ALJ Shaw Issues 15.5-Month Target Date In Certain Marine Sonar Imaging Devices, Including Downscan And Sidescan Devices (337-TA-921)

Posted On: August 1, 2014   By:
Topics: ALJ Orders, ALJ Shaw

On July 28, 2014, ALJ David P. Shaw issued Order No. 4 in Certain Marine Sonar Imaging Devices, Including Downscan And Sidescan Devices, Products Containing the Same, and Components Thereof (Inv. No. 337-TA-921).

By way of background, this investigation is based on a June 9, 2014 complaint filed by Navico, Inc. and Navico Holding AS alleging violation of Section 337 in the importation into the U.S. and sale of certain marine sonar imaging devices, including downscan and sidescan devices, products containing the same, and components thereof that infringe one or more claims of U.S. Patent Nos. 8,305,840; 8,300,499; and 8,605,550.  See our June 10, 2014 and July 11, 2014 posts for more details on the complaint and Notice of Investigation, respectively.

According to the Order, ALJ Shaw set October 30, 2015 as the target date for completing this investigation (which is approximately 15.5 months after institution of the investigation).  ALJ Shaw further indicated that the initial determination on alleged violation shall be due on June 30, 2015.

Valeo Files New 337 Complaint Regarding Certain Windshield Wipers

On July 25, 2014 Valeo North America, Inc. of Troy, Michigan and Delmex de Juarez S. de R.L. de C.V. of Mexico (collectively, “Valeo”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.  Please note that Oblon Spivak represents Valeo in this matter.

The complaint alleges that Federal-Mogul Corp. of Southfield, Michigan, Federal-Mogul Vehicle Component Solutions, Inc. of Southfield, Michigan, and Federal-Mogul S.A. of Belgium (collectively, “Federal-Mogul”) unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain windshield wipers and components thereof that infringe one or more claims of U.S. Patent Nos. 7,891,044 (the ‘044 patent); 7,937,798 (the ‘798 patent); and 8,220,106 (the ‘106 patent) (collectively, “the asserted patents”).

According to the complaint, the asserted patents relate generally to automotive windshield wipers.  These wipers include a special connector that detachably links a wiper blade with a driven wiper arm allowing for the blade to be manually attached or detached from the wiper arm for installation or replacement.  In the complaint, Valeo states that Federal-Mogul imports and sells products that infringe the asserted patents.

Regarding domestic industry, Valeo states that it has made significant investments in plant and equipment and significant employment of labor and capital in the U.S. devoted to research and development, engineering, quality management, technical support, field training, and service.  Valeo notes its facilities in Troy, Michigan; El Paso, Texas; Hampton, Virginia; and Santa Fe Springs, California.

As to related litigation, Valeo states that it previously asserted the ‘044, ‘798, and ‘106 patents against Federal-Mogul Corp. and Federal-Mogul Vehicle Component Solutions, Inc. in the U.S. District Court for the Western District of Texas.  According to the complaint, the same day, Federal-Mogul Corp. and Federal-Mogul Vehicle Component Solutions, Inc. filed a declaratory judgment action against Valeo in the U.S. District Court for the Eastern District of Michigan, alleging non-infringement and invalidity of the asserted patents.  Valeo’s Texas case was subsequently transferred to Michigan, and both cases remain pending.  The complaint further notes other litigation outside of the U.S. between the parties.

With respect to potential remedy, Valeo requests that the Commission issue a permanent limited exclusion order and permanent cease and desist orders directed at Federal-Mogul.

Bose Files New 337 Complaint Regarding Certain Noise Cancelling Headphones

On July 25, 2014, Bose Corp. of Framingham, Massachusetts (“Bose”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.

The complaint alleges that Beats Electronics, LLC of Culver City, California and Beats Electronics International Ltd. of Ireland (collectively, “Beats”), and Fugang Electronic (Dong Guan) Co., Ltd. of China, and PCH International Ltd. of Ireland (all collectively, the “Proposed Respondents”) unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain noise cancelling headphones and components thereof that infringe one or more claims of U.S. Patent Nos. 6,717,537 (the ‘537 patent), 8,073,150 (the ‘150 patent), 8,073,151 (the ‘151 patent), 8,054,992 (the ‘992 patent), and 8,345,888 (the ‘888 patent) (collectively, the “asserted patents”).

