Delorme Publishing Co., Inc. v. Itc , 805 F.3d 1328 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
DELORME PUBLISHING COMPANY, INC.,
DELORME INREACH LLC,
Appellants
v.
INTERNATIONAL TRADE COMMISSION,
Appellee
______________________
2014-1572
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-854.
______________________
Decided: November 12, 2015
______________________
PETER J. BRANN, Brann & Isaacson, Lewiston, ME,
argued for appellants. Also represented by STACY O.
STITHAM, DAVID SWETNAM-BURLAND.
CLINT A. GERDINE, Office of the General Counsel,
United States International Trade Commission, Washing-
ton, DC, argued for appellee. Also represented by DOMINIC
L. BIANCHI, WAYNE W. HERRINGTON.
______________________
Before MOORE, REYNA, and TARANTO, Circuit Judges.
2 DELORME PUBLISHING CO., INC. v. ITC
Opinion for the court filed by Circuit Judge MOORE.
Opinion dissenting-in-part filed by Circuit Judge
TARANTO.
MOORE, Circuit Judge.
DeLorme Publishing Company, Inc. and DeLorme
InReach LLC (collectively, “DeLorme”) appeal from a
decision by the International Trade Commission (“Com-
mission”) (1) finding that DeLorme violated a consent
order by selling InReach 1.5 and SE devices containing
imported components, and (2) imposing a civil penalty of
$6,242,500. Certain Two-Way Global Satellite Communi-
cation Devices, System and Components Thereof, Inv.
No. 337-TA-854 (Enforcement), Comm’n Op. (June 17,
2014) (J.A. 40–90) (“Comm’n Op.”). We affirm.
BACKGROUND
In September 2012, the Commission instituted an in-
vestigation to determine if DeLorme was violating sec-
tion 337 of the Tariff Act of 1930, as amended, 19 U.S.C.
§ 1337, by importing, selling for importation, or selling
after importation “certain two-way global satellite com-
munication devices, system and components thereof” that
allegedly infringed claims 1, 2, 5, 10–12, and 34 of Bri-
arTek IP, Inc.’s U.S. Patent No. 7,991,380. Certain Two-
Way Global Satellite Communication Devices, System and
Components Thereof, Inv. No. 337-TA-854, Notice of
Institution of Investigation (Sept. 17, 2012) (J.A. 420–22).
The ’380 patent is directed to emergency monitoring and
reporting systems comprising a user unit and a monitor-
ing system that communicate through a satellite network.
The accused products included DeLorme’s InReach 1.0
and 1.5 satellite-communication devices, as well as the
software and service plan used with the devices.
In April 2013, the Commission terminated the inves-
tigation based on entry of a consent order proposed by
DeLorme. Certain Two-Way Global Satellite Communica-
DELORME PUBLISHING CO., INC. v. ITC 3
tion Devices, System and Components Thereof, Inv.
No. 337-TA-854, Termination of Investigation (Apr. 5,
2013) (J.A. 1505–06). In the consent order, DeLorme
agreed to the following:
Upon entry of the proposed Consent Order, De-
Lorme shall not import into the United States,
sell for importation into the United States, or sell
or offer for sale within the United States after im-
portation any two-way global satellite communi-
cation devices, system, and components thereof,
that infringe claims 1, 2, 5, 10–12, and 34 of the
’380 Patent after April 1, 2013, until the expira-
tion, invalidation, and/or unenforceability of the
’380 Patent.
Certain Two-Way Global Satellite Communication Devic-
es, System and Components Thereof, Inv. No. 337-TA-854,
Consent Order ¶ 1 (April 5, 2013) (J.A. 1507–09) (“Con-
sent Order”).
On May 24, 2013, the Commission instituted an en-
forcement proceeding based on BriarTek’s allegations that
DeLorme violated the Consent Order by, inter alia, selling
InReach 1.5 and SE devices containing imported compo-
nents. Four days later, DeLorme filed an action against
BriarTek in the United States District Court for the
Eastern District of Virginia, seeking declaratory judgment
of noninfringement and invalidity of the ’380 patent.
While the district court action was pending, the Commis-
sion issued a decision in the enforcement proceeding
(1) finding that DeLorme violated the Consent Order, and
(2) imposing a civil penalty of $6,242,500. Comm’n Op. at
1–2. DeLorme appeals. We have jurisdiction under 19
U.S.C. § 1337(c) and 28 U.S.C. § 1295(a)(6).
DISCUSSION
We review the Commission’s legal determinations in
an enforcement proceeding without deference and its
4 DELORME PUBLISHING CO., INC. v. ITC
factual determinations for substantial evidence. uPI
Semiconductor Corp. v. Int’l Trade Comm’n, 767 F.3d
1372, 1377 (Fed. Cir. 2014). “This court must affirm a
Commission determination if it is reasonable and sup-
ported by the record as whole, even if some evidence
detracts from the Commission’s conclusion.” Id. Consent
orders are interpreted as contracts. Id. Contract inter-
pretation is a question of law. Id. We review interpreta-
tion of a contract or consent order de novo. Id. Patent
infringement, whether direct or indirect, is a question of
fact. i4i Ltd v. Microsoft Corp., 598 F.3d 831, 850 (Fed.
Cir. 2010). We review claim construction de novo except
for subsidiary facts based on extrinsic evidence, which we
review for clear error. Teva Pharm. USA, Inc. v. Sandoz,
Inc., 135 S. Ct. 831, 841–42 (2015). We review the Com-
mission’s imposition of a civil penalty under 19 U.S.C.
