background of the Investigation

Serendia, LLC initiated the investigation on April 6, 2023, alleging violations of 19 U.S.C. 1337, which addresses unfair competition through the importation of goods that infringe U.S. patents. The specific patents in question included U.S. Patent no.9,480,836 (“the ‘836 patent”); U.S. Patent No. 10,058,379; U.S. Patent No. 11,406,444 (“the ‘444 patent”); U.S. Patent No. 9,320,536 (“the ‘536 patent”); U.S. Patent No. 9,775,774 (“the ‘774 patent”); and U.S. Patent No. 10,869,812 (“the ‘812 patent”).

The original notice of investigation, published in the Federal Register, named a broad range of respondents, including companies based in South Korea, Arizona, New York, Massachusetts, California, Alabama, and Israel. The Office of Unfair Import Investigations (“OUII”) also participated in the investigation, providing an additional layer of scrutiny.

Scope of the Investigation Narrowed

Over time, the scope of the investigation was refined. The Commission terminated the investigation as to many of the initially asserted patent claims, focusing on claims 1, 9, and 22 of the ‘836 patent; claims 11 and 16 of the ‘536 patent; claim 14 of the ‘774 patent; and claims 5, 13, and 18 of the ‘812 patent.

Similarly, the investigation was terminated as to several respondents, leaving EndyMed, Jeisys, and Cynosure as the primary focus.

Key Events and Findings

An Administrative Law Judge (ALJ) held a Markman hearing on July 13, 2023, followed by the issuance of a Markman Order on October 25, 2023, which construed disputed claim terms. Notably, the Markman Order deemed the asserted claims of the ‘444 patent indefinite, leading to the termination of the investigation as it pertained to that patent.

An evidentiary hearing took place over several days in november and December 2023. Post-hearing briefs were subsequently submitted, further solidifying the evidence presented.

settlements and Final Determination

On December 18, 2024, the ALJ granted a motion to terminate the investigation as to respondents Jeisys and Cynosure, based on settlement agreements. This decision was unreviewed by the commission, effectively removing these companies from the remainder of the investigation.

The ALJ issued the final Initial determination (ID) on December 19, 2024, finding a violation of section 337 by EndyMed, Jeisys, and Cynosure concerning the remaining asserted patent claims. The ID emphasized that by participating in the investigation, the parties had consented to personal jurisdiction at the Commission.

[T]he Private Parties entered stipulations with respect to the importation of Accused products wherein each Respondent stipulated that they have imported to the United States, sold for importation into the United States, and/or sold within the United States after importation at least one Accused Product.

Initial Determination, December 19, 2024

The ID also confirmed that Serendia possessed the exclusive rights and ownership of the asserted patents, granting them the standing to assert these patents in the investigation. The accused products were found to directly infringe the asserted claims, and EndyMed was found to indirectly infringe the asserted claims of the ‘836 and ‘536 patents through inducement and contributory infringement.

EndyMed’s attempts to invalidate the asserted claims based on obviousness, anticipation, lack of enablement, lack of written description support, or unpatentable subject matter were unsuccessful. The ID also affirmed the existence of a domestic industry that practices the asserted patents, as required by 19 U.S.C. 1337(a)(2).

Recommended Remedy and Bonding

The ALJ’s recommended determination (RD) included in the ID proposed the issuance of a limited exclusion order and cease and desist orders against EndyMed, should the Commission find a violation. Regarding the bond amount during the presidential review period, the ID recommended a 10% bond for the Accused Potenza Products.

recommended that the Commission enter a bond of 10% for the Accused Potenza Products but that if the Commission finds that the 10% royalty rate in the patent License Agreement is inapplicable to the Accused Potenza Products, then it is recommended that a 5-6% bond rate be entered on value because Respondents conceded that a 5-6% bond is `economically reasonable.’

Initial Determination/Recommended Determination, December 19, 2024

Commission Review and Vacated Findings

On January 2, 2025, Jeisys and Cynosure petitioned for review, requesting the Commission to set aside the findings pertaining to them due to their termination from the investigation. The Commission has since determined to review and vacate the findings in the ID pertaining to Jeisys and Cynosure, acknowledging their prior settlements and subsequent removal from the investigation.

Commission to Review Key Aspects of Initial Determination

On january 10, 2025, both Serendia and EndyMed submitted petitions for review of the initial determination (ID). Responses to these petitions were subsequently filed on January 21, 2025, by all parties, including the Office of Unfair Import Investigations (OUII). After a thorough examination of the investigative record, including the final ID and submissions from all parties, the Commission has decided to review specific findings within the ID.

The scope of the review encompasses several critical areas, including:

• Jurisdiction
• standing
• The economic prong of domestic industry for all five patents in question
• Contributory infringement for the asserted patents

Background of the Investigation

The USITC’s investigation, identified as inv. No. 337-TA-1356, centers on potential violations of Section 337 of the tariff Act of 1930 (19 U.S.C. 1337). This statute empowers the Commission to investigate and prevent unfair trade practices, including patent infringement, in connection with imported articles. The inquiry was formally instituted following a complaint filed by Serendia, alleging that ViOL and Benev are infringing certain patents.

