Cases & Deals

Foxconn and other cell phone makers gain major Federal Circuit victory in appeal of ITC exclusion order

Clients Foxconn International Holdings, Ltd.

In an important and closely watched case involving virtually the entire cellular phone industry, Jones Day lawyers on October 14, 2008 obtained a significant victory for the Firm's client, Foxconn International Holdings, Ltd., and other importers of cellular telephone handsets and devices. In Kyocera Wireless Corp., et al. v. United States International Trade Commission, a unanimous panel of the U.S. Court of Appeals for the Federal Circuit held that the authority of the United States International Trade Commission to enter a Limited Exclusion Order was limited to exclusion of the products of companies actually named as respondents. In this dispute, which arises out of the long-running patent battles between Broadcom Corporation and Qualcomm Incorporated, Broadcom had succeeded before the International Trade Commission in proving that Qualcomm's chips and chipsets infringed a patent owned by Broadcom. The Commission then issued a Limited Exclusion Order that excluded from importation into the United States not only Qualcomm's chips and chipsets, but all "[h]andheld wireless communications devices, including cellular telephone handsets and PDAs [personal digital assistants]" containing the Qualcomm chips. Even though Qualcomm was the only party named as a respondent in the International Trade Commission proceedings, this exclusion order would have barred imports by virtually all manufacturers of cell phones and PDAs.

Foxconn, along with 18 other companies (15 other cell phone and PDA manufacturer/importers and three providers of cellular networks), appealed from this exclusion order, arguing that the statute governing the International Trade Commission, 19 U.S.C. § 1337, did not allow limited exclusion orders to reach beyond the parties actually named as respondents, and that the approach taken by the Commission would violate those unnamed companies' due process rights. Foxconn and the other non-respondent appellants advanced this argument in obtaining a stay, pending appeal, of the Limited Exclusion Order in November 2007, and the appeal was argued before the Federal Circuit on July 7, 2008. In its October 14 opinion, the Federal Circuit agreed with the appellants' arguments, and held: "Section 337 unambiguously limits the ITC's exclusionary authority to persons named by the complainant."

Jones Day argued the case for ten of the 19 non-respondent appellants, all of them importers of cellular telephones or PDAs: Jones Day client Foxconn, as well as Casio Hitachi Mobile Communications Company, Palm Inc., Sanyo Fisher Co., Pantech & Curitel Communications et al., High Tech Computer Corp., Shenzhen Huawei Communication Technologies Co., and UT Starcom, Inc.

Kyocera Wireless Corp., et al. v. United States International Trade Commission, 545 F.3d 1340 (Fed. Cir. 2008)