Case: 19-2077 Document: 38 Page: 1 Filed: 07/16/2020
United States Court of Appeals
for the Federal Circuit
______________________
MAYBORN GROUP, LTD., MAYBORN USA, INC.,
Appellants
v.
INTERNATIONAL TRADE COMMISSION,
Appellee
______________________
2019-2077
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-1092.
______________________
Decided: July 16, 2020
______________________
JOHN STEPHEN GOETZ, Fish & Richardson P.C., New
York, NY, for appellants.
ROBERT JOHN NEEDHAM, Office of General Counsel,
United States International Trade Commission, Washing-
ton, DC, for appellee. Also represented by DOMINIC L.
BIANCHI, WAYNE W. HERRINGTON.
______________________
Before LOURIE, LINN, and WALLACH, Circuit Judges.
LOURIE, Circuit Judge.
Case: 19-2077 Document: 38 Page: 2 Filed: 07/16/2020
2 MAYBORN GROUP, LTD. v. ITC
Mayborn Group, Ltd., and Mayborn USA, Inc.,
(collectively, “Mayborn”) appeal from a decision of the
United States International Trade Commission (the
“Commission”), denying its petition for rescission of a
general exclusion order prohibiting importation of products
that infringe U.S. Patent 8,028,850 (the “’850 patent”).
Certain Self-Anchoring Beverage Containers, Inv. No. 337-
TA-1092, USITC Pub. 4984, 2019 WL 2174055, at *1 (May
17, 2019) (Rescission Petition) (“Decision”). Because the
Commission did not err in denying the petition, we affirm.
BACKGROUND
The Complainants own the ’850 patent, which discloses
a self-anchoring beverage container that prevents spills by
anchoring the container to a surface by means of a “flexible
nonporous base member adapted to seal to a reference sur-
face.” ’850 patent, Abstract. The seal is broken when the
handle is lifted, and a user can move the container nor-
mally. Figure 1 illustrates an embodiment of the inven-
tion:
J.A. 1338. As the details of the claims are not material to
this decision, we omit them here.
In 2017, Alfay Designs, Inc., Mighty Mug, Inc., and
Harry Zimmerman (the “Complainants”), filed a complaint
at the Commission against several respondents, not
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MAYBORN GROUP, LTD. v. ITC 3
including Mayborn. The complaint alleged infringement of
the ’850 patent, among others, and sought a general exclu-
sion order (“GEO”) barring importation of infringing goods
by any party.
The Commission instituted an investigation, and the
administrative law judge initially determined that the two
remaining respondents—those with whom the Complain-
ants had not settled—were in default and infringed claim
1 of the ’850 patent. Certain Self-Anchoring Beverage Con-
tainers, Inv. No. 337-TA-1092, USITC Pub. 4984, 2018 WL
4357626, at *2, *8–10 (Aug. 27, 2018) (Initial). The default-
ing respondents did not raise any invalidity challenge. The
ALJ also recommended that the Commission grant a GEO
because it was “difficult to gain information about the en-
tities selling infringing self-anchoring beverage contain-
ers,” and numerous entities were importing self-anchoring
beverage containers, making it “nearly impossible to iden-
tify the sources of the[] products.” Id. at *12. The Commis-
sion concluded that the ALJ’s finding of infringement was
correct and issued the GEO. Certain Self-Anchoring Bev-
erage Containers, Inv. No. 337-TA-1092, USITC Pub. 4984,
2018 WL 6716888, at *3 (Dec. 18, 2018) (Final).
The Complainants notified Mayborn of the Commis-
sion’s then-ongoing investigation in October 2018. May-
born took no action during the course of the proceedings.
In early 2019, the Complainants notified Mayborn and its
retail partners that Mayborn’s products infringed the ’850
patent in violation of the GEO. The Complainants also in-
timated that they were “working with special agents from
[Customs & Border Protection (“CBP”)] in the enforcement
of the [GEO] and in the identification of persons who are
evading or violating the GEO.” J.A. 1857–58.
In response, Mayborn petitioned the Commission to re-
scind its GEO pursuant to its power under 19 U.S.C.
§ 1337(k)(1), which allows the Commission to rescind or
modify an order if “the conditions which led to such
Case: 19-2077 Document: 38 Page: 4 Filed: 07/16/2020
4 MAYBORN GROUP, LTD. v. ITC
exclusion from entry or order no longer exist.” Mayborn
argued that this requirement was satisfied because it con-
tends claim 1 of the ’850 patent is invalid under 35 U.S.C.
§§ 102, 103.
The Commission denied Mayborn’s petition, holding
that a petitioner’s asserted discovery of invalidating prior
art after the issuance of a GEO is not a changed condition
under § 1337(k)(1). Decision, 2019 WL 2174055, at *2.
