CAFC affirms ITC in LSI case

LSI lost its appeal to the CAFC in LSI v. ITC.

--
We affirm the Commission’s no-violation decision regarding
the ’958 patent. We do so on the ground that LSI
has shown no error in the Commission’s finding that LSI
failed to establish the existence of the required domestic
industry. We do not address the infringement and invalidity
rulings of the Commission. As to the ’867 patent,
we conclude that LSI has not shown that the Commission
abused its discretion in declining to vacate the ALJ’s
finding of no violation based on that patent.

--

The issue of retroactivity arose:

--
To begin with, it is anything but clear that a “retroactivity”
problem could arise in this context. Even aside
from the notion that “retroactivity is not only permissible
but standard” in agency adjudications, Bowen v.
Georgetown Univ. Hosp., 488 U.S. 204, 221 (1988) (Scalia,
J., concurring), the Supreme Court has indicated that
when a new rule of law “authorizes or affects the propriety
of prospective relief, application of the new provision is
not retroactive.” Landgraf v. USI Film Prods., 511 U.S.
244, 273 (1994). Here, the most that the Commission has
done is to limit the circumstances in which it will issue a
prospective exclusionary remedy, leaving LSI with its full
set of patent-enforcement rights under Title 35. It is
unclear if this situation presents a retroactivity issue
even if the Commission applied a new rule of law. See id.
at 293 (Scalia, J., concurring in the judgment) (“Since the
purpose of prospective relief is to affect the future rather
than remedy the past, the relevant time for judging its
retroactivity is the very moment at which it is ordered.”).1
And LSI does not present an adequacy-of-notice issue
separate from “retroactivity.”

We need not resolve the foregoing issues, however, because
it is clear that LSI did not experience the kind of
unfair surprise as to the governing legal standard that it
need to establish to sustain its retroactivity challenge.
The Commission did not “attach[ ] new legal consequences
to events completed” before the consequences were announced—
before LSI could take action to avoid those
consequences by amassing evidence in discovery and
submitting it at the ALJ hearing. Vartelas v. Holder, 132
S. Ct. 1479, 1491 (2012) (internal quotation marks omitted)
(discussing retroactivity standards). And that conclusion
suffices to answer LSI’s retroactivity challenge
and also to answer any procedural-rights concern about
adequate notice.

--

There was an issue of mootness:

--
The present situation does not involve the exercise of
this court’s discretion about dealing with mootness arising
in the Article III courts. Here, the Commission lost
the ability under § 1337 to grant relief based on the ’867
patent while the ALJ determination was under review
before the Commission, and the Commission, besides
terminating the investigation as to that patent, had to
decide whether to take the affirmative step of vacating
the ALJ’s decision. That is a matter of the Commission’s
discretion, just as the Munsingwear/Tessera choice is a
matter of judicial discretion. The Commission is entitled
to its own choice, as long as that choice is reasonable,
about whether to set aside ALJ determinations that the
Commission cannot review because of intervening expiration
of the patent. See Vt. Yankee Nuclear Power Corp. v.
Natural Res. Def. Council, Inc., 435 U.S. 519, 558 (1978)
(“Administrative decisions should be set aside . . . only for
substantial procedural or substantive reasons as mandated
by statute, not simply because the court is unhappy
with the result reached.”) (citation omitted)

(...)

If someone invokes the ALJ’s decision before another
tribunal purely for the persuasiveness of its reasoning,
the success of that invocation depends on the decision’s
content, not its status. And if the decision is invoked as
evidence, the weight of the decision must be, at a minimum,
lessened by the fact that LSI had no opportunity to
secure even a single level of review. Cf. Kircher v. Putnam
Funds Trust, 547 U.S. 633, 647 (2006) (issue preclusion
generally inapplicable if appeal was unavailable);
Block, 777 F.2d at 1572. In these circumstances, we do
not think that the Commission acted unreasonably in not
disturbing the ALJ decision, leaving other tribunals in
which the decision may be invoked to decide what if any
effect the decision should have.


--