According to the complaint, the asserted patents generally relate to active noise reduction (“ANR”) technology.  In particular, the ‘537 patent relates to apparatuses and methods for minimizing latency in a device which implements ANR using digital signal processing.  The ‘150 and ‘151 patents relate to a configurable ANR apparatus that can have different ANR settings.  The ‘992 patent relates to methods and apparatuses for increasing phase margin, i.e., reducing time delay, in a feedback circuit of an ANR headphone.  Lastly, the ‘888 patent relates to methods and apparatuses for implementing ANR using a digital filter that introduces one or more zeroes to add gain, which is done to introduce positive phase in a signal pathway used for ANR.

In the complaint, Bose states that the Proposed Respondents import and sell products that infringe the asserted patents.  The complaint specifically refers to Beats Studio and Beats Studio Wireless headphones as infringing products.

Regarding domestic industry, Bose states that at least two current Bose headphone models practice one or more claims of each of the asserted patents:  the QuietComfort 20 Acoustic Noise Cancelling headphones and the QuiteComfort 20i Acoustic Noise Cancelling headphones.  Bose states that it conducts significant and substantial domestic industry activities in the U.S. relating to products that practice the asserted patents, including research and development, engineering, design, product support, and warranty service.

As to related litigation, Bose states that shortly after filing the instant ITC complaint, Bose plans to file a complaint asserting infringement of the asserted patents by Beats in the U.S. District Court for the District of Delaware.

With respect to potential remedy, Bose requests that the Commission issue a permanent limited exclusion order and permanent cease and desist orders directed at the Proposed Respondents and related entities.

ALJ Essex Rules On Motion To Compel And For Adverse Inferences In Certain Acousto-Magnetic Electronic Article Surveillance Systems (337-TA-904)

On July 17, 2014, ALJ Theodore R. Essex issued the public version of Order No. 10 (dated July 8, 2014) in Certain Acousto-Magnetic Electronic Article Surveillance Systems, Components Thereof and Products Containing the Same (Inv. No. 337-TA-904).

By way of background, the investigation is based on a December 11, 2013 complaint filed by Tyco Fire & Security GmbH, Sensormatic Electronics, LLC, and Tyco Integrated Security, LLC (collectively, “Tyco”) alleging violations of Section 337 in the importation into the U.S. and sale of certain acousto-magnetic electronic article surveillance devices that infringe one or more claims of U.S. Patent Nos. 5,729,200 and 6,181,245.  See our December 13, 2013 post for more details on the complaint.  According to the Notice of Investigation, the Commission has identified Ningbo Signatronic Technologies, Ltd.; All-Tag Security Americas, Inc.; All-Tag Security Hong Kong Co. Ltd.; All-Tag Europe SPRL; All-Tag Security UK, Ltd.; Best Security Industries; and Signatronic Corporation (collectively, the “Respondents”) as the Respondents in the investigation.  See our January 10, 2014 post for more details on the Notice of Investigation.

According to Order No. 10, Tyco filed a motion to compel Respondents to produce additional documents, including opinions of counsel disclosed to customers, and Dr. Li for a continued deposition in the United States.  Additionally, Tyco requested three adverse rebuttable inferences.  Tyco argued that a third day to depose Dr. Li is needed because he is the only knowledgeable witness provided by the Respondents.

In opposition, Respondents argued that the document requests are moot because the requested documents have already been produced.  Additionally, Respondents asserted that the opinions of counsel were not relevant and that they did not waive privilege.  Lastly, Respondents argued that Tyco’s motion to depose Dr. Li for a third day should be denied because Tyco should have covered the relevant topics during the two days of Dr. Li’s deposition.

