On March 26, 2014, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Audiovisual Components and Products Containing the Same (Inv. No. 337-TA-837). 

By way of background, the investigation is based on a March 2, 2012 complaint filed by LSI Corporation and its subsidiary Agere Systems Inc. (collectively, “LSI”) alleging violation of Section 337 with regard to certain audiovisual components and products containing the same including certain digital televisions, Blu-ray disc players, home theater systems, DVD players and/or recorders that infringe one or more claims of U.S. Patent Nos. 5,870,087 (the ‘087 patent), 6,982,663 (the ‘663 patent),  6,452,958 (the ‘958 patent), and 6,707,867 (the ‘867 patent).  See our April 13, 2012 post for more details on the investigation.  On March 7, 2013, the ALJ granted a motion to terminate the investigation as to certain claims of those patents. 

In the initial determination (“ID”), ALJ Shaw found a violation of Section 337 had occurred with respect to claims 1, 5, 7-11, and 16 of the ‘087 Patent but that no violation had occurred with respect to the remaining asserted claims of the ‘663, ‘958, and ‘867 Patents.  See our September 16, 2013 post for more details.  As of the date of the ID, the remaining respondents in the investigation were Funai Electric Company, Ltd., Funai Corporation, Inc., P&F USA, Inc., and Funai Service Corporation (collectively, “Funai”) and Realtek Semiconductor Corporation (“Realtek”).

As explained in our October 25, 2013 post, after examining the relevant portions of the record of the investigation, including the ID and the parties’ submissions, the Commission determined to review the final ID in its entirety and requested the parties to brief twelve specifically enumerated issues.  According to the opinion, after the Commission determined to review the ID, the parties entered into settlement agreements or agreed to vacate findings (in view of patent expiration) for all patents except the ‘958 patent.  We now provide the details of the Commission’s opinion in relation to the ‘958 patent.

The ‘958 patent relates to digital signal modulation to encode information.  In the accused products, the modulators are included in WiFi chips that are a part of the downstream products.  LSI asserts that the ‘958 patent is essential to the Institute of Electrical and Electronic Engineers, Inc. (“IEEE”) 802.11 standard for complementary code keying (“CCK”) modulation and timing synchronization.

All the asserted claims require “a modulator that chooses a code having N chips in response to a group of data bits,” and LSI petitioned for review of the ALJ’s construction of this phrase.  The Commission affirmed ALJ Shaw’s construction of the term “code” to mean “a sequence of chips representing a real value,” noting that LSI’s proposed construction (to include complex codes) contradicts the parties’ agreed-upon construction, and that LSI’s proposed construction was not supported by either the intrinsic or extrinsic evidence.

The Commission’s affirmation of the claim construction of “code” to exclude complex codes supported a determination that certain products do not infringe the ‘958 patent, as they select complex, not real, codes.  According to the Commission, “[d]espite abundant record evidence supporting [this finding],” LSI continued to argue that the products select a “real” code.  However, the Commission held that the ALJ “correctly concluded that each CCK codeword…represents a complex value, and so the accused codewords do not meet the claimed ‘code.’”  The Commission also determined that the remaining accused products were not proved to infringe, affirming the ALJ’s decision to strike LSI’s supporting evidence as provided too late (as it was only submitted the same day that pre-hearing briefs were due).

The validity dispute was premised on a determination of the correct priority of the ‘958 patent, and the Commission disagreed with the ALJ that the ‘958 patent was entitled to its earliest priority date.  Specifically, the Commission found that at least four limitations were not included in the earliest priority application (as conceded by LSI’s expert at trial), and as such, the written description requirement was not met.

With the priority date of the ‘958 patent now correctly determined to be the actual filing date, prior art that was dismissed by the ALJ was considered by the Commission.  The Commission determined that the ‘958 patent would have been obvious over the van Nee article in view of the Harris Proposal, noting that LSI’s expert conceded that the van Nee article would anticipate or render obvious every asserted claim of the ‘958 patent if it were prior art.  The Commission also reversed the ALJ’s finding of no anticipation of a subset of claims over the Prasad reference, but affirmed that the remaining claims would not have been obvious over Prasad.  The Commission also affirmed that the remaining proffered references were non-analogous art and would not have rendered the ‘958 patent obvious and that the secondary considerations put forward by LSI did not have the required nexus to the claims.  Finally, the Commission affirmed ALJ Shaw’s finding that the asserted claims were not indefinite. 

