United States Court of Appeals
for the Federal Circuit
______________________
INTERDIGITAL COMMUNICATIONS, LLC,
INTERDIGITAL TECHNOLOGY CORPORATION
AND IPR LICENSING, INC.,
Appellants,
v.
INTERNATIONAL TRADE COMMISSION,
Appellee,
LG ELECTRONICS, INC., LG ELECTRONICS USA,
INC., AND LG ELECTRONICS MOBILECOMM U.S.A.,
INC.,
Intervenors.
______________________
2012-1628
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-800
______________________
Decided: June 7, 2013
______________________
RICHARD P. BRESS, Latham & Watkins LLP, of Wash-
ington, DC, argued for appellants. With him on the brief
were MAXIMILIAN A. GRANT, BERT C. REISER, and GABRIEL
K. BELL. Of counsel on the brief were RON E. SHULMAN, of
Menlo Park, California and MICHAEL B. LEVIN, Wilson
Sonsini Goodrich & Rosati, of Palo Alto, California.
2 INTERDIGITAL COMMUNICATIONS v. ITC
PANYIN A. HUGHES, Attorney, Office of the General
Counsel, United States International Trade Commission,
of Washington, DC, argued for appellee. Of counsel on
the brief were DOMINIC L. BIANCHI, Acting General Coun-
sel, and WAYNE W. HERRINGTON, Assistant General Coun-
sel. Of counsel was ANDREA C. CASSON.
MICHAEL J. MCKEON, Fish & Richardson, P.C., of
Washington, DC, argued for intervenors. With him on the
brief were CHRISTIAN A. CHU, RICHARD A. STERBA, SCOTT
A. ELENGOLD and MICHAEL C. TYLER.
______________________
Before LOURIE, BRYSON, and PROST, Circuit Judges.
Opinion for the court filed by Circuit Judge PROST. Dis-
senting opinion filed by Circuit Judge LOURIE.
PROST, Circuit Judge.
InterDigital Communications, Inc. (formerly InterDig-
ital Communications, LLC), InterDigital Technology
Corporation, and IPR Licensing, Inc. (collectively “Inter-
Digital”) appeal from an order of the U.S. International
Trade Commission (“ITC” or “Commission”) terminating
an investigation with respect to LG Electronics, Inc., LG
Electronics USA, Inc., and LG Electronics Mobilecomm
USA, Inc. (collectively “LG”). The ITC terminated the
investigation in favor of arbitration on the basis of a prior
patent license agreement between InterDigital and LG
that permits the parties to submit to arbitration any
disputes arising under the agreement. We hold that the
ITC erred in terminating the investigation because there
is no plausible argument that the parties’ dispute in this
case arose under their patent license agreement. We
therefore reverse the ITC’s order terminating the investi-
gation as to LG and remand to the ITC for further pro-
ceedings.
INTERDIGITAL COMMUNICATIONS v. ITC 3
I. BACKGROUND
A. Patent License Agreement
InterDigital and LG entered into a Wireless Patent
License Agreement (“Agreement”) in January 2006. 1 In
the Agreement, InterDigital granted LG a license to
certain InterDigital patents with respect to devices capa-
ble of wireless voice or data communications, including
devices designed to operate in accordance with second-
generation (“2G”) wireless standards (e.g., GSM, GPRS,
and EDGE) and devices designed to operate in accordance
with third-generation (“3G”) wireless standards (e.g.,
WCDMA and CDMA2000). The Agreement refers to the
licensed products generally as “Licensed Terminal Units”
and to the licensed 2G products more specifically as “GSM
Licensed Terminal Units.” See Agreement §§ 1.27 (defin-
ing “Terminal Unit”), 1.17 (defining “Licensed Terminal
Units”), 1.15 (defining “Licensed Standards”), 1.10 (defin-
1 The Agreement is available at
http://www.sec.gov/Archives/edgar/data/354913/00011931
2506107083/dex1082.htm. In their briefing, the parties
treated the Agreement as confidential and therefore
redacted substantial portions of their submissions. At
oral argument, the parties agreed to treat some material
in the Agreement as non-confidential and to re-file their
briefs with fewer redactions to facilitate the court’s issu-
ance of a public opinion. After oral argument, however,
counsel for InterDigital realized that InterDigital, with
LG’s permission, submitted the Agreement to the SEC in
a public 10-Q filing in 2006 and that the Agreement is
available in substantially unredacted form on the SEC’s
website. The parties have re-filed their briefs with sub-
stantially less material marked as confidential.
4 INTERDIGITAL COMMUNICATIONS v. ITC
ing “GSM Licensed Terminal Unit”). 2 Section 2.1, the
grant clause, provides in full as follows:
Grant.
[1st Sentence] To the extent Licensee has paid
each installment of the License Fee as set forth in
Section 3.1 herein and all royalties as set forth in
Sections 3.3 and 3.4 herein (to the extent applica-
ble) and provided Licensee is otherwise not in de-
fault under this Agreement, InterDigital Group
hereby grants to Licensee and its Affiliates a non-
exclusive, non-transferable, worldwide, royalty-
bearing license under the Licensed Patents to de-
velop, design, make, have made (to the extent
substantially designed by Licensee or its Affili-
ates), use, import, sell, and otherwise distribute
Licensed Terminal Units, alone but not in combi-
nation with other third party equipment, includ-
ing the right to procure components therefore.
