens of thousands of dollars into a patent portfolio and maybe a single product and, you know, maybe some small sales. All of that would be included. And you know, what would be like the bar?
[00:45:38] Evan Langdon: Right. So, right. So, the, the, the, I, anyone the ITC would tell you, and the case law will say that it's not, it's not supposed to be a counting test.
And there is no magical bar, magical number. Right. Okay. You know, without going too far into the weeds on, on the economic problem, there are 2 main things I looked at. 1 is, you know, You have to quantify the investments, right? So it's numerically [00:46:00] how much money is being spent on activity, overhead, um, you know, we can, you know, on the investments, um, and this could be how much money is spent on employee salaries, design, develop, engineer, manufacture, assembly the products.
It could be the rent or mortgage payments for facilities, uh, where these activities take place. It can be the cost of equipment to use, you know, in the design, development, engineer, um, as long as the investments take place in the United States. Now, it is very common, um, for a product to be manufactured abroad and imported, right?
That, that isn't unheard of and it's also not a hurdle that can't be overcome at the ITC. Uh, so to your question, how much money? It really is, this is where they, once you quantify, there's also a qualifying, you know, the, the qualitative, um, factors they look at. And this is, you look at the investments and showing what is the importance of the, these [00:47:00]investments to this company's business or in the context of relative industry.
So if you only spent 10, 000, but that's the entire company, right? That's going to show significance. You only have one product. And everything you spent is going into this one product and without this one product, you would not have a, you would not have a company that's going to be a qualitative factor is going to show this is significant to you.
This is significant to the product, the investments you've made. As opposed to, let's put it on the other end, you have a big multinational company and they spent 10, 000, right? That is probably 0000001 percent of importance to their, to their company, right? Or, or it wouldn't be if you take this product out, the company's falling apart, right?
So they would have to have a bit more of an investment and they'd have to show You know, some sort of, uh, qualifying investments and show that significance. The other way of showing it, and this is one that's really taken on, uh, importance, especially from the commission's [00:48:00] perspective. They want to see, especially when you have this dynamic where we had some investments in research development, we're obviously shifting a little bit more towards marketing because we're trying to sell our product and we manufacture abroad.
How much money are you spending here in the United States versus how much is abroad? Okay, so if you're spending 90 percent on the manufacturer, you're going to be in some trouble, right? If you can, you want to get somewhere in the sweet spot of 35 to 50 percent of your investments are here in the United States versus what's being spent abroad, right?
More north of that, I start feeling more comfortable. That's kind of how I advise my clients. There are some cases where they say. You know, something nor the only benchmark is 5 percent is not enough, right? So, okay, because most of these numbers aren't public. And so, yeah, it's the only public number out there.
I can tell you those cases that are definitely between 5 and 30, 35. But if you get in there, you can make this [00:49:00]comparison between what you're doing here versus abroad. That's another factor. That's another way to qualify those investments to show that they are significant.
[00:49:09] Kristen: Okay, that's much more reasonable.
I think, I mean, when you see a statute like that, that says, well, it has to be substantial. Um, you, you tend to think, okay, I'm a small startup and this wouldn't apply to me, but that's not true. So, this could be for startups, this could be for large companies and medium companies and single inventors, if they have poured their, their, um, money into a single product.
So, good to know.
[00:49:34] Evan Langdon: Yeah, the other overarching standard that is kind of for significance is the reality is the marketplace. So if it's a marketplace that is, like, for a startup, and the product is relatively new, you know, evidence of, well, what are others in the industry spending? We're outspending them, or we're on par with them.
Like, we're making a significant investment here. So there are multiple ways to show it. I'm just trying to go over some of the More [00:50:00] popular, more successful and ones that are directly more applicable to, uh, startups, um, which I understand are, are the ones that are a lot of which are, are concerned with that domestic industry, uh, analysis.
Um, there's also 1 important wrinkle to all of this, especially when it comes to domestic industry and startups. is that complainants can rely on the domestic investments of one of its licensees. So there are a number of factual scenarios where this comes up. Smaller companies or inventors or startups that have licensed their IP to another entity or even a competitor in the industry, right?
Universities or R& D only companies that have licensed Right there intellectual property and more recently, um, non practicing entities that have licensed their IP to practicing entities. So practically speaking, the complainant, whether it be a startup or their, which I've represented, whether it be a university, which I've also represented, They have license, they can step into the [00:51:00] shoe of their licensee and show now the licensee is the part you're looking at for the licensee's products that practice the patent, the licensee's investments in those products to satisfy the economic prong and the technical prong of the domestic industry requirement.
