• ITC Findings of Infringement to Support a General Exclusion Order Have No Preclusive Effects and Do Not Support Collateral Estoppel in Future Proceedings
  • August 20, 2008 | Authors: Michael L. Brody; Johnny A. Kumar
  • Law Firms: Winston & Strawn LLP - Chicago Office ; Winston & Strawn LLP - Washington Office ; Winston & Strawn LLP - Chicago Office
  • Yingbin-Nature (Guangdong) Wood Industry Co., Ltd. et al. v. International Trade Commission et al., No. 2007-1311 (Fed. Cir. July 31, 2008)

    The Federal Circuit affirmed an International Trade Commission (ITC) decision to enter a general exclusion order under § 337 of the Tariff Act of 1930, thus banning infringers’ and their competitors’ importation of laminated floor panel products that were found to infringe claims in three patents. Infringers challenged the ITC’s decision with respect to infringement and validity of the asserted claims.

    The Federal Circuit affirmed that, when the ITC determines that there has been a violation of § 337, the ITC may issue either a limited exclusion order or a general exclusion order. See Fuji Photo Film Co. v. Int’l Trade Comm’n, 474 F.3d 1281, 1286 (Fed. Cir. 2007). “A general exclusion order may only be issued if 1) ‘necessary to prevent circumvention of a limited exclusion order,’ or 2) ‘there is a pattern of violation of this section and it is difficult to identify the source of infringing products.’” 19 U.S.C. § 1337(d)(2); see id. Typical of most general exclusion orders, the ITC’s order referred to the language of the patent claims in describing which products would be barred, and directed Customs to exclude from entry into the United States any laminated floor panels that infringe one or more of the patent claims.

    Infringers’ primary contention on appeal was that the scope of the general exclusion order was too broad. The order included a bar on products covered both by claims that were found applicable to products that infringers were trying to import, as well as by other claims that were found applicable to products of infringers’ competitors. Since infringers desired to import products similar to those of their competitors in the future, infringers argued that the general exclusion order may have a collateral estoppel effect on such future importation. That is, coupled with the ITC’s conclusions in this case regarding infringement of competitors’ products, collateral estoppel may arise during a future proceeding when determining infringement by infringers’ similar products.

    In response, the Federal Circuit held that infringers would not be injured by collateral estoppel since 1) the ITC’s factual findings of infringement against infringers’ competitors in this investigation would not bind infringers in future proceedings, and 2) proof of infringement by collateral estoppel is only appropriate in limited circumstances (i.e., where a close identity exists between the relevant features of the accused device and the device previously determined to be infringing), and infringers had already shown differences in their proposed products that would render them not “essentially the same” as their competitors’ products.