[2nd Sentence] In addition, provided Licensee is
not in default under this Agreement at the end of
the Term, Licensee shall be fully paid-up under
and for the life of the Licensed Patents as to GSM
Licensed Terminal Units only at the end of the
Term.
Id. § 2.1 (emphasis and bracketed text added).
According to its terms, the Agreement terminated on
December 31, 2010. 3 The Agreement contains a survival
2 The Agreement defines “GSM Licensed Terminal
Unit” as “a Terminal Unit designed to operate substan-
tially in accordance with GSM, GPRS, or EDGE, each as
amended from time to time, and no other standard or
specification for CDMA- and TDMA-based communica-
tions systems,” where GSM, GPRS, and EDGE are 2G
wireless standards. Id. § 1.10.
INTERDIGITAL COMMUNICATIONS v. ITC 5
clause, however, which provides that certain provisions
survive the termination of the Agreement, including
“Section 2.1 (the last sentence as to GSM paid-up license
grant only).” Id. § 6.19. 4 The “last sentence” referred to
here is the second sentence of the grant clause, empha-
sized above, which provides that at the end of the term of
the Agreement, LG will have a “fully paid-up” license for
the life of InterDigital’s patents for 2G products.
Article V of the Agreement provides mechanisms for
resolving disputes that arise under the Agreement.
Section 5.1 provides for non-binding negotiation of dis-
putes. If negotiations pursuant to section 5.1 are unsuc-
cessful, then section 5.2 permits either party to submit a
dispute to arbitration:
Arbitration of Disputes. If a dispute arising under
this Agreement has not been resolved by the non-
3 Section 4.1 of the Agreement provides: “Term.
The term of this Agreement shall commence on the Effec-
tive Date [January 1, 2006] and terminate on December
31, 2010, unless sooner terminated as provided herein.”
Id. § 4.1.
4 Section 6.19, the survival clause, provides in full
as follows:
Survival. The following provisions of this Agree-
ment shall survive expiration or termination of
this Agreement: Section 2.1 (the last sentence as to
GSM paid-up license grant only), Section 2.3 (non-
assert limited only to activities occurring prior to
the termination), Article III (license fee and addi-
tional royalties), Section 4.3 (the last two sentenc-
es only), Article V (dispute resolution), and
Sections 6.1, 6.2, 6.4, 6.5, 6.6, 6.8, 6.9, 6.11, 6.12,
6.13, 6.14, 6.16, 6.17, 6.18 (miscellaneous).
Id. § 6.19 (emphasis added).
6 INTERDIGITAL COMMUNICATIONS v. ITC
binding procedures set forth in Section 5.1 within
the time periods provided, either party may sub-
mit the dispute to arbitration administered by the
AAA under its AAA International Rules and as set
forth in this Section. The arbitration proceeding
shall take place in Washington, D.C., in English,
before the Arbitration Panel.
Id. § 5.2.
B. ITC Proceedings
On July 26, 2011, InterDigital filed a complaint with
the ITC, asserting that several companies 5 had violated
section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by
importing wireless devices that infringed patents relating
to 3G wireless technology. On August 25, 2011, the ITC
instituted an investigation regarding “wireless devices
with 3G capabilities and components thereof.”
On October 5, 2011, InterDigital moved to amend its
complaint to add LG as a respondent. LG opposed Inter-
Digital’s motion, but on December 5, 2011, the Adminis-
trative Law Judge (“ALJ”) assigned to the investigation
granted the motion.
On January 20, 2012, LG moved to terminate the in-
vestigation, arguing that its accused 3G products were
still covered by its license to InterDigital’s patents, and
that InterDigital’s infringement claim was subject to
arbitration because it arose under the Agreement. Inter-
Digital and the ITC Staff opposed LG’s motion. Pointing
to the plain text of the Agreement, they argued that LG
did not have an ongoing license for 3G products, and that
5 The original respondents were Huawei Technolo-
gies Co., Ltd. and FutureWei Technologies, Inc. d/b/a
Huawei Technologies (USA); Nokia Corporation and
Nokia Inc.; and ZTE Corporation and ZTE (USA) Inc.
INTERDIGITAL COMMUNICATIONS v. ITC 7
LG’s claim to an arbitrable dispute under the Agreement
was “wholly groundless.”
On June 4, 2012, the ALJ issued an initial determina-
tion granting LG’s motion to terminate the investigation
as to LG. In re Certain Wireless Devices with 3G Capabil-
ities and Components Thereof, Inv. No. 337-TA-800, 2012
WL 2917835 (ITC June 4, 2012) (“Initial Determination”).
The ALJ analyzed LG’s motion using the framework for
analyzing a motion to stay pending arbitration outlined in
Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (Fed. Cir.
2006). In Qualcomm, we said that a district court pre-
sented with a motion to stay pending arbitration should
first determine whether the parties delegated arbitrabil-
ity decisions to an arbitrator. Id. at 1371. If so, the court
should only perform a limited inquiry to determine
whether the assertion of arbitrability is “wholly ground-
less,” and if the assertion is not “wholly groundless,” the
court should stay the action “pending a ruling on arbitra-
bility by an arbitrator.” Id.
In this case, the ALJ first determined that the parties
clearly intended to delegate the question of arbitrability
to an arbitrator. Initial Determination at *3. The ALJ
then analyzed whether LG’s request for arbitration was
“wholly groundless,” and found that it was not. Id. at *4.