§ 1337(f)(2) for abuse of discretion. Ninestar Tech. Co. v.
Int’l Trade Comm’n, 667 F.3d 1373, 1380 (Fed. Cir. 2012).
I.
The Commission determined that DeLorme violated
the Consent Order with regard to claims 1 and 2 of the
’380 patent. It found that DeLorme (1) assembled the
accused InReach 1.5 devices by converting previously
imported devices and (2) assembled the accused
InReach SE devices using, inter alia, imported plastic
housing components. It determined that “[u]nder the
terms of the Consent Order, DeLorme violates the order
if, after entry of the order, it imports, sells for importa-
tion, or sells or offers for sale within the United States
after importation any infringing two-way global satellite
communication devices, system, or components thereof.”
Comm’n Op. at 2. It concluded that DeLorme induced
infringement and violated the Consent Order by selling
the newly accused devices with instructions to use them
in a manner that infringed claims 1 and 2 of the ’380
patent. While it concluded that DeLorme also induced
infringement by activating previously sold InReach devic-
DELORME PUBLISHING CO., INC. v. ITC 5
es, such infringement “did not equate to” a violation of the
Consent Order. Id. at 24–25.
DeLorme argues that even if the devices infringed the
claims, the Consent Order did not preclude DeLorme from
selling domestically manufactured devices containing
imported, noninfringing components. It argues that the
terms of the Consent Order instead prohibited DeLorme
from using imported components only if the components
themselves infringed. It argues that the Commission
“rewrote” the Consent Order to “prohibit not just the use
of imported, infringing, components, but also the use of
any imported components.” Appellants’ Br. 23. It argues
that the Commission’s interpretation of the Consent
Order exceeded its authority to block importation of only
“articles that . . . infringe.” 19 U.S.C. § 1337(a)(1)(B)(i).
We agree with the Commission that DeLorme violated
the Consent Order by selling InReach 1.5 and SE devices
containing imported components with instructions for its
customers to use the devices in an infringing manner.
The Consent Order provided that DeLorme could not
import, sell for importation, or sell or offer for sale after
importation “any two-way global satellite communication
devices, system, and components thereof, that infringe
claims 1, 2, 5, 10–12, and 34 of the ’380 Patent.” Consent
Order ¶ 1. Under these terms, DeLorme was precluded
from selling infringing devices containing imported com-
ponents with instructions to infringe.
DeLorme’s remaining arguments against the Com-
mission’s finding that it violated the Consent Order are
unpersuasive. For example, the claims are not limited as
proposed by DeLorme, and substantial evidence supports
the Commission’s finding of infringement. Under the
Supreme Court’s recent decision in Commil USA, LLC v.
Cisco Systems, 135 S. Ct. 1920, 1928 (2015), a good-faith
belief in the patent’s invalidity was not a defense to
induced infringement. Thus, the Commission did not err
6 DELORME PUBLISHING CO., INC. v. ITC
in its conclusion that DeLorme violated the Consent
Order.
II.
The Commission imposed a civil penalty under 19
U.S.C. § 1337(f)(2) of $27,500 per day for 227 violation
days, for a total of $6,242,500. Section 1337(f)(2) pro-
vides:
Any person who violates an order issued by the
Commission under paragraph (1) after it has be-
come final shall forfeit and pay to the United
States a civil penalty for each day on which an
importation of articles, or their sale, occurs in vio-
lation of the order of not more than the greater of
$100,000 or twice the domestic value of the arti-
cles entered or sold on such day in violation of the
order. Such penalty shall accrue to the United
States and may be recovered for the United States
in a civil action brought by the Commission in the
Federal District Court for the District of Columbia
or for the district in which the violation occurs. . . .
Our court held in San Huan New Materials High Tech,
Inc. v. International Trade Commission, that the Com-
mission has the authority to issue § 1337(f)(2) civil penal-
ties for violation of a consent order. 161 F.3d 1347, 1362
(Fed. Cir. 1998).
The Commission based its penalty determination in
this case on the six “EPROM factors” adopted by this
court: (1) the good or bad faith of the respondent, (2) the
injury to the public, (3) the respondent’s ability to pay,
(4) the extent to which the respondent has benefited from
its violations, (5) the need to vindicate the authority of the
Commission, and (6) the public interest. Comm’n Op. at
27, 42–50 (citing, e.g., Certain Erasable Programmable
Read Only Memories (EPROMs), Inv. No. 337-TA-276
(Enforcement), Comm’n Opinion (July 19, 1991)); see also
DELORME PUBLISHING CO., INC. v. ITC 7
San Huan, 161 F.3d at 1362. The Commission noted that
the penalty was slightly more than a quarter of the statu-
tory maximum of $100,000 per day. See 19 U.S.C.
§ 1337(f)(2). It found that the penalty was “appropriately
proportionate to the value that the violative InReach
devices bring to DeLorme” and consistent with the Com-
mission’s policy of deterring future violations while not
driving DeLorme out of business. Comm’n Op. at 50
(citing, e.g., San Huan, 161 F.3d at 1364).
DeLorme argues that the Commission abused its dis-
cretion by imposing a “grossly excessive” civil penalty.
Appellants’ Br. 55. It argues that the penalty was not
“proportionate” under the EPROM factors analysis. Id.
(citing San Huan, 161 F.3d at 1362). For example, it
argues that the Commission incorrectly determined that
DeLorme acted in bad faith. It also argues that in as-
sessing the benefit of the violative sales to DeLorme, the
Commission should have looked to the imported compo-
nents’ value rather than that of the devices as a whole.
