Investments in Research and Development From More Than Five Years Before the Complaint May Be Used to Satisfy the Economic Prong of the “Domestic Industry” Requirement for Section 337

The International Trade Commission (ITC) found that the accused infringer violated Section 337 by importing ATMs that infringed two patents related to magnetic ink character recognition and servicing internal components of ATMs. The Federal Circuit affirmed with respect to one patent, but found the appeal had become moot with respect to the other due to the patent’s expiration.  The patentee’s speculation that the accused infringer’s redesigned products, which Customs and Border Protection had deemed did not infringe the expired patent, could potentially be the subject of a future enforcement proceeding is not enough to constitute a continuing controversy. The Federal Circuit therefore vacated the ITC’s decision with respect to the now-expired patent.

In finding a violation of Section 337 with respect to the remaining patent, the Federal Circuit affirmed the ITC’s finding that the patentee’s past five-year, multi-million-dollar investments in research and development satisfied the “domestic industry” requirement at the time the complaint was filed five years later. While past investments may have such a tangential relationship to an ongoing domestic industry, there is no hard-line rule that investments that are more than five years old are irrelevant. The accused infringer failed to demonstrate that the prior investments were so attenuated from the current domestic activity so as to fail the requirement.