Accordingly, the ALJ terminated the investigation as to
LG. Id.
On July 6, 2012, the ITC declined to review the ALJ’s
decision, making it the final determination of the ITC. In
re Certain Wireless Devices with 3G Capabilities and
Components Thereof, Inv. No. 337-TA-800, Notice of
Commission Determination Not to Review an Initial
Determination Terminating Certain Respondents From
the Investigation (ITC July 6, 2012). InterDigital has
appealed the ITC’s order terminating the investigation as
to LG.
8 INTERDIGITAL COMMUNICATIONS v. ITC
II. DISCUSSION
A
The threshold question we must consider is whether
this court has the power to entertain InterDigital’s ap-
peal. Our jurisdictional statute, 28 U.S.C. § 1295, broadly
provides this court with exclusive jurisdiction to hear
appeals of any “final determinations of the United States
International Trade Commission relating to unfair prac-
tices in import trade, made under section 337 of the Tariff
Act of 1930 (19 U.S.C. 1337).” 28 U.S.C. § 1295(a)(6).
Section 1337, in turn, lists various ITC determinations for
which a party may seek review with this court, along with
the sections of the Administrative Procedure Act that
govern such review:
Any person adversely affected by a final determi-
nation of the Commission under subsection (d),
(e), (f), or (g) of this section may appeal such de-
termination, within 60 days after the determina-
tion becomes final, to the United States Court of
Appeals for the Federal Circuit for review in ac-
cordance with chapter 7 of Title 5. Notwithstand-
ing the foregoing provisions of this subsection,
Commission determinations under subsections
(d), (e), (f), and (g) of this section with respect to
its findings on the public health and welfare,
competitive conditions in the United States econ-
omy, the production of like or directly competitive
articles in the United States, and United States
consumers, the amount and nature of bond, or the
appropriate remedy shall be reviewable in accord-
ance with section 706 of Title 5. Determinations
by the Commission under subsections (e), (f), and
(j) of this section with respect to forfeiture of
bonds and under subsection (h) of this section
with respect to the imposition of sanctions for
abuse of discovery or abuse of process shall also be
INTERDIGITAL COMMUNICATIONS v. ITC 9
reviewable in accordance with section 706 of Title
5.
19 U.S.C. § 1337(c).
Relevant to this appeal is the language in § 1337(c)
providing a right to appeal “a final determination of the
Commission under subsection (d), (e), (f), or (g) of this
section.” The recited subsections govern exclusion orders,
id. § 1337(d)-(e), cease and desist orders, id. § 1337(f), and
exclusion orders based on default, id. § 1337(g).
LG and the ITC argue primarily that we lack jurisdic-
tion because the order terminating the investigation as to
LG was not “a final determination of the Commission
under subsection (d), (e), (f), or (g).” Rather, according to
LG and the ITC, the ITC terminated the investigated
under subsection (c), which provides that:
The Commission shall determine, with respect to
each investigation conducted by it under this sec-
tion, whether or not there is a violation of this sec-
tion, except that the Commission may, by issuing
a consent order or on the basis of an agreement
between the private parties to the investigation,
including an agreement to present the matter for
arbitration, terminate any such investigation, in
whole or in part, without making such a determi-
nation.
Id. § 1337(c). LG and the ITC maintain, therefore, that
InterDigital has no right to appeal the ITC’s order to this
court. Before addressing the parties’ arguments, we will
provide some background on § 1337(c).
1
This court’s predecessor, the Court of Customs and
Patent Appeals, provided a framework for analyzing
whether an ITC order is appealable under § 1337(c). See
Import Motors, Ltd. v. U.S. Int’l Trade Comm’n, 530 F.2d
10 INTERDIGITAL COMMUNICATIONS v. ITC
940 (C.C.P.A. 1976). 6 In Import Motors, the court ex-
plained that “[s]trictly interpreted,” the phrase “‘final
determination of the Commission under subsection (d) or
(e)’ [in § 1337(c) 7] . . . refers to a final administrative
decision on the merits, excluding or refusing to exclude
articles from entry under subsection (d) or (e).” Id. at 944
(emphasis added). Despite this strict interpretation,
however, the court acknowledged that appealable orders
were not necessarily limited to final decisions on the
merits. More specifically, the court framed the inquiry as
whether an ITC “order is intrinsically a ‘final determina-
tion’ under § 337(c), as amended, and if it is not, whether
its effect upon appellants is the equivalent of a final
determination.” Id. The court reasoned that an order
terminating participation in ITC proceedings “could have
the same operative effect, in terms of economic impact” as
a final determination under subsections (d), (e), (f), or (g).
Id. at 945-46. “Substance, not form, must control.” Id.
In Block v. U.S. International Trade Commission, 777
F.2d 1568 (Fed. Cir. 1985), this court applied the frame-
work from Import Motors in an appeal from an ITC order
terminating an investigation as “abated” because the
patent claims that formed the basis for the alleged § 1337
violation were substantially amended during reexamina-
tion proceedings in the United States Patent and Trade-
mark Office. In finding that the appellant had no right to
appeal, we held that the ITC’s order was not intrinsically
a final determination under subsections (d), (e), or (f)
because “the ITC did not rule on the merits” and thus did
not “exclude or refuse to exclude articles from entry under
6 In South Corp. v. United States, 690 F.2d 1368,
1370 (Fed. Cir. 1982) (en banc), we adopted the decisions
of the Court of Customs and Patent Appeals as binding
precedent.
