Industry when rendering the IDCC decision on 8/1/12
The second ground on which Nokia seeks affirmance is one that was addressed by the administrative law judge but not reviewed by the Commission. Nokia argued to the administrative law judge, and argues to us, that Inter-Digital’s patent licensing activities did not satisfy the “domestic industry” requirement of section 337, 19 U.S.C. § 1337(a)(2) and (3). The administrative law judge held that InterDigital’s activities satisfied the domestic indus-try requirement, and we agree.
Paragraph (2) of subsection (a) of section 337 provides that the portion of paragraph (1) of that subsection that
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bars the importation of articles that infringe a U.S. patent or are made by a process covered by the claims of a U.S. patent applies “only if an industry in the United States, relating to the articles protected by the patent . . . exists or is in the process of being established.” 19 U.S.C. § 1337(a)(2). Paragraph (3) of subsection (a) provides that for purposes of paragraph (2),
an industry in the United States shall be consid-ered to exist if there is in the United States, with respect to the articles protected by the patent . . . concerned—
(A) significant investment in plant or equip-ment;
(B) significant employment of labor or capital; or
(C) substantial investment in its exploitation, including engineering, research and development, or licensing.
Id. § 1337(a)(3).
Nokia argues that in order to satisfy section 337(a)(2), InterDigital had to establish that there is a United States industry “relating to the articles protected by the patent,” and that proof of licensing activities alone is not sufficient to satisfy that requirement. The problem with that argument, as the administrative law judge noted, is that section 337(a)(3) makes clear that the required United States industry can be based on patent licensing alone; it does not require that the articles that are the objects of the licensing activities (i.e., the “articles protected by the patent”) be made in this country. That is, the domestic industry requirement is satisfied if there is a domestic industry based on “substantial investment in [the pat-
INTERDIGITAL COMMUNICATIONS v. ITC 22
ent’s] exploitation” where the exploitation is achieved by various means, including “licensing.”
That interpretation of the statute is strongly sup-ported by the legislative history that gave rise to the “licensing” language in section 337(a)(3). Congress added subparagraph (C) to section 337(a)(3) in 1988 to overrule earlier Commission decisions that had found that licens-ing alone did not constitute a domestic industry. Omni-bus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, § 1342(a), 102 Stat. 1212-13. The Senate report on the bill that amended section 337 specifically recog-nized that the “third factor,” i.e., subparagraph (C), “does not require actual production of the article in the United States if it can be demonstrated that substantial invest-ment and activities of the type enumerated are taking place in the United States.” S. Rep. No. 100-71, at 129 (1987); see H.R. Rep. No. 100–40, at 157 (1987); see also John Mezzalingua Assocs., Inc. v. Int’l Trade Comm’n, 660 F.3d 1322, 1327-28 (Fed. Cir. 2011).
In the years since the enactment of that amendment, the Commission has consistently ruled that a domestic industry can be found based on licensing activities alone. See, e.g., Certain Integrated Circuits, Chipsets, and Prod-ucts Containing Same Including Televisions, Media Players, and Cameras, Inv. No. 337-TA-709, Order No. 33 (Jan. 5, 2011); Certain Semiconductor Chips with Mini-mized Chip Package Size and Products Containing Same, Inv. No. 337-TA-605, Order, at 118 (Dec. 1, 200
; Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same (III), Inv. No. 337-TA-630, Order No. 31 (Sept. 16, 200; Certain 3G Wideband Code Division Multiple Access (WDCMA) Handsets and Com-ponents Thereof, Inv. No. 337-TA-601, Order No. 20 (June 24, 200; Certain Digital Processors and Digital Process-
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ing Systems, Components Thereof, and Products Contain-ing Same, Inv. No. 337-TA-559, Order No. 24, at 84 (June 21, 2007). In those cases, the Commission has held that subparagraph (C) requires a showing of substantial licensing activities related to the asserted patent in order to support a finding as to the existence of a domestic industry based on licensing; it has not, however, required that the licensed product be manufactured in this coun-try. If there were any ambiguity as to whether the stat-ute could be applied to a domestic industry consisting purely of licensing activities, the Commission’s consistent interpretation of the statute to reach such an industry would be entitled to deference under the principles of Chevron U.S.A., Inc. v. Natural Resources Defense Coun-cil, Inc., 467 U.S. 837 (1984); see Nucor Corp. v. United States, 414 F.3d 1331, 1336 (Fed. Cir. 2005); Cathedral Candle Co. v. U.S. Int’l Trade Comm’n, 400 F.3d 1352, 1361-62 (Fed. Cir. 2005).
Nokia has not challenged the administrative law judge’s findings as to that nexus. Nor has Nokia ques-tioned whether the scope of InterDigital’s licensing activi-ties was sufficient to constitute a domestic licensing industry, a point on which the administrative judge made extensive affirmative findings. Accordingly, we reject Nokia’s “domestic industry” argument.
V
Because the Commission erred in construing the claim terms “code” and “increased power level” and in finding, based on those claim constructions, that Nokia’s products do not infringe InterDigital’s patents, we reverse the administrative law judge’s determination of non-infringement and remand for further proceedings.
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24
REVERSED AND REMANDED
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