This appeal, challenging the denial of the petition, fol-
lowed. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(6).
DISCUSSION
Our review of the Commission’s final determination of
a Section 337 violation is governed by the standards of the
Administrative Procedure Act. 19 U.S.C. § 1337(c);
Ajinomoto Co. v. Int’l Trade Comm’n, 597 F.3d 1267, 1272
(Fed. Cir. 2010). Under 5 U.S.C. § 706, we review the Com-
mission’s legal determinations de novo and its factual find-
ings for substantial evidence. Converse, Inc. v. Int’l Trade
Comm’n, 909 F.3d 1110, 1115 (Fed. Cir. 2018) (citing Cisco
Sys., Inc. v. Int’l Trade Comm’n, 873 F.3d 1354, 1360–61
(Fed. Cir. 2017)). Statutory interpretation is a question of
law, generally reviewed de novo, Power Integrations, Inc. v.
Semiconductor Components Indus., LLC, 926 F.3d 1306,
1313–14 (Fed. Cir. 2019) (citing Unwired Planet, LLC v.
Google Inc., 841 F.3d 1376, 1379 (Fed. Cir. 2016)), but we
review the Commission’s interpretation of § 1337 under the
Chevron framework, Suprema, Inc. v. Int’l Trade Comm’n,
796 F.3d 1338, 1345–46 (Fed. Cir. 2015) (en banc).
Mayborn argues that the Commission erred in reject-
ing its petition for rescission, and the Commission contends
that Mayborn lacks standing to appeal the Commission’s
denial of its petition. We first address the Commission’s
argument.
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MAYBORN GROUP, LTD. v. ITC 5
I. Standing
The Commission asserts that Mayborn lacks standing
to appeal from the Commission’s decision because Mayborn
continues to import the accused products and thus lacks
the requisite injury. In the Commission’s view, Mayborn’s
evidence of injury pertains to actions of the Complain-
ants—insofar as they have threatened to enforce the GEO
against Mayborn and its retail partners—and has nothing
to do with the Commission or its decision not to rescind the
GEO.
Mayborn responds that it has been injured by the Com-
plainants’ efforts to assert the GEO, specifically by losing
revenue while retailers suspended sales of its products. It
further maintains that the Complainants’ threat to seek
enforcement of the GEO at the Commission creates a harm
that is both imminent and real.
We agree with Mayborn that it has standing to appeal.
“[A]ny person” may petition the Commission for rescission
or modification of an exclusion order, subject to certain con-
ditions. 19 C.F.R. § 210.76(a)(1). Nonetheless, a party
seeking judicial review of a Commission determination
must establish that it presents a case or controversy for
which the federal courts have jurisdiction under Article III
of the United States Constitution. See Phigenix, Inc. v. Im-
munogen, Inc., 845 F.3d 1168, 1171 (Fed. Cir. 2017) (citing
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016); Hol-
lingsworth v. Perry, 570 U.S. 693, 704 (2013)). A party has
Article III standing to appeal from a decision of an admin-
istrative agency when it has: (1) suffered a particularized,
concrete injury in fact that is (2) fairly traceable to the chal-
lenged conduct of the defendant and is (3) likely to be re-
dressed by a favorable judicial decision. Spokeo, 136 S. Ct.
at 1547; Consumer Watchdog v. Wis. Alumni Research
Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014).
Mayborn has shown here that it satisfies these require-
ments and thus has Article III standing to maintain its
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6 MAYBORN GROUP, LTD. v. ITC
appeal. First, Mayborn has shown that it has suffered an
injury in fact as a result of the GEO. Mayborn imports
products that potentially infringe the ’850 patent and
therefore violate the GEO. As an initial matter, and con-
trary to the Commission’s arguments, it is unnecessary for
the Commission to have already barred importation of
Mayborn’s products for Mayborn to have standing to ap-
peal the Commission’s decision. Cf. JTEKT Corp. v. GKN
Automotive LTD., 898 F.3d 1217, 1220 (Fed. Cir. 2018)
(holding that an inter partes review petitioner may appeal
the Board’s decision on showing “that it is engaged or will
likely engage ‘in an activity that would give rise to a possi-
ble infringement suit’” (quoting Consumer Watchdog, 753
F.3d at 1262) (alteration omitted)).
As the Commission acknowledges, Commission Br. 7,
17, CBP may at any moment determine that Mayborn’s
products violate the GEO and halt their importation.
