Case: 22-1386 Document: 70 Page: 1 Filed: 01/19/2024
United States Court of Appeals
for the Federal Circuit
______________________
ROKU, INC.,
Appellant
v.
INTERNATIONAL TRADE COMMISSION,
Appellee
UNIVERSAL ELECTRONICS, INC.,
Intervenor
______________________
2022-1386
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-1200.
______________________
Decided: January 19, 2024
______________________
DOUGLAS HALLWARD-DRIEMEIER, Ropes & Gray LLP,
Washington, DC, argued for appellant. Also represented
by BRENDAN FREDERICK MCLAUGHLIN, MATTHEW RIZZOLO;
MICHAEL MORALES, MATTHEW R. SHAPIRO, New York, NY;
ANDREW N. THOMASES, East Palo Alto, CA; JONATHAN
DANIEL BAKER, Dickinson Wright RLLP, Mountain View,
CA; MICHAEL DAVID SAUNDERS, Austin, TX.
MATTHEW S. STEVENS, Alston & Bird LLP, Charlotte,
NC, argued for intervenor. Also represented by KIRK T.
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2 ROKU, INC. v. ITC
BRADLEY, NICHOLAS CHRISTOPHER MARAIS; THOMAS W.
DAVISON, ADAM SWAIN, Washington, DC, RYAN W.
KOPPELMAN, Los Angeles, CA.
CARL PAUL BRETSCHER, Office of the General Counsel,
United States International Trade Commission, Washington, DC, argued for appellee. Also represented by WAYNE
W. HERRINGTON, SIDNEY A. ROSENZWEIG.
______________________
Before DYK, HUGHES, and STOLL, Circuit Judges.
HUGHES, Circuit Judge.
Appellant Roku, Inc. appeals a final determination
from the International Trade Commission, finding that
(1) Intervenor Universal Electronics, Inc. had ownership
rights to assert U.S. Patent No. 10,593,196 in the investigation; (2) Universal satisfied the economic prong of the domestic industry requirement under subparagraph (a)(3)(C)
of
19 U.S.C. § 1337 (Section 337); and (3) Roku failed to
present clear and convincing evidence that the ’196 patent
was obvious over the prior art. Because the Commission
did not err in making any of these findings, we affirm.
I
A
Different television and video devices (such as
smart TVs and DVD or Blu-ray players) use different communication protocols. There are two broad categories of
communication protocols: wired communication protocols,
such as HDMI connections; and wireless communication
protocols, such as Wi-Fi or Bluetooth connections. Many of
these communication protocols are incompatible with each
other, but consumers might have multiple devices they
want to use together, such as a wireless smart TV connected to a DVD player. The ’196 patent purports to address this incompatibility with a “universal control
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ROKU, INC. v. ITC 3
engine,” referred to in the claims as a “first media device,”
that can connect to and scan various target devices (called
“second media devices” in the patent) to determine which
kind of communication protocols they use. The first media
device essentially translates between the different types of
devices. Figure 2 of the ’196 patent shows how a “first media device” can help connect multiple other types of devices:
The first media device (labeled “100” in Figure 2) is able to
receive wireless signals from either a remote control (200)
or an app on a tablet computer (202). The first media device
then issues commands, using either wired or infrared (IR)
signals, to various controllable appliances, such as a television (106), a digital video recorder (110), or a DVD player
(108).
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4 ROKU, INC. v. ITC
Representative claim 1 is as follows:
1. [p] A first media device, comprising:
[a] a processing device;
[b] a high-definition multimedia interface communications port, coupled to the processing device, for
communicatively connecting the first media device
to a second media device;
[c] a transmitter, coupled to the processing device,
for communicatively coupling the first media device
to a remote control device; and
[d] a memory device, coupled to the processing device, having stored thereon processor executable instruction;
[e] wherein the instructions, when executed by the
processing device,
[i] cause the first media device to be configured to transmit a first command directly to
the second media device, via use of the high-definition multimedia communications port,
to control an operational function of the second media device when a first data provided
to the first media device indicates that the
second media device will be responsive to the
first command, and
[ii] cause the first media device to be configured to transmit a second data to a remote
control device, via use of the transmitter, for
use in configuring the remote control device to
transmit a second command directly to the
second media device, via use of a
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ROKU, INC. v. ITC 5
communicative connection between the remote control device and the second media device, to control the operational function of the
second media device when the first data provided to the first media device indicates that
the second media device will be unresponsive
to the first command.
’196 patent, cl. 1 (annotated by the parties).
