Vicor Corp. v. FII USA Inc.

132 F.4th 1
CourtCourt of Appeals for the First Circuit
DecidedMarch 6, 2025
Docket24-1620
StatusPublished

This text of 132 F.4th 1 (Vicor Corp. v. FII USA Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vicor Corp. v. FII USA Inc., 132 F.4th 1 (1st Cir. 2025).

Opinion

United States Court of Appeals For the First Circuit

No. 24-1620

VICOR CORPORATION,

Plaintiff, Appellee,

v.

FII USA INC., a/k/a FOXCONN INDUSTRIAL INTERNET USA INC.; INGRASYS TECHNOLOGY INC.; INGRASYS TECHNOLOGY USA INC.,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Leo T. Sorokin, U.S. District Judge]

Before

Gelpí, Thompson, and Rikelman, Circuit Judges.

Marcus E. Sernel, P.C., with whom Russell E. Levine, P.C., Philip M. Cooper, Mark C. Gillespie, Tiffany M. Knapp, and Kirkland & Ellis LLP were on brief, for appellants.

Lawrence K. Kolodney, with whom Steven R. Katz, Elizabeth G. H. Ranks, and Fish & Richardson P.C. were on brief, for appellee.

March 6, 2025 RIKELMAN, Circuit Judge. The United States

International Trade Commission (ITC) investigates complaints

alleging unfair competition related to imported goods. A federal

statute provides that until the ITC's resolution of a complaint

becomes final, courts are limited in what disputes they can resolve

between the parties involved in the ITC matter. Specifically, at

the request of the party charged in the ITC complaint, a federal

district court must stay proceedings in a civil action between the

same parties "with respect to any claim that involves the same

issues [as those] involved" in the ITC action. See 28 U.S.C.

§ 1659(a) ("Section 1659"). This case concerns when the

requirements for a Section 1659 stay are triggered.

After doing business together for many years, the

parties here developed a dispute about Vicor Corporation's

patents. Vicor eventually filed a complaint before the ITC,

alleging that Appellants (collectively "Foxconn") infringed

Vicor's patents by importing knock-off products into the United

States. In response, Foxconn initiated arbitration in China.

Vicor then sued Foxconn in federal court, contending that it had

never agreed to arbitrate and seeking to enjoin the arbitration.

Despite Foxconn's request for a Section 1659 stay, the district

court granted a preliminary injunction of the arbitration,

concluding that it had authority to do so even though Section 1659

applied. On appeal, Vicor defends the district court's ruling but

- 2 - on different grounds, arguing that Section 1659 does not apply

because this case is not a parallel patent infringement action.

We conclude that Section 1659's scope is not as narrow as Vicor

claims and that the statute's plain text required the district

court to grant Foxconn's stay request. Thus, we vacate the order

granting the preliminary injunction and remand to the district

court for further proceedings.

I. BACKGROUND

A. Relevant Facts

Foxconn assembles electronic products, and Vicor

manufactures power converter modules. For years, Vicor supplied

its modules to Foxconn for use in Foxconn's products.

According to Vicor, Foxconn eventually switched from

Vicor's patented modules to "knock-off" modules, which Foxconn

manufactured and imported into the United States from abroad. As

a result, in July 2023, Vicor filed a complaint with the ITC

alleging that Foxconn, among others, was unlawfully importing

power converter modules that infringed Vicor's patents.

The ITC is a federal agency with a range of trade-related

responsibilities. One of them is to investigate complaints brought

under Section 337 of the Tariff Act of 1930 that allege unfair

competition in connection with imported goods, such as the

infringement of U.S. intellectual property rights. See 19 U.S.C.

§ 1337 ("Section 337"). Each investigation is assigned to an

- 3 - Administrative Law Judge (ALJ), who holds a hearing and issues an

initial ruling. See 19 C.F.R. §§ 210.10, 210.36, 210.61. The ITC

reviews the ALJ's ruling and renders a final determination. Id.

§ 210.42. It can also elect not to review the ALJ's ruling, in

which case that ruling becomes the ITC's final decision. Id.

§ 210.42(h). Additionally, the ITC may issue remedial orders,

such as orders excluding the challenged products from entry into

the United States. See 19 U.S.C. § 1337(d). The United States

Court of Appeals for the Federal Circuit has exclusive jurisdiction

over final determinations by the ITC on claims made under Section

337. See 28 U.S.C. § 1295(a)(6).

The same day that Vicor filed a complaint with the ITC,

it also sued Foxconn and others for patent infringement in the

United States District Court for the Eastern District of Texas.

Foxconn and the other defendants moved to stay the Texas

proceedings pursuant to Section 1659. The district court granted

the motion, staying the case pending resolution of the ITC

complaint.

Several months after Vicor filed its ITC complaint,

Foxconn initiated an arbitration in China before the China

International Economic and Trade Arbitration Commission (CIETAC).

Foxconn argued that Vicor had agreed to arbitrate their current

dispute, pointing to the arbitration terms ("Arbitration Terms")

contained in the purchase orders ("Purchase Orders") it repeatedly

- 4 - sent to Vicor during their power converter module transactions.

CIETAC accepted the arbitration in December 2023.

Foxconn then asked the ITC to terminate its proceedings

in favor of the CIETAC arbitration. It also argued that Vicor was

bound by the license terms in the Purchase Orders ("License

Terms"), which it claimed granted Foxconn a license to Vicor's

patents and therefore undermined Vicor's infringement claim

against it. In January 2024, the ALJ refused to dismiss the ITC

proceeding in favor of arbitration, finding that Foxconn had waived

its right to arbitrate by participating in the ITC proceeding for

months without invoking that right. Several weeks later, Vicor

moved for a summary determination by the ALJ that it was not bound

by the Purchase Orders and had not granted a license to Foxconn.

B. Procedural History

After Foxconn initiated arbitration in China, Vicor

filed a new lawsuit against it, this time in the United States

District Court for the District of Massachusetts (where Vicor is

headquartered). Vicor maintained that it had never agreed to

arbitrate and thus could not be forced into proceedings before

CIETAC. In its complaint, Vicor requested (1) an injunction

staying the CIETAC arbitration and preventing Foxconn from

prosecuting it, (2) a declaratory judgment that Vicor is not bound

by the Arbitration Terms, and (3) a declaratory judgment that Vicor

is not bound by the License Terms.

- 5 - Vicor then filed a series of motions in the Massachusetts

lawsuit. On January 9, 2024, Vicor moved for preliminary and

permanent injunctions against the CIETAC arbitration and for a

declaration that Foxconn lacked a license to use Vicor's

intellectual property. Three days later, Vicor moved for a

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Bluebook (online)
132 F.4th 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vicor-corp-v-fii-usa-inc-ca1-2025.