By Eric Schweibenz
On May 28, 2010, S3 Graphics, Inc. of Fremont, California and S3 Graphics Co., Ltd. of the Cayman Islands (collectively, “S3G”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.

The complaint alleges that Apple Inc. of Cupertino, California (“Apple”) unlawfully imports into the U.S., sells for importation, and sells within the U.S. after importation certain electronic devices with image processing systems, components thereof, and associated software (collectively, the “accused products”) that infringe S3G’s U.S. Patent Nos. 7,043,087, 6,775,417, 6,683,978, and 6,658,146 (collectively, the “Asserted Patents”). The complaint asserts that the accused products include, but are not limited to multimedia devices, smart phones, personal computers, and software for use with such devices.  The complaint specifically identifies the Apple iPod Touch, iPhone, iPad, Apple computers such as the MacBook used in conjunction with an Apple software development kit (“SDK”), and other application software.

According to the complaint, the Asserted Patents generally relate to aspects of an image processing system for encoding and decoding, including compressing image data files into a more compact form, a format for storing the compressed data, and a system for decompressing that data for display as an image.  In particular, the Asserted Patents disclose an image compression technology including an image decomposer, an encoder for computing image data values and generating codeword reference values, and a construction module for creating indices that map each image data value to a set of colors generated from the codewords.  The Asserted Patents also disclose a format for storage of encoding or compressing image data that includes a portion for storage of multiple codewords from which a set of colors can be computed and a portion for storage of indices for mapping pixel color to computed color.  Finally, the Asserted Patents disclose an image decoding or decompressing technology that includes a decomposer for processing the encoded image data stream into a header and a plurality of encoded image blocks, a header converted for generating an output image header, one or more block data decoders for generating from the codewords and indices pixel image attributes such as color for mapping those attributes to pixels, and an image composer that reassembles data blocks for a display device and/or a data file.

In the complaint, S3G alleges that Apple sells a variety of imported products, including but not limited to the Apple iPod Touch, iPhone, iPad, Apple computers such as the MacBook, certain applications for those products, and associated software that incorporate the image data compression, decompression, and/or data format disclosed and claimed in the Asserted Patents.  The complaint further alleges that Apple provides an SDK specifically adapted for use with Apple computers to compress and decompress image data files using the technology disclosed and claimed in the Asserted Patents, and that Apple’s SDK and computers generate encoded image files in the format disclosed and claimed in the Asserted Patents.

Regarding domestic industry, S3G states that it employs a work force in the U.S. that conducts research, development, engineering, product design, support, and repair in the U.S. for S3G’s products that practice the Asserted Patents, including at least the S3 Graphics, Inc. Chrome series of graphics products.  S3G further states that it operates a licensing business in the U.S. that licenses S3G’s patent portfolio (including the Asserted Patents) and that its licensees practice the Asserted Patents in the U.S.

With respect to potential remedy, S3G requests that the Commission issue a limited exclusion order and a permanent cease-and-desist order directed at Apple.