7 Subsections (f) and (g) were added later.
INTERDIGITAL COMMUNICATIONS v. ITC 11
19 U.S.C. § 1337(d), (e), or (f).” Id. at 1571. We further
held that the ITC’s order was not “the equivalent of a
final determination” because the ITC’s termination was
without prejudice, explaining that “Appellant is free to
request a second investigation under 19 U.S.C.
§ 1337(b)(1) based on the reexamined claims . . . .” Id.
This court distinguished Block in Farrel Corp. v. U.S.
International Trade Commission, 949 F.2d 1147 (Fed. Cir.
1991). In Farrel, as we do in this case, we reviewed an
ITC order terminating an investigation on the basis of an
arbitration agreement between the parties. We held that
we had jurisdiction over the appeal pursuant to
§ 1295(a)(6) and § 1337(c) because unlike in Block, in
which “the ITC’s dismissal was without prejudice to
request a second investigation, [and] the court held that
the dismissal was neither intrinsically a final determina-
tion nor the equivalent of a final determination,” in Far-
rel, “the dismissal was with prejudice and, since petitioner
cannot request reopening, must be considered a final
determination.” Id. at 1151 & n.4.
After finding jurisdiction, the court in Farrel ad-
dressed whether the ITC properly terminated the investi-
gation without first determining whether there was a
violation of § 1337. The version of § 1337(c) in effect at
that time permitted the ITC to terminate an investigation
without making such a determination only “by issuing a
consent order or on the basis of a settlement agreement.”
Id. at 1152-53. Because an arbitration agreement did not
fall within the statutory exceptions in § 1337(c), the court
concluded that the ITC improperly terminated the inves-
tigation. Id. at 1153.
In 1994, in response to Farrel, Congress amended
§ 1337(c) “by striking ‘a settlement agreement’ and insert-
ing ‘an agreement between the private parties to the
investigation, including an agreement to present the
matter for arbitration.’” Uruguay Round Agreements Act,
12 INTERDIGITAL COMMUNICATIONS v. ITC
Pub. L. 103-465, § 321(a)(2)(A), 108 Stat. 4809, 4943-44
(1994). This language survives to this day. Thus,
§ 1337(c) now permits the ITC to terminate an investiga-
tion based on an arbitration agreement without determin-
ing whether there is a violation of § 1337.
2
Against this historical backdrop, we now address the
parties’ arguments. LG and the ITC argue that under the
plain language of § 1337(c), there is no right to appeal an
ITC order terminating an investigation on the basis of an
arbitration agreement. They note that § 1337(c) provides
a right to appeal “a final determination of the Commission
under subsection (d), (e), (f), or (g),” and that the ITC
terminated the investigation as to LG under the language
added to subsection (c) in the wake of Farrel to allow for
termination “on the basis of an agreement between the
private parties to the investigation, including an agree-
ment to present the matter for arbitration.” 8 They view
§ 1337(c) as only permitting appeals of decisions made on
8 The dissent believes we should begin our analysis
with the first sentence of § 1337(c), which requires the
ITC to “determine . . . whether or not there is a violation
of this section, except that the Commission may,” in
certain circumstances, including where the parties have
agreed to arbitration, terminate an investigation “without
making such a determination.” According to the dissent,
this language means a termination due to an arbitrability
agreement “is not a determination” and therefore “is also
not a ‘final determination.’” Dissenting Op. 2. We disa-
gree. The first sentence of § 1337(c) merely informs us
that a termination due to an arbitrability agreement is a
termination without a determination of “whether or not
there is a violation of” § 1337. It does not speak to wheth-
er such a termination is a “final determination” as that
phrase is used later in § 1337(c) and in § 1295(a)(6).
INTERDIGITAL COMMUNICATIONS v. ITC 13
the merits as to whether a violation of § 1337 has oc-
curred. They conclude that the ITC’s termination under
subsection (c) is not a final determination under subsec-
tion (d), (e), (f), or (g) and thus is not appealable.
We find, however, that the reading of § 1337(c) urged
by LG and the ITC, permitting appeals only of final
decisions on the merits, is overly restrictive. It contra-
venes Import Motors and its progeny, which establish that
a party may appeal an ITC order that is not a final deci-
sion on the merits if “its effect upon appellants is the
equivalent of a final determination.” Import Motors, 530
F.2d at 944. Their view of the statute also “disregards the
general rule that judicial review will not be precluded on
the sole ground that specific procedures for judicial review
of a particular agency action are not spelled out in a
statute.” Allied Corp. v. U.S. Int’l Trade Comm’n, 850
F.2d 1573, 1579 (Fed. Cir. 1988) 9; see also Traynor v.
Turnage, 485 U.S. 535, 542 (1988) (“We have repeatedly
acknowledged ‘the strong presumption that Congress
intends judicial review of administrative action.’ The
presumption in favor of judicial review may be overcome
9 In Allied Corp., we addressed an argument simi-
lar to the one made by LG and the ITC. In that case, the
ITC modified an existing exclusion order as permitted by
§ 1337(h). The intervenor argued that this court lacked
jurisdiction over an appeal from that order because
§ 1337(c) limited our review to ITC determinations under
subsections (d), (e), and (f). We rejected the intervenor’s
argument, explaining that although the “ITC finds au-
thority to modify an existing exclusion order in § 337(h)[,]
when it actually modifies that order and issues the modi-
fied order it is making an appealable final determination
under subsection (d), (e), or (f).” Allied Corp., 850 F.2d at
1580. Thus, the source of the authority for a particular
ITC action is not necessarily dispositive as to whether a
party may appeal that action under § 1337(c).
