ITC Extends Target Date And Makes Supplemental Briefing Request Relating To Domestic Industry Issues In Certain Multimedia Display And Navigation Devices And Systems (337-TA-694)
On April 18, 2011, the International Trade Commission (the “Commission”) issued a notice determining to extend the target date for completion of the investigation from April 18, 2011 to June 17, 2011 in Certain Multimedia Display And Navigation Devices And Systems (337-TA-694). In the notice, the Commission also requested supplemental briefing from the public and from the parties to the investigation with respect to certain domestic industry-related issues.
By way of background, the Complainants in this investigation are Pioneer Corporation and Pioneer Electronics (USA), Inc. (collectively, “Pioneer”) and the Respondents are Garmin International, Inc. and Garmin Corp. (collectively, “Garmin”). In the ID, ALJ Charneski determined there was no violation of Section 337. Specifically, ALJ Charneski determined that (i) Garmin’s accused products do not infringe the asserted claims of the Patent Nos. 5,365,448, 5,424,951, and 6,122,592 (the ‘592 patent), (ii) Respondents did not show by clear and convincing evidence that any claim of the ‘592 patent is invalid due to obviousness or lack of written description, and (iii) Complainants satisfied the domestic industry requirement with respect to the asserted patents. See our February 11, 2011 post for more details. On February 23, 2011, the Commission determined to review the ID in part. See our February 28, 2011 post for more details.
The April 18 notice includes the following supplemental briefing request:
A domestic industry may be shown to exist, inter alia, by ‘substantial investment’ in the ‘exploitation’ of an asserted patent. 19 U.S.C. § 1337(a)(3)(C). Such investment may take the form of ‘engineering, research and development, or licensing,’ but other kinds of investments are not precluded. See Certain Coaxial Cable Connectors and Components Thereof and Products Containing Same, Inv. No. 337-TA-650, Comm’n Op. at 45 (Apr. 14, 2010). The following questions explore the domestic industry requirement in the context of a complainant that invests in licensing a patent portfolio, which includes the asserted patent among the licensed patents.
(1) Assuming that the evidence in the record does not show the patent asserted in a section 337 investigation to have more or less value than the rest of the patents of a portfolio, to what extent should the Commission attribute total expenses in licensing the portfolio toward the complainant’s investment in exploitation of the asserted patent under section 337(a)(3)(C)? Please comment on whether the statute authorizes the Commission to allocate to the asserted patent the amount of the total expenses divided by the number of patents in the portfolio?
(2) Assuming that the statute authorizes allocation of total licensing expenses across all of the patents in the portfolio, what is the significance of evidence demonstrating that at the time the licensing expenses were incurred, the complainant did or did not present information to potential licensees that the asserted patent was being practiced or infringed by the respondent or a third party? What is the significance of evidence showing that the asserted patent was more or less important or valuable than the others in the portfolio? What is the significance of evidence indicating that, while total expenses in licensing a portfolio may be substantial, the share of the expenses allocated to the asserted patent is not?
(3) In light of any practical benefits of licensing a group of patents in a portfolio rather than licensing patents individually, does the statute permit expenses in the licensing of an entire portfolio to be considered an investment in the exploitation of the individual asserted patent?
(4) How should licensing expenses and activities relating to (a) cross-licenses and (b) global portfolio licenses (i.e., U.S. and foreign patents) be treated under section 337(a)(3)(C)?
(5) What is the nature and extent of the ‘nexus’ between an asserted patent and a licensing expense or activity that is sufficient to prove that such expense or activity constitutes an investment in the asserted patent? What factors should be considered in determining whether the required nexus is established? What is the evidentiary showing required to prove a nexus between the asserted patent and the licensing activities and expenses in the context of a portfolio license?
(6) Is a ‘nexus’ between an asserted patent and a licensing activity sufficient to prove that expenses associated with that licensing activity are an investment in the asserted patent under section 337(a)(3)(C) even if other patents are involved? See ID at 165 (citing Certain 3G Wideband Code Division Multiple Access (WCDMA) Handsets and Components Thereof, Inv. No. 337-TA-601, Order No. 20 (unreviewed ID) (June 24, 2010)). If a ‘nexus’ is sufficient, is the strength of that nexus relevant in determining the amount of investment in the asserted patent(s)? For example, is the number of patents included in a license relevant in determining the amount of investment in an asserted patent(s) compared to the expenses generally associated with licensing all of the patents? Is the breadth of technology covered by the portfolio, as a whole, relative to the breadth of technology covered by the asserted patent(s) relevant in determining the amount of investment in the asserted patent(s)?
(7) In Certain Stringed Musical Instruments and Components Thereof, Inv. No. 337-TA-586, the Commission noted that ‘the requirement for showing the existence of a domestic industry will depend on the industry in question, and the complainant’s relative size.’ Comm’n Op. at 25-26 (May 16, 2008). Please comment on the appropriate context for determining whether a complainant’s investments in licensing a portfolio of patents, which includes the asserted patent, is ‘substantial’ within the meaning of section 337(a)(3)(C) in a particular industry? In other words, in determining whether appropriately identified investments in licensing the portfolio constitute a ‘substantial investment in [the asserted patent’s] exploitation’ within the meaning of the statute, against what specific measure should those investments be assessed? In discussing the context for determining whether portfolio licensing investments are substantial, please discuss relevant factors, criteria, and evidence that should be considered in determining whether the complainant’s licensing investments are ‘substantial’ in the context of a portfolio license. Please include in the discussion, how these factors, criteria, and evidence may vary depending on the industry in question and complainant’s relative size.
(8) Please comment on the significance of whether and to what extent the complainant receives royalties under the license agreement or acquires other rights or benefits as a result of a portfolio license in assessing whether the complainant’s licensing expenses and activities constitute a ‘substantial investment in [the asserted patent’s] exploitation.’
(9) Please comment on the significance of whether and to what extent a complainant engages in ancillary exploitation activities that frequently accompany licensing efforts, such as development, engineering, or servicing of licensed articles, in assessing whether a complainant has made a ‘substantial investment in [the asserted patent’s] exploitation’ through licensing.
(10) For the parties to the investigation only:
a. Please cite and discuss the specific evidence of record in this investigation supporting your position as to each of the above questions.
b. Assuming the licensing efforts of complainant Pioneer and Discovision Associates are viewed together, to what extent did the expenses in licensing Pioneer’s navigation portfolio (before Pioneer retained outside counsel) represent Pioneer’s investment in licensing the asserted patents? Please support your response with citations to the record.
c. Please comment on the weight that should be given to documents concerning complainant’s licensing activities and expenses from which information has been redacted. Please discuss the significance, vel non, of the content of the redacted documents to the complainant’s licensing activities and investments in view of such redactions.
Written submissions of the parties to the investigation are due by May 3, 2011, with reply submissions due by May 17, 2011. Written submissions from members of the public will be accepted anytime on or before May 17, 2011.