With regard to domestic industry, the Commission determined that the ALJ’s finding of domestic industry based on licensing conflicts with recent decisions imposing an “articles” requirement for licensing-based domestic industry, and LSI failed to prove that the products covered by the license practiced the invention of the ‘958 patent. 

Because “there are multiple grounds for determining no violation” of Section 337, the Commission did not reach any RAND or equitable defenses asserted by Funai and Realtek.

In light of the above, the Commission affirmed the ALJ’s finding of no violation of Section 337 with respect to the ‘958 patent as modified, and terminated the investigation.

On April 4, 2014, the International Trade Commission (the “Commission”) issued a notice in Certain Encapsulated Integrated Circuit Devices and Products Containing Same (Inv. No. 337-TA-501).  In the notice, the Commission found a violation of Section 337 by Respondents Carsem (M) SdnBhd, Carsem Semiconductor Sdn Bhd, and Carsem, Inc. (collectively, “Carsem”).  The Commission issued a limited exclusion order and terminated the investigation.

By way of background, the Commission instituted an investigation based on a complaint filed by Amkor Technology Inc. (“Amkor”), alleging the importation into the U.S., sale for importation, and sale within the U.S. after importation of certain encapsulated integrated circuit devices that infringe claims of U.S. Patent Nos. 6,433,277 (the ‘277 patent), 6,630,728 (the ‘728 patent), and 6,455,356 (the ‘356 patent) (collectively, “the Asserted Patents”).  The investigation also concerned a third-party, ASAT, Inc. (“ASAT”) and its invention (the “ASAT invention”), which Carsem argued was invalidating prior art to Amkor’s Asserted Patents.

On November 18, 2004, ALJ Charles E. Bullock issued a final initial determination (“Final ID”) finding no violation of Section 337.  After reviewing the Final ID, the Commission modified ALJ Bullock’s claim construction and remanded the investigation, instructing ALJ Bullock “to conduct further proceedings and make any new findings or changes to his original findings that are necessitated by the Commission’s new claim construction.”  On November 9, 2005, ALJ Bullock issued a remand initial determination (“Remand ID”) finding a violation of Section 337 with regard to six claims of the ‘277 patent and finding no violation of the ‘728 or ’356 patents.  The investigation was delayed due to difficulty obtaining certain documents from ASAT that Carsem asserted were critical for its affirmative defenses.  On July 1, 2009, after ASAT had complied with a subpoena requesting the documents, the Commission issued a notice and order remanding the investigation to ALJ Bullock in order for the ASAT documents to be considered.  On October 30, 2009, ALJ Bullock issued a supplemental ID (“First Supplemental ID”), finding that the ASAT invention was not prior art and reaffirming the Section 337 violation.  On February 18, 2010, the Commission revered ALJ Bullock’s finding that the ASAT invention was not prior art to the Asserted Patents and remanded the investigation for ALJ Bullock to make necessary findings in light of the determination that the ASAT invention was prior art.  On March 22, 2010, ALJ Bullock issued a Supplemental ID (“Second Supplemental ID”), finding that the ‘277 and ‘728 patents were invalid in view of the ASAT prior art and determining that there was no violation of section 337.  The Commission determined not to review the ALJ’s Remand ID and Second Supplemental ID and determined that there was no violation of Section 337.  Amkor appealed the Commission’s decision to the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”), which reversed the Commission’s determination that the ‘277 patent is invalid under 35 U.S.C. §102(g), declined to affirm the invalidity determination on alternative grounds raised by Carsem, and remanded for further proceedings.  On October 5, 2012, Carsem filed a combined petition for panel rehearing and for rehearing en banc, which the Federal Circuit denied.  On January 14, 2013, the Commission issued an Order directing the parties to submit their comments regarding what further proceedings must be conducted to comply with the Federal Circuit’s judgment.  On June 5, 2013, the Commission issued a Notice requesting briefing on remedy, bonding, and public interest, as well as responses to certain questions regarding the economic prong of the domestic industry requirement and the public interest.  See our July 28, 2010, September 7, 2010, and August 27, 2012 posts for more background details on this matter.   