Regarding the additional documents requested by Tyco, ALJ Essex held that Tyco’s motion was moot because the documents have already been produced.  However, ALJ Essex ordered that Respondents must provide a sworn affidavit that that all relevant documents have been produced.  With respect to the opinions of counsel, ALJ Essex denied Tyco’s request for the opinions because Tyco has not shown that they are relevant and Respondents have averred that they will not rely on these document in the investigation.  ALJ Essex held that Dr. Li must be made available for a third day of deposition, but is not required to travel to the United States for the additional deposition.  Lastly, ALJ Essex denied Tyco’s requests for adverse inferences because the sole basis for the adverse inferences was Respondents failure to produce documents, which Respondents have already produced.  Accordingly, ALJ Essex granted-in-part and denied-in-part Tyco’s Motion to Compel and for Adverse Inferences.

Federal Circuit Reverses Termination Of Enforcement Proceedings In Align Technology Appeal (2013-1240, 1363)

On July 18, 2014, the U.S. Court of Appeals for the Federal Circuit issued its opinion in Align Technology, Inc. v. ITC (2013-1240, 1363).  This was an appeal from the International Trade Commission’s (“the Commission”) decision that it could review the ALJ’s Order determining that the accused devices were within the scope of the Consent Order issued in Certain Incremental Dental Positioning Adjustment Appliances and Methods of Producing Same (Inv. No. 337-TA-562).

By way of background, this investigation was based on a complaint filed by Align Technology, Inc. (“Align”) alleging violation of Section 337 in the importation into the U.S. and sale of incremental dental positioning adjustment appliances that infringed certain patents.  The Respondents in this investigation were OrthoClear, Inc.; OrthoClear Holdings, Inc.; and OrthoClear Pakistan Pvt, Ltd. (collectively, “OrthoClear”).  The ALJ terminated the original investigation based on a consent order, which prohibited “the importation, sale for importation, and sale in the United States after importation of incremental dental positioning adjustment appliances referenced in the complaint and any other articles manufactured in violation of the asserted patents or trade secrets.”

After suspecting that OrthoClear and others were violating the Consent Order, Align filed a complaint seeking an enforcement proceeding under Commission Rule 210.75.  See our March 5, 2012 post for more details.  The complaint alleged that parties were violating the consent order by continuing to practice prohibited activities by “importing, offering for sale, and selling for importation into the United States digital datasets.”  According to the enforcement complaint, the digital datasets are used to manufacture dental appliances in the U.S. 

When instituting the investigation, the Commission stated that a threshold issue is whether the accused digital datasets are within the scope of the consent order, and that the ALJ’s decision “should be issued in the form of an initial determination (‘ID’) under Commission rule 210.42(c).”   However, since the ALJ determined that the digital articles were within the scope of the Consent Order, ALJ Rogers issued Order No. 57, determining that the enforcement proceeding would continue.

The Respondents to the enforcement proceeding sought review of the Order, although Align and the Commission Investigative Staff (“OUII”) argued that review was impermissible because Order No. 57 was a non-final order rather than an ID.  However, the Commission determined that Order No. 57 constituted an ID, and on review, determined that the digital articles were not within the scope of the Consent Order and that the enforcement proceeding should be terminated.  See our February 26, 2013 post for more details.

The Federal Circuit began by noting that, although the Commission has broad authority to issue rules and regulations governing administration, “an agency must abide by its own regulations.”  In this case, the Court found that the Commission impermissibly “circumvented its own rules without waiving, suspending, or amending them” and as such, “its review of Order No. 57 was ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’” 

Specifically, the Commission rules explicitly distinguish between rulings that must be issued as an ID, and those that must be issued as orders, and the Commission is only authorized to review IDs.  Rule 210.42(c) states that motions for termination (such as that determined in Order No. 57) shall be granted by ID, but denied by an order.  As such, the Court recognized that the ALJ “properly denied that motion via an order.”

The Federal Circuit dismissed the Commission’s arguments that it had discretion to construe the order as an ID, because the rules expressly state the contrary.  Furthermore, later amendments to the rule also support this interpretation, as the amendments designate additional motions as appropriately handled by ID in some instances and by order in other instances.  The Court also noted that Commission precedent “reflects that the Commission has historically declined to treat orders denying motions for summary determinations as [IDs].”  Last, according to the opinion, the Commission’s attempt to argue that it intended to invoke the “waiver” rule, allowing it to review Order No. 57, is an “improper post hoc rationalization.” 

