The hypothetical device does not meet the requirements of the domestic industry | McDermott Will & Emery
In a joint appeal by the International Trade Commission (the Commission) and two inter partes review proceeding (IPR) before the Patent Trial & Appeal Board (Board), the United States Court of Appeals for the Federal Circuit upheld the Board’s findings that a hypothetical device does not meet the requirement of domestic industry, as well as the findings of the Board and the Commission which held that the claims of the patents concerned were invalid as being obvious. Broadcom Corp. against ITC, case no. 20-2008; 21-1260, -1362, -1511 (March 8, 2022) (LourieHughes, Stoll, JJ.)
Broadcom filed a complaint with the Commission alleging violation of 19 USC § 1337 based on products imported by numerous respondents, including Renesas Electronics, which allegedly infringed two patents. The first patent relates to reducing power consumption in computer systems, and the second patent relates to a memory access unit that improves upon conventional methods of requesting data located at different addresses in shared memory. The Commission’s administrative law judge issued an initial decision that Broadcom had failed to satisfy the technical part of the domestic industry requirement for the power consumption patent and that one of the asserted claims of the memory access patent was obvious from the state of the art. The Commission confirmed both findings.
During the Commission’s investigation, Renesas filed an IPR application for both patents. The Board found that two claimed claims of the energy consumption patent were obvious, but Renesas failed to demonstrate that six other claimed claims would have been obvious. The Board also concluded that all of the claimed claims of the memory access patent would have been obvious from the cited art.
Both parties appealed. Renesas appealed the Board’s decision that six power consumption patent claims would not have been obvious in light of the cited art, and Broadcom appealed the Board’s decision that two claims of the power consumption patent and five claims of the memory access unit patent would have been obvious. Broadcom also appealed the Board’s decision that there was no infringement with respect to the power consumption patent and that the asserted claims of the memory access unit patent would have been obvious.
The Federal Circuit first considered the Commission’s decision that there was no domestic industry for the energy consumption patent. Citing his 2013 decision in Microsoft Corp. against ITC, the Court explained that a plaintiff must demonstrate that there is a product of domestic industry which carries out at least one claim of the claimed patent. Broadcom identified its system-on-chip (SoC) as an item of domestic industry, but it was undisputed that the SoC did not contain a “clock tree driver” required by the asserted claims. To overcome this acknowledged shortcoming, Broadcom argued that a domestic industry exists because Broadcom is working with customers to integrate the SoC with external memory to enable tree driver function recovery and execution. clock. The Court rejected this argument, finding that Broadcom only offered a hypothetical device and did not identify any specific integration that included external memory containing a clock tree driver. The Court found that there was no evidence of the existence of an actual product of the domestic industry and therefore upheld the Commission’s finding with respect to the domestic industry.
The Federal Circuit then turned to the Commission’s findings of non-patentability regarding the energy consumption patent. The Court upheld the Board’s decision, concluding that there was insufficient evidence to modify the prior art so as to respect the limits of the contested claim. The Court also found that the Board’s reasoning regarding its conclusion on the obviousness of other claims was supported by substantial evidence. Broadcom also argued that a skilled craftsman would not have had a reasonable expectation of success in combining two of the references, but the Court found that Broadcom did not raise this issue before the Board and “[g]Despite Broadcom’s silence, it cannot demonstrate that the Commission was wrong on this issue.
Turning to the Board’s decision regarding the Memory Access Unit patent, the Federal Circuit upheld the Board’s rulings that all of the contested claims were unpatentable. Broadcom argued that the Commission incorrectly applied the anticipation standard under Section 102 in its obviousness analysis. However, the Court stated that “[s]meeting a higher standard does not compromise meeting a lower standard” and affirmed the Board’s decision. The Court explained that the Board considered and applied the appropriate standard of evidence and that its findings of fact were supported by substantial evidence.
Practical note: When identifying its purported domestic industry product, Broadcom identified only the Broadcom SoC, which lacked enough external memory to allow the “tree driver” firmware to be retrieved and executed. clock”, a necessary part of the energy consumption patent. Broadcom submitted that this external memory was typically provided by customers as part of specific integrations, but these new “system” integrations were submitted too late for the Commission to consider. Whether the “systems” integrations would have satisfied the technical part of the domestic industry requirement has never been decided. Potential complainants to the Commission should make sure to “identify actual integrations [rather than] hypothetical devices.