General Electric Co. v. International Trade Commission

Federal Circuit Remands Issues Decided by Initial Determination but Not Substantively Reviewed by the ITC


February 29, 2012


Last Month at the Federal Circuit - March 2012

Judges: Rader, Newman (author), Linn

[Appealed from: ITC]

In General Electric Co. v. International Trade Commission, No. 10-1223 (Fed. Cir. Feb. 29, 2012), the Federal Circuit affirmed-in-part, vacated-in-part, reversed-in-part, and remanded the ITC’s findings in a Section 337 investigation concerning wind turbines imported by Mitsubishi Heavy Industries, Ltd. and Mitsubishi Power Systems Americas, Inc. (collectively “Mitsubishi”). Mitsubishi’s turbines were investigated in view of three wind turbine patents owned by General Electric Company (“GE”).

It was undisputed during the ITC investigation that both Mitsubishi and GE sell variable speed wind turbines in the United States. Moreover, the turbines of each party employ “doubly-fed” induction generators, meaning that they utilize two electromagnetic fields to generate electricity for transmission over the power grid. While the doubly-fed design is generally more efficient at harvesting power than singly-fed generators, a downside occurs when the grid experiences irregularities, such as lightning strikes, downed lines, and short circuits. During those periods, large voltage differences between the stator coils and grid coils generate high current levels that can damage the converters used for feeding the rotor current. To address this problem, the Mitsubishi and GE turbines employ circuitry that decouples the rotor windings from the circuit during periods of elevated current. Then, to resume operation, the turbines trigger recoupling of the rotor windings. Mitsubishi’s turbines recouple after a preset period of time, while GE’s turbines recouple once the current levels decline to an acceptable level. In addition, GE’s turbines employ a shunt circuit within the rotor inverter that responds to signals during a low-voltage event to enable the turbine to maintain steady voltage.

The ALJ found that all three of GE’s patents, U.S. Patent Nos. 7,321,221 (“the ’221 patent”), 6,921,985 (“the ’985 patent”), and 5,083,039 (“the ’039 patent”), were valid and infringed. The ALJ also found that GE had established a domestic industry with respect to the ’985 and ’039 patents, but not the ’221 patent. The ALJ issued an initial determination finding a Section 337 violation. The ITC reviewed the ALJ’s initial determination and reversed the ALJ’s ruling. The ITC concluded that the ’221 and ’039 patents were not infringed, the ’039 patent is not invalid by reason of obviousness or written description, and that GE had not established a domestic industry for any of the patents. In sum, the ITC held that Section 337 is not violated by the turbines imported by Mitsubishi.

On appeal, the Federal Circuit first considered the issue of infringement of the ’221 patent. This issue was determined based on the construction of “predetermined value” in the claims of the ’221 patent. Under the ALJ’s construction of “predetermined value,” the trigger for recoupling could include the expiration of a preset period of time. On review, the ITC determined that the “predetermined value” was limited to a measurement of current, not time. The Federal Circuit agreed with the ITC and affirmed the ITC’s view that “predetermined value” refers to a value of current or a proxy for current.

The Court next considered whether a preset time period in the Mitsubishi turbines is an adequate proxy for current and concluded it was not. Thus, the Court affirmed the ITC’s finding that the Mitsubishi turbines do not literally infringe the ’221 patent claims. The Court also rejected GE’s argument that the turbines infringe under the DOE. The Court found substantial evidence to support the ITC’s conclusion that “a system that measures when the specific emergency event has actually ended is not substantially the same as a system that applies the same time period to all emergency events.” Slip op. at 13. Accordingly, the Court affirmed the ITC’s determination that the Mitsubishi turbines do not infringe under the DOE. Finding no infringement, the Court also vacated the ITC’s ruling that GE’s turbines do not practice the ’221 patent invention and therefore do not meet the domestic industry requirement as to the ’221 patent.

Next, the Federal Circuit examined whether GE has a domestic industry with regard to the ’985 patent. The ’985 patent is directed to a wind turbine generator with a converter controller capable of shunting (diverting) current “from the inverter” in response to variations in current flow such as during a low-voltage event. The issue of claim construction was whether claim 15 of the ’985 patent requires that the circuit that shunts current on signal from the converter controller is located entirely outside of the inverter. The ITC held that the shunt circuit must be separate from the inverter, for otherwise the circuit could not shunt current from the inverter, as claim 15 requires. The Federal Circuit disagreed, finding that the ’985 patent specification does not require separation of the inverter and the shunt circuit in order for that circuit to be coupled with the input of the inverter and with the converter controller. Specifically, the Court found that the ITC construed “from the inverter” too narrowly when it required that the circuit be in a physically separate location from the inverter. Accordingly, the Court reversed the ITC’s finding of no domestic industry with regard to the ’985 patent.

The Court’s reversal on domestic industry resulted in a procedural dispute involving the question of infringement of the ’985 patent, which was back in play. Because the ITC had “noticed” review of the ALJ’s infringement analysis of the ’985 patent, but never reached the issue, the ITC argued that infringement of the ’985 patent was “removed from access to judicial review.” Slip op. at 24. In support of this argument, the ITC cited Beloit Corp. v. Valmet Oy, 742 F.2d 1421 (Fed. Cir. 1984), in which the Court confined itself to review of the ITC’s final determinations on dispositive issues. The Court, however, found Beloit inapposite on the grounds that, in that case, only the prevailing party was not permitted to appeal and the reason was for lack of case or controversy on appeal. Id. at 26 (citing Am. Tel. & Tel. Co. v. Int’l Trade Comm’n, 626 F.2d 841, 842 (C.C.P.A. 1980)). Here, the Court opined, GE had not prevailed below and was entitled to review. The Court further explained that the ITC’s interpretation “conflicts with the statutory right of judicial review of Commission determinations, provided in 19 U.S.C. §1337(c) . . . [and] with the principles of 19 C.F.R. §210.42(h) and §210.45(c), for no statutory or regulatory provision contemplates excluding a fully litigated ITC decision from access to judicial review.” Slip op. at 24. Accordingly, the Court remanded for unspecified further proceedings on the ’985 patent, noting that “[t]he legislative purpose of expedited ITC resolution of unfair competition issues requires attention, in accord with statute and regulation, that issues decided by initial determination and not substantively reviewed by the full Commission are deemed determinations of the Commission . . . and entitled to appeal . . . .” Id. at 26.

Summary authored by Phillip K. Decker, Esq.