04
Nov
By Eric Schweibenz
On October 27, 2009, ALJ Theodore R. Essex issued the public version of the Initial Determination (“ID”) (dated September 22, 2009) in Certain Automotive Multimedia Display and Navigation Systems, Components Thereof, and Products Containing Same (Inv. No. 337-TA-657).

By way of background, the Complainant in this investigation is Honeywell International, Inc. (“Honeywell”).  The original Respondents were Alpine Electronics, Inc.; Alpine Electronics of America, Inc.; Denso Corporation; Denso International America, Inc.; Pioneer Corp.; Pioneer Electronics (USA) Inc.; Kenwood Corp.; and Kenwood USA Corp.  However, all of the Respondents other than Pioneer Corp. and Pioneer Electronics (USA) Inc. (collectively, “Pioneer”) were terminated from the investigation before the issuance of the ID as a result of settlement agreements with Honeywell.

ALJ Essex issued the ID in this investigation on September 22, 2009, finding no violation of Section 337 in the importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain automotive multimedia display and navigation systems, components thereof, and products containing same.  According to the ID, ALJ Essex held that Pioneer did not infringe the asserted claims of U.S. Patent Nos. 6,308,132 (the ‘132 patent); 5,923,286 (the ‘286 patent); 6,664,945 (the ‘945 patent); and 6,289,277 (the ‘277 patent).  Further, ALJ Essex held that many of the asserted claims were invalid for various reasons including anticipation, indefiniteness, failure to satisfy the best mode requirement, the public use bar, and the on-sale bar.  Finally, ALJ Essex found that a domestic industry existed for all four asserted patents based on Honeywell’s licensing activities.

The asserted patents relate to automotive navigation systems.  Honeywell accused several of Pioneer’s navigation units of infringement, but only some of the accused models are identified in the heavily-redacted public version of the ID.

Infringement

ALJ Essex found that Pioneer did not infringe any of the four asserted patents, either directly or indirectly.  According to the ID, for the ‘132 patent, Pioneer’s source code was central to the infringement analysis.  While the details of the analysis are redacted from the public version of the ID, it is clear from the public version that ALJ Essex’s noninfringement determination was based on a finding that Pioneer’s accused products did not meet the following claim limitation: “generating at least one intermediate database by a software means, each intermediate database containing projection data representing navigational information, the intermediate database and the software means both being loaded and stored on the electronic medium.”  Since this limitation is present in every asserted claim, ALJ Essex’s finding that Pioneer’s products do not practice it led to a holding that Pioneer does not infringe any of the asserted claims of the ‘132 patent.

For the ‘286, ‘945, and ‘277 patents, ALJ Essex found noninfringement based on the fact that Honeywell had based all of its infringement arguments on its own proposed claim construction for various disputed terms, and had failed to make any arguments in the alternative based on Pioneer’s or the Staff’s proposed claim construction.  Since ALJ Essex ultimately adopted either Pioneer’s or the Commission Investigative Staff’s (“Staff”) proposed constructions for the disputed terms in the ‘286, ‘945, and ‘277 patents, this meant that Honeywell had simply failed to meet its evidentiary burden to show infringement by a preponderance of the evidence.

Nevertheless, despite finding noninfringement based on Honeywell’s failure to carry its burden, ALJ Essex nevertheless went on to find noninfringement on the merits in the ID.

For the ‘286 patent, ALJ Essex found that Pioneer’s accused products do not include an inertial reference system (IRS) and therefore do not meet the following limitations in the asserted claim: (1) “an inertial reference system providing an IRS position system;” (2) “an IRS position estimator providing an estimated IRS position signal based upon the IRS position signal, the velocity of the vehicle, and the acceleration of the vehicle;” or (3) “a position selector providing a vehicle position signal wherein the vehicle position signal corresponds to the hybrid position signal when the GPS position signal is reliable, and wherein the vehicle position signal corresponds to the estimated IRS position signal when the GPS position is unreliable.”

For the ‘945 patent, ALJ Essex found that Pioneer’s accused products do not include: (1) “a selectable alphanumeric text portion;” (2) “a selectable tuning portion;” or (3) “storage select means in communication with the frequency list; the radio select means, text portion, turning portion, frequency list, tuning buttons and storage select means each in communication with a microprocessor, the microprocessor in communication with at least one radio means, and each radio tuning button corresponding to each radio means.”

For the ‘277 patent, ALJ Essex  found that Pioneer’s accused products do not practice the step of “receiving data representing a proposed route for a vehicle.”   Interestingly, for the ‘277 patent, the Staff agreed with Honeywell that Pioneer’s accused products infringed.  Honeywell and the Staff argued that the accused navigation systems received data representing a proposed route for a vehicle when a user entered a destination address into the system.  However, the ALJ disagreed and found that a “destination address” was not the same as a “proposed route.”  According to the ID, “data representing a route is a sequence of segments.”  The fact that the accused systems themselves calculated a route after receiving a destination address was insufficient to meet the claim limitation of “receiving data representing a proposed route.”  Accordingly, ALJ Essex found that the accused products do not infringe the asserted claims of the ‘277 patent.

