One World Technologies, Inc. v. United States
This text of 357 F. Supp. 3d 1278 (One World Technologies, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Choe-Groves, Judge:
*1282This action concerns garage door openers that were redesigned to avoid infringing a registered patent. Plaintiff One World Technologies, Inc. ("Plaintiff" or "One World") commenced this action to obtain judicial review of a decision by U.S. Customs and Border Protection ("Customs") excluding an entry of One World's Ryobi Ultra-Quiet Garage Door Opener, Model No. GD126 ("Redesigned GDO"),1 pursuant to a Limited Exclusion Order issued by the International Trade Commission ("Commission" or "ITC"). Plaintiff asserts that Customs denied its protest regarding the entry of the Redesigned GDO based on a flawed interpretation of the registered patent and that its product is not included in the scope of the Limited Exclusion Order.
Before the court are multiple motions filed by the Parties, including Plaintiff's motion for temporary restraining order and preliminary injunction, ECF No. 5, a partial motion to dismiss and motion to strike demand for jury trial filed by Defendants United States, U.S. Department of Homeland Security, Customs, and Acting Commissioner Kevin K. McAleenan (collectively, "Defendants" or "Government"), ECF No. 39, and motions to intervene filed by the ITC and The Chamberlain Group, Inc. ("Chamberlain"), ECF Nos. 43 and 47. For the reasons explained below, the court grants Defendants' partial motion to dismiss with respect to Plaintiff's claim under
BACKGROUND
One World is a company that designs, markets, and sells power tools and outdoor products under, inter alia , the Ryobi brand. Ryobi products are sold exclusively at The Home Depot.
The ITC initiated Investigation 337-TA-1016 ("ITC's 1016 Investigation") on August 9, 2016 pursuant to a complaint filed by Chamberlain. See Certain Access Control Systems and Components Thereof,
*1283The '319 Patent includes the following illustration:
Compl. Ex. A, at 4, Sept. 13, 2018, ECF No. 4-1 (" '319 Patent"). The motor drive unit, which opens and closes the garage door, contains a microcontroller (or controller) that is connected to the wall console "by means of a digital data bus."
One World's Ryobi Ultra-Quiet Garage Door Opener, Models Nos. GD125, GD200, and GD200A (collectively, the "Original GDOs"), were part of the ITC's 1016 Investigation. See Compl. Ex. B, at 8, Sept. 13, 2018, ECF No. 4-2. The Original GDOs contain a wire that extends from the wall console to the head unit:
*1284Mem. P. & A. Supp. Pl. One World Technologies, Inc.'s Mot. TRO & Prelim. Inj. 18, Sept. 13, 2018, ECF No. 6 ("Pl.'s Mem.").
The Commission issued a final determination on March 23, 2018, in which it found a violation of Section 337 of the Tariff Act of 1930, as amended,
Access control systems and components thereof that infringe one or more of claims 1-4, 7-12, 15, and 16 ofU.S. Patent No. 7,161,319 ("the '319 patent") that are manufactured by, or on behalf of, or are imported by or on behalf of Techtronic Industries Co., Ltd.; Techtronic Industries North America, Inc.; One World Technologies, Inc.; OWT Industries, Inc.; or Et Technology (Wuxi) Co. or any of their affiliated companies, parents, subsidiaries, agents, or other related business entities, or their successors or assigns, are excluded from entry for consumption into the United States, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption, for the remaining terms of the '319 patent except under license of the patent owner or as provided by law.
Compl. Ex. O, at 35, Sept. 13, 2018, ECF No. 4-15. The final determination is under review at the U.S. Court of Appeals for the Federal Circuit. See Compl. ¶ 19, Sept. 13, 2018, ECF No. 4.