According to the April 4, 2014 notice, after considering the record of the investigation, including the parties’ submissions in response to the Commission’s Order and Notice, the Commission determined to affirm ALJ Bullock’s First Supplemental ID and Remand ID finding a violation of Section 337.  The Commission also determined to:

• Affirm ALJ Bullock’s determination that claims 2-4 and 21-23 of the ‘277 patent are not invalid over the ASAT invention;
• Affirm ALJ Bullock’s determination that Carsem failed to show that the equitable estoppel defense based applied in this investigation;
• Affirm that Carsem failed to prove that Amkor had deceived the standard setting body or that the’277 patent is necessary to practice JEDEC’s standards and that Carsem failed to show that its legal estoppel defense applied in this investigation;
• Affirm with modifications ALJ Bullock’s finding that Amkor satisfied the economic prong of the domestic industry requirement under subsection 337(a)(3)(A);
• Affirm with modifications ALJ Bullock’s finding that Amkor failed to satisfy the economic prong of the domestic industry requirement under subsection 337(a)(3)(B);
• Take no position on ALJ Bullock’s findings with respect to whether Amkor satisfied the economic prong of the domestic industry requirement under subsection 337(a)(3)(C).

Accordingly, the Commission determined that the appropriate form of relief in the investigation was a limited exclusion order prohibiting the unlicensed entry of certain encapsulated integrated circuit devices covered by claims 2-4 and 21-23 of the ‘277 patent that are manufactured abroad by, or on behalf of, or imported by, or on behalf of, Carsem.  The Commission also determined that the public interest factors did not preclude issuing the limited exclusion order and that Amkor was required to post a bond in the amount of a reasonable royalty rate of $0.00025 per contact per covered encapsulated integrated circuit device imported during the period of Presidential review.

On April 10, 2014, ALJ E. James Gildea issued the public version of Order No. 18 (dated March 6, 2014) granting Complainants’ Motion to Compel Production of Documents in Certain Sleep-Disordered Breathing Treatment Systems and Components Thereof (Inv. No. 337-TA-879).

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 which they previously entered into.  See our December 16, 2013 post for more details on the ITC’s decision to institute this advisory opinion proceeding.    

According to the Order, Complainants ResMed Inc., ResMed Ltd., and ResMed Corp. (collectively, “ResMed”) filed a motion to compel Apex to produce certain photographs.  According to ResMed, these photographs were produced several times by Apex.  ResMed also asserted that one of the photographs was marked as an exhibit during the deposition of an Apex fact witness and that the witness was questioned about the photograph without objection of Apex’s U.S. or Taiwanese counsel.  Additionally, ResMed asserted that Apex did not assert a claim of privilege with respect to these photographs until after the deposition, and that Apex cannot establish that the photographs are protected by the attorney-client privilege or work product doctrine.  ResMed further argued that Apex had waived any privilege by producing the documents multiple times without objection and permitting their use during a deposition.

Apex opposed the motion arguing that the photographs were protected by both the attorney-client privilege and the work product doctrine because they reflect the mental impressions of Apex’s in-house patent adviser, were prepared for the purpose of seeking advice of counsel, and were prepared in anticipation of Apex’s Request for Advisory Opinion and the pending District Court action between the parties.  Apex also argued that it had not waived any privilege because the disclosure was inadvertent, because Apex took reasonable steps to prevent disclosure, and because Apex took reasonable steps to rectify its error.

ALJ Gildea found that Federal Circuit precedent and Federal Rule of Evidence 502 both supported a finding that any applicable privilege was waived by Apex’s repeated disclosure of the photographs.  ALJ Gildea determined that what may have been inadvertent production in one case could not reasonably be deemed to be inadvertent after three subsequent productions as well as Apex’s failure to object to the use of the photographs during a deposition.  ALJ Gildea further determined that the subsequent productions undermined Apex’s argument that it took reasonable steps to prevent disclosure of the photographs.  Accordingly, ALJ Gildea granted ResMed’s motion to compel.

