IP Law Daily, PATENT—Fed. Cir.: ITC’s refusal to enter show cause order was discretionary and not reviewable, (Mar 18, 2025)

By Kevin M. Finson, J.D.

The International Trade Commission’s decision not to issue a show cause order upon request was not reviewable because issuing such an order was committed to the agency’s discretion by law.

The International Trade Commission did not violate the Administrative Procedures Act by declining sua sponte to enter a show cause order regarding the patent owner’s allegedly sanctionable conduct, the U.S. Court of Appeals for the Federal Circuit has held. The decision of whether to enter such an order was within the agency’s discretion (Realtek Semiconductor Corp. v. ITC, No. 23-1095 (Fed. Cir. Mar. 18, 2025)).

DivX, LLC (DivX) filed a complaint with the International Trade Commission (ITC) alleging unfair practices involving imported goods against Realtek Semiconductor Corporation (Realtek) and other defendants. DivX subsequently filed an unopposed motion to withdraw the complaint against Realtek, which was granted. Realtek then filed a motion for sanctions against DivX. The administrative law judge denied the motion. Realtek then asked the Commission to review the decision and to enter an order sua sponte directing DivX to show cause why it had not committed sanctionable conduct. The Commission declined to review the decision or issue the requested show cause order. DivX appealed, arguing that the ITC had violated the Administrative Procedure Act (APA) by failing to issue the show cause order without explanation.

Unreviewability. The Federal Circuit held that the decision of whether or not to enter a show cause order was left to the discretion of the administrative law judge or Commission by law, and that the applicable regulation specifically said that they “may,” not “must,” issue such an order. Decisions that are committed to an agency’s discretion by law are not reviewable by the court.

Realtek argued that the Commission’s failure to provide any reasoning required review in order to prevent any “shenanigans” in the Commission’s exercise of discretion, but the Federal Circuit held that the risk of “shenanigans” was covered by the reviewability of decisions which were “contrary to constitutional right, in excess of statutory jurisdiction, or arbitrary and capricious.” The present case did not fall into any of these categories.

Because the decision was unreviewable, the Federal Circuit dismissed the appeal without reaching the ITC’s arguments addressing standing or jurisdiction.

The Case is No. 23-1095.

Judge: Reyna, J.

Attorneys: Theodore J. Angelis (K&L Gates LLP) for Realtek Semiconductor Corp. Carl Paul Bretscher, U.S. International Trade Commission, for International Trade Commission.

Companies: Realtek Semiconductor Corp.

Cases: Patent FedCirNews