In 2009 Pioneer asked the International Trade Commission (ITC) to ban Garmin Ltd (NASDAQ: GRMN) from importing any global positioning system (GPS) device made with technology that infringes on its patented technology. Recently the ITC said Garmin isn’t violating Pioneer’s patent rights because Pioneer didn’t fulfill legal requirements of having a domestic industry for the underlying technology, which relates to how data may be stored, retrieved or displayed on GPS devices.
The commission looked at whether Pioneer, a Japanese maker of car-navigation and audio equipment, may use a portfolio licensing program as proof of a market when only one or two patents in the portfolio were being asserted. The ITC’s reasoning in today’s ruling won’t be made public until Pioneer and Garmin can redact confidential information. The International Trade Commission’s ruling may limit future patent disputes at the agency for Pioneer.
Pioneer filed the complaint to the ITC in December 2009. The ITC is a quasi-judicial agency in Washington set up to protect U.S. markets from unfair trade practices.
Google Inc (NASDAQ: GOOG), Hewlett Packard and Cysco Systems supported Garmin by calling on a limit to ITC cases in which the patent owner doesn’t make a product. Google, HP and Cisco argued that those patent owners should be forced to prove that their licensing programs relate to promoting products in the market, not just extracting royalty payments. Federal law lets inventors and companies that only license their patents file trade complaints with the ITC.
However, a German court ruled in favor of Pioneer in a similar case in December 2010.