Years-Old R&D Investments Satisfy Domestic Industry Requirement

HYOSUNG TNS INC. V. ITC

Before Dyk, Clevenger, and O’Malley. Appeal from the International Trade Commission.

Summary: Past investments can satisfy the ITC’s domestic industry requirement if (1) the investments pertain to products covered by an asserted patent and (2) the complainant continues to make other investments relating to such products at the time the complaint is filed.

Diebold filed a complaint with the ITC arguing that Hyosung violated 19 U.S.C. § 1337(a)(1)(B) by importing products that infringed Diebold’s patents. The ITC agreed with Diebold and entered a limited exclusion order and a cease and desist order. Hyosung appealed the ITC’s decision.

On appeal, Hyosung argued that Diebold failed to satisfy the domestic industry requirement under § 1337(a)(1)(B) for the products covered by one of the asserted patents. In particular, Hyosung asserted that Diebold’s main investments for these products, which occurred between 2005 and 2010, failed to meet the economic prong of the domestic industry requirement, as those investments occurred at least 5 years before Diebold brought the ITC action in 2015.

The Federal Circuit disagreed with Hyosung and held that past investments may be considered to support a domestic industry claim if (1) the investments pertain to products covered by the asserted patent and (2) the complainant continues to make investments relating to such products at the time the complaint is filed. Diebold’s investments between 2005 and 2010 were directly related to products covered by the asserted patent. Additionally, Diebold continued to have service and assembly expenses for those products until the date of its ITC complaint. As a result, substantial evidence supported the ITC’s domestic industry finding.

Editor: Paul Stewart

Written by: Derk A.Westermeyer & Jeremy Anapol