Since the Commission’s decision was reversed based on this fatal procedural flaw, the Court also reviewed the decision substantively, to prevent the Commission from “propelling this case back to us without the errant procedural flaw but otherwise substantially unchanged.”  In that regard, the Court specifically held that it is not necessary for the Consent Order to explicitly reference digital data, and as such, the Commission’s determination that the digital articles were not within the Consent Order was also reversed.

Johnson Outdoors Files New 337 Complaint Regarding Certain Marine Sonar Imaging Systems

On July 18, 2014, Johnson Outdoors Inc. of Racine, Wisconsin and Johnson Outdoors Marine Electronics, Inc. of Eufaula, Alabama (collectively, “Johnson Outdoors”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.

The complaint alleges that Garmin International, Inc., Garmin North America, Inc., and Garmin USA, Inc.—all of Olathe, Kansas—and Garmin Corp. of Taiwan (collectively, “Garmin”) unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain marine sonar imaging systems, products containing the same, and components thereof that infringe one or more claims of U.S. Patent Nos. 7,652,952 (the ‘952 patent), 7,710,825 (the ‘825 patent), and 7,755,974 (the ‘974 patent) (collectively, the “asserted patents”).

According to the complaint, the asserted patents generally relate to marine sonar imaging technology.  In particular, the ‘952 patent relates to a side scanning sonar imaging system with a boat-mounted transducer assembly and an electronic control head.  The ‘825 patent relates to a side scanning sonar system which displays left and/or right side images; a boat location relative to the image; and a distance to an object from the side of the boat.  Lastly, the ‘974 patent relates to a side scanning sonar imaging system in which an image enhancement algorithm is applied to the side scan image data to provide an enhanced image.

In the complaint, Johnson Outdoors states that Garmin imports and sells products that infringe the asserted patents.  The complaint specifically refers to the Garmin SideVu/DownVu sonar imaging transducer, GCV 10 sounder module, and compatible echoMAP and GPSMAP series sonar displays as infringing products.

Regarding domestic industry, Johnson Outdoors states that it has made significant investments in plant and equipment in the U.S. devoted to manufacturing, testing, packing, engineering, marketing, and servicing side scan sonar imaging products that utilize technology covered by the asserted patents.  Johnson Outdoors specifically refers to its facility in Eufaula, Alabama, where it manufactures products protected by the asserted patents and conducts engineering, research and development, repairs, and customer service.  Johnson Outdoors also states that it has engaged in a significant employment of labor and capital in the U.S. to manufacture, test, package, engineer, market, and service products covered by the asserted patents.  Johnson Outdoors further states that it has made substantial investments in exploiting the asserted patents in the U.S. through engineering and research and development.

As to related litigation, Johnson Outdoors states that it previously asserted the ‘952 patent and other patents related to side scan sonar against Navico, Inc. in the U.S. District Court for the Middle District of Alabama.  According to the complaint, the litigation with Navico ended on January 13, 2012 as a result of a settlement agreement.  Johnson Outdoors also states that the ‘952, ‘825, and ‘974 patents were each subject to reexamination before the U.S. Patent and Trademark Office, and that reexamination certificates issued for these patents on June 30, May 8, and May 13, 2013, respectively.  Finally, Johnson Outdoors states that on July 17, 2014, it filed suit against the domestic Garmin respondents in the U.S. District Court for the Middle District of Alabama, alleging infringement of the asserted patents.

With respect to potential remedy, Johnson Outdoors requests that the Commission issue a permanent limited exclusion order and permanent cease and desist orders directed at Garmin and related entities.

ITC Decides To Review And Modify Initial Advisory Opinion In Certain Sleep-Disordered Breathing Treatment Systems And Components Thereof (337-TA-879)

On July 18, 2014, the International Trade Commission (the “Commission) issued a notice determining to review in its entirety the Initial Advisory Opinion (“IAO”) issued by ALJ E. James Gildea in Certain Sleep-Disordered Breathing Treatment Systems And Components Thereof (Inv. No. 337-TA-879) and to issue a Commission Advisory Opinion.

