Apple Inc. v. International Trade Commission, et al.

To protect American industry, Congress has granted the ITC the power to ban the importation of articles that infringe a patent. The statutory threshold for exercising this power is the patentee must show a “domestic industry” in articles protected by the patent. The Federal Circuit has lowered the bar to meet that requirement. Here, it affirmed—based on a rationale the agency never provided—a ban on Apple Watches with pulse oximetry to protect a patentee that barely sold a consumer product that used the patents. In so doing, the court held the patentee could show “significant employment of labor or capital” under 19 U.S.C. §1337(a)(3)(B) by pointing to nascent R&D investments, even though R&D is expressly covered by §1337(a)(3)(C). The effect was to subject the R&D investments to less rigorous scrutiny than is required by §1337(a)(3)(C). Because few ITC cases result in an appellate decision, this case is a rare opportunity to resolve the scope of Subparagraph (B), which even the ITC has called an issue of exceptional importance. The questions presented are:

1. Whether a patentee fails to establish “significant employment of labor or capital” “with respect to the articles protected by the patent” under 19 U.S.C. §1337(a)(3)(B) where the patentee’s investment falls into one of three uses listed only in §1337(a)(3)(C).

2. Whether the Federal Circuit’s affirmance of an agency decision where (1) the court’s rationale does not appear in the agency’s opinion and (2) the agency’s result was not required by law is contrary to SEC v. Chenery Corp., 318 U.S. 80 (1943), and its progeny.