ALJ Pender Issues Recommended Determination on Remedy and Bond in Certain Wireless Communication Devices (337-TA-745)
On May 21, 2012, ALJ Thomas B. Pender issued the public version of the Recommended Determination on Remedy and Bond (“RD”) (dated May 9, 2012) in Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers, and Components Thereof (337-TA-745).
By way of background, the investigation is based on a complaint filed by Motorola Mobility, Inc. (“Motorola”) alleging violation of Section 337 by Respondent Apple, Inc. (“Apple”) in the importation into the U.S. and sale of certain wireless communications devices, portable music and data processing devices, computers, and components thereof that infringe certain U.S. Patents. See our October 8, 2010 post for more details. On April 24, 2012, ALJ Pender issued a notice regarding the Initial Determination (“ID”) which found that a violation of Section 337 has occurred in this investigation by Apple by reason of infringement of certain valid claims of U.S. Patent No. 6,246,697 (the ‘697 patent). See our May 1, 2012 post for more details on the ID.
Regarding remedy and bond, Motorola sought a cease and desist order, a limited exclusion order (“LEO”) and a 100% bond. In order to Prevent Apple from circumventing the LEO, Motorola asked for the LEO to apply to all of Apple’s related companies. Apple argued that either no LEO should issue or it should be limited to accused products imported prior to the close of the evidentiary record. This is fair, Apple argued, because a broad LEO would harm third parties, including Verizon and AT&T. ALJ Pender rejected Apple’s argument, holding that they presented no evidence of third party harm, and recommended an LEO issue directed at all infringing products.
Cease and desist orders are issued when there is a commercially significant amount of imported, infringing products that could undercut the remedy provided by an exclusion order. ALJ Pender found there is, indeed, a commercially significant inventory of products in the United States and thus recommended that the ITC issue a cease and desist order.
With respect to the bond amount, Motorola also asked for a 100% bond in light of the wide range of prices charged for infringing products and the resulting difficulty in making a price differential analysis. Apple responded by arguing that Motorola has not identified an injury it will suffer and, therefore, no bond is appropriate. Alternatively, they argued that if a bond should issue, a discounted reasonable royalty approach should be implemented because Motorola products do not compete with most of the accused Apple products. ALJ Pender agreed with Apple’s reasonable royalty approach, but the actual bond rate was redacted from the public version of the RD.