In a consolidated appeal from the International Trade Commission (Commission) and two inter partes review (IPR) proceedings before the Patent Trial & Appeal Board (Board), the US Court of Appeals for the Federal Circuit affirmed the Commission’s findings that a hypothetical device does not meet the domestic industry requirement, as well as findings by the Board and the Commission that asserted claims of the involved patents were invalid as obvious. Broadcom Corp. v. ITC, Case Nos. 20-2008; 21-1260, -1362, -1511 (Mar. 8, 2022) (Lourie, Hughes, Stoll, JJ.)

Broadcom filed a complaint at the Commission alleging a violation of 19 U.S.C. § 1337 based on products imported by many respondents, including Renesas Electronics, that allegedly infringed two patents. The first patent is directed to reducing power consumption in computer systems, and the second patent is directed to a memory access unit that improves upon conventional methods of requesting data located at different addresses within a shared memory. The Commission’s administrative law judge issued an initial determination that Broadcom failed to satisfy the technical prong of the domestic industry requirement for the power consumption patent and that one of the asserted claims of the memory access patent was obvious over the prior art. The Commission affirmed both findings.

During the course of the Commission investigation, Renesas petitioned for IPR of both patents. The Board found that two asserted claims of the power consumption patent were obvious but Renesas failed to show that six other asserted claims would have been obvious. The Board also found that all petitioned claims of the memory access patent would have been obvious over the cited art.

Both parties appealed. Renesas appealed the Board’s ruling that six claims of the power consumption patent would not have been obvious in light of the cited art, and Broadcom appealed the Board’s ruling that two claims of the power consumption patent and five claims of the memory access unit patent would have been obvious. Broadcom also appealed the Commission’s decision that there was no violation with respect to the power consumption patent and that the asserted claims of the memory access unit patent would have been obvious.

The Federal Circuit first addressed the Commission’s decision that there was no domestic industry for the power consumption patent. Citing its 2013 decision in Microsoft Corp. v. ITC, the Court explained that a complainant must show that a domestic industry product exists that actually practices at least one claim of the asserted patent. Broadcom identified its System on a Chip (SoC) as a domestic industry article, but there was no dispute that the SoC did not contain a “clock tree driver” required by the asserted claims. To overcome this admitted deficiency, Broadcom argued that a domestic industry existed because Broadcom collaborates with customers to integrate the SoC with external memory to enable retrieval and execution of the clock tree driver feature. The Court rejected this argument, finding that Broadcom posited only a hypothetical device and failed to identify a specific integration that included an external memory containing a clock tree driver. The Court found that there was no evidence of any actual domestic industry product and thus affirmed the Commission’s domestic industry finding.

The Federal Circuit next turned to the Board’s unpatentability findings regarding the power consumption patent. The Court affirmed the Board’s decision, finding that there was insufficient evidence to modify the prior art in a manner to meet limitations of the challenged claim. The Court also found that the Board’s reasoning with respect to its holding of obviousness of other claims was supported by substantial evidence. Broadcom also argued that a skilled artisan would not have had a reasonable expectation of success in combining two of the references, but the Court found that Broadcom did not raise this issue before the Board and “[g]iven Broadcom’s silence, it cannot show that the Board erred on that issue.”

Turning to the Board’s decision regarding the memory access unit patent, the Federal Circuit affirmed the Board’s decisions that all challenged claims were unpatentable. Broadcom argued that the Board improperly applied the standard for anticipation under § 102 when conducting its obviousness analysis. However, the Court stated that “[s]atisfying a more stringent standard does not undermine satisfaction of a lesser standard” and affirmed the Board’s holding. The Court explained that the Board discussed and applied the proper obviousness standard, and that its factual findings were supported by substantial evidence.

Practice Note: In identifying its alleged domestic industry product, Broadcom identified only the Broadcom SoC, which did not have sufficient external memory to enable retrieval and execution of the “clock tree driver” firmware, a necessary element of the power consumption patent. Broadcom argued that this external memory was typically provided by customers in specific integrations, but these new “system” integrations were submitted too late for Commission consideration. Whether the “system” integrations would have satisfied the technical prong of the domestic industry requirement was never adjudicated. Would-be Commission complainants should make sure to “identify[] actual integrations [rather than] hypothetical devices.”