14 INTERDIGITAL COMMUNICATIONS v. ITC
‘only upon a showing of “clear and convincing evidence” of
a contrary legislative intent.’” (quoting Bowen v. Mich.
Acad. of Family Physicians, 476 U.S. 667, 670 (1986), and
Abbott Labs. v. Gardner, 387 U.S. 136, 141 (1967))). 10 In
addition, the language of § 1337(c) indicates that when
Congress amended the statute to permit the ITC to ter-
minate an investigation on the basis of “an agreement
between the private parties to the investigation, including
an agreement to present the matter for arbitration,” it was
envisioning a situation where the parties indisputably
agreed to arbitrate—not a situation like the present case,
where there is a serious disagreement as to whether the
dispute is subject to arbitration.
Because the ITC’s order terminating the investigation
in favor of arbitration was not a determination on the
merits under § 1337(d), (e), (f), or (g), the pertinent ques-
tion is whether the effect of the ITC’s order is the equiva-
lent of a final determination. As discussed above, in
Farrel, we found an order terminating an investigation in
10 The dissent contends that “[t]he exclusion of an
arbitrability termination from” the list of appealable
determinations specified in § 1337(c) “exempts it from
inclusion on that list.” Dissenting Op. 3. For support, the
dissent quotes a D.C. Circuit case for the general proposi-
tion that “[a] statute listing the things it does cover ex-
empts, by omission, the things it does not list.” Id.
(quoting Original Honey Baked Ham Co. of Ga. v. Glick-
man, 172 F.3d 885, 887 (D.C. Cir. 1999)). However, in the
context of judicial review of administrative action, the
Supreme Court has instructed that “‘[t]he mere fact that
some acts are made reviewable should not suffice to
support an implication of exclusion as to others. The
right to review is too important to be excluded on such
slender and indeterminate evidence of legislative intent.’”
Bowen, 476 U.S. at 674 (quoting Abbott Labs., 387 U.S. at
141).
INTERDIGITAL COMMUNICATIONS v. ITC 15
favor of arbitration to be an appealable final determina-
tion because “the dismissal was with prejudice and [the]
petitioner [could] not request reopening.” Farrel, 949
F.2d at 1151 n.4.
The ITC argues that this case is unlike Farrel because
“the effect of the dismissal depends on the decision of the
arbitrator.” ITC Br. 24. The ALJ terminated the investi-
gation in favor of allowing an arbitrator to determine
whether the dispute between InterDigital and LG is
subject to arbitration. The ITC notes that “[i]f the arbi-
trator decides that the matter is not subject to the arbi-
tration provision, InterDigital can re-assert its complaint
against LG before the Commission.” Id. In essence, the
ITC’s argument is that because InterDigital may be able
to re-file its complaint against LG at some point in the
future, the order terminating the investigation is not
“final.”
We disagree. It is true that InterDigital may be able
to bring its claims against LG in the ITC again in the
future. On the other hand, it may not. Moreover, Inter-
Digital contends (without contradiction from the other
parties) that even if it ultimately succeeds in convincing
the arbitrators that its claims against LG are not subject
to arbitration, it will not be able to reopen the terminated
investigation. Instead, it will have to file a new com-
plaint. And unlike in Block, where the patent owner
could file a new complaint immediately, InterDigital will
have to await the outcome of the proceeding before the
arbitrators to find out whether it can file a new complaint.
Until the arbitrators determine whether InterDigital’s
claims are subject to arbitration, any new complaint
InterDigital filed would also be terminated in favor of
arbitration. In the meantime, LG may continue to import
devices that allegedly infringe InterDigital’s asserted
patents. The order therefore has “the same operative
effect, in terms of economic impact” as a final determina-
tion. Import Motors, 530 F.2d at 945-46.
16 INTERDIGITAL COMMUNICATIONS v. ITC
Our conclusion is further supported by legislative his-
tory. When Congress amended § 1337(c) after Farrel to
permit the ITC to terminate investigations on the basis of
arbitration agreements, the Senate Report explained that
“[b]y according deference to arbitration agreements, this
amendment is intended to bring ITC practice under
section 337 into closer conformity with district court
practice” under the Federal Arbitration Act (“FAA”). S.
Rep. No. 103-412, at 121 (1994). The FAA permits an
appeal to be taken from a “final decision with respect to
an arbitration,” but not from an interlocutory order stay-
ing the action or compelling arbitration. 9 U.S.C.
§ 16(a)(3), (b)(1), (b)(3).
Supreme Court and other precedent likewise support
our conclusion. In Green Tree Financial Corp.-Alabama v.
Randolph, 531 U.S. 79 (2000), the Supreme Court held
that a district court order dismissing an action in favor of
arbitration under the FAA is an appealable “final deci-
sion.” Id. at 89. Following Green Tree, the regional
circuits have uniformly held that a district court order
dismissing an action in favor of arbitration, “without
prejudice” to re-filing after the completion of arbitration,
is also an appealable “final decision.” See, e.g., Hill v.