On April 10, 2014, the International Trade Commission (the “Commission”) issued a notice in Certain Dimmable Compact Fluorescent Lamps and Products Containing Same (Inv. No. 337-TA-830).  In the notice, the Commission determined to affirm-in-part and reverse-in-part the Enforcement Initial Determination (“EID”) issued by ALJ Thomas B. Pender on January 10, 2014.  In addition, the Commission found a violation of a consent order, issued a civil penalty order, and terminated the enforcement proceeding.

By way of background, the Commission instituted an investigation based on a complaint filed by the Complainants in this investigation, Andrzej Bobel and Neptun Light, Inc. (collectively, “Neptun”), alleging the importation into the U.S., sale for importation, and sale within the U.S. after importation of certain dimmable compact fluorescent lamps (“CFLs”) that infringe claim 9 of U.S. Patent No. 5,434,480 (the ‘480 patent).  The complaint named numerous respondents, including MaxLite, Inc. (“MaxLite”).  On July 25, 2012, the Commission terminated the investigation with respect to MaxLite and entered a consent order preventing MaxLite from importing dimmable CFLs that infringe claim 9 of the ‘480 patent.  MaxLite petitioned the Commission for a modification of the consent order based on a district court proceeding regarding a covenant not to sue.  Additionally, Neptun filed a complaint requesting that the Commission institute a formal proceeding to investigate a violation of the consent order.  The Commission instituted a consolidated formal enforcement and modification proceeding to determine whether MaxLite was in violation of the consent order.  In the EID, ALJ Pender found that MaxLite’s accused CFL bulbs infringed claim 9 of the ‘480 patent, but that Neptun had not demonstrated infringement by MaxLite’s “dimmable CFL Faux Cans” (“Faux Cans”).  See our January 14, 2014 post for more details on the EID.  On February 26, 2014, the Commission determined to review the EID in part and requested briefing on certain patent-related issues and on assessment of the civil penalty.  See our March 5, 2014 post for more details.

According to the April 10 notice, after considering the record of the investigation, including the EID, the petitions for review and responses thereto, and the parties’ briefing in response to the Commission’s notice of review, the Commission determined to affirm-in-part and reverse-in-part the EID.  In particular, the Commission reversed ALJ Pender’s finding that claim 9 has a “bi-directionality” requirement imposed by disavowal in the patent specification.  The Commission also reversed the portion of the non-infringement determination regarding the Faux Cans predicated on this claim construction.  However, the Commission affirmed the ALJ’s determination that Neptun had failed to demonstrate infringement by the Faux Cans even absent such a “bi-directionality” requirement.  The Commission also determined to impose a civil penalty of $10,000 on MaxLite for violation of the consent order as to the accused CFL bulbs.

The notice states that a Commission opinion is forthcoming.  We will provide additional information once the public version of the opinion issues.

On April 3, 2014, ALJ E. James Gildea issued Order No. 62 in Certain Integrated Circuit Devices and Products Containing the Same (Inv. No. 337-TA-873). 

In the Order, ALJ Gildea denied Complainant Tela Innovations, Inc.’s (“Tela”) motion requesting that the ALJ hear closing arguments in this Investigation.  According to the Order, the Commission Investigative Staff did not oppose Tela’s motion, but the Respondents did oppose noting that Tela failed to identify a sufficient justification for presenting closing arguments. 

ALJ Gildea determined that while his Ground Rule 9.2 indicates that parties may make a request to present closing arguments, those requests are not granted as a matter of right.   Because
Tela did not present sufficient justification for presenting closing arguments and the ALJ’s schedule does not allow for setting a timely enough date for closing arguments to be meaningful, ALJ Gildea denied Tela’s motion.

On April 2, 2014, ALJ Dee Lord issued Order No. 7 in Certain Television Sets, Television Receivers, Television Tuners, and Components Thereof (Inv. No. 337-TA-910).

