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The U.S. Supreme Court on Monday declined to review Roku Inc.’s challenge to a Federal Circuit ruling that upheld a U.S. International Trade Commission (ITC) decision barring the importation of certain Roku streaming devices deemed to infringe a Universal Electronics Inc. patent.

ITC Ruling and Domestic Industry Requirements

The ITC had issued an exclusion order under Section 337 of the Tariff Act of 1930, which prohibits the importation of infringing products if the patent owner can demonstrate significant domestic investment in products tied to the patent.

Roku contested this finding, arguing that Universal Electronics failed to meet the "domestic industry" requirement, as its investments were tied to unpatented software — QuickSet — incorporated into Samsung televisions, rather than the patent-protected product itself. The patent at issue, U.S. Patent No. 10,593,196, covers a device designed to reconcile incompatibilities between wired and wireless video equipment, such as televisions and DVD players.

Roku’s Arguments Against the ITC Decision

In its petition, Roku argued that the ITC overstepped its congressional authority by broadening the domestic industry requirement beyond what the law intended. The company claimed the ruling could open the door for nonpracticing entities (NPEs) to seek exclusion orders without genuine domestic industry investments.

"The ITC is entirely a 'creature of Congress,' and the determinative question is not what the ITC thinks it should do, but what Congress has said it can do," Roku argued.

Roku contended that the Federal Circuit’s affirmation of the ITC decision erodes safeguards designed to limit the use of ITC remedies, potentially enabling misuse of exclusion orders by entities without substantial domestic interests.

Supreme Court Declines Review

By refusing to hear Roku’s appeal, the Supreme Court leaves intact the Federal Circuit ruling, effectively endorsing the ITC’s interpretation of the domestic industry requirement. The high court’s decision not to intervene avoids further examination of the ITC’s authority under Section 337, leaving this contentious issue unresolved for now.

Implications for the Industry

The case underscores ongoing concerns among tech companies over the ITC’s approach to domestic industry requirements. Critics argue that the current framework allows undue leverage for certain patent holders, particularly nonpracticing entities, to obtain exclusion orders against competitors.

For its part, Universal Electronics successfully defended its ability to rely on unpatented components integrated into a patent-protected product to satisfy the domestic industry requirement.

Legal Representation

• Roku Inc. was represented by Matthew J. Rizzolo and Douglas Hallward-Driemeier of Ropes & Gray LLP, along with Jonathan Baker and Michael Saunders of Dickinson Wright RLLP.
• Universal Electronics was represented by in-house counsel and U.S. Solicitor General Elizabeth B. Prelogar.