One World redesigned their products as a result of the ITC's final determination, including the Redesigned GDO produced under the Ryobi brand. See
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Choe-Groves, Judge:
*1282This action concerns garage door openers that were redesigned to avoid infringing a registered patent. Plaintiff One World Technologies, Inc. ("Plaintiff" or "One World") commenced this action to obtain judicial review of a decision by U.S. Customs and Border Protection ("Customs") excluding an entry of One World's Ryobi Ultra-Quiet Garage Door Opener, Model No. GD126 ("Redesigned GDO"),1 pursuant to a Limited Exclusion Order issued by the International Trade Commission ("Commission" or "ITC"). Plaintiff asserts that Customs denied its protest regarding the entry of the Redesigned GDO based on a flawed interpretation of the registered patent and that its product is not included in the scope of the Limited Exclusion Order.
Before the court are multiple motions filed by the Parties, including Plaintiff's motion for temporary restraining order and preliminary injunction, ECF No. 5, a partial motion to dismiss and motion to strike demand for jury trial filed by Defendants United States, U.S. Department of Homeland Security, Customs, and Acting Commissioner Kevin K. McAleenan (collectively, "Defendants" or "Government"), ECF No. 39, and motions to intervene filed by the ITC and The Chamberlain Group, Inc. ("Chamberlain"), ECF Nos. 43 and 47. For the reasons explained below, the court grants Defendants' partial motion to dismiss with respect to Plaintiff's claim under
BACKGROUND
One World is a company that designs, markets, and sells power tools and outdoor products under, inter alia , the Ryobi brand. Ryobi products are sold exclusively at The Home Depot.
The ITC initiated Investigation 337-TA-1016 ("ITC's 1016 Investigation") on August 9, 2016 pursuant to a complaint filed by Chamberlain. See Certain Access Control Systems and Components Thereof,
*1283The '319 Patent includes the following illustration:
Compl. Ex. A, at 4, Sept. 13, 2018, ECF No. 4-1 (" '319 Patent"). The motor drive unit, which opens and closes the garage door, contains a microcontroller (or controller) that is connected to the wall console "by means of a digital data bus."
One World's Ryobi Ultra-Quiet Garage Door Opener, Models Nos. GD125, GD200, and GD200A (collectively, the "Original GDOs"), were part of the ITC's 1016 Investigation. See Compl. Ex. B, at 8, Sept. 13, 2018, ECF No. 4-2. The Original GDOs contain a wire that extends from the wall console to the head unit:
*1284Mem. P. & A. Supp. Pl. One World Technologies, Inc.'s Mot. TRO & Prelim. Inj. 18, Sept. 13, 2018, ECF No. 6 ("Pl.'s Mem.").
The Commission issued a final determination on March 23, 2018, in which it found a violation of Section 337 of the Tariff Act of 1930, as amended,
Access control systems and components thereof that infringe one or more of claims 1-4, 7-12, 15, and 16 ofU.S. Patent No. 7,161,319 ("the '319 patent") that are manufactured by, or on behalf of, or are imported by or on behalf of Techtronic Industries Co., Ltd.; Techtronic Industries North America, Inc.; One World Technologies, Inc.; OWT Industries, Inc.; or Et Technology (Wuxi) Co. or any of their affiliated companies, parents, subsidiaries, agents, or other related business entities, or their successors or assigns, are excluded from entry for consumption into the United States, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption, for the remaining terms of the '319 patent except under license of the patent owner or as provided by law.
Compl. Ex. O, at 35, Sept. 13, 2018, ECF No. 4-15. The final determination is under review at the U.S. Court of Appeals for the Federal Circuit. See Compl. ¶ 19, Sept. 13, 2018, ECF No. 4.