Rent-A-Ctr., Inc., 398 F.3d 1286, 1288 (11th Cir. 2005)
(finding appellate jurisdiction over a district court’s
dismissal without prejudice in favor of arbitration);
Westlake Styrene Corp. v. P.M.I. Trading, Ltd., 71 F.
App’x 442 (5th Cir. 2003) (same); McCaskill v. SCI Mgmt.
Corp., 298 F.3d 677, 678 (7th Cir. 2002) (same); Blair v.
Scott Specialty Gases, 283 F.3d 595, 602 (3d Cir. 2002)
(same); Salim Oleochemicals v. M/V Shropshire, 278 F.3d
90, 93 (2d Cir. 2002) (same); Interactive Flight Techs., Inc.
v. Swissair Swiss Air Transp. Co., Ltd., 249 F.3d 1177,
1179 (9th Cir. 2001) (same).
Accordingly, we hold that the order terminating the
investigation as to LG was an appealable final determina-
INTERDIGITAL COMMUNICATIONS v. ITC 17
tion under 19 U.S.C. § 1337(c) and that we therefore have
jurisdiction under 28 U.S.C. § 1295(a)(6).
B
We now turn to the merits. The ALJ analyzed LG’s
motion to terminate the investigation under the frame-
work outlined in our opinion in Qualcomm. That case
involved an appeal from a district court’s order on a
motion to stay the district court action pending arbitra-
tion pursuant to section 3 of the FAA, 9 U.S.C. § 3. We
held that when presented with a motion to stay pending
arbitration, “the district court should first inquire as to
who has the primary power to decide arbitrability under
the parties’ agreement.” Qualcomm, 466 F.3d at 1371. If
“the parties did not clearly and unmistakably intend to
delegate arbitrability decisions to an arbitrator, . . . the
district court should undertake a full arbitrability in-
quiry.” Id. On the other hand, if “the parties to the
agreement did clearly and unmistakably intend to dele-
gate the power to decide arbitrability to an arbitrator,
then the court should perform a second, more limited
inquiry to determine whether the assertion of arbitrabil-
ity is ‘wholly groundless.’” Id. If the assertion of arbitra-
bility is not “wholly groundless,” then the district court
should stay the action “pending a ruling on arbitrability
by an arbitrator.” Id. But if it is “wholly groundless,”
then the district court should deny the request for a stay.
We further instructed:
[I]n undertaking the “wholly groundless” inquiry,
the district court should look to the scope of the
arbitration clause and the precise issues that the
moving party asserts are subject to arbitration.
Because any inquiry beyond a “wholly groundless”
test would invade the province of the arbitrator,
whose arbitrability judgment the parties agreed to
abide by . . . , the district court need not, and
18 INTERDIGITAL COMMUNICATIONS v. ITC
should not, determine whether [the moving par-
ty’s] defenses are in fact arbitrable.
Id. at 1374.
In this case, in a conclusion not challenged on appeal,
the ALJ first determined “that the parties clearly and
unmistakably intended to delegate the question of arbi-
trability to an arbitrator.” Initial Determination at *3.
The ALJ then turned to the question of whether LG’s
request for arbitration was “wholly groundless.” The ALJ
agreed with LG’s position that the “wholly groundless”
inquiry “does not extend to the merits of LG’s license
defense.” Id. at *4. The ALJ then found that LG’s asser-
tion of arbitrability was not wholly groundless, stating:
The undersigned finds that LG has met the
low threshold of demonstrating that its arbitra-
tion claim is not wholly groundless. LG claims
that it has a continuing license for the accused
products under the terms of the Agreement, a dis-
pute “arising under” the Agreement. InterDigital
and the Staff argue that LG’s motion to terminate
should be dismissed because the text of the
Agreement does not support LG’s license defense,
but such a determination on the merits will be
addressed and resolved by the arbitrator.
Id. (citations omitted). As a result, the ALJ terminated
the investigation as to LG. 11
InterDigital argues that the ALJ erred by failing to
assess the text of the parties’ Agreement to determine
whether LG’s assertion of arbitrability was “wholly
groundless.” We agree.
11Neither party challenges the ALJ’s decision to
analyze LG’s assertion of arbitrability under the “wholly
groundless” standard. We therefore simply assume that
the “wholly groundless” standard applies.
INTERDIGITAL COMMUNICATIONS v. ITC 19
In Qualcomm, we explained that the “wholly ground-
less” inquiry allows a court to stay an action based on an
agreement among the parties to submit their disputes to
arbitration, “while also preventing a party from asserting
any claim at all, no matter how divorced from the parties’
agreement, to force an arbitration.” Qualcomm, 466 F.3d
at 1373. Accordingly, “even if the court finds that the
parties’ intent was clear and unmistakable that they
delegated arbitrability decisions to an arbitrator, the
court may make a second more limited inquiry to deter-
mine whether a claim of arbitrability is ‘wholly ground-
less.’” Id. (quoting Dream Theater, Inc. v. Dream Theater,
21 Cal. Rptr. 3d 322, 326 (2004)). Because the “wholly
groundless” inquiry is supposed to be limited, a court
performing the inquiry may simply “conclude that there is
a legitimate argument that [the] arbitration clause covers
the present dispute, and, on the other hand, that it does
not” and, on that basis, leave “[t]he resolution of [those]
plausible arguments . . . for the arbitrator.” Agere Sys.,
Inc. v. Samsung Elecs. Co., 560 F.3d 337, 340 (5th Cir.