So you're seeing a lot of those cases, like I said, falling under any of those factual scenarios, um, at the ITC to again, try to open the doors for, for clients. Smaller inventors, um, you know, I'll say non practicing entities because universities are a non practicing entity. Um, and we've recently seen, uh, universities, uh, take, take their cases to the ITC for enforcement when they're having difficulties, um, with their tech transfer offices trying to license their IP.
Um, so that is a very powerful tool, uh, for complainants, especially in the, like I said, the start, startup or smaller space. So strategically, um, that [00:52:00] is something that a startup can do is find a license. Licensee partner, right? Uh, not necessarily an investment partner, but a licensed partner, um, obviously get some income stream coming in from them to continue developing, um, but obviously, uh, can help potentially open the doors, um, for the ITC for a large enforcement campaign.
[00:52:21] Ashley: Evan, is there any, um, magic language in licensing contracts that you would need to have to. Be able to use that partnership in that way. I just think of, you know, like assignments and things like that. There's some magic language and, or is there needs No, there's no
[00:52:36] Evan Langdon: magic language. You know, just making sure that they're licensed to the patents.
Right. So you don't want, um, you know, a lot of times Yeah, just make sure the license to the patents that you're asserting, right. That that's the biggest deal. Um, you know, like any license, you know, there's give and takes, uh, with what's negotiated. But, you know, oftentimes if you have, you know, a list of patents and portfolios are still open, continuations includes those [00:53:00] anyway, right?
So then down the line, the continuations, the ones that you're asserting, so you make sure they're covered. I have seen language, uh, in, in license agreements that obligates the third party to participate in the ITC case. That's not required. It's not necessary. Um, you know, there's some companies that don't want to be the third party, um, domestic industry, uh, which is what it's commonly referred to as a third party domestic industry.
Um, but many of them participate, uh, and provide, you know, the necessary information for, for, to satisfy that, but there's more and more you're starting to see strategically companies saying, hey, you know, as a negotiating piece, I want you, I'm going to bring an ITC case, I want you to be the domestic industry, you know, there may be some compensation for that, um, you know, in terms of other terms of the agreement, uh, but it's not required and there's no magic wing there necessarily.
Absolutely.
[00:53:53] Ashley: But it would be, if you have a partner, a long standing partner, they wouldn't have to participate though. So if you [00:54:00] want them to have to participate, then your contract should obligate them, right? Because they wouldn't, if you decide to bring action and you want to work with them on that, they don't have to participate though, right?
[00:54:11] Evan Langdon: Well, you'd subpoena them for the information. Um, you know, I think it makes for a much, much, uh, happier environment, uh, you know, if, if they are participating. And, and a lot of companies, um, are okay, you know, we reach out to them saying, you know, we're going to bring this suit, um, we're going to subpoena you, largely so, everything you provide is under the protective order, you know, maintain your rights.
And even though it's via subpoena, you know, it's, it's a very harmonious thing to do. You know, a relationship. It's not adverse. Um, I think, I think some of the bigger tech will say, we don't like this practice, it allows these non practicing entities, you know, to license and, and establish domestic industry and go after us.
We got to kill this practice. Um, but we have unwilling third parties and that's [00:55:00] not really the case. I mean, not to say there, there hasn't ever been an unwilling party, you know, not necessarily happy about being the domestic industry, but, um, it's not what is being. For trade trade. Yeah. Thank you.
[00:55:14] Ashley: Okay.
Perfect. Thank you.
[00:55:16] Evan Langdon: So I'm not sure how we're doing on on time here Uh what I was going to flip over to was just discuss a little bit of uh litigation finance Um, and how it's, it's growing in the area of patent litigation and it's found its way to the ITC. Um, so like going back to like the Mossimo Apple, uh, example, and I don't have any numbers on the cost of litigation, but I can tell you it was not inexpensive, right?
Um, not all ITC cases are going to be as large or expensive as that case, but, you know, there is a cost to, to litigating, um, patents. Um, and, you know, There has been an increase in litigation financing in the past 5 10 years and even more so in probably the last Um, you know, three to four [00:56:00] years, uh, even more so than the last two years.
Um, it's just a continually growing industry. Uh, and it has allowed patent holders, you know, big and small to bring district court cases, ITC cases, uh, and what has been popular, uh, as of late is multi jurisdictional campaigns. We have district court, ITC, and potentially another jurisdiction outside of the United States.
Uh, but obviously that can be expensive. Um, It's also a way for companies that may have the cash flow to de risk investing all their money in litigation. No one, you know, some of these cases it was like a bet the company case. Well, it doesn't have to always be a bet the company case anymore. Um, it can be a bet a good portion of the, of the company, but you can de risk that.