One World redesigned their products as a result of the ITC's final determination, including the Redesigned GDO produced under the Ryobi brand. See
*1285
One World and its related companies, Techtronic Industries Co. Ltd., Techtronic Industries North America Inc., OWT Industries, Inc., and Et Technology (Wuxi) Co., Ltd., submitted a letter to Customs' Intellectual Property Rights Branch ("IPRB"), seeking a ruling prior to importation that Model Nos. GD126 and GD201 are not covered by the final determination and are not subject to the Limited Exclusion Order. The IPRB issued Ruling HQ H295697 on July 20, 2018, determining that the two models infringe the '319 Patent. See Compl. Ex. E, Sept. 13, 2018, ECF No. 4-5 ("HQ H295697"). IPRB concluded that the two models are included in the ITC's final determination and are subject to the Limited Exclusion Order. See
While awaiting Customs' ruling letter, One World attempted to import the Redesigned GDO. Customs excluded one entry of the Redesigned GDO (Entry No. 442-75629994) at the Port of Charleston on June 29, 2018. See Compl. ¶ 40; see also Compl. Ex. H, Sept. 13, 2018, ECF No. 4-8; Summons, Sept. 13, 2018, ECF No. 1. The entry contained 936 pieces of the Redesigned GDO. See Compl. Ex. F, at 1, Sept. 13, 2018, ECF No. 4-6 ("HQ H300129"). One World filed a timely protest with Customs, contesting the exclusion of the entry. See
IPRB concluded that the Redesigned GDO infringes Claims 1 and 9 of the '319 Patent. See HQ H295697 at 35; HQ H300129 at 33. IPRB found that the merchandise includes "(a) a wireless, wall-mounted keypad, (b) a wireless receiver, and (c) a pair of wires that extends from the wireless receiver to the head unit." HQ H300129 at 35. Relying on representations made by One World at a hearing before the IPRB, the IPRB determined that "the pair of wires connecting the head unit to the wireless receiver" in the Redesigned GDO "is a digital data bus that connects the wireless receiver to the controller in the head unit."
One World initiated this action on September 13, 2018, challenging Customs' denial of its protest. See Summons; Compl. One World asserts that Customs improperly excluded the Redesigned GDO because the merchandise is not infringing, and requests that the products be allowed entry into the United States. See Compl. ¶¶ 52-61. One World also seeks a declaration that the Redesigned GDO does not infringe Claims 1-4, 7-12, 15, and 16 of the '319 Patent and that Customs may not exclude the subject imports. See
Plaintiff filed a motion for a temporary restraining order and preliminary injunction, seeking entry of the Redesigned GDO. See Pl. One World Technologies, Inc.'s Mot. TRO & Prelim. Inj., Sept. 13, 2018, ECF No. 5; see also Pl.'s Mem. Defendants filed a brief opposing Plaintiff's motion, as well as a motion to stay the proceedings pending a final decision in the related matters before the ITC, U.S. Patent and Trademark Office, U.S. Court of Appeals for the Federal Circuit, and the U.S. District Court for the Northern District *1286of Illinois. See Defs.' Mot. Stay, Sept. 21, 2018, ECF No. 22; see also Defs.' Mem. Supp. Mot. Stay & Opp'n Pl.'s Mot. TRO & Prelim. Inj., Sept. 21, 2018, ECF No. 22 ("Defs.' Opp'n"). The court held a hearing on September 25, 2018. See Hearing, Sept. 25, 2018, ECF No. 27; see also Conf. Tr., Oct. 3, 2018, ECF No. 33. One World presented testimony during the hearing from two witnesses, Mr. Mark Huggins and Mr. Stewart Lipoff, and both witnesses were cross-examined by the Government.
Plaintiff filed an amended complaint, adding
During the pendency of this action, the U.S. Patent Trial and Appeal Board ("PTAB") published a Final Written Decision in response to One World's petition for inter partes review of the '319 Patent. The PTAB concluded that multiple claims, including Claims 1 and 9 of the '319 Patent, are unpatentable as obvious in light of prior art. See Pl. One World Technologies, Inc.'s Notice Suppl. Authority, Oct. 16, 2018, ECF No. 48; see also Ex. 1, Oct. 16, 2018, ECF No. 48-1 ("PTAB Op.").
