By Eric Schweibenz
On June 15, 2010, ALJ E. James Gildea issued the public version of Order No. 24 (dated May 28, 2010) in Certain Video Displays, Components Thereof, and Products Containing Same (Inv. No. 337-TA-687) granting-in-part a motion to amend the Answers to the Second Amended Complaint and Notice of Investigation, and granting a motion to compel the production of a witness to testify filed by Respondents Vizio, Inc. (“Vizio”) and AmTran Technology Co., Ltd. and AmTran Logistics, Inc. (“AmTran”) (collectively, “Respondents”).

According to the Order, both Respondents moved to amend their Answers to assert the defense of express or implied license relating to a late-produced license agreement between Complainant LG Electronics, Inc. (“LG”) and Gemstar-TV Guide International, Inc. (the “Gemstar Agreement”).  Vizio also moved to amend its Answer to assert a breach of the contractual duty of good faith defense because it was not aware of the standard that forms the basis for this defense until it was asserted by AmTran.  LG responded that the new affirmative defenses are specious, that it would be prejudiced by their addition, that their addition would delay and complicate the hearing, and that the Gemstar Agreement was publicly known and that Vizio had knowledge of it based on its own license negotiations with Gemstar.  The Commission Investigative Staff (“OUII”) supported the motion with respect to Respondents’ proposed license defense, but opposed the motion as it relates to Vizio’s proposed breach of contractual duty of good faith defense.

ALJ Gildea agreed with OUII that Respondents demonstrated good cause for the late addition of the license defense, and that the prejudice, if any, to LG was caused by LG’s own delay in producing the Gemstar Agreement.  The ALJ also agreed with OUII that Vizio did not demonstrate good cause for the late addition of the breach of contractual duty of good faith defense, finding that Vizio did not show that it acted with diligence in identifying that the defense was applicable to the investigation, and that Vizio failed to timely move to amend.

Having granted Respondents’ motion with respect to the express or implied license defense in light of LG’s failure to timely produce the Gemstar Agreement during discovery, ALJ Gildea then granted Respondents’ motion to compel testimony relating to the agreement, disagreeing with OUII that the agreement speaks for itself.