By way of background, this advisory opinion proceeding was initiated by Respondents Apex Medical Corp. and Apex Medical USA Corp. (collectively, “Apex”).  Apex sought an advisory opinion in order to confirm that their redesigned sleep-disordered breathing treatment systems are not covered by the consent order into which they previously entered.  See our December 16, 2013 post for more details on the ITC’s decision to institute this advisory opinion proceeding.  

According to the notice, ALJ Gildea issued the IAO on June 3, 2014 finding that Apex’s redesigned iCH and XT CPAP humidifiers are covered by the Consent Order, but that the redesigned WiZARD 220 mask is not covered by the Consent Order.

Both parties and the Commission Investigative Staff (“OUII”) filed petitions for review of the IAO.

After examining the relevant portions of the record of the investigation, including the IAO and the parties’ submissions, the Commission determined to review the IAO in its entirety.  According to the notice, the Commission determined to adopt, with modified reasoning, the ALJ’s determination that the iCH CPAP humidifier is covered by the Consent Order and that the WiZARD 220 mask is not covered by the Consent Order.  However, the Commission reversed the ALJ’s determination with respect to the XT CPAP humidifier, holding that this device is not covered by the Consent Order.  The Commission’s detailed findings will be set forth in a modified advisory opinion.

Federal Circuit Affirms In X2Y Attenuators Appeal (2013-1340)

On July 7, 2014, the Federal Circuit issued its opinion in X2Y Attenuators, LLC  v. Int’l Trade Comm’n (2013-1340).  This was an appeal by X2Y Attenuators, LLC (“X2Y”) from the International Trade Commission’s (the “Commission”) final determination in Certain Microprocessors, Components Thereof, and Products Containing Same (Inv. No. 337-TA-781).

In the opinion, the Federal Circuit affirmed the Commission’s final determination of no violation of Section 337 by Intel Corp., Intel Americas, Inc., Componentes Intel De Costa Rica S.A., Intel Technology Sdn. Bhd, Intel Products (Chengdu) Ltd., Apple Inc., and Hewlett-Packard Co. (collectively, “Respondents”) with respect to U.S. Patent Nos. 7,609,500, 7,916,444, and 8,023,241 (collectively, the “asserted patents”).  In particular, the Federal Circuit affirmed the Commission’s claim construction and thus affirmed the Commission’s finding that X2Y’s asserted patents do not cover Respondents’ accused products.

According to the opinion, the Commission found that certain claim terms (the “electrode terms”)  were limited to a so-called “sandwich” configuration—an arrangement of three electrodes in which a center conductor is flanked by paired differential, or oppositely charged, conductors.  In particular, the Commission adopted ALJ David P. Shaw’s construction of the electrode terms requiring “a common conductive pathway electrode positioned between paired electromagnetically opposite conductors.”  This construction was based on a finding that X2Y had disavowed a broader construction in the specifications of the asserted patents.  Because X2Y conceded non-infringement in view of this claim construction, the Commission found no violation of Section 337.  See our March 8, 2013 post for more details on the Commission’s opinion.

On review, the Federal Circuit agreed with the Commission’s claim construction and thus affirmed the finding of no violation of Section 337 due to non-infringement.  The Federal Circuit noted that the asserted patents stated that the presence of a common conductive pathway electrode positioned between paired electromagnetically opposite conductors is “universal to all the embodiments” and is “an essential element among all embodiments or connotations of the invention.”  The Federal Circuit found that these statements constituted a clear and unmistakable disavowal of claim scope and thus operated to limit the scope of the claims as the Commission had found.  In coming to this conclusion, the Federal Circuit rejected an argument by X2Y that some of the disclaimers were inapplicable because they only appeared in priority patents to which the asserted patents are related as continuations-in-part.

In view of the Federal Circuit’s affirmance of the Commission’s claim construction and X2Y’s concession of non-infringement based on that claim construction, the Federal Circuit affirmed the Commission’s final determination of no violation of Section 337.

