This month, the U.S. Court of Appeals for the Federal Circuit issued a precedential opinion in Zircon Corp. v. ITC, No. 2022-1649 (May 8, 2024), affirming the U.S. International Trade Commission’s (“ITC”) final determination of no violation of 19 U.S.C. § 1337 (“section 337”) based on Zircon’s failure to satisfy the statute’s domestic industry requirement.
Zircon filed a complaint with the ITC alleging respondents Stanley Black & Decker, Inc. and Black & Decker (U.S.) Inc. infringed three patents related to electronic stud finders, and the ITC instituted an investigation. During the evidentiary hearing before an administrative law judge (“ALJ”), Zircon contended that it satisfied the domestic industry requirement’s economic prong based on U.S. investments related to 53 stud finder products, most of which practiced some but not all of the asserted patents. Zircon further contended that these investments were significant based on the aggregate amount for all 53 products and did not allocate investments to particular products, product groups, or patents. The ALJ found that these aggregated investments precluded analysis of the investments as to each asserted patent, such that Zircon failed to satisfy the domestic industry requirement. The ITC affirmed that finding, and Zircon appealed.
The Federal Circuit affirmed. It observed that section 337 requires proof of a domestic industry based on significant or substantial investment “relating to articles protected by the patent” at issue. 19 U.S.C. § 1337(a)(2). The Court explained that under this language and prior precedent, where different products or product groups practice different asserted patents, separate domestic industries must be established for each product or group. The Court distinguished prior cases that concerned products that all practiced the same asserted patents or that predated the 1988 amendments to section 337, which adopted the current statutory language. The Court also concluded that a declaration from Zircon’s executive providing a revenue-based per-patent breakdown was not at issue because Zircon failed to appeal both the ALJ’s decision excluding it and the ITC’s decision finding Zircon abandoned its right to rely on it. Finally, the Court affirmed the ITC’s finding that uncorroborated testimony from the Zircon executive relating to research and development investments related to one asserted patent was unreliable and failed to satisfy the domestic industry requirement as to that patent.