ANALYSIS
I. Subject Matter Jurisdiction
Defendants filed a partial motion to dismiss, arguing that the court does not have subject matter jurisdiction over Plaintiff's action under
The U.S. Court of International Trade, like all federal courts, is one of limited jurisdiction and is presumed to be without jurisdiction unless the contrary appears affirmatively from the record. DaimlerChrysler Corp. v. United States,
A. Subject Matter Jurisdiction Over the Excluded Entry
The U.S. Court of International Trade has exclusive jurisdiction over any civil action commenced to contest Customs' denial of a protest, in whole or in part, under
B. Subject Matter Jurisdiction Over Future Entries
An importer may seek review of a ruling prior to the importation of goods under
The Court of International Trade shall have exclusive jurisdiction of any civil action commenced to review, prior to the importation of the goods involved, a ruling issued by the Secretary of the Treasury, ... relating to ... restricted merchandise, ... or similar matters, but only if the party commencing the civil action demonstrates to the court that he would be irreparably harmed unless given an opportunity to obtain judicial review prior to such importation.
Jurisdiction under
One World imported multiple entries totaling thousands of units of the Redesigned GDO prior to initiating this action and clearly will not be harmed if it does not obtain judicial review prior to importation. The court has jurisdiction over the excluded entry pursuant to
II. Defendants' Motion to Strike Demand for Jury Trial
Plaintiff requested a jury trial in its complaint. See Am. Compl. Defendants move to strike this demand. See Defs.' Mem. 38-39. Jury trials are not allowed in cases brought under
III. Motions to Intervene
Both the ITC and Chamberlain filed motions to intervene in this matter pursuant to USCIT Rule 24. See ITC's Mot.; Chamberlain's Mot. Both the ITC and Chamberlain seek defendant-intervenor status to the extent that One World asserts subject matter jurisdiction under
Chamberlain requests, in the alternative, that the court reconsider Chamberlain's motion to appear as amicus curiae to the extent that One World seeks relief under
IV. Plaintiff's Motion for Injunctive Relief
Rule 65 of the Rules of this Court allows for a court to grant injunctive relief in an action. USCIT R. 65. The court considers four factors when evaluating whether to grant a temporary restraining order or preliminary injunction: (1) whether the party will incur irreparable harm in the absence of such injunction; (2) whether the party is likely to succeed on the merits of the action; (3) whether the balance of hardships favors the imposition of the injunction; and (4) whether the injunction is in the public interest. See Winter v. Nat. Res. Def. Council, Inc.,
*1289A. Irreparable Harm
Plaintiff must show that it will suffer irreparable harm absent a grant of injunctive relief. See Winter,
One World argues that, absent injunctive relief, One World will be unable to supply The Home Depot with enough inventory to meet customer demands, especially during the holiday season. See Pl. One World Technologies, Inc.'s Suppl. Br. Supp. Mot. TRO & Prelim. Inj. & Req. Declaratory J. 44-47, Oct. 4, 2018, ECF No. 34. One World claims that its inability to provide a consistent supply of the Redesigned GDO will cause The Home Depot to terminate its existing business relationship with One World. See
At the hearing, One World presented witness testimony from Mark Huggins, One World's Senior Vice President of Product Development. Mr. Huggins described how the new garage door openers were designed at The Home Depot's request for a "game changer" in the market. See Conf. Tr. at 145:20-146:21. Mr. Huggins testified that One World has a close relationship with The Home Depot and he believes that The Home Depot will terminate its program with One World if the court denies entry of the Redesigned GDO into commerce. See id. at 142:24-144:6, 161:3-163-4.2
Without injunctive relief, One World claims that it will not only suffer a permanent loss of business, but it will lose its market share and innovative advantage. One World claims that its reputation with its exclusive supplier will be irrevocably damaged. The court finds that One World has demonstrated irreparable harm for the purposes of a preliminary injunction through the credible testimony and declarations of its witnesses.
B. Likelihood of Success on the Merits
In order to obtain a preliminary injunction, Plaintiff bears the burden of showing that it is likely to succeed on the merits of its claims. See Winter,
1. Deference
The Government argues that the two ruling letters, HQ H295697 and HQ H300129, issued by IPRB deserve deference under United States v. Mead Corporation,
2. Infringement
Plaintiff alleges that Customs denied its protest due to an incorrect interpretation of the ITC's findings. Plaintiff argues that the asserted claims of the '319 Patent do not cover the Redesigned GDO, which use wireless communications, and to the extent that they do, the claims are invalid. See Pl.' Mem. 11.
