By Tom Fisher
Further to our October 15 post, on November 4, 2009, ALJ E. James Gildea issued the public version of the October 13, 2009 Initial Determination (“ID”) in Certain Coaxial Cable Connectors and Components Thereof and Products Containing Same (Inv. No. 337-TA-650).

The Complainant in this investigation was John Mezzalingua Associates, Inc. d/b/a PPC, Inc. (“PPC”).  PPC alleged that Fu Ching Technical Industry Co. Ltd. and Gem Electronics, Inc. (collectively, “Respondents”) were engaged in the manufacture and sale for importation, and the importation and sale after importation of coaxial cable connectors that infringed claims of United States Patent No. 5,470,257 (the ‘257 patent).  Four other respondents, Hanjiang Fei Yu Electronics Equipment Factory, Zhongguang Electronics, Yangzhou Zhongguang Electronics Co., Ltd., and Yangzhou Zhongguang Foreign Trade Co., Ltd. (collectively, the “Defaulting Respondents”), were previously found to be in default and were alleged to be in violation of Section 337 for reasons of infringement of the ‘257 patent, as well as U.S. Patent Nos. 6,558,194 (the ‘194 patent); D440,539 (the ‘539 patent); and D519,076 (the ‘076 patent).

According to the ID, ALJ Gildea determined that no violation of Section 337 had occurred in connection with Respondents importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain coaxial cable connectors by reason of infringement of the ‘257 patent.  The ID further indicates, however, that the Defaulting Respondents were determined to be in violation of Section 337 for reasons of infringement of the ‘257 patent, the ‘194 patent, the ‘539 patent, and the ‘076 patent.

Specifically, with regard to the ‘257 patent, ALJ Gildea determined that some of Respondents’ connector models did not perform the function of connecting the end connector to the system component in the same way as that disclosed in the ‘257 patent.  ALJ Gildea also concluded that the accused connectors did not “inseparably couple” their locking members to their connector bodies, as is done in the ‘257 patent.  The ALJ additionally determined that the accused devices did not accommodate limited axial movement of the locking member relative to the connector body from a first to a second position.  As a result, none of the accused Respondents’ devices were found to infringe claim 1 of the ‘257 patent.  Defaulting Respondents’ devices did, however, meet every element of the claims 1 and 5 of the ‘257 patent, and therefore were determined to be infringing.

With regard to the ‘194 patent, ALJ Gildea determined that the Defaulting Respondents’ accused devices infringed both claims 1 and 2 of the patent.

ALJ Gildea also determined that the design patents, the ‘539 patent and the ‘076 patent, were infringed by Defaulting Respondents products.

Respondents challenged the validity of the ‘257 patent on both anticipation and obviousness grounds.  ALJ Gildea upheld the validity of the ‘257 patent, citing, among other factors, a heightened burden on Respondents to show that references that were previously considered by the Examiner during prosecution, render the claims invalid.  ALJ Gildea also noted that, even after KSR, Respondents were required to identify a reason that would have prompted a person of ordinary skill in the art to look outside the relevant field or identify why an allegedly obvious combination did not occur to a person of ordinary skill in the art in the eight years between issuance of the prior art and the filing of the ‘257 application.

In response to allegations of patent misuse, ALJ Gildea found no bad faith or misconduct on the part of PPC in enforcing the ‘257 patent.  Nor did ALJ Gildea find evidence supporting Respondents’ equitable estoppel assertion.

In the ID, PPC was found to have satisfied both the technical and economic prongs of the domestic industry requirement for each of the asserted patents.

Regarding remedy, ALJ Gildea issued a general exclusion order with respect to connectors infringing the ‘194 patent, the ‘257 patent, the ‘539 patent, and the ‘076 patent.  In connection with each of these patents, the ALJ determined that general exclusion orders were necessary to prevent circumvention of limited exclusion orders.  In reaching this conclusion, ALJ Gildea cited, among other factors, the ease of operating Chinese companies under a number of different names; a profitable market and established marketplace and demand for the connectors; and the inexpensive and readily available raw materials, component parts, manufacturing equipment, and labor.  ALJ Gildea also found a pattern of violation of the ‘194 and ‘257 patents, citing prior lawsuits and favorable verdicts involving the ‘194 patent, PPC’s active engagement in sending cease and desist letters in connection with both patents, and the importation and sales of infringing products by certain non-respondents in connection with both patents.  ALJ Gildea additionally found that it was difficult to identify the source of the infringing products as companies often did not reveal their suppliers, when served with cease-and-desist letters, and commonly this series of connectors lacked markings or were “mismarked” with PPC’s name.

Finally, ALJ Gildea recommended that a bond be set “that eliminates the differential between the domestic product and the imported, infringing product,” and thus he set a bond of $0.13 for each accused connector imported during the Presidential review period.