19
Nov
By Barry Herman
Further to our November 17 post, where we reported that the International Trade Commission issued a notice determining not to review ALJ Robert K. Rogers, Jr.’s October 15, 2009 Initial Determination (“ID”) granting Complainant Saxon Innovations, LLC’s (“Saxon”) motion for summary determination that it has met the economic prong of the domestic industry requirement in Certain Electronic Devices, Including Handheld Wireless Communications Devices (Inv. No. 337-TA-667/673), the public version of the October 15 ID was released on November 18.

According to the ID, Saxon filed a motion for summary determination that it has met the economic prong of the domestic industry requirement based on the activities of its licensee, Motorola, Inc., pursuant to 19 U.S.C. § 1337(a)(3)(C).  Respondents Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLP (collectively, “Samsung”), Research In Motion, Ltd. and Research In Motion Corp. (collectively, “RIM”, no longer a party to the investigation based on a settlement agreement), and Palm, Inc. (“Palm”) filed a joint response opposing the motion.  In addition, Samsung and RIM filed a joint motion for summary determination of no violation based upon Saxon’s failure to satisfy the economic prong of the domestic industry requirement.  The Commission Investigative Staff filed a combined response to the parties’ motions and supported Saxon’s position that it satisfied the economic prong as a matter of law due to substantial investments in relevant technology made by Saxon’s licensee, Motorola.

In the ID, ALJ Rogers set forth the applicable law and noted that Section 1337 provides that a patentee can satisfy the domestic industry requirement if it satisfies either (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing.  He also noted that the domestic industry inquiry is not limited to the activities of the patent owner, but also involves that of any licensees and can, in fact, rest exclusively on the activities of a licensee.

Saxon’s motion was based on Motorola’s activities.  Saxon asserted that Motorola has been a licensee of the two asserted patents for more than ten years.  Saxon also asserted that a number of Motorola wireless handsets practice the patents and that Motorola has devoted a significant amount of engineering design time with respect to these products.

Respondents opposed Saxon’s motion on the basis that 1) they needed more discovery; and 2) Saxon had not demonstrated the requisite nexus between Motorola’s engineering investments and the patented technology.

In granting Saxon’s motion, ALJ Rogers found that Motorola was licensed to practice the patents-in-suit at the time of the filing of the complaint.  He also rejected Respondents’ position with respect to nexus, finding that “[t]he relevant inquiry is whether Motorola has made a substantial investment with respect to the articles protected by the patent, and not whether the investment relates to the specific features of the articles that contain the patented technology.”  ALJ Rogers also rejected Respondents’ contention that the hours and dollar amounts cited by Saxon do not accurately reflect the amount of work performed by Motorola, finding that Respondents did not dispute these facts in response to Saxon’s statement of undisputed facts, and thus those facts were admitted by Respondents.

ALJ Rogers noted in a footnote that the issue as to whether the Motorola handsets practice the asserted patents was not an issue in this motion, and will be determined in connection with the technical prong analysis.

In denying Samsung’s motion, ALJ Rogers addressed an additional argument related to whether there is a requirement that Saxon earn licensing revenue from Motorola.  This portion of the ID is heavily redacted, but ALJ Rogers indicated that Saxon was relying on the engineering and research and development portions of § 1337(a)(3)(C), not the licensing portion.
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