Appeals Court Vacates Exclusion Order, Remands LED Patent Case to ITC
In a patent case involving imported light emitting diodes (LEDs), the Court of Appeals for the Federal Circuit vacated the limited exclusion order (LEO) which the International Trade Commission had imposed against Epistar Corporation of Hsinchu, Taiwan.
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The CAFC also ruled that the ITC erred in extending the LEO to downstream products manufactured by third parties not named in the case.
Prior to this appeal, in a section 337 patent-based investigation on certain high-brightness LEDs (with a special electrically conductive, transparent window layer that provides brighter light and improved efficiency), an administrative law judge at the ITC ruled that Epistar had infringed parts of a patent held by Phillips, and that because of prior contractual engagements between the two companies, Epistar could not challenge the validity of the patent. The ITC judge gave a limited exclusion order enjoining importation, and the order encompassed not only imports of Epistar's allegedly infringing LEDs, but also imports of downstream packaged LEDs, i.e., products manufactured by other companies but containing Epistar's LEDs.
Subsequently, the CAFC, in Kyocera Wireless Corp. v. International Trade Commission, held that the ITC lacks statutory authority to issue a LEO that excludes imported products manufactured by entities not named as respondents before the ITC. Epistar then petitioned the ITC, and moved for the CAFC to remand the patent case, in order to have the ITC alter its determination so as to reflect the Kyocera decision, and thereby, allow imports of downstream products containing Epistar's disputed LEDs.
The appeals court has now upheld the ruling of the administrative law judge at the ITC with respect to the meaning and applicability of two key claim terms in Phillips' patent ("transparent window layer" and "substrate").
At the same time, the CAFC overruled the ITC with respect to whether, in light of past contractual terms Epistar had entered into with Phillips (and also the contractual terms between Phillips and a company Epistar had merged with, United Epitaxy Company), Epistar now has the right to challenge the validity of the patent at issue, deciding that it does have the right. Finally, the CAFC ruled that the ITC erred in extending the LEO to downstream products manufactured by third parties not named in the case.
The appeals court then remanded the case to the ITC for reconsideration of these issues.
(See ITT's Online Archives or 07/18/07 news, 07071825, for BP summary of Epistar's LEO.)
CAFC decision (No. 07-1457, dated 05/22/09, Epistar Corporation v. International Trade Commission and Phillips Lumileds Lighting Company, LLC) available athttp://www.cafc.uscourts.gov/opinions/07-1457.pdf