Validity

ALJ Essex found the ‘132, ‘286, and ‘277 patents invalid on various grounds, but found the ’945 patent valid.  The asserted claims of the ‘132 patent were found to be anticipated by a McDonough reference under 35 U.S.C. § 102, indefinite under 35 U.S.C. § 112 ¶ 2, and invalid based on the public use and on-sale bars of 35 U.S.C. § 102(b).  The asserted claims of the ‘286 patent were found to be invalid for failure to satisfy the best mode requirement of 35 U.S.C. § 112 ¶ 1.  Finally, the asserted claims of the ‘277 patent were found to be anticipated by the factory-installed navigation system in a 1998 model Lexus GS 400 automobile.

Rather than arguing anticipation of the ‘132 patent in detail, Pioneer had simply referred ALJ Essex to its expert’s witness statement for a “step-by-step” anticipation analysis.  In response to this, ALJ Essex stated that “[c]onclusory statements referring the ALJ to hundreds of pages of witness testimony en masse does not meet the spirit or letter of Ground Rule 11.1 and is a means of circumventing the page limitations set by the ALJ.”  Further, “the ALJ is not inclined to invalidate a patent based on prior art that the parties have not fully addressed.”  However, since the Staff had argued in detail that a McDonough reference anticipated the ‘132 patent, ALJ Essex was willing to consider that reference and ultimately concluded that it did in fact anticipate the asserted claims of the ‘132 patent.

Additionally, ALJ Essex found that the term “software means” -- which is present in all of the asserted claims of the ‘132 patent -- was indefinite under 35 U.S.C. § 112 ¶ 2.  ALJ Essex construed the claims containing the term as means-plus-function claims under 35 U.S.C. § 112 ¶ 6, but found that the ‘132 patent’s specification failed to disclose any corresponding structure for the claimed “software means.”  Accordingly, ALJ Essex found the claims indefinite under 35 U.S.C. § 112 ¶ 2.

Moreover, ALJ Essex found that the ‘132 patent was invalid under 35 U.S.C. § 102(b) because the claimed invention was in public use and on sale more than a year before the patent’s filing date.  Specifically, the invention had been publicly shown at a trade show in 1998 and had been offered for sale shortly after the trade show, in November 1998.  Since the application leading to the issuance of the ‘132 patent was not filed until June 13, 2000, the patent was invalid under 35 U.S.C. § 102(b).

The ‘286 patent was held invalid for failure to satisfy the best mode requirement of 35 U.S.C. § 112 ¶ 1. The patent’s inventor, Dr. Divakaruni, was found to have intentionally failed to disclose the best mode of practicing his invention.  At the evidentiary hearing, Dr. Divakaruni admitted that he did not disclose the best mode because he wanted to keep it from Honeywell’s competitors.  In particular, while testifying at the hearing, Dr. Divakaruni asked ALJ Essex, “[a]m I allowed to quote Napolean, your honor?,”  to which ALJ Essex replied, “[t]here’s no ban on quoting Napolean.  I don’t know what it will do.”  Then, Dr. Divakuni stated that “[o]ne of the worst practices for a field general is to do anything to help the enemy in any form.”  He then proceeded to admit that, like Napolean, he did not disclose his best mode because he did not want to help Honeywell’s competitors.  Based on this testimony, ALJ Essex found the ‘286 patent invalid under 35 U.S.C. § 112 ¶ 1.

Finally, ALJ Essex found that the ‘277 patent was anticipated by the factory-installed navigation system in a 1998 model Lexus GS 400.  Honeywell had argued that the Lexus system was not prior art because Pioneer had failed to provide evidence “regarding who owns the Lexus, its chain of custody, its four accidents, or whether the system in the car today operates in the same way as those sold in 1997.”  But ALJ Essex rejected Honeywell’s objections and found that the Lexus system was prior art under 35 U.S.C. § 102(b), and that it disclosed all of the limitations of the ‘277 patent’s asserted claims.

Domestic Industry

ALJ Essex found that Honeywell had satisfied the domestic industry requirement through its licensing activities for all four of the asserted patents.  Pioneer argued that these activities were only born out of litigation, including the present Section 337 investigation, and as such should not be considered for purposes of deciding whether Honeywell satisfied the domestic industry requirement.  However, the ALJ found that “speculating on Honeywell’s motives for starting activities relating to licensing does not detract from the fact that Honeywell has actually expended significant resources in developing its licensing program.”  Accordingly, ALJ Essex found that the domestic industry requirement was satisfied for all four asserted patents.

Remedy and Bond

With respect to remedy, ALJ Essex recommended that, if the Commission reversed his initial determination and found a violation of Section 337, it should issue a Limited Exclusion Order (“LEO”) directed to automotive navigation systems imported by or on behalf of Pioneer.  However, ALJ Essex further recommended that the LEO should not extend to downstream products, such as automobiles containing potentially infringing navigation systems.  Additionally, ALJ Essex found that Pioneer maintains a significant inventory of aftermarket products in the U.S., and, accordingly, a cease and desist order directed to Pioneer would also be appropriate if the Commission were to find a violation of Section 337.  Finally, ALJ Essex recommended that, if necessary, the bond during the presidential review period should be set at 100% of the value of the accused infringing products.
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