The court applies the requisite two-step patent infringement analysis to determine whether the Redesigned GDO infringes Claims 1 and 9 of the '319 Patent. See Tessera, Inc. v. Int'l Trade Comm'n,
a. Claim Construction
The Parties contest two independent claims of the '319 Patent in this action:
*1291Claim 1 and Claim 9. Claim 1 of the '319 Patent states:
An improved garage door opener comprising a motor drive unit for opening and closing a garage door, said motor drive unit having a microcontroller and a wall console, said wall console having a microcontroller, said microcontroller of said motor drive unit being connected to the microcontroller of the wall console by means of a digital data bus.
'319 Patent at 23. Claim 9 of the '319 Patent states:
An improved garage door opener comprising a motor drive unit for opening and closing a garage door, said motor drive unit having a controller and a wall console, said wall console having a controller, said controller of said motor drive unit being connected to the controller of the wall console by means of a digital data bus.
In interpreting Claims 1 and 9 of the '319 Patent, the ITC adopted the following constructions based on the plain and ordinary meaning of the terms in the ITC's 1016 Investigation:
Term/Phrase ITC Construction "wall console" "a wall-mounted control unit" "digital data bus" "a conductor or group of conductors which conveys digital data" "controller" "any type of control device" "motor drive unit" "unit where a driven motor resides"
Compl. Ex. B, at 120-24, Sept. 13, 2018, ECF No. 4-2 ("ITC ALJ Determ."); see also Mem. P. & A. Supp. Pl. One World Technologies, Inc.'s Mot. TRO & Prelim. Inj. Ex. C, at 19, Sept. 13, 2018, ECF No. 6-3. The ITC Administrative Law Judge construed an additional term based on the prosecution history of the '319 Patent and in harmony with the patent's other claims:
Term/Phrase ITC Construction "motor drive unit" "unit where a driven motor resides"
ITC ALJ Determ. at 124-28. The court construes the terms similarly here.
Plaintiff proffered Mr. Stewart Lipoff as an expert witness at the hearing. Mr. Lipoff possesses two bachelors' degrees in electrical engineering and in engineering physics, and two masters' degrees in electrical engineering and in business administration. See Conf. Tr. at 63:2-63:7. He also has educational certificates and approximately fifty years of career experience, including experience with embedded control systems. See id. at 63:8-64:6. Mr. Lipoff testified as to the plain, ordinary usage of the term "conductor" to a person of ordinary skill in the art, as well as its consistent usage within the '319 Patent. See id. at 79:18-80:9. Mr. Lipoff defined the term "conductor" as "a metallic set of wires that are capable of conveying digital data." Id. at 80:3-80:4. Mr. Lipoff represented *1292further that, although not part of the construction, a conductor intrinsically is capable of carrying electric power, which serves to provide power to the product in the '319 Patent. See id. at 80:5-80:9. The court interprets "conductor" to mean a metallic wire or set of wires.
IPRB represented the claim language on a limitation-by-limitation basis as follows:
Limitation Claim Language A an improved garage door opener comprising B a motor drive unit for opening and closing a garage door, C said motor drive unit having a controller and D a wall console, E said wall console having a controller, F said controller of said motor drive unit being connected to the controller of the wall console by means of a digital data bus.
See HQ H295697 at 5. Limitations A-E were not contested in the IPRB's review process. See id. at 24-25. One World argues that IPRB misapplied Limitation F in the first ruling letter, which then informed IPRB's second letter denying One World's protest.
Limitation F requires that the motor drive unit's controller be connected to the wall console's controller by means of a "digital data bus," or "conductors or group of conductors which conveys digital data." The court finds that "conductor" within Limitation F refers to a metallic wire or set of wires. Based on the definition of "conductor" to a person of ordinary skill in the art, Limitation F requires that the motor drive unit's controller be connected to the wall console's controller by a physical wire or set of wires.4
The IPRB construed the '319 Patent to encompass a device that combines wired and wireless communication links. See HQ H295697 at 27-28; HQ H300129 at 35. The court finds that the IPRB's position is inconsistent with a reading of the terms "digital data bus" and "conductor," which requires a physical wire or set of wires. The court concludes that the IPRB's interpretation has no merit.5
To interpret the term "digital data bus" and Limitation F otherwise potentially renders Claims 1 and 9 invalid in light of Doppelt (Chamberlain's U.K. Patent Application G.B. 2,312,540) and other patents (e.g., Jacobs, U.S. Patent No. US 5,467,266 ). By statute, an invention is unpatentable due to prior art if "the claimed invention was patented, described in a printed publication, or in public use, on sale, or *1293otherwise available to the public before the effective filing date of the claimed invention."
