WASHINGTON — The U.S. Court of Appeals for the Federal Circuit today overturned a ruling barring the importation and sale of U-shaped couples vibrators that had been found to infringe on a patent held by Standard Innovation Corp.
In Monday's ruling, the Washington-based appeals court reversed a June 2013 decision by the U.S. International Trade Commission and ruled for LELO Inc., which for years has been fighting with rival Standard Innovation over its patent as well as sale and importation of two-armed or dual-motor vibrator couples vibrators.
The International Trade Commission only has power to protect a business or industry that has significant levels of research and development or employment in the U.S.
Ottawa-based Standard Innovation filed a suit in early 2012 accusing a number of companies led by San Jose, Calif.- and Stockholm-based LELO of infringing on its patent covering the We-Vibe.
The Federal Circuit, in overturning the International Trade Commission ruling, said Standard Innovation's investment and employment levels in the U.S. lacked satisfying "domestic industry requirements." The court, however, did not rule on the validity of Standard Innovation's intellectual property registered under U.S. Patent No. 7,931,605.
The court, in its opinion, said that Standard Innovation uses Chinese manufacturers to assemble the We-Vibe devices, from parts and components obtained from third-party suppliers, and fell short of the requirements for protection tied to a patent.
“We hold that qualitative factors alone are insufficient to show ‘significant investment in plant and equipment’ and ‘significant employment of labor or capital’ under [several prongs] of the § 337 domestic industry requirements,” the appellate court ruled today.
“The purchase of so called ‘crucial’ components from third-party U.S. suppliers are insufficient to satisfy the ‘significant investment’ or ‘significant employment of labor or capital’ criteria of § 337 where there is an absence of evidence that connects the cost of the components to an increase of investment or employment in the U.S.”
Standard Innovation spokesman Denny Alexander told Reuters today that it had not yet decided whether to seek a rehearing of the case.
Alexander, however, said that Standard Innovation would view any resumption of import and sales of We-Vibe competitors by LELO or others as "willful infringement."
"While disappointed in the ruling we're still optimistic in the validity of our patent," Alexander told Reuters. “The patent office has reconfirmed time and again that our patent is valid.”
LELO officials were not immediately available for XBIZ comment on the ruling.