One World Technologies, Inc. v. United States

357 F.Supp.3d 1278

ONE WORLD TECHNOLOGIES, INC., Plaintiff,

v.UNITED STATES, United States Department of Homeland Security, United States Customs and Border Protection, and Acting Commissioner Kevin K. McAleenan, Defendants.

Slip Op. 18-173

Court No. 18-00200

United States Court of International Trade.

Dated: December 14, 2018

Stephen E. Ruscus, Jason C. White, and Michael J. Abernathy, Morgan, Lewis & Bockius, LLP, of Washington, D.C. and Chicago, IL, argued for Plaintiff One World Technologies, Inc.

Guy R. Eddon and Edward F. Kenny, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., argued for Defendants United States, U.S. Department of Homeland Security, U.S. Customs and Border Protection, and Acting Commissioner Kevin K. McAleenan. With them on the brief were Joseph H. Hunt, Assistant Attorney General, and Amy M. Rubin, Assistant Director. Of counsel were Michael Heydrich and Christopher Bullard, Office of Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

Choe-Groves, Judge:

This 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 28 U.S.C. § 1581(h) and issues a preliminary injunction with respect to Plaintiff's claim under 28 U.S.C. § 1581(a). The motions to intervene are denied. Defendants' motion to strike Plaintiff's demand for a jury trial is granted.

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, 81 Fed. Reg. 52,713, 52,713 (Int'l Trade Comm'n Aug. 9, 2016) (institution of investigation by Commission of Section 337 violations). Chamberlain alleged that several companies sold products that infringed Chamberlain's patents, including U.S. Patent No. 7,161,319 ("'319 Patent"). See id.

The '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." Id. at 23.

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:

Mem. 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, 19 U.S.C. § 1337 (2012). See Certain Access Control Systems and Components Thereof, 83 Fed. Reg. 13,517, 13,517 (Int'l Trade Comm'n Mar. 29, 2018) (notice of the Commission's final determination finding a violation of Section 337; issuance of limited exclusion order and cease and desist orders; termination of investigation). The Commission adopted a Limited Exclusion Order barring importation of products covered by one or more claims in the '319 Patent and issued a cease and desist order to the investigated companies, including One World. See id. at 13,519. Paragraph 1 of the Limited Exclusion Order states:

Access control systems and components thereof that infringe one or more of claims 1–4, 7–12, 15, and 16 of U.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 id. ¶ 21. Ryobi's Redesigned GDO replaces the wired connection between the wall console and the head unit with a wireless connection. See id. ¶¶ 21–23. The head unit connects to a receiver through small wires, and the receiver communicates wirelessly to the keypad. See Pl.'s Mem. 19–21. The new design is illustrated in the following graphic:

Id. at 21.

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 id. at 35.

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 id. at 1 n.1. The IPRB denied the protest on September 7, 2018 by issuing Ruling HQ H300129, relying on its infringement determination from its previous ruling letter. See id. at 33.

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." Id. IPRB rejected One World's contention that Chamberlain was estopped from arguing that the '319 Patent encompasses part-wired, part-wireless connections. Id. at 36–37.

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 id. ¶¶ 62–66. Plaintiff alleged in its original complaint that the court has subject matter jurisdiction over this action under 28 U.S.C. § 1581(a), which grants the U.S. Court of International Trade exclusive jurisdiction over any civil action commenced to contest the denial of a protest. See id. ¶¶ 2–3.

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 of Illinois. See Defs.' Mot. Stay, Sept. 21, 2018, ECF No. 22; see also Defs.' Mem....