The Commission did not abuse its discretion in impos-
ing a civil penalty of $6,242,500. The penalty—which
amounted to $27,500 per day for 227 violation days—was
substantially less than the statutory ceiling of $100,000
per violation per day. See 19 U.S.C. § 1337(f)(2). The
Commission took into account the EPROM factors and we
see no clear error in its fact findings or error in its appli-
cation of the law. DeLorme has not shown, for example,
that there was clear error in the Commission’s findings
regarding DeLorme’s bad faith or that the violative sales
greatly benefited DeLorme. We conclude that the Com-
mission did not abuse its discretion in its penalty deter-
mination.
8 DELORME PUBLISHING CO., INC. v. ITC
III.
A. Interpreting the Consent Order
After the Commission issued the decision on appeal in
this case, the Eastern District of Virginia granted sum-
mary judgment that claims 1, 2, 5, 10–12, 34, and 35 of
the ’380 patent are invalid for anticipation and obvious-
ness. DeLorme Publ’g Co. v. BriarTek IP, Inc., 60 F.
Supp. 3d 652 (E.D. Va. 2014). We sought supplemental
briefing from the parties as to how, if at all, the Eastern
District of Virginia’s decision impacted the Commission’s
enforcement of the Consent Order or appeal.
DeLorme argues that because claims 1 and 2 have
been invalidated, 1 the Commission’s enforcement decision
and accompanying civil penalty cannot stand. It argues
that because the claims are invalid, it “cannot in-
duce . . . infringement [of claims 1 and 2] now, nor be
liable for having induced their infringement in the past.”
Appellants’ Supp. Br. 3.
The relevant parts of the Consent Order are as fol-
lows:
1. Upon entry of the proposed Consent Order,
DeLorme shall not import into the United States,
sell for importation into the United States, or sell
or offer for sale within the United States after im-
portation any two-way global satellite communi-
cation devices, system, and components thereof,
that infringe claims 1, 2, 5, 10–12, and 34 of the
’380 Patent after April 1, 2013, until the expira-
1 BriarTek appealed the Eastern District of Virgin-
ia’s invalidity determination and we affirm in a concur-
rently issued decision. DeLorme Publ’g Co. v. BriarTek
IP, Inc., Appeal Nos. 15-1169, -1241.
DELORME PUBLISHING CO., INC. v. ITC 9
tion, invalidation, and/or unenforceability of the
’380 Patent.
2. DeLorme shall be precluded from seeking judi-
cial review or otherwise challenging or contesting
the validity of this Consent Order.
...
4. The Consent Order shall not apply with respect
to any claim of any intellectual property right that
has expired or been found or adjudicated invalid
or unenforceable by the Commission or a court or
agency of competent jurisdiction, provided that
such finding or judgment has become final and
non-reviewable.
Consent Order ¶¶ 1, 2, 4.
Interpretation of the Consent Order is a question of
law. The Consent Order in this case is short—two pages
long—and was drafted by DeLorme. Though we
acknowledge that “[c]onsent decrees and orders have
attributes both of contracts and of judicial decrees,”
United States v. ITT Cont’l Baking Co., 420 U.S. 223, 237
n.10 (1975), DeLorme agreed to the terms of the Consent
Order. We conclude that the Consent Order unambigu-
ously resolves the question of the impact of an invalidity
decision on the enforcement of the Consent Order. The
Consent Order bars certain sales and importations “until”
one of three events occurs: “expiration, invalidation,
and/or unenforceability of the ’380 Patent.” Consent
Order ¶ 1. Additionally, it explains that the Consent
Order ceases to apply when the patent claim at issue has
“expired or been found or adjudicated invalid or unen-
forceable . . . provided that such finding or judgment has
become final and non-reviewable.” Consent Order ¶ 4.
Thus, the Consent Order identifies three events which
will cause it to no longer apply. When one of these events
occurs the Consent Order will no longer apply, and De-
10 DELORME PUBLISHING CO., INC. v. ITC
Lorme will no longer be constrained by its terms. Until
one of these events occurs, however, the Consent Order is
binding upon DeLorme.
In this case, the Consent Order applied to DeLorme at
the time it committed the acts found to violate the order.
The Consent Order applied to DeLorme even at the time
the enforcement decision with the civil penalty issued. 2
DeLorme argues in its supplemental briefing that the
subsequent district court invalidation of the claims retro-
actively eliminates the Consent Order such that we can
no longer affirm the civil penalty properly adjudicated by
the Commission. This argument is inconsistent with the
plain language of the Consent Order itself. The Order
explains that it applies “until” one of the triggering
events. Paragraph 1 contains no language that could be
construed as requiring (or even allowing) the triggering
events to apply retroactively. Indeed, DeLorme argues
with respect to paragraph 1 that invalidation “would end”
its obligations—an argument that is forward-looking.
Appellants’ Suppl. Br. 5.
Paragraph 4 similarly provides that the Consent Or-
der “shall not apply” with respect to any claim that
“has . . . been” invalidated. Consent Order ¶ 4. Particu-
larly when read in the context of the Consent Order as a
whole, this provision is forward-looking and contains no
language indicating that the invalidation trigger would
apply retroactively. DeLorme’s argument regarding
paragraph 4—that the Commission would “no longer”
retain jurisdiction over invalidated claims—is also for-
ward-looking. Appellants’ Suppl. Br. 5.