B
Universal Electronics, Inc. owns the ’196 patent. Universal developed a set of technologies called “QuickSet,”
which is incorporated into multiple smart TVs. Universal
relied on QuickSet to satisfy the economic prong of the domestic industry requirement 1 in this investigation and
claimed that QuickSet practices the teachings of the ’196
patent.
Roku creates various TV streaming technologies, such
as the Roku streaming channel and the Roku stick. Roku
also works with third parties to create Roku-branded TVs
and licenses its operating system to other parties.
Universal filed a complaint with the International
Trade Commission against Roku for importing certain TV
products that infringe the ’196 patent. The Commission instituted an investigation, and the administrative law judge
1 For a party to file a complaint under Section 337,
they must show that they have an economic domestic industry in the United States, as laid out in 19 U.S.C.
§ 1337(a)(3)(A)–(C). Parties need only satisfy one of paragraphs (A) through (C). As discussed infra, Universal
claimed that it satisfied subparagraph (a)(3)(C) based on
its substantial investment in engineering and research and
development (R&D) related to QuickSet in the United
States.
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found that Roku violated Section 337 by importing infringing articles. The Commission affirmed the administrative
judge’s finding and found in relevant part that (1) Universal had ownership rights to assert the ’196 patent; (2) Universal satisfied the economic prong of the domestic
industry requirement; and (3) the asserted claims were not
invalid as obvious.
1
Earlier in the investigation, Roku filed a motion for
summary determination that Universal lacked standing to
assert the ’196 patent because, at the time Universal filed
its complaint, it did not own all rights to the ’196 patent.
Roku argued that Universal filed a petition for correction
of inventorship to add one of its employees as an inventor
to the patent after it filed its complaint with the Commission and that the agreements between this employee (Mr.
Barnett) and Universal did not constitute an assignment of
rights.
Initially, the administrative judge granted Roku’s motion, finding that a 2004 agreement between Mr. Barnett
and Universal was a “mere promise to assign rights in the
future, not an immediate transfer of expectant rights.” J.A.
26177 (quoting Abraxis Bioscience, Inc. v. Navinta LLC,
625 F.3d 1359, 1365 (Fed. Cir. 2010)). Thus, “the 2004 Barnett Agreement did not automatically assign to [Universal]
any of Mr. Barnett’s rights to the Provisional Applications
or the ’196 patent that eventually issued from the priority
chain.” J.A. 26177. The Commission reversed, finding instead that in a separate 2012 agreement, Mr. Barnett assigned all his rights to a series of provisional applications,
including the one to which the ’196 patent claims priority.
The Commission also found that Mr. Barnett did not contribute any new or inventive matter to the ’196 patent after
filing the provisional applications. Based on those two
facts, the Commission found that the 2012 agreement constituted a “present conveyance” of Mr. Barnett’s rights in
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ROKU, INC. v. ITC 7
the ’196 patent, and thus Universal could assert the ’196
patent. From this, the Commission found that the issue involving the 2004 agreement was moot.
2
The Commission found that Universal satisfied the
economic prong of the domestic industry requirement by
proving a substantial investment in engineering and research and development to exploit the ’196 patent pursuant
to subparagraph (a)(3)(C) of Section 337. Subparagraph
(a)(3) of Section 337 requires a party filing suit with the
Commission to possess a domestic industry in the United
States, which can be satisfied by showing “substantial investment in [a patent’s] exploitation, including engineering, research and development, or licensing.” 19 U.S.C.
§ 1337(a)(3)(C). Specifically, the Commission found that
Universal had made substantial investments in domestic
engineering and R&D related to the QuickSet platform.
The Commission also found that Universal’s investments
in domestic R&D accounted for a substantial portion of its
total investments in engineering and R&D. The Commission also found that Universal demonstrated a nexus between its engineering and R&D investments, the ’196
patent, and the Samsung TVs that constituted Universal’s
domestic industry products. Accordingly, the Commission
found that Universal’s investments constituted exploitation of the asserted patent as required for investments under subparagraph (a)(3)(C).
3
The administrative judge initially found that Roku
made a “marginal prima facie case” that claim 1 of the ’196
patent was obvious over two prior art references, Chardon 2
2 U.S. Patent Pub. No. 2012/0249890, which discloses a multi-media gateway, such as a set-top box, that
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and Mishra. 3 J.A. 169–71. The parties did not dispute that
Chardon disclosed all limitations of claim 1 other than
1[e][ii]. The administrative judge found that Mishra disclosed limitation 1[e][ii], which requires the “first media
device” to transmit a signal to configure the remote control
device to directly control a target device via IR or other
wireless pathway when that device is unresponsive to an
HDMI signal. However, the administrative judge said that
“a certain amount of cherry-picking is required” to find all
claim limitations disclosed in the combination of Chardon
and Mishra and that Roku’s case was at best “marginal.”