The patents in question include the ‘536, ‘774, ‘812, ‘836, and ‘444 patents. The investigation will delve into whether the importation and sale of products by ViOL and Benev infringe these patents and whether such activities harm a domestic industry.

Key Issues Under review

The Commission has identified several critical issues that require further examination.These issues span various aspects of patent law and domestic industry considerations.

• Infringement of the ‘536, ‘774, ‘812, and ‘836 patents
• Secondary considerations for the ‘536 and ‘836 patents
• Indefiniteness of the asserted claims of the ‘444 patent

Key Questions Posed by the Commission

To ensure a thorough understanding of the issues, the commission has outlined specific questions to be addressed by the parties involved. These questions aim to clarify critical aspects of the case, and parties are required to support their positions with references to applicable law and existing evidentiary records.

1. Does section 337 allow investments of an implied licensee to count towards the existence of a domestic industry?
2. Under the terms of the agreement between Serendia and ViOL, could ViOL grant an implied sublicense to Benev?
3. Under the doctrine of patent exhaustion, did Serendia extinguish its rights to the domestic industry products upon ViOL’s sale to Benev? Does it matter whether Benev is an implied licensee?
4. Provide a breakout of the investments for Benev personnel, Medical Professionals, and Medical and Scientific Advisor presented in CDX-0003C.48 among the six categories of investments delineated in the ID at 279. Please also provide a breakout of the investments on an annual basis and prior to and after the date of the agreement in CX-0765C.
5. to the extent not already briefed, to what extent are any of the six categories of investments delineated in the ID at 279 of the sort that a mere importer would engage in, including by addressing if they are activities that must by their nature be performed in the United States as a legal or a practical matter, such that they might not be distinguishable from the activities of a mere importer?
6. Address if there is any distinction or legal requirement under the statute or legislative history of Section 337 or by Commission or Federal circuit precedent that certain activities are onyl cognizable if (1) the activities must be performed in the united States or (2) if the activities are chosen to be performed in the United States?
7. What costs for contractors (both types of services and amounts) are not included in the data provided for ViOL’s manufacturing costs (see, e.g., RX-2566C at 119:1-11,CPX-0156C)? Please provide a breakout prior to and after the date of the agreement in CX-0765C.
8. Regarding the ‘444 patent, if the Commission finds that the claims are not indefinite, what benefit is there in remanding to the ALJ? Would an exclusion order naming the’444 patent cover products that the asserted claims of the ‘836 patent would not cover?

the Commission has explicitly stated that parties should only address the specific issues outlined above and refrain from briefing other issues already presented in existing filings.

Potential Remedies and Public Interest Considerations

The USITC is also seeking input on potential remedies should a violation of section 337 of the Tariff Act of 1930 be found. These remedies could include:

• an exclusion order, possibly preventing the subject articles from entering the United States.
• Cease and desist orders, requiring respondents to stop engaging in unfair acts related to the importation and sale of the articles.

The Commission is notably interested in receiving written submissions addressing the form of remedy that should be ordered, if any. Parties seeking exclusion of an article for purposes other than consumption must provide evidence that other types of entry are adversely affecting them or are likely to do so.

Furthermore, the statute mandates that the Commission consider the effects of any remedy on the public interest. The Commission will evaluate the impact of potential exclusion and cease and desist orders on:

1. The public health and welfare
2. Competitive conditions in the U.S.economy
3. U.S. production of articles that are like or directly competitive with those under investigation
4. U.S. consumers

The Commission is also soliciting input on whether remedial orders should include exemptions related to service and/or repair. This includes the rationale for such exemptions, warranty terms, and the scope and duration of any potential exemption.

Presidential Review and Bonding

If the Commission orders a remedy, the U.S. Trade representative, acting on behalf of the President, has 60 days to either approve, disapprove, or take no action on the Commission’s determination. During this review period, the subject articles might potentially be allowed to enter the United States under bond. the amount of this bond is determined by the Commission and prescribed by the Secretary of the Treasury. Therefore, the Commission is also seeking submissions concerning the appropriate bond amount should a remedy be ordered.

See Presidential Memorandum of July 21, 2005, 70 FR 43251 (July 26, 2005).

Filing Deadlines and Procedures

All parties involved in the investigation are required to file written submissions addressing the issues outlined in the notice. Interested goverment agencies and other parties are also encouraged to submit their views on remedy, public interest, and bonding. These submissions should address the Administrative Law Judge’s (ALJ) recommended determination on remedy and bonding.

Complainants are required to identify the remedy sought and submit proposed remedial orders for the Commission’s consideration. They must also provide the Harmonized Tariff Schedule of the United States (HTSUS) subheadings under which the accused products are imported and identification details for all known importers of the products.