2 Because our concurrently issued affirmance of the
district court’s summary judgment of invalidity is still
reviewable, the Consent Order continues to be binding
upon DeLorme even now.
DELORME PUBLISHING CO., INC. v. ITC 11
Indeed in application DeLorme’s argument makes no
sense. DeLorme acknowledges that the expiration and
unenforceability triggers would have the same effect as
the invalidation trigger because the plain language of the
Consent Order treats them identically. If invalidation of
claims 1 and 2 were to apply retroactively to eliminate the
Commission’s enforcement decision and accompanying
penalty, then expiration of the claims would do the same.
Under such a reading of the Consent Order, the Commis-
sion could determine that DeLorme violated the Consent
Order and award a civil penalty in an enforcement action.
Then, under DeLorme’s proposed interpretation of the
Consent Order, if the patent expires while the enforce-
ment decision is on appeal, this court would be forced to
vacate the enforcement decision. Under DeLorme’s
interpretation later expiration of the patent would erase
an earlier violation and any civil penalty assessed for that
violation. DeLorme would have no motivation to abide by
the terms of the Consent Order and could violate the
order, and when the patent inevitably expired, DeLorme’s
violation would need to be vacated. This is an absurd
reading of the Consent Order.
DeLorme argues that its position is supported by the
Commission Rules adopted after the Consent Order was
entered in this case, which it purports now require con-
sent orders to include statements that they become “null
and void” if any claim of the patent expires or is held
invalid or unenforceable “in a final decision, no longer
subject to appeal.” Appellants’ Supp. Br. 6–7 (quoting 19
C.F.R. § 210.21(c)(4) (eff. May 20, 2013)); see also Consent
Order at 1 (“DeLorme . . . agrees to the entry of this
Consent Order and to all waivers and other provisions as
required by Commission Rule of Practice and Proce-
dure 201.21(c) . . . .”). This argument is unpersuasive. At
the time of the Consent Order, Rule 210.21(c)(4) did not
exist. The Commission Rules did not require inclusion of
the statements that now exist at Rule 210.21(c)(4). Thus,
12 DELORME PUBLISHING CO., INC. v. ITC
the statements set forth in this Rule were not incorpo-
rated into the Consent Order. Moreover, we note that
even if the statements had been incorporated, the Con-
sent Order becomes null and void only after a decision of
invalidity that is “final” and “no longer subject to appeal.”
19 C.F.R. § 210.21(c)(4)(x). The enforcement decision was
entered for this case before the Eastern District of Virgin-
ia’s invalidity decision. And even now, the invalidity
decision remains subject to appeal. Finally, we note that
like the Consent Order, the Rule groups the invalidation
trigger with expiration and unenforceability triggers,
which, as discussed above, cannot sensibly apply retroac-
tively. We thus reject DeLorme’s argument that the new
Rules mandate reversal of the Commission’s enforcement
decision or the accompanying penalty.
DeLorme also argues that the Commission is not au-
thorized to enforce a Consent Order with regard to invalid
patent claims. This argument is inapplicable to this case.
DeLorme’s acts, the Commission’s finding that those acts
violated the Consent Order, and the Commission’s imposi-
tion of a civil penalty all occurred before the summary
judgment of invalidity. If that judgment becomes non-
reviewable, the Consent Order will not apply prospective-
ly as to the invalid claims. But the Commission’s finding
that DeLorme violated the Consent Order and the accom-
panying penalty for that violation will not be lifted. The
Commission acted within the scope of its authority in
enforcing the Consent Order.
In its supplemental briefing and at argument, the
Commission declined to take a position on the interpreta-
tion of the Consent Order. The Commission laid out a
number of possible actions this court could take, including
(1) remand to the Commission for a determination of the
effect of the affirmance of invalidity, or (2) “not to remand
at all, but to proceed to judgment in both appeals.” Appel-
lee’s Suppl. Br. 4. If the Consent Order were unclear as to
the impact of the invalidation decision in this case, we
DELORME PUBLISHING CO., INC. v. ITC 13
would remand. But the Consent Order unambiguously
indicates that the invalidation trigger—like the expira-
tion and unenforceability triggers—applies only prospec-
tively. Neither the Commission nor DeLorme argues that
the Consent Order is ambiguous. There is no reason to
remand this case because the Consent Order unambigu-
ously answers the question at issue.
B. Our ePlus Decision
Finally, DeLorme argues that our recent decision in
ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349 (Fed.
Cir. 2015) requires that the Commission’s civil penalty in
this case be reversed. In ePlus, we (1) vacated an injunc-
tion after the U.S. Patent and Trademark Office cancelled
the only patent claim on which the injunction was based,
id. at 1355–56, and (2) set aside the civil contempt sanc-
tion imposed for violation of the vacated injunction, id. at
1361.
DeLorme’s argument that ePlus controls this case is
incorrect. ePlus held that a civil contempt sanction can be
set aside when the underlying injunction, upon which the
sanction is based, is still itself non-final or reviewable. As
we explained in ePlus, “The rule for civil contempt for
violating a provision of an injunction that is not final, i.e.,
that is still subject to litigation over the propriety of its
issuance, is that ‘[t]he right to remedial relief falls with
an injunction which events prove was erroneously is-
sued.’” 789 F.3d at 1356 (quoting United States v. United
Mine Workers of Am., 330 U.S. 258, 295 (1947)). In ePlus,
we determined that the injunction was not final (it was
still subject to appellate review) at the time we were
reviewing the civil contempt sanction and thus when the
patent claims were cancelled, both the injunction and civil
contempt sanction had to be vacated. Id. at 1361. In this
case, in contrast, there is no question that the underlying
Consent Order was final and not appealable. The Con-
sent Order itself states that “DeLorme shall be precluded
14 DELORME PUBLISHING CO., INC. v. ITC
from seeking judicial review or otherwise challenging or
contesting [its] validity.” Consent Order ¶ 2. Neither
party has argued that the Consent Order in this case, like
the injunction in ePlus, was not final or appealable.
