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ITC says Garmin circumvented order

Claims the electronics maker packaged components separately to get around patent ruling favoring Navico

A patent infringement case between electronics manufacturers Garmin and Navico continued to play out in September as the U.S. International Trade Commission issued two strongly worded public opinions making it clear that it was ruling in favor of Navico.

The ITC determined last December that Garmin’s DownVü sonar products violated Navico patents and had prohibited them from being imported into the United States. Navico alleges that Garmin circumvented that prohibition by separately packaging components, importing them to the United States and repackaging them for sale here.

The ITC, in a Sept. 8 clarification of a “public opinion” issued earlier in the month, made it clear that it agrees with Navico.

Despite asserting that the ITC had ruled in its favor, Garmin requested a stay, which would have allowed it to continue importing the devices until a federal appeals court rules on the company’s appeal of all of the ITC’s rulings. The ITC recommended to the U.S. Court of Appeals for the Federal Circuit that it deny the request, calling Garmin’s position “unusually weak.”

“Garmin treated the commission’s exclusion order like a nuisance,” the ITC says in its Sept. 8 public opinion denying Garmin a stay of the importation ban. “Instead of importing certain infringing sonar systems, it imported each system by separating the components into two plastic bags to circumvent the exclusion order.”

The company then put the two bags into the same box in the United States and sold the “infringing boxed systems after importation,” the ITC says.

“When the commission put an end to Garmin’s charade and clarified that its exclusion order covered Garmin’s importation of the components separately for their combined sale after importation, Garmin brought this appeal,” the ITC says. “Garmin’s motion for a stay is unusually weak. For the same reasons that Garmin deserves no stay, Garmin is not entitled to an expedited appeal shortening the time for other parties to respond to Garmin’s brief.”

Garmin, meanwhile, says the ITC’s public opinion regarding the stay request — though acknowledging that the strong language in the public document referred to Garmin’s conduct as “egregious” — was not a ruling, but a statement that spelled out why the commission thought the court should deny Garmin’s request for a stay. Further, the opinion did not mention Garmin’s tilted redesign, says Garmin spokeswoman Carly Hysell.

Navico has said Garmin was required to submit any redesigned products for review and approval by the ITC, but had not yet done so. “Garmin’s new tilted design infringes Navico’s patents,” Navico says.

Navico initially informed Garmin in September 2015 that its then-forthcoming tilted “design around” is an infringing design. More important, in accordance with normal commission practice, the commission’s original opinion, dated Dec. 1, 2015, told Garmin that ‘if Garmin intends to import its [new] products into the United States, it should use established procedures at the commission or U.S. Customs and Border Protection to obtain a ruling as to whether such products infringe the relevant patents,’ ” says Navico CEO Leif Ottosson.

“The commission’s new opinion repeats the point, stating: as noted in the [original] commission opinion, ‘the certification procedure of U.S. Customs and Border Protection does not apply to redesigns that have not been adjudicated as non-infringing.’ The commission also noted that, despite Garmin’s obligation, ‘Garmin has not submitted a petition for modification or a request for advisory opinion seeking adjudication of its alleged redesigns,” Ottoson says. “Thus, Garmin clearly has known since Dec. 1, 2015, that it is up to Garmin to seek approval of the tilted design. Garmin has elected not to do so for reasons that we can only speculate.”

“The ITC argument [of Sept. 8] also confirmed our position that standalone products are fine,” Hysell maintained, quoting from the opinion: “Components of infringing products are subject to exclusion, while ‘standalone’ components are permitted entry.”

“So everything we said in our original press release remains 100 percent accurate,” Hysell said. In that release Garmin maintained that the ITC modification to the exclusion order did not address the new tilted DownVü scanning sonar transducer design, “which Garmin strongly asserts does not infringe — that Garmin has been shipping since last December, when the previous decision was made by the ITC.”

Navico contends that Garmin was supposed to submit redesigns for approval and had not done so, which is why the public opinions did not address it. The ITC issued a public opinion Aug. 29 regarding the decision to grant the limited exclusion order, or LEO, that modified its original ruling prohibiting Garmin from importing its DownVü scanning sonar products. “We granted Navico’s request to modify the exclusion order,” says Megan Valentine, who is with the office of general counsel for the U.S. International Trade Commission.

“We are pleased that the ITC once again has ruled in our favor. It’s clear from the rulings that Garmin’s DownVü products from the start have infringed our patents, and it surprises me that a company claiming to respect other companies’ intellectual property would improperly circumvent the ITC’s orders by importing and selling these products in the U.S. market,” said Ottosson. “We have offered a license for DownScan Imaging technology to all major manufacturers in the market, but in this and every other matter of patent infringement, we will continue to vigorously defend our intellectual property and innovations.”

“Garmin‘s importation of transducers for the purpose of kitting an infringing device, rather than for individual sale of a standalone component, would be contrary to commission practice and would violate the purpose of the LEO,” the ITC wrote in its decision, which took the exclusion a step further and prohibited the importation of the device as separate components.

Garmin has appealed the denial of a stay, as well as the ITC’s ruling that it infringed on Navico’s patents and the ruling that it could not import the components separately.

The appeals court will hear arguments, but no dates have been set, Valentine says. “We opposed Garmin’s motion, but the court has not yet ruled on it.”

Generally, if an exclusion order has been issued to Customs, importation of a device will be stopped, Valentine says. The importer then has several options to get the goods into the country. It can ask Customs to determine whether the device falls under the exclusion. If a product is stopped by Customs and has not been released within 30 days, the importer can file a claim to force Customs to determine whether the product is excluded from importation. If Customs decides it is excluded, the party can make an appeal to the International Trade Commission in New York, Valentine says.

If that entity upholds Customs’ determination, the importer can appeal to a federal circuit court in Washington, D.C. “There are a couple layers of review,” Valentine says. “If the importer fails at all levels and nobody says the product can come in, it doesn’t come in.”

“Garmin did not argue that Customs has excluded any of its products from entry, nor has Garmin availed itself of the numerous avenues for obtaining decisions from the commission or from Customs about any of its allegedly non-infringing redesign,” the ITC says in its opinion.

“According to Garmin, the commission was divested of jurisdiction to modify the LEO as requested when Navico appealed the commission‘s findings that the component ‘standalone transducers’ do not indirectly infringe,” the ITC said. “We disagree. Although Garmin is correct that the filing of an appeal of a commission determination typically divests the commission of jurisdiction over matters related to the appeal, the commission nonetheless retains jurisdiction to ensure that the remedial orders it has issued are being properly executed.”

The ruling last December that Garmin’s DownVü scanning sonar products violated Navico’s patents for DownScan imaging technology was the second within a month that found Garmin was violating sonar patents. Johnson Outdoors said in November that a judge ruled Garmin’s SideVü sonars violated Johnson Outdoors patents.

In July 2015, Humminbird won a ruling in a patent lawsuit regarding Garmin’s unlicensed use of its side scan sonar technology. In May of this year, Garmin agreed to license the patents from Johnson Outdoors, Humminbird’s parent company.

This article originally appeared in the October 2016 issue.



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