The deadline for initial written submissions and proposed remedial orders is the close of business on March 14, 2025. Reply submissions must be filed by the close of business on March 21, 2025. Opening submissions are limited to 60 pages, while reply submissions are limited to 30 pages. No further submissions will be permitted unless specifically ordered by the Commission.

All written submissions must be filed electronically, referencing the investigation number (inv. No. 337-TA-1356) prominently on the cover page.Confidential information must be clearly marked, and a redacted non-confidential version must be filed within two business days of any confidential filing.

Details of the USITC action

The USITC’s action follows an investigation conducted under 19 CFR part 210, which governs investigations of unfair practices in import trade. The issuance of a limited exclusion order means that certain agricultural tractors and components found to infringe upon intellectual property rights will be barred from entering the United States. This measure is designed to protect domestic industries from unfair competition arising from imported goods that violate U.S. patents or trademarks.

Along with the exclusion order, the USITC also issued a cease and desist order. This order prohibits specific parties from engaging in certain activities related to the infringing products,such as importing,selling,marketing,or distributing them within the United States. The combination of these two orders provides a extensive approach to preventing the continued infringement of intellectual property rights.

Impact on the Agricultural Sector

The agricultural sector relies heavily on advanced machinery, and the protection of intellectual property rights is crucial for fostering innovation and maintaining a competitive market. the USITC’s decision underscores the importance of safeguarding these rights and ensuring that companies can invest in research and growth without fear of unfair competition from infringing imports.

The specific details of the agricultural tractors and components covered by the orders were not disclosed in this announcement, but the implications for companies involved in the import and sale of such equipment are significant. Affected parties will need to ensure compliance with the exclusion order and cease and desist order to avoid potential penalties.

Official Commission Statement

The USITC formally announced the orders through an official statement. The statement confirms the agency’s commitment to enforcing intellectual property rights and preventing unfair trade practices. The orders were issued under the authority granted to the Commission by U.S. law.

By order of the Commission.

Lisa Barton, Secretary to the Commission

The official issuance date is February 28, 2025, as confirmed by Lisa Barton, Secretary to the Commission.

The Core of the dispute: Patent Infringement

At the heart of the USITC investigation was Serendia, LLC’s claim that several companies infringed upon their patents related to dermatological treatment devices.Dr. Anya Sharma, a leading expert in intellectual property law focusing on the medical device sector, explained the outcome. Serendia successfully argued their case,leading the USITC to issue a limited exclusion order and cease and desist orders.

According to Dr. Sharma, “This essentially means that certain devices deemed infringing can no longer be imported or sold in the United States.” This decision highlights the severe consequences of patent infringement and the importance of respecting intellectual property rights within the competitive medical device market.

Narrowing the Scope: From Many to a few

The investigation initially involved numerous respondents, but the scope eventually narrowed to a few key players.This reduction was due to several factors, including the termination of many initially asserted patent claims as the USITC delved into the specifics. dr. Sharma noted that investigations often begin with potentially overlapping or less-relevant claims.

Settlements with some respondents also streamlined the process. “The final focus was on the key players demonstrating the most significant patent infringement,” Dr. Sharma stated. The USITC’s efficiency in focusing on the essence of the alleged violations helped manage complexities and reduce unneeded burdens on the involved parties.

The Markman Hearing: Defining the Terms

The administrative Law Judge (ALJ) played a crucial role in the proceedings, particularly through the Markman hearing. This hearing,named after the Supreme Court case markman v.Westview Instruments, is a critical step in patent litigation. During the hearing, the ALJ construes the meaning of disputed claim terms within the patents.

Dr. Sharma emphasized the importance of this process: “this interpretation is crucial because it determines the scope of the patent and which products are infringed.” The Markman order directly affected the outcome of the investigation, ultimately leading to the dismissal of certain patents, such as the ‘444 patent. A clear and concise Markman construction is essential to ensure fairness and accuracy in applying patent law.

Settlements and Vacated Findings

The Commission’s decision to vacate the findings pertaining to Jeisys and Cynosure after settlement agreements raises questions about the settlement process in such investigations. Settlements in USITC investigations are common and serve as effective ways to resolve disputes outside of a full investigation.

Dr. sharma explained, “These settlements usually involve a compromise, which can eliminate the need for a full evidentiary hearing and final determination on the merits of the claim.” While the USITC vacating the initial determination for those parties reflects standard procedures following a settlement, it showcases the value and benefit of early settlement resolution to bring speed and cost efficiency to litigations.

Broader Implications for the Medical Device Industry

Beyond the specific outcome, this case has broader implications for the medical device industry. The successful enforcement of Serendia, LLC’s patents sends a clear message about the importance of respecting intellectual property rights. Companies must conduct thorough due diligence to ensure their products do not infringe on existing patents.

The USITC’s willingness to issue exclusion orders and cease and desist orders demonstrates its commitment to protecting patent holders and fostering innovation within the medical device sector. This case serves as a reminder that robust intellectual property protection is essential for maintaining a competitive and innovative marketplace.