Roku, Inc. v. Int'l Trade Comm'n

90 F.4th 1367

ROKU, INC., Appellant v. INTERNATIONAL TRADE COMMISSION, AppelleeUniversal Electronics, Inc., Intervenor

2022-1386

United States Court of Appeals, Federal Circuit

Decided: January 19, 2024

Appeal from the United States International Trade Commission in Investigation No. 337-TA-1200.

Douglas Hallward-Driemeier, Ropes & Gray LLP, Washington, DC, argued for appellant. Also represented by Brendan Frederick McLaughlin, Matthew Rizzolo; Michael Morales, Matthew R. Shapiro, New York, NY; Andrew N. Thomases, East Palo Alto, CA; Jonathan Daniel Baker, Dickinson Wright RLLP, Mountain View, CA; Michael David Saunders, Austin, TX.

Matthew S. Stevens, Alston & Bird LLP, Charlotte, NC, argued for intervenor. Also represented by Kirk T. Bradley, Nicholas Christopher Marais; Thomas W. Davison, Adam Swain, Washington, DC, Ryan W. Koppelman, Los Angeles, CA.

Carl Paul Bretscher, Office of the General Counsel, United States International Trade Commission, Washington, DC, argued for appellee. Also represented by Wayne W. Herrington, Sidney A. Rosenzweig.

Before Dyk, Hughes, and Stoll, Circuit Judges.

Hughes, Circuit Judge.

Appellant Roku, Inc. appeals a final determination from the International Trade Commission, finding that (1) Intervenor Universal Electronics, Inc. had ownership rights to assert U.S. Patent No. 10,593,196 in the investigation; (2) Universal satisfied the economic prong of the domestic industry requirement under subparagraph (a)(3)(C) of 19 U.S.C. § 1337 (Section 337); and (3) Roku failed to present clear and convincing evidence that the '196 patent was obvious over the prior art. Because the Commission did not err in making any of these findings, we affirm.

I

A

Different television and video devices (such as smart TVs and DVD or Blu-ray players) use different communication protocols. There are two broad categories of communication protocols: wired communication protocols, such as HDMI connections; and wireless communication protocols, such as Wi-Fi or Bluetooth connections. Many of these communication protocols are incompatible with each other, but consumers might have multiple devices they want to use together, such as a wireless smart TV connected to a DVD player. The '196 patent purports to address this incompatibility with a "universal control engine," referred to in the claims as a "first media device," that can connect to and scan various target devices (called "second media devices" in the patent) to determine which kind of communication protocols they use. The first media device essentially translates between the different types of devices. Figure 2 of the '196 patent shows how a "first media device" can help connect multiple other types of devices:

Image materials not available for display.

The first media device (labeled "100" in Figure 2) is able to receive wireless signals from either a remote control (200) or an app on a tablet computer (202). The first media device then issues commands, using either wired or infrared (IR) signals, to various controllable appliances, such as a television (106), a digital video recorder (110), or a DVD player (108).

Representative claim 1 is as follows:

1. [p] A first media device, comprising:

[a] a processing device;

[b] a high-definition multimedia interface communications port, coupled to the processing device, for communicatively connecting the first media device to a second media device;

[c] a transmitter, coupled to the processing device, for communicatively coupling the first media device to a remote control device; and

[d] a memory device, coupled to the processing device, having stored thereon processor executable instruction;

[e] wherein the instructions, when executed by the processing device,

[i] cause the first media device to be configured to transmit a first command directly to the second media device, via use of the high-definition multimedia communications port, to control an operational function of the second media device when a first data provided to the first media device indicates that the second media device will be responsive to the first command, and

[ii] cause the first media device to be configured to transmit a second data to a remote control device, via use of the transmitter, for use in configuring the remote control device to transmit a second command directly to the second media device, via use of a communicative connection between the remote control device and the second media device, to control the operational function of the second media device when the first data provided to the first media device indicates that the second media device will be unresponsive to the first command.

'196 patent, cl. 1 (annotated by the parties).