ALJ Bullock Sets 15-Month Target Date In Certain Archery Products (337-TA-919)

Posted On: July 21, 2014   By:

On July 18, 2014, Chief ALJ Charles E. Bullock issued Order No. 6 in Certain Archery Products and Related Marketing Materials (Inv. No. 337-TA-919).

By way of background, this investigation is based on a May 9, 2014 complaint filed by Bear Archery, Inc. and SOP Services, Inc. alleging violation of Section 337 in the importation into the U.S. and sale of certain archery products that infringe one or more claims of U.S. Patent Nos. RE38,096, 6,978,775, and 7,226,375, and related marketing materials that infringe U.S. Trademark Reg. No. 2,501,255 for the mark WHISKER BISCUIT ARROW REST and U.S. Trademark Reg. No. 3,312,392 for the mark WHISKER BISCUIT.  See our May 12, 2014 post for more details on the complaint and our June 12, 2014 post for more details on the Notice of Investigation.   

In the Order, ALJ Bullock set September 16, 2015 as the target date for completing the investigation (which is approximately fifteen months after institution of the investigation).  In addition, ALJ Bullock directed the parties to submit proposed procedural schedules by August 8, 2014.

ITC Issues Public Version of Opinion In Certain Cases For Portable Electronic Devices (337-TA-867/861)

On July 10, 2014, the International Trade Commission (“the Commission”) issued the public version of its opinion in Certain Cases For Portable Electronic Devices (Inv. Nos. 337-TA-867/861).

By way of background, the Commission instituted Inv. No. 337-TA-861 based on a complaint filed by Speculative Product Design, LLC (“Speck”) alleging violations of Section 337 by reason of infringement of various claims of U.S. Patent No. 8,204,561 (the ‘561 patent) by several respondents.  See our November 16, 2012 post for more details.  The Commission instituted Inv. No. 337-TA-867 based on a second complaint filed by Speck alleging violations of Section 337 by reason of infringement of various claims of the ‘561 patent by additional respondents.  See our January 29, 2013 post for more details.  The two investigations were consolidated on January 31, 2013.  All of the respondents that participated in the consolidated investigation were terminated from the investigation based upon consent order stipulations, settlement agreements, or withdrawal of the complaint. 

On August 19, 2013, Speck filed a motion for summary determination that it has satisfied the domestic industry requirement under Sections 337(a)(3)(A), (B), and (C) (not including licensing).  The Commission Investigative Staff (“OUII”) filed a response in support of Speck’s motion.  On September 10, 2013, ALJ Pender issued an ID granting Speck’s motion in part, finding that Speck established a domestic industry for the ‘561 patent under Section 337(a)(3)(C).  See our October 30, 2013 post for more information.  On November 15, 2013, Speck filed a motion for summary determination with respect to defaulting respondents.  OUII filed a response in support of Speck’s motion and on February 21, 2014, ALJ Pender issued the final ID granting the motion and recommending the issuance of a general exclusion order (“GEO”) and the imposition of a bond of 100 percent of entered value during the Presidential review period.  See our March 11, 2014 post for more details on the public version of this ID.  On April 8, 2014, the Commission issued a notice of its determination not to review ALJ Pender’s finding of violation, and solicited submissions on remedy, the public interest, and bonding. 

General Exclusion Order

According to the Opinion, the Commission determined that the requirements for issuing a GEO under Section 337(d)(2)(A) and (d)(2)(B) had been met.  With respect to prong (a) “prevent[ing] circumvention” of a limited exclusion order (“LEO”), the Commission found that the defaulting respondents customarily engage in business practices that necessitated a GEO in order to prevent the circumvention of an LEO.  Specifically, the Commission noted that the respondents could easily circumvent an LEO by selling infringing goods online.  Additionally, the Commission found that, as the barrier to entering the protective case manufacturing market is low and foreign manufacturing operations can change their names and distribution patterns, respondents have, or are capable of, changing their names, facilities, or corporate structures to avoid detection.  The Commission found that Speck also met its burden to show that issuing a GEO is necessary because the evidence showed a widespread pattern of infringement by respondents and non-respondents and because it is difficult to identify the source of the infringing products.  Accordingly, the Commission adopted ALJ Pender’s recommendation and determined to issue a GEO in this investigation.  Under the GEO, cases for portable electronic devices covered by claims 4, 5, 9, and 11 of the ‘561 patent are excluded from entry into the United States for consumption, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption, for the remaining term of the ‘561 patent, except under license of the patent owner or as provided by law.