J.A. 167. Furthermore, the administrative judge found that
Universal’s evidence of secondary considerations, which
showed that QuickSet satisfied a long-felt but unmet need,
outweighed Roku’s obviousness case.
The Commission affirmed this finding and modified the
administrative judge’s other findings. The Commission
found that the combination of Chardon and Mishra was not
even “marginal” and simply did not disclose a system that
automatically configures two different control devices to
transmit commands over different pathways. The Commission also found that Roku failed to present clear and convincing evidence of a motivation to combine. Thereafter,
the Commission affirmed the administrative judge’s finding that the asserted claims were non-obvious.
Roku now appeals. We have jurisdiction under 28
U.S.C. § 1295(a)(6).
acts as a “messenger” of sorts between a remote control and
an “HDMI appliance” (such as a TV); the remote control
does not directly communicate with the HDMI appliance.
3 U.S. Patent Pub. No. 2001/0005197, which discloses communication pathways for telephones, and discloses a method for answering a telephone call remotely
using a remote control unit that can also control a VCR.
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II
To bring a complaint before the International Trade
Commission, “at least one complainant [must be] the owner
or exclusive licensee of the subject intellectual property.”
19 C.F.R. § 210.12(a)(7); see also IpVenture, Inc. v. ProStar
Comput., Inc.,
503 F.3d 1324, 1325 (Fed. Cir. 2007). Interpretation of an agreement for patent ownership is a legal
question of contract interpretation, reviewed de novo. See
Omni MedSci, Inc. v. Apple Inc.,
7 F.4th 1148, 1151–52
(Fed. Cir. 2021). This Court reviews for substantial evidence underlying factual determinations upon which a conclusion of standing is based. SiRF Tech., Inc. v. ITC,
601
F.3d 1319, 1325 (Fed. Cir. 2010); see also Finnigan Corp. v.
ITC,
180 F.3d 1354, 1361–62 (Fed. Cir. 1999). Whether a
complainant has satisfied the domestic industry requirement generally involves mixed questions of law and fact,
reviewed de novo and for substantial evidence, respectively. Motorola Mobility, LLC v. ITC,
737 F.3d 1345, 1348
(Fed. Cir. 2013).
Obviousness is a legal question based on underlying
fact findings. Purdue Pharma L.P. v. Epic Pharma, LLC,
811 F.3d 1345, 1351 (Fed. Cir. 2016). This Court reviews
legal determinations de novo and underlying factual determinations for substantial evidence. Rambus Inc. v. Rea,
731 F.3d 1248, 1251 (Fed. Cir. 2013).
III
Roku challenges three aspects of the Commission’s
final determination: (1) the Commission’s determination
that Universal had ownership rights to assert the ’196 patent in this investigation; (2) the Commission’s determination that Universal’s QuickSet technology satisfied the
economic prong of the domestic industry requirement; and
(3) the Commission’s determination that Roku failed to establish that claim 1 of the ’196 patent is obvious over the
combination of Chardon and Mishra. We address each argument in turn.
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10 ROKU, INC. v. ITC
A
Roku contends that Universal did not have ownership rights to assert the ’196 patent in this investigation. 4
Roku argues that the Commission erred in finding that
Universal had ownership rights based on the 2004 agreement Mr. Barnett signed because that agreement did not
constitute a present conveyance of his intellectual property
rights—it only said that inventions created by Mr. Barnett
“shall be” the property of Universal. Roku argues that the
2004 agreement was merely a promise to assign his rights
in the future, not an actual conveyance of those rights.
We are not persuaded. Roku disregards the actual
basis of the Commission’s determination, which was a separate 2012 agreement that constituted a present conveyance of Mr. Barnett’s rights in the provisional application
associated with the ’196 patent—the Commission’s decision did not rely on the 2004 agreement Roku references.
Whether the agreement includes an automatic assignment
or is merely a promise to assign depends on the contract
language. See Abraxis, 625 F.3d at 1364. The language of
each assignment states that Mr. Barnett “hereby sell[s]
and assign[s] . . . [his] entire right, title, and interest in and
to the invention,” including “all divisions and continuations
thereof, including the subject-matter of any and all claims
which may be obtained in every such patent.” J.A.
