Federal Circuit Vacates ITC’s Broadcom Order

Kyocera v. ITC (Fed. Cir. 2008) (Broadcom v. Qualcomm)

The ITC found that Qualcomm infringed Broadcom’s ‘983 patents and issued a limited exclusion order against imports by Qualcomm and its customers.

On appeal, the Federal Circuit vacated and remanded — finding that the ITC (1) did not properly find inducement of infringement and (2) lacked authority to issue a limited exclusion order against non-respondents.

Inducement Requires Specific Intent: On their own, Qualcomm’s MSM chipsets do not infringe. However, the ITC found direct infringement in handsets that use the Qualcomm chipset in conjunction with “system determination software.”  The ITC found Qualcomm liable for inducing infringement because it provided the chipsets and the system determination software along with training and customer support.

Inducement requires underlying direct infringement and that the accused infringer “knowingly induced infringement and possessed specific intent to encourage another’s infringement.” This includes an “affirmative intent to cause direct infringement.”

On appeal, the Federal Circuit found that the ITC had based its decision on a lower level of “general” intent without requiring evidence of Qualcomm’s “culpable conduct” of “encouraging another’s infringement.”

In particular, the ITC’s statement that “Qualcomm intends to induce infringement because it provides its customers with the system determination code” is insufficient.  On remand, the ITC must find specific intent.

ITC Exclusion Orders: The ITC may issue either limited exclusion orders directed toward the actions of specific companies or general exclusion orders directed broadly to an industry. In this case, the ITC issued a limited order that excluded, inter alia, downstream manufacturers who were not named parties in the litigation.

On appeal, the Federal Circuit found that limited exclusion orders may not go beyond the named parties.  A general exclusion order may be appropriate. However, additional proof of necessity are required for general orders.

Notes:

• This case involves different patents than the District Court Broadcom case [Part I][Part II]
• This case is also involves different patents from the earlier Broadcom v. ITC. In that case, the Federal Circuit also vacated an ITC holding this time in Broadcom’s favor — vacating the ITC’s non-infringement finding. [LINK]