ITC Issues Public Version Of Opinion Finding No Violation Of Section 337 In Certain Integrated Circuits (337-TA-786)

On October 10, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions (Inv. No. 337-TA-786).

By way of background, the investigation is based on a complaint filed by Complainant Freescale Semiconductor, Inc. (“Freescale”) alleging violation of Section 337 in the importation into the U.S., sale for importation, and/or sale within the U.S. after importation of certain integrated circuits, integrated circuit chipsets, and products containing the same, including televisions, that infringe one or more claims of U.S. Patent No. 5,467,455 (the ‘455 patent).  See our December 2, 2011 post for more details on Freescale’s complaint.  The remaining respondents in this investigation are MediaTek Inc. and Zoran Corp (collectively, “Respondents”).

On July 12, 2012, ALJ Rogers issued his final ID, finding no violation of Section 337 with respect to the ‘455 patent.  More specifically, ALJ Rogers found that an industry does not exist in the U.S. that exploits the ‘455 patent.  ALJ Rogers also found claims 9 and 10 of the ‘455 patent to be invalid under 35 U.S.C. § 103 and that Freescale failed to show that the Accused Zoran Hybrid Termination Circuits infringe these claims.  See our July 16, 2012 post for more details.  The Commission’s findings regarding validity and domestic industry will be discussed in turn.

Validity

The Commission reversed the ALJ’s finding that Japanese Patent Application JP H05-83113-A to Kuboki (“Kuboki”) discloses the limitation “[a] data processor within an integrated circuit package comprising … a plurality of bus termination circuits” of claim 9 of the ‘455 patent.  Specifically, the Commission reversed the ALJ’s finding that Kuboki discloses a microprocessor and bus termination circuitry integrated onto a single chip because Kuboki did not explicitly recite this feature and testimony from Freescale’s expert suggested that the two elements may be decoupled, depending on design requirements, without hindering operability.  However, because the evidence of record suggested an industry trend towards single chip integration, the Commission affirmed the ALJ’s finding that Kuboki, in combination with the knowledge of one of ordinary skill in the art, renders claims 9 and 10 of the ‘455 patent obvious.  The Commission also determined that Kuboki, in combination with U.S. Patent No. 5,479,123 to Gist (“Gist”) and the knowledge of one of ordinary skill in the art, renders claims 9 and 10 obvious. 

Domestic Industry

To satisfy the economic prong of the domestic industry requirement, Freescale relied on its investments in licensing the asserted patent.  Freescale’s arguments regarding the extent of its licensing efforts were redacted from the public version of the Commission’s opinion.  In affirming the ALJ’s determination that Freescale failed to prove that it made a substantial investment in the exploitation of the ‘455 patent through its licensing activities, the Commission stated that “the evidence presented by Freescale here does not allow the Commission to ascertain how the ‘455 patent relates to its overall licensing program,” citing Certain Semiconductor Chips and Products Containing Same, Inv. No. 337-TA-753, Comm’n Op. at 44-51 (July 31, 2012).  In that investigation, the Commission determined that the complainant failed to establish the substantiality of its licensing activities because it did not specifically demonstrate what portion of its overall company wide licensing expenses/revenues were directly tied to the asserted patents. 

Lastly, the Commission found that it was inappropriate for Freescale to rely primarily on post-complaint activities in attempting to establish its domestic industry.  In particular, the Commission noted that Freescale did not point to any circumstances justifying a post-complaint perspective, which can include post-complaint bankruptcy filings, the identification of “new, relevant and timely disclosed evidence,” or evidence of “dwindling” industry.

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