By way of background, this investigation is based on a January 28, 2014 complaint filed by Cresta Technology Corp. of Santa Clara, California alleging violation of Section 337 in the importation into the U.S. and sale of certain television sets, television receivers, television tuners, and components thereof that infringe one or more claims of U.S. Patent Nos. 7,075,585, 7,265,792, and 7,251,466.  See our January 30, 2014 and March 24, 2014 posts for more details on the complaint and Notice of Investigation, respectively.

According to Order No. 7, ALJ Lord set the procedural schedule for this investigation and  determined that the evidentiary hearing will commence on December 1, 2014; the Initial Determination on alleged violation of Section 337 will be issued on February 27, 2015; and the target date for completing the investigation is June 29, 2015 (which is approximately sixteen months after institution of the investigation).

On April 9, 2014, the U.S. International Trade Commission issued a press release announcing their vote to institute an investigation of Certain Sulfentrazone, Sulfentrazone Compositions, and Processes for Making Sulfentrazone (Inv. No. 337-TA-914).

The investigation is based on a March 5, 2014 complaint and March 26, 2014 letter clarifying the complaint filed by FMC Corp. of Philadelphia, Pennsylvania (“FMC”) alleging violation of Section 337 in the importation into the U.S. and sale of certain certain sulfentrazone active ingredient and formulated sulfentrazone compositions made by a process that infringes one or more claims of U.S. Patent No. 7,169,952.  See our March 6, 2014 post for more details. 

According to the Notice of Investigation, the Commission has identified Beijing Nutrichem Science and Technology Stock Co., Ltd. of China, Summit Agro USA, LLC of Cary, North Carolina, Summit Agro North America Holding Corp. of New York, New York, and Jiangxi Heyi Chemicals Co. Ltd. of China as the respondents in this investigation.  The Notice of Investigation further indicates that FMC’s motion for temporary relief filed concurrently with the complaint has been provisionally accepted.

Lastly, Chief ALJ Charles E. Bullock issued a notice indicating that Dee Lord will be the presiding Administrative Law Judge in this investigation.

On April 8, 2014, the International Trade Commission (“the Commission”) issued a notice in Certain Compact Fluorescent Reflector Lamps, Products Containing Same and Components Thereof (Inv. No. 337-TA-872).  In the notice, the Commission determined to review, in part, ALJ David P. Shaw’s Final Initial Determination (“ID”) finding a violation of Section 337 by Respondents Maxlite, Inc. (“Maxlite”), Satco Products, Inc. (“Satco”), and Litetronics International, Inc. (“Litetronics”) (collectively, “Respondents”). 

By way of background, the investigation is based on a complaint filed by Andrzej Bobel and Neptun Light, Inc. (collectively, “Neptun”) alleging violation of Section 337 in the importation into the U.S. and sale of certain compact fluorescent reflector lamps (“reflector CFLs”), and products and components containing same, that infringe claims 1, 2, 10, and 11 of U.S. Patent No. 7,053,540 (the ‘540 patent).  See our January 30, 2013 and March 1, 2013 posts for more details on Neptun’s complaint and the Notice of Investigation, respectively.  In Order No. 20, ALJ Shaw terminated the investigation as to Respondent Technical Consumer Products, Inc. based on a settlement agreement.  Thus, Maxlite, Satco, and Litetronics remained as respondents to the investigation.

On February 3, 2014, ALJ Shaw determined that Respondents importation and sale of certain reflector CFLs infringed asserted claims 1, 2, 10, and 11.  Respondents did not contest that the accused products satisfied the limitations of dependent claims 2, 10, and 11.  See our March 14, 2014 post for more details on the public version of the ID.

On February 18, 2014, Respondents petitioned the Commission for review of several of ALJ Shaw’s findings.  Neptun also petitioned for review of the ALJ’s finding that it failed to demonstrate specific investments in licensing activities under 337(a)(3)(C)—ALJ Shaw otherwise found that Neptun had satisfied the economic prong of the domestic industry requirement through plant and equipment, and labor and capital.

The Commission determined to review ALJ Shaw’s findings on the economic prong of the domestic industry requirement, the construction of the term “mating opening,” and the ALJ’s finding on infringement.