B

Universal Electronics, Inc. owns the '196 patent. Universal developed a set of technologies called "QuickSet," which is incorporated into multiple smart TVs. Universal relied on QuickSet to satisfy the economic prong of the domestic industry requirement¹ in this investigation and claimed that QuickSet practices the teachings of the '196 patent.

Roku creates various TV streaming technologies, such as the Roku streaming channel and the Roku stick. Roku also works with third parties to create Roku-branded TVs and licenses its operating system to other parties.

Universal filed a complaint with the International Trade Commission against Roku for importing certain TV products that infringe the '196 patent. The Commission instituted an investigation, and the administrative law judge found that Roku violated Section 337 by importing infringing articles. The Commission affirmed the administrative judge's finding and found in relevant part that (1) Universal had ownership rights to assert the '196 patent; (2) Universal satisfied the economic prong of the domestic industry requirement; and (3) the asserted claims were not invalid as obvious.

Earlier in the investigation, Roku filed a motion for summary determination that Universal lacked standing to assert the '196 patent because, at the time Universal filed its complaint, it did not own all rights to the '196 patent. Roku argued that Universal filed a petition for correction of inventorship to add one of its employees as an inventor to the patent after it filed its complaint with the Commission and that the agreements between this employee (Mr. Barnett) and Universal did not constitute an assignment of rights.

Initially, the administrative judge granted Roku's motion, finding that a 2004 agreement between Mr. Barnett and Universal was a "mere promise to assign rights in the future, not an immediate transfer of expectant rights." J.A. 26177 (quoting Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1365 (Fed. Cir. 2010)). Thus, "the 2004 Barnett Agreement did not automatically assign to [Universal] any of Mr. Barnett's rights to the Provisional Applications or the '196 patent that eventually issued from the priority chain." J.A. 26177. The Commission reversed, finding instead that in a separate 2012 agreement, Mr. Barnett assigned all his rights to a series of provisional applications, including the one to which the '196 patent claims priority. The Commission also found that Mr. Barnett did not contribute any new or inventive matter to the '196 patent after filing the provisional applications. Based on those two facts, the Commission found that the 2012 agreement constituted a "present conveyance" of Mr. Barnett's rights in the '196 patent, and thus Universal could assert the '196 patent. From this, the Commission found that the issue involving the 2004 agreement was moot.

The Commission found that Universal satisfied the economic prong of the domestic industry requirement by proving a substantial investment in engineering and research and development to exploit the '196 patent pursuant to subparagraph (a)(3)(C) of Section 337. Subparagraph (a)(3) of Section 337 requires a party filing suit with the Commission to possess a domestic industry in the United States, which can be satisfied by showing "substantial investment in [a patent's] exploitation, including engineering, research and development, or licensing." 19 U.S.C. § 1337(a)(3)(C). Specifically, the Commission found that Universal had made substantial investments in domestic engineering and R&D related to the QuickSet platform. The Commission also found that Universal's investments in domestic R&D accounted for a substantial portion of its total investments in engineering and R&D. The Commission also found that Universal demonstrated a nexus between its engineering and R&D investments, the '196 patent, and the Samsung TVs that constituted Universal's domestic industry products. Accordingly, the Commission found that Universal's investments constituted exploitation of the asserted patent as required for investments under subparagraph (a)(3)(C).

The administrative judge initially found that Roku made a "marginal prima facie case" that claim 1 of the '196 patent was obvious over two prior art references, Chardon² and Mishra.³ J.A. 169-71. The parties did not dispute that Chardon disclosed all limitations of claim 1 other than 1[e][ii]. The administrative judge found that Mishra disclosed limitation 1[e][ii], which requires the "first media device" to transmit a signal to configure the remote control device to directly control a target device via IR or other wireless pathway when that device is unresponsive to an HDMI signal. However, the administrative judge said that "a certain amount of cherry-picking is required" to find all claim limitations disclosed in the combination of Chardon and Mishra and that Roku's case was at best "marginal." J.A. 167. Furthermore, the administrative judge found that Universal's evidence of secondary considerations, which showed that QuickSet satisfied a long-felt but unmet need, outweighed Roku's obviousness case.

The Commission affirmed this finding and modified the administrative judge's other findings. The Commission found that the combination of Chardon and Mishra was not...