§ 1337(d)(1). Mayborn understandably sees this, or an en-
forcement action by the Commission, as a real threat to its
business. VastFame Camera, Ltd. v. Int’l Trade Comm’n,
386 F.3d 1108, 1113, 1116 (Fed. Cir. 2004) (permitting the
Commission to conduct enforcement proceedings). The
threat of injury is not merely conjectural, as Mayborn has
lost sales and incurred costs stemming from the Complain-
ants’ threats to assert the GEO, with attendant reputa-
tional injury, market share loss, and damage to Mayborn’s
brand and its relationships with retailers. Mayborn Open-
ing Br. 13–17; Commission Br. 17; cf. E.I. DuPont de
Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1005 (Fed.
Cir. 2018). Thus, given the strong possibility the Commis-
sion or CBP might act to enforce the GEO at any time and
Complainants’ ongoing efforts to assert the GEO against
Mayborn, Mayborn has alleged that the GEO has injured
it in a “particularized” and “concrete” manner.
The Commission’s chief argument is that this injury is
not traceable to the Commission but instead to the Com-
plainants. The Commission adds that the Complainants’
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MAYBORN GROUP, LTD. v. ITC 7
views concerning whether Mayborn’s products violate the
GEO are irrelevant, as it is CBP and the Commission that
decide whether to exclude specific products under a GEO.
We disagree with the Commission on this point. May-
born’s injuries stem from its risk of infringing the ’850 pa-
tent, the consequences of which are heightened by the
existence of the GEO. See 19 C.F.R. § 12.39(b)(1) (the Com-
mission “may direct” CBP to exclude products “violating or
suspected of violating section 337”). The Complainants
may have brought the GEO to the attention of Mayborn
and its commercial partners, but it is the Commission that
has issued the GEO, and it retains the ability to enforce,
modify, or rescind it. See 19 U.S.C. § 1337(k)(1). Thus,
Mayborn’s injuries may be fairly traced to the conduct of
the Commission.
Finally, Mayborn’s injuries are likely redressable. The
relief Mayborn seeks—an invalidity judgment and rescis-
sion of the GEO—would remove the threat of enforcement
against Mayborn by CBP or in further proceedings at the
Commission. We therefore conclude that Mayborn has Ar-
ticle III standing to appeal from the Commission’s decision.
II. Merits
Mayborn argues that the Commission erred in holding
that an invalidity challenge is not a proper basis for a peti-
tion for rescission or modification of an exclusion order un-
der § 1337(k)(1). Mayborn also asserts that the
Commission failed to heed its own regulation, 19 C.F.R.
§ 210.76, by not considering the merits of its petition, and
that the public interest lies in resolving patent validity.
The Commission responds that Mayborn’s invalidity
challenge is not a changed condition under § 1337(k)(1)—
unlike a subsequent final judgment of invalidity or license
agreement between the affected parties—and the Commis-
sion therefore had no obligation to consider the substance
of Mayborn’s petition. The Commission also maintains
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8 MAYBORN GROUP, LTD. v. ITC
that it lacks statutory authority to consider an invalidity
challenge outside of an investigation or enforcement pro-
ceeding, regardless of Mayborn’s insistence that the public
interest generally lies in doing so.
Patent invalidity is an affirmative defense to an action
for infringement in district court or before the Commission.
35 U.S.C. § 282(b); see Guangdong Alison Hi-Tech Co. v.
Int’l Trade Comm’n, 936 F.3d 1353, 1359 (Fed. Cir. 2019)
(citing One-E-Way, Inc. v. Int’l Trade Comm’n, 859 F.3d
1059, 1062 (Fed. Cir. 2017)). All factual propositions and
inferences underlying an invalidity defense must be proven
by clear and convincing evidence. Microsoft Corp. v. i4i
Ltd. P’ship, 564 U.S. 91, 95 (2011).
But we agree with the Commission and conclude that
Mayborn’s invalidity challenge is not a permissible basis
for it to petition for rescission or modification of the GEO.
The Commission may only act pursuant to powers granted
to it by Congress. See Kyocera Wireless Corp. v. Int’l Trade
Comm’n, 545 F.3d 1340, 1355 (Fed. Cir. 2008) (“The ITC is
a creature of statute, and must find authority for its actions
in its enabling statute.”). Under § 1337(b), the Commission
is empowered to investigate violations of § 1337(a), which
prohibits, among other things, “the importation into the
United States, the sale for importation, or the sale within
the United States after importation” of articles that “in-
fringe a valid and enforceable United States patent.” The
Commission is also permitted under § 1337(b) to conduct
proceedings to enforce an existing exclusion order.
VastFame, 386 F.3d at 1113. The Commission may also
rescind or modify an exclusion order when “the conditions
which led to such exclusion . . . no longer exist,” or when a
party previously adjudged in violation of § 1337(a) petitions
for a “determination that the petitioner is no longer in vio-
lation of [Section 337].” 35 U.S.C. § 1337(k).
