The Federal Circuit upheld the International Trade Commission’s (“ITC”) $6.2 million fine against DeLorme InReach LLC (“DeLorme”) for violating a consent order and importing parts that infringed a communications system patent, despite the court concluding in a separate ruling that the asserted claims were invalid.
In a unanimous decision, three judges on the appeals court panel affirmed a Virginia federal judge’s decision from last November that various claims of BriarTek IP Inc.’s patent for its emergency communications device were invalid.
However, in a separate ruling, the majority of the judges said the finding does not undo the fine ordered by the ITC after it held that DeLorme violated a consent order by importing parts of a satellite-device that infringed the then-valid patent.
The judges said the terms of the order are clear and that nowhere does it say that an invalidity finding can be applied retroactively to cancel the agreement. DeLorme’s “argument is inconsistent with the plain language of the consent order itself,” Circuit Judge Kimberly Moore wrote on behalf of the majority panel.
The appeals court also rejected arguments that the $6.2 million fine was “grossly excessive,” even though the fine was among the highest fines it has ordered to date. Judges noted the fine — which amounted to $27,500 for each of the 227 days that DeLorme was allegedly in violation of the order — was far less than the $100,000 per day maximum allowed by law.
DeLorme attorney Peter J. Brann stated that they were “dumbfounded that a bare majority of the court would … uphold an enormous penalty imposed by the ITC for using imported, but non-infringing, parts in one sub-component of a device that is manufactured in the United States which was part of a system that allegedly infringed an invalid patent.”
The Federal Circuit’s reasoning was that under DeLorme’s interpretation of the consent order, if the patent were to expire while the enforcement decision was on appeal, the court would have to vacate that decision.
However, in a partial dissent, Circuit Judge Richard G. Taranto said he would have remanded the case back to the ITC for further briefing on what effect the invalidity decision should have on the civil penalty. He noted that the ITC has specifically argued that such a remand was necessary.
“To decide the issue ourselves at this stage, I believe, we would have to conclude that the answer is clear as a matter of law,” he wrote. “I do not currently think that the answer is clear,” he added later.
