ALJ Essex Grants Motion To Compel And Denies Motion For Summary Determination In Certain Gaming And Entertainment Consoles (337-TA-752)

On April 12, 2013, ALJ Theodore R. Essex issued the public versions of Order No. 15 (dated August 31, 2011) and Order No. 18 (dated October 21, 2011) in Certain Gaming and Entertainment Consoles, Related Software, and Components Thereof (Inv. No. 337-TA-752).

According to Order No. 15, Complainants Motorola Mobility, Inc. and General Instrument Corporation (collectively, “Motorola”) moved to compel Respondent Microsoft Corporation (“Microsoft”) to provide adequate discovery on the H.264 digital video decoder functionality in the accused Xbox 360 products, arguing that although Microsoft provided source code files for inspection, it consistently failed to provide information necessary to confirm which files (or portions thereof) are compiled for use in the accused products.  Specifically, Motorola sought an order compelling Microsoft to provide a corporate witness to be deposed on the source code-level implementation of the H.264 decoder in its Xbox 360 products, including the identification of the source code files and functions that are compiled for use in the decoder, and a source code computer available for the witness’ use during the deposition.  Microsoft opposed the motion, contending that Motorola failed to take discovery when it had the chance during the deposition of a witness (Mr. Wu) designated on the topic of Microsoft’s implementation of the H.264 decoder, and that Microsoft offered Motorola a verified list identifying the source code files included in the Xbox binary that provide H.264 decoding support, which Motorola refused.  ALJ Essex found that neither Microsoft nor its technical witnesses provided Motorola with the identification of the requested source code files (or portions thereof), that Motorola’s counsel did in fact ask questions of Mr. Wu about the files that become part of the executable image, and that there appeared to be discrepancies between Mr. Wu’s deposition testimony and the report of Microsoft’s expert.  Accordingly, the ALJ granted the motion.

According to Order No. 18, Motorola moved for summary determination that it satisfied the domestic industry requirement based on its extensive licensing program relating to the asserted patents, and in the alternative, that significant domestic investment in plant and equipment, significant employment of labor and capital, and substantial domestic investment in engineering, research and development related to products covered by the asserted patents satisfied the economic prong of the domestic industry requirement.  ALJ Essex denied the motion, finding genuine issues of fact as to whether the record evidence demonstrated the required nexus between the asserted patents and Motorola’s licensing activities and investments, specifically as to whether each asserted patent was raised during licensing negotiations, and whether the asserted patents are particularly important within their portfolios as “essential to certain technology standards,” as Motorola contended.  The ALJ also found genuine issues of fact relating to Motorola’s domestic engineering, research and development activities, such as whether a 2,243 page spreadsheet with no pagination supports the figures alleged by Motorola’s declarant, and why the report of Motorola’s expert relied on a document that is not part of the record.  Moreover, ALJ Essex found that the evidence concerning the size and location of Motorola facilities in the U.S. showed that activities at these facilities relate to products other than Motorola’s domestic industry products, and that Motorola made no attempt to connect the employees in its “Mobile Devices” segment – relied on by Motorola as significant employment of labor and capital – to the domestic industry products.

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