2009) (applying the “wholly groundless” inquiry from
Qualcomm). Nevertheless, the “wholly groundless” in-
quiry “necessarily requires the courts to examine and, to a
limited extent, construe the underlying agreement.”
Dream Theater, 21 Cal. Rptr. 3d at 326.
In conducting the “wholly groundless” inquiry, the
ALJ recited LG’s arguments that (i) the Agreement ex-
pressly grants LG a license to the asserted patents,
(ii) the license covers the products accused in this Investi-
gation, and (iii) Section 2.1, the grant clause, survived the
expiration of the Agreement. See Initial Determination at
*3 (citing various provisions of the Agreement); see also
LG Br. 32. However, the ALJ failed to construe the
provisions in the Agreement cited by LG to the limited
extent necessary to assess whether its arguments were
plausible. Instead, the ALJ simply concluded, “LG claims
that it has a continuing license for the accused products
20 INTERDIGITAL COMMUNICATIONS v. ITC
under the terms of the Agreement, a dispute ‘arising
under’ the Agreement.” Initial Determination at *4
(emphasis added). It was legal error for the ALJ to ter-
minate the investigation without assessing whether LG’s
license defense was at least plausible.
If the ALJ had performed the proper analysis, he
would have found that LG’s license defense is not plausi-
ble. Rather, a cursory review of the relevant provisions in
the Agreement confirms that LG no longer holds a license
to InterDigital’s patents for 3G products.
Section 2.1, the grant clause, provided LG with a li-
cense to InterDigital’s patents for both 2G and 3G prod-
ucts during the term of the Agreement. However, the
Agreement terminated on December 31, 2010. See
Agreement § 4.1. After that date, only the provisions
specified in the survival clause survived. Relevant to the
present dispute, the survival clause provides for the
survival of “Section 2.1 (the last sentence as to GSM paid-
up license grant only).” Agreement § 6.19. The “last
sentence” of Section 2.1 provides the following:
In addition, provided Licensee is not in default
under this Agreement at the end of the Term, Li-
censee shall be fully paid-up under and for the life
of the Licensed Patents as to GSM Licensed Ter-
minal Units only at the end of the Term.
Agreement § 2.1. “GSM Licensed Terminal Units” refers
to licensed 2G products. See Agreement § 1.10.
Reading these provisions together, the result is un-
ambiguous: the only surviving portion of the grant clause
is that portion providing LG with a “fully paid-up” license
for the life of InterDigital’s patents for 2G products.
There simply is no plausible argument that LG’s license
for 3G products survived the termination of the Agree-
ment. Accordingly, LG’s assertion of arbitrability was
“wholly groundless.”
INTERDIGITAL COMMUNICATIONS v. ITC 21
III. CONCLUSION
For the foregoing reasons, we reverse the ITC’s order
terminating the investigation as to LG and remand for
further proceedings.
REVERSED AND REMANDED
United States Court of Appeals
for the Federal Circuit
______________________
INTERDIGITAL COMMUNICATIONS, LLC,
INTERDIGITAL TECHNOLOGY CORPORATION
AND IPR LICENSING, INC.,
Appellants,
v.
INTERNATIONAL TRADE COMMISSION,
Appellee,
LG ELECTRONICS, INC., LG ELECTRONICS USA,
INC., AND LG ELECTRONICS MOBILECOMM U.S.A.,
INC.,
Intervenors.
______________________
2012-1628
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-800
______________________
LOURIE, Circuit Judge, dissenting.
I respectfully dissent from the majority’s decision to
reverse and remand the order of the U.S. International
Trade Commission (“ITC” or “Commission”) terminating
an investigation with respect to LG Electronics, Inc., LG
Electronics USA, Inc., and LG Electronics Mobilecomm
USA, Inc. (collectively “LG”). While I agree with the
majority that there is no plausible argument that LG
2 INTERDIGITAL COMMUNICATIONS v. ITC
could prevail under its patent license agreement, and
hence that LG’s position is “wholly groundless,” I nonethe-
less believe that we do not have jurisdiction to entertain
this appeal and would therefore dismiss.
Our subject matter jurisdiction is limited by statute.
We are vested with jurisdiction over “final determinations
of the United States International Trade Commission
relating to unfair practices in import trade, made under
section 337 of the Tariff Act of 1930.” 28 U.S.C.
§ 1295(a)(6). As noted by the majority, section 337 lists
various ITC determinations that are appealable. Termi-
nations for arbitration are not among them.
The first sentence of that section should be our start-
ing point in resolving this case:
The Commission shall determine, with respect to
each investigation conducted by it under this sec-
tion, whether or not there is a violation of this sec-
tion, except that the Commission may, by issuing
a consent order or on the basis of an agreement be-
tween the private parties to the investigation, in-
cluding an agreement to present the matter for
arbitration, terminate any such investigation, in
whole or in part, without making such a determi-
nation.
19 U.S.C. § 1337(c) (emphasis added). In my opinion, that
language is clear: a termination due to an arbitrability
agreement is a termination “without . . . a determination.”
As it is not a determination, it is also not a “final deter-
mination.” As none of the other appeal provisions of
section 337(c) apply, I believe we lack jurisdiction to hear
this appeal.