Therefore, we reject DeLorme’s argument that ePlus
permits us to reject the civil penalty assessed in this case.
If the underlying order upon which a civil penalty or civil
contempt sanction is based is final and no longer subject
to appeal, the penalty or sanction cannot be vacated by
subsequent events such as invalidation of the claims. Of
course, if subsequent events warrant vacating the injunc-
tion, such as invalidation of the patent claims, then the
injunction is vacated prospectively. ePlus, 789 F.3d at
1356. But such prospective relief (vacating the injunc-
tion) is not a basis for setting aside civil contempt sanc-
tions. Likewise, the Consent Order by its terms will no
longer apply prospectively once the invalidation is final
and non-reviewable. Given that the Consent Order itself
is already final and unappealable, this case is not gov-
erned by ePlus. 3 The Consent Order was final and no
longer subject to review at the time of the violation, thus
we cannot set aside the penalty for that violation. This
distinction is critical. 4 Finally, ePlus is inapplicable here
because ePlus involved the Patent Office’s cancellation of
claims, which voids claims “ab initio.” See, e.g., Fresenius
USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1346 (Fed.
Cir. 2013).
3 To the extent ePlus left open the question of
whether civil contempt sanctions survive if the underlying
injunction was final at the time the sanctions were im-
posed, 789 F.3d at 1358, that question is hereby resolved.
4 We note that the § 1337(f)(2) “civil penalty” is pu-
nitive and paid to the government and thus more like a
criminal contempt sanction which cannot be set aside.
We leave this issue to a future case where its resolution is
briefed and necessary to the outcome.
DELORME PUBLISHING CO., INC. v. ITC 15
CONCLUSION
Because the Commission did not err in finding that
DeLorme violated the Consent Order or abuse its discre-
tion in imposing a civil penalty of $6,242,500, we affirm.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
______________________
DELORME PUBLISHING COMPANY, INC.,
DELORME INREACH LLC,
Appellants
v.
INTERNATIONAL TRADE COMMISSION,
Appellee
______________________
2014-1572
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-854.
______________________
TARANTO, Circuit Judge, dissenting in part.
I join the majority’s determination that the Commis-
sion committed no reversible error in entering its order
imposing penalties on DeLorme for violation of the pa-
tent-infringement-based Consent Order. Nevertheless, I
dissent from the affirmance of the penalty order. After
the penalty order was entered, indeed after DeLorme filed
its opening brief in this appeal challenging the order, a
district court held the relevant patent claims to be inva-
lid, and today we affirm that invalidation in No. 2015-
1169. The Commission has not had an opportunity to
consider the effect of the invalidation. I would remand
this matter to the Commission for it to consider the effect
2 DELORME PUBLISHING CO., INC. v. ITC
of the invalidation on enforcement of the civil penalty for
pre-invalidation violations of the Consent Order.
The Commission has specifically argued to us that
such a remand is “necessary”; it has not argued or conced-
ed that we may decide for ourselves whether the penalty
should stand. ITC Supp. Br. 3, 8. To decide the issue
ourselves at this stage, I believe, we would have to con-
clude that the answer is clear as a matter of law—in
particular, that (a) no possible factual findings or statuto-
ry or regulatory interpretations within the Commission’s
authority could affect the answer and (b) all material
considerations have been fully explored in briefing here. I
am not prepared to draw those conclusions. I do not
currently think that the answer is clear, and I believe
that potentially material considerations have not been
fully developed, having been addressed only in abbreviat-
ed letter briefs from the parties requested by this court
shortly before the oral argument.
Preliminarily, I note that I do not believe it matters
that the appeal in No. 2015-1169 might be reheard by this
court or that our judgment in that appeal might be the
subject of discretionary certiorari review in the Supreme
Court. Those possibilities are slim, but even if they mean
that the district court’s judgment of invalidation is not
currently “final and non-reviewable” under paragraph 4 of
the Consent Order, J.A. 1508, the present case is subject
to the same possibilities of further review on the same
timetables. The invalidation of the patent is highly likely
to become final and non-reviewable at such later stages of
this case or on a remand to the Commission. That is
reason enough for a remand to the Commission, which
can take appropriate action on the remand if the invalida-
tion is set aside on further review in No. 2015-1169.
A
I begin with the language of the Consent Order, J.A.
1507–09, which is quoted in the majority opinion. I do not
DELORME PUBLISHING CO., INC. v. ITC 3
address what legal effect that language would have if it
were unambiguous. That language clearly contemplates
that DeLorme could obtain a (final and non-reviewable)
judgment of invalidity in district court. But I do not think
that the language is unambiguous on the question before
us concerning the effect of such a judgment regarding
earlier conduct. I find ambiguity for several reasons.
Two features of the language of paragraph 1 offer
support for the conclusion that the penalty for pre-
invalidation conduct is meant to be enforceable under the
Consent Order even after invalidation. One feature is the
word “until.” The other is the listing of “expiration”
alongside “invalidation” and “unenforceability”: a penalty
for pre-expiration infringing conduct almost certainly
remains enforceable after expiration.
