By Alex GasserOn June 4, 2012, Apple Inc., f/k/a Apple Computer, Inc. of Cupertino, California (“Apple”) filed an enforcement complaint in Certain Personal Data and Mobile Communications Devices and Related Software (Inv. No. 337-TA-710). In the enforcement complaint, Apple alleges that High Tech Computer Corp. a/k/a HTC Corp. of Taiwan and HTC America, Inc. of Bellevue, Washington (collectively, “HTC”) have violated the Commission’s December 19, 2011 limited exclusion order (“LEO”) in the underlying investigation.
By way of background, the Commission instituted the underlying investigation on March 31, 2010 based on Apple’s complaint of March 2, 2010. See our April 1, 2010 post for more details. On July 15, 2011, ALJ Carl C. Charneski issued an Initial Determination (“ID”) finding, inter alia, that HTC violated Section 337 through its importation, use, and sale of personal data and mobile communications devices that infringe valid claims 1 and 8 of U.S. Patent No. 5,946,647 (the ‘647 patent). See our September 2, 2011 post for more details. On December 19, 2011, the Commission issued an opinion modifying ALJ Charneski’s ID but upholding the finding of a violation of Section 337 based on HTC’s infringement of claims 1 and 8 of the ‘647 patent. See our January 11, 2012 post for more details. On the same day, the Commission issued an LEO identifying HTC by name. The LEO went into effect on April 19, 2012.
According to the enforcement complaint, the LEO prohibits from “entry for consumption into the United States, entry for consumption from a foreign trade zone, or withdrawal from a warehouse for consumption” “[p]ersonal data and mobile communication devices and related software covered by claims 1 or 8 of the ‘647 patent.” Apple states that this includes HTC’s line of Android-based smartphones and tablets, which are manufactured abroad and imported into the U.S. for sale.
In the enforcement complaint, Apple alleges that while HTC is expressly bound by the LEO and has full knowledge thereof, HTC has refused to abide by the LEO’s provisions or to conform its conduct to the Commission’s directives. In particular, Apple alleges that HTC is importing for consumption into the U.S., importing for consumption from a foreign trade zone, and/or withdrawing from a warehouse for consumption personal data and mobile communications devices that infringe claims 1 or 8 of the ‘647 patent in violation of the LEO. Apple specifically refers to Android-based HTC smartphones—such as the HTC One X, HTC One S, and HTC EVO 4G LTE—and Android-based HTC tablets as infringing products.
In view of these alleged violations of the LEO, Apple requests that the Commission institute a formal enforcement proceeding pursuant to 19 C.F.R. § 210.75 and impose sanctions against HTC. Apple also requests that the Commission take temporary emergency action pursuant to 19 C.F.R. § 210.77 in order to remedy the substantial harm caused by HTC’s continued violations of the LEO. In particular, Apple requests that the Commission immediately modify the LEO to make express that all of HTC’s Android-based smartphones and tablets are excluded from entry for consumption into the U.S., entry for consumption from a foreign trade zone, or withdrawal from a warehouse for consumption pending resolution of the enforcement proceeding. Apple further requests that the Commission impose a cease and desist order (“CDO”) barring HTC from importing, offering for sale, selling, advertising, or distributing in the U.S. all HTC Android-based smartphones and tablets during the pendency of the enforcement proceeding. As an alternative to the CDO and excluding all HTC Android-based smartphones and tablets, Apple requests that the Commission modify the LEO to impose a bond equivalent to 100% of the domestic value of each imported HTC device during the pendency of the enforcement proceeding. Lastly, Apple states that if the Commission declines to impose a 100% bond, it should at least modify the LEO to impose a bond, based on the price differential, equal to $290 for each imported HTC Android-based smartphone or tablet.
With respect to potential remedy in the enforcement proceeding, Apple requests that the Commission modify the LEO and issue a permanent CDO directed at HTC and parties acting in concert with HTC. Additionally, Apple requests that the Commission impose any available civil penalties for violation of the LEO, and if necessary, bring a civil action in an appropriate U.S. district court pursuant to 19 C.F.R. § 210.75(c) and 19 U.S.C. § 1337(f) requesting the imposition of such civil penalties or the issuance of such injunctions as the Commission deems necessary to enforce its orders and protect the public interest. Apple also requests that the Commission order the forfeiture to Apple in the full amount of any bonds posted by HTC or any importers of HTC Android-based smartphones or tablets during the pendency of the enforcement proceeding. Lastly, Apple requests that the Commission impose such other remedies and sanctions as are appropriate and within the Commission’s authority.