ALJ Pender Grants Summary Determination Of Violation And Recommends General Exclusion Order In Certain Cases For Portable Electronic Devices (337-TA-861/867)
On March 5, 2014, ALJ Thomas B. Pender issued the public version of Order No. 28 (dated February 21, 2014) in Certain Cases for Portable Electronic Devices (Inv. No. 337-TA-861/867). In the Order, ALJ Pender granted Complainant Speculative Product Design, LLC’s (“Speck”) motion for summary determination that defaulting Respondents Hongkong Wexun Ltd., ROCON Digital Technology Corp., SW-Box.com, Trait Technology Co., Anbess Electronics Co., Ltd., and Global Digital Star Industry, Ltd. (collectively, the “Defaulting Respondents”) have violated Section 337. The ALJ also recommended that the Commission issue a general exclusion order (“GEO”) and impose a bond of 100 percent on the Defaulting Respondents.
By way of background, this investigation is a consolidation of Inv. Nos. 337-TA-861 and 337-TA-867. Speck filed a first complaint on September 26, 2012, which led to the institution of the 337-TA-861 investigation. See our November 16, 2012 post for more details. On December 26, 2012, Speck filed a second complaint, which led to the institution of the 337-TA-867 investigation and its consolidation with the 337-TA-861 investigation. See our January 29, 2013 post for more details. During the course of the consolidated investigation, a number of Respondents either were terminated or defaulted. On September 10, 2013, ALJ Pender granted-in-part Speck’s motion for partial summary determination that it has satisfied the domestic industry requirement. See our October 30, 2013 post for more details. On November 15, 2013, Speck filed the instant motion for summary determination of violation and for entry of a GEO.
According to the Order, Speck argued that each of the Defaulting Respondents violated Section 337 by importing, selling for importation, and/or selling after importation certain cell-phone cases that infringe Speck’s U.S. Patent No. 8,204,561 (the ‘561 patent). The Commission Investigative Staff filed a response in support of Speck’s motion. According to the Order, no other responses were received.
After conducting an analysis of importation and infringement, ALJ Pender concluded that there are no genuine issues of material fact that each of the Defaulting Respondents has imported, sold for importation, and sold after importation into the U.S. products that infringe the asserted claims of the ‘561 patent. In particular, ALJ Pender found that the declaration of Speck’s expert Dr. Osswald was persuasive on the infringement issue. Moreover, as noted above, ALJ Pender had already found that Speck had satisfied the domestic industry requirement. Accordingly, the ALJ granted Speck’s motion and issued an Initial Determination that the Defaulting Respondents have violated Section 337 through the importation, sale for importation, or sale in the U.S. after importation of certain cases for electronic devices that infringe at least one asserted claim of the ’561 patent.
In addition, ALJ Pender issued a Recommended Determination on remedy and bonding. With respect to remedy, the ALJ found that a GEO would be well justified. In particular, he found that market conditions for cell-phone cases invite counterfeiting and infringement, and that the low barriers to entry in the market and the ease with which foreign manufacturing operations can change their names and distribution patterns to avoid detection were particularly relevant. The ALJ also found that there was a widespread pattern of violation of Section 337 by manufacturers that would be difficult to identify. Accordingly, ALJ Pender found that a GEO would be well justified under both 19 U.S.C. § 1337(d)(2)(A) and 19 U.S.C. § 1337(d)(2)(B).
Lastly, ALJ Pender determined that a bonding rate of 100% would be appropriate during the Presidential Review Period. Specifically, ALJ Pender found that the variety of pricing, coupled with the number of accused products, made it difficult to reliably compare the price of Speck’s domestic industry products to the prices of the infringing products. The ALJ found that a bond value of 100% was therefore appropriate under Commission precedent.