Uh, obviously you're capping your upside a little bit. Um, but you are lowering your downside to zero. A lot of these are non recourse loans from, uh, from a funder. Um, that if successful, [00:57:00] um, either going to want a percentage or take home a percentage of the ultimate relief, um, if not, it's no recourse to the, to the plaintiff.
Um, so it, it is something for startups to consider, uh, for sure, small companies. Um, you know, if the small to mid sized companies that have the IP have a strong case and the damages are large enough is definitely something they should be considering. Um, and the ITC, because of all its, all its advantages has been a form where cases are being, uh, asserted by smaller entities or even mid size entities, um, that are backed by, um, companies.
It's been, uh, it's been one of those things that's led to, you know, diversification of legal providers, more boutique firms, specialty firms that specialize in either legal litigation finance or ITC litigation, or even [00:58:00] those who are part of larger campaigns and, you know, some firms combine or co counsel depending upon, you know, which part of the campaign is being, uh, um, handled by that firm.
Um, but a lot, not a lot of times, but growing number of times, uh, that litigation is backed by, um, litigation funding. Not to get too many weeds on that, but a lot of questions I field, uh, from, uh, startups, small companies, mid sizes, okay, that all sounds great, the ITC sounds good, you sold me on that, um, I understand how to craft my patents, I understand what I'm looking for, I, I, I think I understand what needs to happen on the economic problem of the domestic industry.
Yes. Money sounds good. So let's, how do we, how do we get that? Um, and so, you know, it's, you know, we spend a lot of time evaluating cases, whether or not, you know, the, the client's a traditional hourly rate or whether it's going to be funded. Um, and there are certain things that funders do look at, uh, in determining whether to fund a case.
And, you know, one [00:59:00] of those is a lot of times that we look at time to trial, they're important in these cases. So ITC. You know, jumps the top of their list, Eastern District of Texas, Western District of Texas are things that are looked at, the number of patents in the portfolio, um, the more diverse the portfolio is, reduce the risks of invalidation via IPR, unfavorable claim construction, invalidated during the case, non infringement, obviously, um, the more you have, the more diverse you can be.
Um, yeah. The others, you know, that are often looked at age of the patents relative to technology, uh, and that kind of dovetails with, um, realistic potential damages. You know, you want to somewhat of mature market, uh, so you can realistically we Uh, value the patents and value the patents and litigation, which are sometimes mutually exclusive things.
Um, and by what I mean by value in litigation is, you know, what are the volume of sales? How big is the company? [01:00:00] Can they afford to, you know, pay for a license? Where's the realistic, uh, ability to collect damages, um, to obtain a settlement fee or license fee? Um, those are things that, you know, are looked at.
Um, whether or not the inventor or company are still attached to the patent, that is very important to the funder and also to the ITC case, you know, patents that are bought, sold, bought, sold, you start losing the connect to the inventors, um, now, you know, establishing domestic industry, you got to dig in a little bit more and see what's going on.
So that plays a factor. Um, but that, that, those are kind of the threshold and obviously, you know, the realistic damage is the amount that varies from funder, you know, they're looking, um, for the value, the litigation value of the case to be, you know, of a certain amount, um, and of course the merits of the case, you know, evaluating infringement and domestic net, well, if it's ITC, you have infringement validity, and then obviously, yeah, domestic industry.[01:01:00]
[01:01:00] Ashley: Um, so you were going to mention the age. I've heard that most litigation doesn't happen until like the last 5 plus years of the patent. Is that pretty consistent with the ITC too? Or are those cases happening earlier in the patent life? Or what's that look like?
[01:01:16] Evan Langdon: It's really technology dependent. Um, I think a lot of, uh, software cases, bigger tech cases, um, pharmaceutical cases.
Those are an R& D stages. Long ago, and it takes a long time to get to market and then for the masses to pick it up when you have more of a lower cost consumer product that can be Adopted manufactured and put out in the market sooner. It's not it. It doesn't typically have the same You know the same life cycle if the patents are typically a little bit younger Is that that makes sense?
Yeah, but yeah, but On [01:02:00] average, that's a good question. It is typically later. I would say the last couple of cases I litigated, there was probably only about four or five years left on the patents when we filed the ITC case. Sweet spot, I think, because you're also looking for not just past damages, but future damage, that five to eight year is probably a sweet spot.
Not to say that, you know, funders or even law firms won't get involved as under that force. Um, but one concern at the ITC, if it's too short of a runway, um, you know, we say nine to 10 months to trial, but the case, if it goes to trial and it goes to commission review and it goes up to the president, you're looking at 16 to 18 months.