Nevertheless, I do not think that the language does
more than point in one direction; it does not unambigu-
ously establish the answer. The “until” language does not
imply a solely prospective effect of the event once it comes
to pass. Linguistically, it allows the effect also to be
retrospective, i.e., to govern (non-final, still reviewable)
determinations about earlier conduct. Cf. MedImmune,
Inc. v. Genentech, Inc., 549 U.S. 118, 124–25 (2007) (not-
ing that, under Lear, Inc. v. Adkins, 395 U.S. 653, 673
(1969), even when a patent license provided that a licen-
see was to pay royalties “until” a final judgment of invali-
dation, patent law precluded enforcement of that
contractual commitment against a “repudiating” licensee).
The inclusion of “expiration” alongside “invalidation”
and “unenforceability” likewise does not resolve the
interpretive issue. “Expiration” has an intrinsically
different meaning from “invalidation” and “unenforceabil-
ity.” The former intrinsically indicates nothing to under-
mine the legal force of the patent-compliance obligation
before the event, whereas the latter two terms do precise-
ly that—they imply that the legal obligation of patent
4 DELORME PUBLISHING CO., INC. v. ITC
compliance was defective from day one. Serial enumera-
tion of terms with different intrinsic temporal meanings
does not imply that all have the same temporal meaning.
Further, there is an obvious absence of parallelism of
the “expiration,” “invalidation,” and “unenforceability”
terms. The first two terms refer to events; the third refers
to a condition, not an event—specifically, not a judicial-
pronouncement event. Moreover, with the third term of
the series naming a condition that existed from the time
of the patent’s issuance, its inclusion in the series raises
the question whether the second term in the series might
also have been meant to refer to a similar condition
present from issuance, i.e., invalidity. If the inclusion of
“expiration” points in one direction for interpreting the
effect of “invalidation,” the inclusion of “unenforceability”
points the other way.
I find significant not only the language that the Con-
sent Order uses, but also the language it does not use.
Neither in paragraph 1 nor in paragraph 4 does the
Consent Order use language that is readily available and
widely used in the realm of licensing in order to be clear
about the compliance obligation’s coverage of pre-
invalidation conduct. An example: “with respect to acts
occurring thereafter.” Brian G. Brunsvold et al., Drafting
Patent License Agreements 474 (6th ed. 2008). 1 The best
1 Other examples of available language that is
clearer than the Consent Order: “will not, however, be
relieved from paying any royalties that accrued before the
final decision,” Corporate Counsel’s Guide to Licensing
§ 36:2 (2015); “shall not relieve either party of its obliga-
tions and liabilities accruing up to the time of termina-
tion,” 3 Eckstrom’s Licensing in Foreign and Domestic
Operations: The Forms and Substance of Licensing § 5:35
(2015); “shall not have a damage claim for refund or
reimbursement . . . for past royalty payments,” Icon
DELORME PUBLISHING CO., INC. v. ITC 5
reading of language used is often influenced by how it
contrasts with language not used. See, e.g., Roberts v.
Sea-Land Servs., Inc., 132 S. Ct. 1350, 1357 n.5 (2012);
New Process Steel, L.P. v. NLRB, 560 U.S. 674, 681–82
(2010); United States v. Ron Pair Enterprises, Inc., 489
U.S. 235, 242 n.4 (1981). That interpretive principle
seems especially weighty where clarity is important, as it
is with obligations enforced by penalties, since the choice
not to use familiar language for imposing a particular
obligation can often reasonably be understood to imply
that that obligation is not being imposed.
It is a standard principle of contract interpretation
that, where possible, provisions should be read in a way
that harmonizes them. See Mastrobuono v. Shearson
Lehman Hutton, Inc., 514 U.S. 52, 63 (1995); Banknote
Corp. of America, Inc. v. United States, 365 F.3d 1345,
1353 (Fed. Cir. 2004). Under that principle, paragraph 1
should be treated as a shorthand invocation of the same
rule stated in paragraph 4 of the Consent Order. As a
common-sense matter, it would be odd if the two para-
graphs of the Consent Order stated two different rules on
the same topic. And that is so even putting aside the
regulatory background, described below, which suggests
that paragraph 4 may be the primary Consent Order
provision on the topic.
But paragraph 4 is itself unclear about the effect on
pre-invalidation conduct of a final judicial determination
Health & Fitness, Inc. v. Park City Entm’t, Inc., No. 1:10-
CV-195-RJS, 2013 WL 4027504, at *7 (D. Utah Aug. 7,
2013); “shall pay to [patentee] a royalty of Three Percent
(3%) of the Net Sales of all Licensed Products sold . . .
until the last date on which there is a Valid Claim,” then
defining “Valid Claim,” MedImmune, LLC v. PDL Bio-
Pharma, Inc., No. C 08-5590 JF HRL, 2011 WL 61191, at
*21 (N.D. Cal. Jan. 7, 2011).
6 DELORME PUBLISHING CO., INC. v. ITC
that the claims were, from the beginning, invalid. Para-
graph 4 does not use the “until” language that is present
in paragraph 1, suggesting that “until” not be given great
weight. And the language paragraph 4 does use is un-
clear on the point at issue.
As relevant here, paragraph 4 says that “[t]he Con-
sent Order shall not apply with respect to any [patent]
claim . . . that has . . . been found or adjudicated inva-
lid . . . by . . . a court[,] . . . provided that such finding or
judgment has become final and non-reviewable.” J.A.