Furthermore, section 337 precisely defines appealable
Commission actions. Crucible Materials Corp. v. U.S.
Int’l Trade Comm’n, 127 F.3d 1057, 1060 (Fed. Cir. 1997)
(“Final determinations appealable under § 1295(a)(6) are
INTERDIGITAL COMMUNICATIONS v. ITC 3
specified in § 1337(c) . . . .”). The primary appeal right
granted by the statute is for final determinations on the
merits of a violation of section 337 under subsections (d),
(e), (f), or (g). § 1337(c). Appeal of an arbitrability termi-
nation, as it is not “such a determination,” does not fall
under this provision. Indeed, the termination in this case
was premised on subsection (c), not (d), (e), (f), or (g).
Aside from that specific grant of appellate review of
merits determinations, the statute lists a limited set of
findings and determinations that can also be appealed
under the Administrative Procedure Act that notably do
not include a right to appeal terminations due to an
arbitrability agreement. Id. The exclusion of an arbitra-
bility termination from such a specific list of appellate
review exempts it from inclusion on that list. See Origi-
nal Honey Baked Ham Co. of Ga. v. Glickman, 172 F.3d
885, 887 (D.C. Cir. 1999) (“A statute listing the things it
does cover exempts, by omission, the things it does not
list.”).
As noted by the majority, an exception does exist as to
the right to appeal determinations that are equivalent to
a final determination under subsections (d), (e), (f), or (g),
thus falling within the statutory grant providing for
appeals of final determinations. See Import Motors, Ltd.
v. U.S. Int’l Trade Comm’n, 530 F.2d 940, 944 (C.C.P.A.
1976). I believe, however, that our inquiry should not
reach this exception, as the current statute is clear on its
face: arbitrability terminations are, according to the
statute, explicitly not a determination of a violation under
subsection (d), (e), (f), and (g). § 1377(c).
The majority cites Farrel, which stated in a footnote
that an order terminating an investigation in favor of
arbitration was an appealable final determination be-
cause the dismissal was with prejudice as the petitioner
could not request reopening of the investigation. Farrel
Corp. v. U.S. Int’l Trade Comm’n, 949 F.2d 1147, 1151
4 INTERDIGITAL COMMUNICATIONS v. ITC
n.4. (Fed. Cir. 1991). The Farrel court distinguished
Block v. U.S. International Trade Commission, 777 F.2d
1568 (Fed. Cir. 1985), which held that the ability to
request a second investigation rendered a termination of
an investigation to be without prejudice. Id. at 1571.
But this case is like Block, not Farrel. The supposed
prejudicial effect of the termination depends completely
upon the results of the arbitration. If the arbitrator
determines that the matter is not subject to arbitration,
InterDigital can indisputably refile its complaint against
LG at the Commission, just as in Block. If, on the other
hand, the arbitrator decides that the matter is subject to
arbitration, then InterDigital and LG should not have
been before the Commission at all. Thus, I do not believe
that this circumstance rises to the level of prejudice in
Farrel.
Moreover, while I believe the statute is clear on its
face, the overall legislative history further supports the
reading that Congress did not intend to allow for appeals
of terminations for arbitrability. Congress amended
section 337 in 1988 to specifically allow the Commission
to terminate investigations based on settlement agree-
ments. Omnibus Trade and Competitiveness Act of 1988,
Pub. L. 100-418, § 1342(a)(2) (1988). That provision
appears in subsection (c), not in the other subsections
creating specific appeal rights. At the same time, Con-
gress amended the judicial review provision to add appel-
late rights under subsection (g), but, again, did not add
similar rights for terminations due to settlement agree-
ments, which would later include arbitration agreements
after the 1994 amendment as discussed below. What it
did do was to permit terminations for arbitrability under
(c), but not to make them appealable under (d), (e), (f),
and (g). If Congress had wished to make arbitrability
terminations appealable, it could have specifically done
so.
INTERDIGITAL COMMUNICATIONS v. ITC 5
The majority notes that Congress may have, in
amending the statute again in 1994, intended to bring the
ITC practice under section 337 into “closer conformity
with district court practice” under the Federal Arbitration
Act (“FAA”), which does allow appeals of non-
interlocutory arbitrability determinations. See S. Rep.
No. 103-412, at 121 (1994). But the general goal of bring-
ing ITC practice into “closer conformity” is not the same
as exact conformity. And, regardless, the statement in
the legislative history has been taken out of context and
instead stands for the opposite proposition of increased
deference to arbitration agreements, not expanded ap-
pealability: “By according deference to arbitration agree-
ments, this amendment is intended to bring ITC practice
under section 337 into closer conformity with district
court practice.” Id. (emphasis added). That goal was
accomplished not by expanding the ability to appeal to the
full outer bounds of the FAA, but by specifically allowing
for termination based on arbitration agreements, directly
overruling our prior holding in Farrel that an arbitration
agreement was not a ground for terminating an investiga-
tion. Compare Farrel, 949 F.2d at 1153 with Uruguay
Round Agreements Act, Pub. L. 103-465, § 321(a)(2)(A),
108 Stat. 4809, 4943-44 (1994).
In conclusion, although I agree with the majority that
LG’s assertion of arbitrability was “wholly groundless,” I
do not believe we have jurisdiction to hear this appeal and
would dismiss the case. I therefore respectfully dissent.