23339–42. On its face, the agreement language constitutes
a present conveyance. See FilmTec Corp. v. Allied-Signal
Inc.,
939 F.2d 1568, 1573 (Fed. Cir. 1991) (explaining that
an agreement to “hereby grant” title to the patent “expressly granted . . . rights in any future invention”);
4 Throughout its briefs, Roku refers to this argument
as a “standing” challenge. We agree with the Commission
that “standing” is not the right term. Rather, Roku is actually challenging whether Universal had rights to the ’196
patent when it filed its complaint against Roku.
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Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1253 (Fed.
Cir. 2000) (finding that an agreement that “hereby conveys, transfers and assigns . . . all right, title and interest
in and to Inventions” operated as an automatic assignment). Thus, we agree with the Commission that “Mr. Barnett assigned his entire rights to the invention . . . through
the 2012 Barnett Agreements.” J.A. 26186. Accordingly, we
affirm.
B
Next, Roku argues that the Commission erred in
determining that Universal had satisfied the economic
prong of the domestic industry requirement because it did
not require Universal to allocate its domestic industry expenses to a specific domestic industry product. The administrative judge found, and the Commission affirmed, that
“because QuickSet involves software and ‘software updates’ that result in practice of the asserted claims when
implemented on the Samsung DI products,” Universal’s asserted expenditures are attributable to its domestic investments in R&D and engineering. J.A. 190. Furthermore, the
administrative judge found, and the Commission affirmed,
that “[Universal’s] investments go directly to the functionality necessary to practice many claimed elements of” the
’196 patent. J.A. 189. Both findings are supported by substantial evidence, such as data regarding Universal’s specific domestic investments in QuickSet and the amount of
Universal’s domestic R&D investments relative to its total
R&D expenditures. 5
Roku instead focuses on Universal’s investments in
certain smart TVs, rather than the QuickSet technology
5 The specific amounts and percentages of these investments have been designated confidential business information subject to a protective order, and as such, are not
recited in this opinion.
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that is installed on those TVs. But that is not the appropriate inquiry. Our precedent does not require expenditures
in whole products themselves, but rather, “sufficiently substantial investment in the exploitation of the intellectual
property.” InterDigital Commc’ns, LLC v. ITC, 707 F.3d
1295, 1303–04 (Fed. Cir. 2013). In other words, a complainant can satisfy the economic prong of the domestic industry
requirement based on expenditures related to a subset of a
product, if the patent(s) at issue only involve that subset.
Here, there is no dispute that the “intellectual property” at
issue is practiced by QuickSet and the related QuickSet
technologies, a subset of the entire television. Roku does
not dispute that QuickSet embodies the teachings of the
’196 patent, nor does Roku explain why Universal’s domestic investments into QuickSet are not “substantial.” Accordingly, we affirm the Commission’s determination that
Universal has satisfied the economic prong of the domestic
industry requirement in subparagraph (a)(3)(C) of Section
337.
C
Roku’s final argument on appeal is that the Commission erred in finding that it failed to prove that the combination of Chardon and Mishra discloses limitation 1[e] of
the ’196 patent, and also erred by accepting Universal’s evidence of secondary considerations of non-obviousness. But
Roku does not directly challenge the Commission’s actual
findings. For example, the Commission noted that limitation 1[e] allows a first media device to choose between two
different control devices, depending on whether the second
media device is responsive to commands from the first media device. But the Commission determined that neither
Chardon nor Mishra—or even the combination of both—allow for a choice between different second media devices,
and cited to several portions of the references in support of
this finding.
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Regarding secondary considerations, Roku’s only
argument is that the Commission erred in finding a nexus
between the secondary considerations of non-obviousness
because some of the news articles Universal presented discuss features in addition to QuickSet. But that argument
is meritless. Roku does not dispute that the Commission’s
determination regarding secondary considerations of non-obviousness is supported by substantial evidence, nor does
Roku dispute that QuickSet is discussed in the references
the Commission relied on.
Because Roku does not directly address or dispute any
of the Commission’s findings on obviousness, we affirm.
IV
We have considered the rest of Roku’s arguments
and find them unpersuasive. We therefore affirm the Commission’s final determinations that (1) Universal had ownership rights in the ’196 patent and had the right to assert
it in this investigation; (2) Universal satisfied the economic
prong of the domestic industry requirement under subparagraph (a)(3)(C) of Section 337; and (3) Roku failed to establish a prima facie case that the challenged claims were
unpatentable as obvious.
AFFIRMED
