06
Aug
By Eric Schweibenz
On August 3, 2010, the International Trade Commission issued the public version of its opinion detailing its final determination not to (i) revise the existing limited exclusion order (“LEO”), and (ii) issue a cease and desist order (“CDO”) in the enforcement proceeding in Certain Voltage Regulators, Components Thereof and Products Containing Same (Inv. No. 337-TA-564).

By way of background, the Complainant in this investigation is Linear Technology Corporation (“Linear”) and the Respondent is Advanced Analogic Technologies, Inc. (“AATI”).  The ITC issued its Final Determination on September 24, 2007 finding that a representative AATI voltage regulator infringed certain claims of Linear’s U.S. Patent No. 6,580,258.  The ITC issued an LEO directed to AATI with respect to voltage regulators covered by the asserted claims.  Linear thereafter filed a complaint requesting that the ITC institute a formal enforcement proceeding against AATI for alleged violation of the LEO.  The ITC issued a Notice of Institution of Formal Enforcement Proceeding on October 1, 2008.  On March 18, 2010, ALJ Charneski issued the Enforcement Initial Determination (“EID”) finding a violation of the LEO by AATI’s redesigned products.  See our April 2, 2010 post for more details.  On May 14, 2010, the Commission determined not to review the ALJ's EID, and issued a notice regarding its determination and inviting briefing on the issues of remedy, the public interest, and bonding.  See our May 17, 2010 post for more details.

The Commission determined that the parties and Commission Investigative Attorney (“OUII”) agreed that the existing LEO covers AATI’s accused redesigned products and therefore no modification of the existing LEO was required.

With respect to the possible issuance of a CDO, Linear argued a CDO is appropriate due to AATI’s commercially significant inventory in the United States, and AATI’s alleged “disregard” of the LEO.  The IA added that a CDO was warranted as an additional deterrent because AATI did not seek an advisory opinion before importing its accused redesigned products.  AATI responded that its domestic inventory is not “commercially significant,” AATI did not disregard the LEO since many products were found non-infringing by the ALJ and Commission in the violation phase - rendering importation permissible until issuance of the Federal Circuit’s decision on appeal.  AATI additionally argued that “deterrence” was not a proper ground for imposing a CDO in view of AATI ceasing importation and the entry of consent orders after the Federal Circuit’s decision in the violation phase.

The Commission determined not to issue a CDO because AATI’s “5800 samples and 75,000 engineering parts at issue here do not constitute a commercially significant inventory in the context of the millions of parts maintained and sold abroad by AATI,” and a CDO is not needed for deterrent effect because AATI did not act “in disregard of the LEO by importing products found non-infringing by the ALJ and Commission in the violation phase, even if those findings were later reversed or vacated by the Federal Circuit.”

The Commission further determined that the issues of public interest and bonding were essentially moot, because it was not recommending any additional relief, and given that the parties agree that the existing LEO should remain in place without modification or need for Presidential review, there is no reason to impose a bond.