According to the Opinion, terminated Respondent Superior Communications, Inc. (“Superior”) filed a submission stating that if the Commission issued a GEO, it should “either (i) exempt the products imported by and for Superior from the scope of the order, or (ii) include a provision enabling third parties such as Superior to certify that their products do not infringe Speck’s ‘561 Patent.”  Specifically, Superior argued that ALJ Pender’s termination of Superior due to Speck’s motion to withdraw the complaint and terminate the investigation as to Superior based on Superior ceasing to import the accused DualTek line of cases had deprived Superior of its ability to offer its defense at the Commission.  Superior also noted that during a conference call with ALJ Pender it requested that ALJ Pender provide a carve-out for Superior’s products in his recommended remedy, and that ALJ Pender rejected this request.  

Speck filed a reply submission urging the Commission to reject Superior’s request for a carve-out because: (1) the exemption sought by Superior is overbroad and would permit Superior to import infringing products of its own; (2) the exemption would impermissibly include products that Superior concealed from Speck during the investigation; (3) Superior did not seek review of the ALJ’s ID terminating Superior from the investigation; (4) Superior will not be prejudiced by a GEO because Superior has twice previously challenged the validity of the ‘561 patent and lost before the Patent Office; and (5) Customs can readily identify infringing products, including those that Superior may attempt to import, and that existing procedural safeguards prevent seizure of noninfringing product. 

OUII also filed a reply submission contending that the Commission should not provide a carve-out for Superior’s products.  OUII argued that Superior had not established compelling facts or cited to legal precedent to support its request for a “carve-out.”  OUII, however, did recommend that the Commission include a certification provision to provide Customs and third parties with the ability to certify that their products are noninfringing, which would reduce the burden on Customs when it is not immediately clear whether an imported product infringes the ‘561 patent.

The Commission declined to include a carve-out provision for Superior’s products finding that Superior had not shown that a carve-out was necessary or appropriate.  The Commission noted that the Commission’s rules provide procedures that allowed Superior to contest ALJ Pender’s ruling terminating Superior from the investigation, but that Superior failed to use these established procedures and therefore waived its right to challenge ALJ Pender’s ruling.  The Commission also decided to include a certification provision in the GEO in order to reduce the burden on Customs in enforcing the GEO and to alleviate concerns that noninfringing products will be prevented from entering the United States. 

The Public Interest

According to the Opinion, Speck argued that none of the public interest factors warranted denying a GEO.  Speck also noted that no party raised any public interest concerns during the investigation.  The IA also determined that a GEO would have a minimal impact on competitive conditions in the U.S. economy and the production of like or directly competitive articles in the United States. 

The Commission found, based on the evidence of record, that issuing a GEO would not harm the public interest.  The Commission noted that there is no evidence that Speck and its legitimate competitors cannot meet the domestic demand for protective cases and that the record does not indicate that issuing a GEO would have any potential adverse impact on the public health and welfare, competitive conditions in the U.S. economy, or U.S. production. 

Bond

According to the Opinion, ALJ Pender recommended that if the Commission imposed a remedy following a finding of violation, it should set the bond in the amount of 100 percent of the entered value during the Presidential review period.  The Commission agreed with ALJ Pender’s recommendation, noting that the pricing variability, along with the number of accused products, made it difficult to reliably compare the price of the infringing products to the price of Speck’s domestic industry products.  The Commission noted that when it is difficult or impossible to calculate a bond based on price differentials, particularly where respondents have failed to provide discovery, the Commission has set the bond in the amount of 100 percent of the entered value of the infringing product.  Accordingly the Commission determined to set the bond in the amount of 100 percent of the entered value of infringing cases for portable electronic devices during the Presidential review period.