According to the notice, the Commission requested briefing from the parties on the following issues:

• The portion of Neptun’s investments and expenditures associated with the articles protected by the ‘540 patent.
• Whether Neptun’s investments and expenditures are “significant” under 337(a)(3)(A) and (B).
• Whether Neptun made substantial investment in engineering or research and development under 337(a)(3)(C).
• The proper construction of the term “mating opening.”
• An explanation of how Respondents accused products satisfy (or do not satisfy) the claim limitations “said cavity having a first circumferential flange” and “the first circumferential flange of the reflector cavity.”
• An explanation of how Respondents accused products satisfy (or do not satisfy) the claim limitation “said base being inside said defined cavity of said reflector and located inside said mating opening.”
• An explanation of how Respondents accused products satisfy (or do not satisfy) the claim limitations “said base having a second circumferential flange” and “the second circumferential flange of the light source base.”

In addition, the Commission requested written submissions from the parties, interested government agencies, and any other interested persons on the form of remedy, if any, that should be ordered, the public interest factors associated with that determination, and bonding.

Written submissions are due by April 22, 2014, with reply submissions due by April 29, 2014.

On March 25, 2014, ALJ Dee Lord issued Order No. 42 denying Respondents’ motion to compel Complainant’s employee Ryan Fry for an additional day of deposition and to reimburse fees and costs associated therewith in Certain Optical Disc Drives, Components Thereof, and Products Containing the Same (Inv. No. 337-TA-897).

By way of background, the investigation in this case is based on a September 3, 2013 complaint and September 20, 2013 letter supplementing the complaint filed by Optical Devices, LLC (“Optical”) alleging violation of Section 337 in the importation into the U.S. and sale of certain optical disc drives, components thereof, and products containing the same that infringe one or more claims of U.S. Patent Nos. 6,904,007; 7,196,979; 8,416,651; RE40,927; RE42,913; and RE43,681.  See our September 6, 2013 and October 23, 2013 posts for more details on the complaint and Notice of Investigation, respectively.

According to the Order, Respondents filed a motion to compel Optical to make its employee Ryan Fry available for an extra day of deposition, to reimburse fees and costs for the same, and to prohibit Optical and its counsel from giving “improper instructions” to Mr. Fry.  Specifically, Respondents argued that when Mr. Fry was deposed, he was instructed not to answer questions based on relevance in violation of Commission rules, or was instructed not to answer based on erroneous privilege claims.  As such, Respondents sought an extra day of deposition to rectify this issue.  Respondents also requested a shortened response time, which Optical opposed. 

The parties participated in a teleconference where they “were instructed on the expected conduct and form of depositions” in this Investigation.  After the teleconference, Optical filed its opposition to Respondents’ motion, stating that it is willing to produce Mr. Fry for a second day limited to the topics on which he was instructed not to answer, and that the motion is now moot.  AJL Lord agreed, and as such, denied the motion, while reminding the parties to be mindful of the instructions provided during the teleconference.

On April 8, 2014, ALJ Dee Lord issued Order No. 14 in Certain Navigation Products, Including GPS Devices, Navigation and Display Systems, Radar Systems, Navigational Aids, Mapping Systems and Related Software (Inv. No. 337-TA-900).

By way of background, this investigation is based on a September 23, 2013 complaint filed by Furuno Electric Co., Ltd. and Furuno U.S.A., Inc. (collectively, “Furuno”) alleging violation of Section 337 in the importation into the U.S. and sale of certain navigation products, including GPS devices, navigation and display systems, radar systems, navigational aids, mapping systems, and related software that infringe one or more claims of U.S. Patent Nos. 6,084,565, 6,424,292, 7,161,561, and 7,768,447.  See our September 25, 2013 and November 12, 2013 posts for more details on the complaint and Notice of Investigation, respectively.

According to Order No. 14, ALJ Lord granted a joint motion filed by Furuno and Respondents Navico Holding AS, Navico UK Limited, and Navico Inc. (collectively, “Navico”) to terminate the investigation based on a settlement agreement between Furuno and Navico.

The investigation remains pending against other Respondents.