1508. The “shall” in that language is at least as likely an
imperative as it is a future-tense word. Given the natural
imperative meaning, the language can easily be under-
stood to mean that prohibitions within the Consent Order
do not apply, and cannot be treated as applying in making
any determination requiring that they apply, to any claim
that has been adjudicated to be invalid, once the invalidi-
ty adjudication is final and non-reviewable. The language
itself does not command a (prospective-only) effect limited
to post-invalidation conduct regarding such a claim.
For those reasons, I think at present that the answer
to the question before us cannot be determined without
looking outside the four corners of the Consent Order.
B
I do not feel adequately informed about a number of
non-textual issues that could be material and might
involve Commission interpretive, fact-finding, or other
discretion. Such matters might affect the best interpreta-
tion of the Consent Order or might lead to a result justi-
fied independently of what is found to be the best
interpretation.
We have not had a full exploration of how the Com-
mission has treated such issues in the past. Nor have we
been shown how similar Consent Orders have been inter-
preted elsewhere, whether in agency or judicial settings.
DELORME PUBLISHING CO., INC. v. ITC 7
Such practices could be significant background for deter-
mining how best to interpret the Consent Order here.
The interpretation and application of a Consent Order
generally follow principles of contract law. E.g., uPI
Semiconductor Corp. v. Int’l Trade Comm’n, 767 F.3d
1372, 1377 (Fed. Cir. 2014). Contract interpretation is a
matter of law as long as the court can conclude that the
contract is unambiguous on the point at issue, but if
ambiguity exists, the question in many contract settings
can become a factual one, or involve factual components,
whether about the parties’ subjective intent or about a
usage, practice, or method in the field. See Teva Pharm.
USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 837–38 (2015)
(discussing Williston); Restatement (Second) of Contracts
§ 212(2) (1981); Farnsworth on Contracts § 7.14 at 336–37
(3d ed. 2004); Warner, All Mixed Up About Contract:
When Is Contract Interpretation a Legal Question and
When Is It a Fact Question, 5 Va. L. & Bus. Rev. 81
(2010). I cannot at present exclude the possibility that
Commission findings of fact could matter here.
Moreover, an enforceable consent order, even a judicial
consent decree, is not always to be treated under the same
principles that govern an ordinary contract. See Foster v.
Hallco Mfg. Co., Inc., 947 F.2d 469 (Fed. Cir. 1991) (hold-
ing that the Lear v. Adkins ruling, which overrides certain
contractual promises, does not override the claim-
preclusive effect of a consent decree). Perhaps, in the
present setting, there is reason not to find a contractual
approach controlling. For now I focus on one such possi-
ble reason: the Consent Order is an order backed by (non-
compensatory) penalties.
The First Circuit has written: “Consent decrees have
to be specific and any ambiguities or omissions in the
decree are construed against the person alleging a viola-
tion of the consent decree and invoking the contempt
sanction.” Porrata v. Gonzalez-Rivera, 958 F.2d 6, 8 (1st
8 DELORME PUBLISHING CO., INC. v. ITC
Cir. 1992); see FTC v. Kaykendall, 371 F.3d 745, 760–61
(10th Cir. 2004). In this court’s decision in TiVo Inc. v.
EchoStar Corp., 646 F.3d 869 (Fed. Cir. 2011) (en banc),
the five-judge dissent cited Porrata for the proposition
that an order must be “clear and unambiguous” to be
enforced in contempt, 646 F.3d at 899 n.7, and the majori-
ty did not disagree in principle, instead concluding that
the dissent’s point was not “persuasive on the facts before
us,” id. at 887–88. Under such principles, ambiguity in
the Consent Order in the present case—regarding the
effect of invalidation once invalidation becomes final—
might be enough to bar enforcement. That principle
seems particularly weighty where, as here, it appears to
be easy for a Consent Order to be clear on the point at
issue, as discussed above.
For penalties for a Consent Order violation, the anti-
ambiguity principle might trump any conclusion to be
drawn from the contra proferentem principle of contract
interpretation—favoring construction against the drafter.
See Mastrobuono, 514 U.S. at 62–63. Even that principle,
however, is not of clear-cut application here on its own
terms. On one hand, it appears that DeLorme initially
drafted the Consent Order. On the other hand, DeLorme
did so against a strong regulatory background that might
be viewed as effectively having controlled what the Con-
sent Order should say. The former point suggests con-
struction against DeLorme, the latter suggests the
opposite to the extent that the Commission’s regulations
effectively made the Commission the drafter.
The regulatory background is significant for that rea-
son and independently as an interpretive tool. 2 The
2 See, e.g., United States v. ITT Continental Baking
Co., 420 U.S. 223, 240 (1975) (relying on the antitrust
statutes to interpret terms in the consent order); United
States v. Bradley, 484 F. App’x 368, 374 (11th Cir. 2012)
DELORME PUBLISHING CO., INC. v. ITC 9
Consent Order was issued on April 5, 2013, J.A. 1507–09,
based on a “consent order stipulation” submitted by
DeLorme in early March 2013, J.A. 1495–97. At that
time, the governing regulation specified what the “consent
order stipulation shall” contain, including a statement
that the Consent Order “shall not apply with respect to
any claim . . . that has expired or been found or adjudicat-
ed invalid or unenforceable,” “provided that such finding
or judgment has become final and nonreviewable.” 19
C.F.R. § 210.21(c)(3)(i)(B)(1) (2012) (emphasis added),
currently codified at id. § 210.21(c)(3)(ii)(A). The required
language appears in paragraph 6 of the March 2013
Consent Order Stipulation in this case. J.A. 1497. De-
Lorme also included it in paragraph 4 of the proposed
Consent Order. J.A. 1508.
