Hesai announces initial determination from ITC regarding Ouster patent case

Hesai (HSAI) announced developments in its patent infringement lawsuit against Ouster (OUST). On April 11, Ouster filed a complaint against Hesai and Hesai Technology Co. in the United States District Court for the District of Delaware for alleged patent infringement. At the same time, Ouster filed a companion complaint at the U.S. International Trade Commission, or ITC, requesting an investigation into Hesai and its affiliated entities pursuant to Section 337 of the Tariff Act of 1930 based on substantially similar allegations. Hesai denies all of Ouster’s allegations. The Delaware Action is presently stayed. On June 22, Hesai filed a motion to terminate the ITC Action. In its motion, Hesai argued that Ouster’s infringement allegations are barred by a prior settlement and arbitration agreement between Hesai and Velodyne Lidar. Velodyne and Ouster completed a merger of equals transaction in February 2023. Hesai argued that, pursuant to the settlement agreement, resolution of the issues should be decided in arbitration rather than in district court or the ITC. On August 24, the presiding Administrative Law Judge, or ALJ, issued an order granting Hesai’s motion to terminate the ITC Action. The order is an initial determination that is subject to review by the ITC Commissioners.