The Commission correctly denied Mayborn’s petition
for two independent reasons. First, the Commission may
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MAYBORN GROUP, LTD. v. ITC 9
only adjudicate patent validity when an invalidity defense
is raised by a respondent in the course of an investigation
or an enforcement proceeding pursuant to § 1337(b). That
did not occur here as Mayborn was not a party to the pro-
ceeding. This court has carefully considered the Commis-
sion’s power to adjudicate patent validity, first granted to
it by Congress in the Trade Act of 1974, Pub. L. No. 93-618,
88 Stat. 1978 (1975), and we have long held that the Com-
mission lacks authority to do so “when no defense of inva-
lidity has been raised.” Lannom Mfg. Co. v. Int’l Trade
Comm’n, 799 F.2d 1572, 1580 (Fed. Cir. 1986). In Lannom,
this court explained that § 1337(c) was enacted to abrogate
precedent that barred the Commission from addressing a
respondent’s invalidity defense. Id. at 1576–79; see also
§ 1337(c) (allowing a respondent to present “[a]ll legal and
equitable defenses” in the course of an investigation au-
thorized under § 1337(b)). Since Mayborn’s petition did not
raise an invalidity defense in the course of an investigation
or enforcement proceeding under § 1337(b), the Commis-
sion lacked the authority to adjudicate its invalidity chal-
lenge.
Furthermore, subsection (k)(1) does not permit an end-
run around this rule. 19 C.F.R. § 210.76(a)(1) interprets
the statute to allow a person to petition for rescission or
modification of an exclusion order when the person “be-
lieves that changed conditions of fact or law, or the public
interest, require that an exclusion order . . . be modified or
set aside.” A petitioner’s invalidity challenge is not, on its
face, a changed condition under § 1337(k)(1) and is thus not
a proper basis for a petition to rescind or modify an exclu-
sion order. The ’850 patent has not been held to be invalid,
which would indeed be a changed condition.
While Mayborn argues that the “public interest” gener-
ally lies in “resolving questions of patent validity,” May-
born Opening Br. 43–44 (quoting Cardinal Chem. Co. v.
Morton Int’l, Inc., 508 U.S. 83, 100 (1993) (internal quota-
tion marks omitted)), the “public interest” in § 210.76(a)(1)
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10 MAYBORN GROUP, LTD. v. ITC
must be interpreted consistently with § 1337(k)(1), which
only allows a petition that alleges changed conditions. Sec-
tion 210.76(a)(1), consistent with § 1337(k)(1), thus re-
quires a petitioner to show a change in the “public interest”
conditions that led the Commission to issue the exclusion
order in the first place. These public interest conditions
are enumerated in Section 337 itself. Under § 1337(d)(1),
the Commission must enter an exclusion order upon a find-
ing of a violation “unless, after considering the effect of
such exclusion upon the public health and welfare, compet-
itive conditions in the United States economy, the produc-
tion of like or directly competitive articles in the United
States, and United States customers” the Commission con-
cludes the articles should not be excluded. None of those
conditions has been shown here.
Here, as in many similar situations, the regulation’s
invocation of the public interest does not grant the agency
a “roving commission,” A.L.A. Schechter Poultry Corp. v.
United States, 295 U.S. 495, 551 (1935) (Cardozo, J., con-
curring) (citation omitted), nor can it be interpreted to
greatly expand the limited nature of the authority granted
to the Commission in Section 337, see, e.g., Kyocera, 545
F.3d at 1355. Mayborn did not argue in its petition that
the public interest conditions listed in § 1337(d)(1) had
changed since the Commission issued the GEO, and its con-
tention that the public interest favors its invalidity chal-
lenge is therefore meritless.
Mayborn also compares its invalidity challenge to the
Commission’s practice of rescinding exclusion orders once
the patent at issue has been found invalid or unpatentable,
but its analogy is inapt. A patent claim is extinguished
upon a final judgment of invalidity or a final decision of
unpatentability, and “[i]t is well established that an injunc-
tion must be set aside when the legal basis for it has ceased
to exist.” ePlus, Inc. v. Lawson Software, Inc., 789 F.3d
1349, 1354 (Fed. Cir. 2015). The Commission’s practice is
consistent with this principle and § 1337(k)(1), which
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MAYBORN GROUP, LTD. v. ITC 11
allows rescission of an exclusion order upon a changed con-
dition of law. In contrast, the legal status of the ’850 patent
is unaffected by Mayborn’s wish to present an invalidity
challenge. See Roper Corp. v. Litton Sys., Inc., 757 F.2d
1266, 1270 (Fed. Cir. 1985) (“A patent is born valid. It re-
mains valid until a challenger proves [its invalidity].”).
CONCLUSION
We have considered the parties’ further arguments but
find them unpersuasive. The decision of the Commission
is
AFFIRMED