In Realtek Semiconductor Corporation v. ITC (23-1187), the Federal Circuit concluded that it lacked jurisdiction to decide whether the International Trade Commission (ITC) correctly denied Realtek’s motion for sanctions against Future Link Systems, LLC because the ITC decision did not involve a final determination affecting the entry of articles. As a result, the panel did not address the merits of Realtek’s appeal.
Background
In 2019, Future Link entered into a license agreement with MediaTek, Inc., which stipulated a lump sum payment if Future Link filed a lawsuit against Realtek. After filing a complaint with the ITC accusing Realtek of patent infringement, Future Link subsequently settled with a third party and told Realtek that the settlement resolved the underlying investigation. Realtek filed a motion for sanctions alleging that the agreement between Future Link and MediaTek was improper.
Despite expressing concern about the agreement between Future Link and MediaTek, the administrative law judge (ALJ) denied the sanctions motion on the basis that the agreement did not influence Future Link’s decision to file the complaint. Future Link then withdrew its complaint, and the investigation was successfully terminated. As such, there was no final determination on the merits by the Commission.
Once the ITC adopted the ALJ’s order, Realtek appealed the denial of the sanctions motion to the Federal Circuit.
Jurisdictional Analysis
The Federal Circuit’s jurisdiction to hear appeals from the ITC is governed by 28 U.S.C. § 1295(a)(6), which allows for the review of final determinations under 19 U.S.C. § 1337.
On appeal, Realtek was not able to persuade the panel that the ITC’s denial of the sanctions motion was a final determination within Section 1295(a)(6). Rather, the panel explained that Realtek’s position misconstrued Federal Circuit case law and that a final decision on the merits, such that it would trigger jurisdiction under 28 U.S.C. § 1295(a)(6), must be a decision that is tied to the entry of articles. In doing so, the panel harkened back to an almost 40-year old decision in which the appellant asked the Federal Circuit to review a decision by the Commission regarding the declassification of certain materials. More specifically, in Viscofan, S.A. v. U.S. International Trade Commission, the Federal Circuit found that it did not have jurisdiction to review an ITC decision on declassification because (1) 28 U.S.C. § 1295(a)(6) only gave the Federal Circuit exclusive jurisdiction to review final determinations “relating to unfair practices in import trade” and (2) Congress specifically defined final determinations to include those set forth in the first sentence of Section 1337(c):
The Commission shall determine, with respect to each investigation conducted by it under this section, whether or not there is a violation of this section, 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 determination.
In other words, ITC decisions that do not affect the validity of an exclusion order are not within the Federal Circuit’s jurisdiction. Since Realtek’s appeal sought sanctions unrelated to the entry of articles, the appeal did not meet this requirement and was dismissed.
Takeaways
While the Federal Circuit did not reach the merits of Realtek’s appeal on the sanctions issue, this decision highlights the importance of understanding the specific jurisdictional boundaries of the Federal Circuit in ITC-related matters, particularly concerning sanctions and other issues that are not ancillary to a final determination. As an aside, the panel did lend some insight into what “ancillary issues” would still be deemed to fall within Federal Circuit jurisdiction under 28 U.S.C. § 1295(a)(6). In this aspect, a decision not to institute an investigation or dismissal for lack of subject matter jurisdiction would be an ancillary issue appropriate for appellate review under Section 1295(a)(6) because they have the effect of conclusively denying the complainant’s request to exclude particular items from entry.
However, the panel recognizes that, based on the statute, it remains an open question which court can review this type of matter. The only guidance from the panel on this question is that “in other settings, courts have held that, in the absence of an indication of where judicial review will take place, ‘the normal default rule is that persons seeking review of agency action go first to district court rather than to a court of appeals.’”