DeLorme included the language in the proposed Con-
sent Order even though, when the Consent Order in this
case was proposed (and adopted), the Commission’s
regulations did not specify what a consent order itself
(rejecting interpretation of consent order that would
require forfeiture given background principles that disfa-
vor forfeiture); Doe v. Briley, 511 F. Supp. 2d 904, 918
(M.D. Tenn. 2007), aff’d, 562 F.3d 777 (6th Cir. 2009)
(using a change in the city code to interpret a consent
order); Henderson v. Morrone, 214 F. App’x 209, 213 (3d
Cir. 2007) (construing consent order in light of differences
between terms of the consent order and later-adopted
regulations); United States v. Saccoccia, 433 F.3d 19, 29
(1st Cir. 2005) (finding ambiguity in consent order based
on background forfeiture laws); McDowell v. Phila. Hous.
Auth., 423 F.3d 233, 239–40 (3d Cir. 2005) (interpreting
consent order in light of housing regulations); United
States v. Charter Int’l Oil Co., 83 F.3d 510, 517–18 (1st
Cir. 1996) (defining scope of consent order by looking to
background law).
10 DELORME PUBLISHING CO., INC. v. ITC
must say. But it is evident that this language originated
from the language in the Commission’s requirement for
what the required stipulation must say. Moreover, at the
time of the proposal and adoption of the Consent Order,
the Commission had already proposed regulations to add
just such a requirement for the content of consent orders,
mirroring the pre-existing requirement for consent-order
stipulations. 77 Fed. Reg. 41,120, 41,123, 41,128–29 (July
12, 2012). On April 19, 2013, two weeks after the Consent
Order in this case was issued, the Commission adopted its
regulatory proposal, making it effective May 20, 2013.
The adopted language, now in 19 C.F.R. § 210.21(c)(4)(x),
requires a Consent Order to state that if a patent claim
“is held invalid,” “the Consent Order shall become null
and void as to such invalid . . . claim.” See 78 Fed. Reg.
23,474, 23,477, 23,483 (Apr. 19, 2013). This effectively
puts the pre-existing requirement for a consent order
stipulation into a new list of requirements for the associ-
ated consent order. And the new regulation (like the
proposal) says: “The Commission will not enforce consent
order terms beyond those provided for in this section.” 19
C.F.R. § 210.21(c)(5); 77 Fed. Reg. at 41,129 (proposed
rule).
I am not prepared to draw conclusions at this point
about the significance of this regulatory background.
Perhaps the regulatory amendments adopted on April 19,
2013 (to take effect one month later) should be read to
confirm, by making express, a pre-existing understanding
that the requirements for a consent-order stipulation
effectively controlled the consent order itself. Perhaps for
that reason the Consent Order here should or must be
read to go no further than the pre-May 2013 prescription
for consent-order stipulations. I would benefit from the
Commission’s analysis of such matters. And the public
might benefit if, in the course of considering them, the
Commission decided to clarify its regulations to avoid
recurrence of the problem presented here.
DELORME PUBLISHING CO., INC. v. ITC 11
The statutory provisions under which the Consent
Order was issued and is being enforced, 19 U.S.C.
§ 1337(f), may also be significant here. In San Huan New
Materials High Tech, Inc. v. International Trade Commis-
sion, 161 F.3d 1347 (Fed. Cir. 1998), this court affirmed
the Commission’s ruling that a consent order was to be
enforced like an involuntary order, through penalties
under § 1337(f)(2). But § 1337(f)(2) may be confined
within the limits stated in § 1337(f)(1), which, by its
language, may reach no further than conduct that consti-
tutes a violation of § 1337(a), which, in turn, for a patent-
based proceeding like this one, requires that the respond-
ent “infringe a valid” patent, § 1337(a)(1)(B)(i) (emphasis
added). In that way or others, the statute governing this
matter may limit how the Consent Order can be enforced
once there is a final judgment of invalidity. I would
benefit from more focused development of this issue than
we have had, especially because the issue might be one on
which the Commission will ultimately be owed deference.
Finally, it seems relevant to consider how the penalty
order for violating the Consent Order compares to con-
tempt orders issued by federal courts for violating orders
(even consensual orders) against patent infringement and,
specifically, how such contempt orders are treated once
the patent is adjudicated (always to have been) invalid.
How contempt orders are treated depends on the finality
of the underlying infringement-barring order and the
character of the contempt—in particular, whether the
contempt is criminal or civil. See ePlus, Inc. v. Lawson
Software, Inc., 789 F.3d 1349, 1356–58, reh’g denied, 790
F.3d 1307 (Fed. Cir. 2015). If we ask the question wheth-
er the Commission’s civil penalty here is more like civil or
criminal contempt in the federal courts, we find at least
some reason to view it as more like criminal contempt,
because there is nothing either compensatory or specifi-
cally coercive (pay until you comply) about it. But even as
12 DELORME PUBLISHING CO., INC. v. ITC
to that, I would benefit from the Commission’s own full
consideration of its statutory and regulatory regime.
For the foregoing reasons, I would not affirm the pen-
alty order before us, but remand for the Commission to
consider the effect of the invalidation of the underlying
patent claims.