So the patent doesn't have at least that left. It's too short. You're going to have problems asserting at the ITC and really you can't do 18 months because you get an exclusion order for one day, right? It needs to be 18 months plus six months to a year, right? So you need two and a half, three years left on your patent, at least, [01:03:00] uh, for the ITC to be really have the teeth, uh, and have the levers that we've talked about here today.
[01:03:06] Ashley: That's helpful. And so kind of, you know, putting this, you know, this has been awesome and super helpful. And I think it gives a lot of hope to inventors, especially in light of the, um, um, being able to actually stop infringers. So, from a practitioner standpoint, then the things that are, you know, in thinking about how to craft patents to be best or like, best practices for portfolios for itc.
I mean, it sounds like, you know, continuations, you kind of mentioned, um, diverse portfolios, maybe claiming things in lots of different ways, lots of different flavors, having like singular patents that cover a would be infringing product and the actual product that you're from your domestic industry. Are there other key takeaways from like a, you know, how can clients set up their portfolio now to hopefully be used at the ITC?
[01:03:59] Evan Langdon: [01:04:00] Yeah, no, I think, you know, the primary ones there. I mean, like any other litigation, keep the continuations open. you know, you always want to keep yourself flexible. Uh, you know, been in cases where you put forth your strongest patent, the other side identifies, uh, a nuance, or you get a bad claim construction read well, file a track one, right?
Got some time left to get, keep keep your, uh, Many arrows in the quiver as you possibly can, but those ones you identify there are the primary. Do
[01:04:28] Ashley: you think any of the, this is really going in the weeds, but um, do you think any of the more recent, you know, there was the whole Sonos, BeGoogle latches where, you know, they should have prosecuted claims earlier, um, you know, to make them more viable for judicial court.
Do you see that impacting the ITC at all? Like, you know, I've waited a long time to prosecute claims.
[01:04:50] Evan Langdon: Yeah, latches typically is not a defense of the ITC because it's a forward facing remedy. Um, so, you know, people try to make it a lot. Uh, [01:05:00] oftentimes the ITC, it just doesn't go anywhere because it's just not a, a, a, a, a remedy because it cuts off past damages.
Yeah. And so, you're not awarding damages and the forward facing injunctive relief, so it doesn't really have any practical effect.
[01:05:14] Ashley: Awesome. That's fantastic. Kristen, Marie, Josh, anybody else have any other questions for Evan? And we really, really appreciate it. Yeah, no, thank you very much. Perfect. It makes me excited.
Now we get to like, talk about this more with clients.
[01:05:28] Evan Langdon: Well, I appreciate you guys having me today. Uh, it's been fun. If there's any other questions, uh, we handle those. Otherwise it was great talking with everyone.
[01:05:37] Josh: Evan, we, we really, we really appreciate it. Cause we, you know, we talk a lot about how, You know, there's a lot of different audiences for a patent over its, you know, life cycle, but a lot of times people are only thinking about, you know, getting it past the goal line of the patent office initially.
And so we're really, really trying to have this quality series that's focused on, you know, what are all the things you can do to set futures up for success and, and raise awareness to these other [01:06:00] audiences, you know, for the, for the patent. So this was, this was so helpful.
[01:06:05] Evan Langdon: Well, I appreciate that, Josh. I think that's a great thing that you guys are doing with your series.
I do follow that on, um, IP Watchdog and it, you know, trying to broaden the audience. We're not really brought in the audience and educate the audience, right? Like you said, I used to work at the patent office. I did prosecution for a while. And, you know, the goalposts should not just be, right? Obtaining a patent for the pet.
That's the beginning step, right? That's, that's our football analogy. That's first intent. We got a lot of ways to go, um, to, uh, enforce that patent. And hopefully you never have to, right? Um, but unfortunately in today's world, if it's a, if it's a quality patent, quality product, you're going to have to.
[01:06:42] Ashley: Yep.
100%. Well, we appreciate what you do for, for companies because it's, it's a, it's a good venue and so, yeah.
[01:06:50] Evan Langdon: Great. Well, thanks everyone.
[01:06:52] Ashley: Take care. Thanks. Have a good week.
[01:06:53] Evan Langdon: You
[01:06:53] Josh: too.
[01:06:54] Kristen: Bye
[01:06:55] Ashley: bye.
[01:06:55] Josh: Bye. All right. That's all for today, folks. Thanks for listening and remember to check us out at [01:07:00] aurorapatents. com for more great podcasts, blogs, and videos covering all things patent strategy.
And if you're an agent or attorney and would like to be part of the discussion or an inventor with a topic you'd like to hear discussed, Email us at podcast at aurorapatents. com. Do remember that this podcast does not constitute legal advice, and until next time, keep calm and patent on.