The ITC Administrative Law Judge found in the ITC's 1016 Investigation that the combination of the Doppelt and Jacobs patents discloses every limitation recited in Claims 1 and 9, but found that One World had not proven the claims to be unpatentable by clear and convincing evidence. See ITC ALJ Determ. at 170-71, 188. On the contrary, the PTAB found that One World demonstrated that the combined teachings of Doppelt, Jacobs, and applicant admitted prior art account for each of the limitations required by Claims 1 and 9. See PTAB Op. at 49.
The court construes Limitation F as encompassing only wired connections between the motor drive unit's controller and the wall controller. To the extent that the IPRB found otherwise, the court concludes that the IPRB's determination was incorrect.
b. Application of the Claims to the Redesigned GDO
The court applies the limitations of Claims 1 and 9, as interpreted above, to the Redesigned GDO. See Tessera,
There is no dispute that the Redesigned GDO contains Limitations A-E. The Redesigned GDO is garage door opener that contains: a motor drive unit that opens and closes a garage door (the "head unit"), a controller attached to the motor drive unit, and a wall console that also has a controller. See HQ H295697 at 24-25. The Redesigned GDO does not contain Limitation F because the controller in the head unit communicates with the wall console's controller through a wireless connection, whereas Limitation F contemplates a wired connection specifically. To the extent that the wires connecting the head unit's controller to the head unit constitute a part-wired, part-wireless connection, Limitation F is not implicated because it is not a completely wired connection.
Because the Redesigned GDO does not contain all limitations of the '319 Patent -in other words, the head unit's controller does not communicate with the wall console by means of a "digital data bus," or wired connection-the court concludes that the Redesigned GDO does not infringe the '319 Patent. The court's findings are consistent with the recent PTAB Final Written Decision issued in October 2018. In concluding otherwise, IPRB improperly determined that the Redesigned GDO fell within the scope of the ITC's Limited Exclusion Order and excluded the entry of the Redesigned GDO. The court concludes that One World has shown a likelihood of success on the merits of this action.
C. Balance of Hardships
When evaluating a request for a preliminary injunction, it is the court's responsibility to balance the hardships on each of the Parties. See Winter,
D. Public Interest
Plaintiff must also address whether the grant of a preliminary injunction serves the public interest. See Winter,
The court concludes that the balance of hardships and public interest are neutral between the Parties, but finds that Plaintiff has demonstrated credible irreparable harm and a likelihood of success on the merits. Plaintiff's motion for a preliminary injunction is granted.
CONCLUSION
For the aforementioned reasons, the court concludes that subject matter jurisdiction over this action does not exist under
Because jury trials are not permitted for cases brought under
Entities are statutorily prohibited under
The court finds that Plaintiff has made the requisite showing for a preliminary injunction. Plaintiff has proffered sufficient evidence of irreparable harm based on credible witness testimony that its relationship with its exclusive distributor, The Home Depot, will be permanently damaged absent a preliminary injunction. Plaintiff has proven that it is likely to succeed on the merits of the action. Pursuant to an evaluation of Claims 1 and 9 of the '319 Patent, the court concludes that One World's Redesigned GDO does not infringe the '319 Patent because the '319 Patent is limited to wired connections only. The court finds that the IPRB's determination that the '319 Patent encompasses a part-wired and part-wireless connection was incorrect, and Customs improperly excluded One World's Redesigned GDO from entry into the United States. The court grants Plaintiff's motion for a preliminary injunction.
An order will issue accordingly.
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