10
Aug
By Eric Schweibenz
On July 29, 2010, Chief ALJ Paul J. Luckern issued Order No. 12 and Order No. 13 in Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions, Media Players, and Cameras (Inv. No. 337-TA-709).  Both orders addressed motions filed by Respondents Panasonic Corporation, Panasonic Corporation of North America, Panasonic Semiconductor Discrete Devices Co., Ltd. (collectively, “Panasonic”), Funai Electric Co., Ltd., Funai Corporation, Inc., JVC Kenwoor Holdings, Inc., Victor Company of Japan Limited, JVC Americans Corp., Best Buy Co., Inc., B & H Foto & Electronics Corp., Huppin’s Hi-Fi Photo & Video, Inc., Buy.com Inc., Liberty Media Corporation, QVC, Inc., Crutchfield Corporation, Wal-Mart Stores, Inc., and Computer Nerds International, Inc. (collectively, “Respondents”).  In Order No. 12, ALJ Luckern denied Respondents’ motion for interlocutory review of Order No. 11.  In Order No. 13, ALJ Luckern also denied Respondents’ motion for a stay of the investigation pending the ITC’s review of Order No. 10.

By way of background, on July 8, 2010, ALJ Luckern issued both Order No. 10 and Order No. 11.  In Order No. 10, the ALJ granted Complainant Freescale Semiconductor, Inc.’s (Freescale) motion to amend the complaint and notice of investigation to correct typographical errors and add a dependent claim.  Order No. 11 denied Respondents’ motion to amend or clarify the notice of investigation by Respondents.  Following the issuance of Orders No. 10 and 11, Respondents filed Motion No. 709-21, requesting an interlocutory review of Order No. 11 and Motion No. 709-22 requesting a stay of the investigation pending ITC review of Order No. 10.

Both Complainants and the Commission Investigative Staff (“OUII”) opposed each of these motions.  With respect to the request for a stay, according to Order No. 13, the OUII commented that the motion for stay appeared to be little more than an attempt at delay by Respondents “in the face of unfavorable rulings.”

In Order No. 12, ALJ Luckern considered Motion No. 709-21 requesting an interlocutory review of Order No. 11.  In Order No. 11, Respondents argued that the complaint did not provide a representative showing of infringement of any non-Panasonic integrated circuits and provided claim charts only for representative Panasonic integrated circuits.  Similarly, Respondents argued that because the Complaint was limited to Panasonic integrated circuits, the investigation could not encompass non-Panasonic integrated circuits.  Respondents also argued that because no pleading was made with regard to non-Panasonic integrated circuits, there was no in rem jurisdiction for those circuits.  Respondents asserted that due to these issues with the complaint, any number of third-party integrated circuit manufacturers could be subject to a limited exclusion order despite the fact they were not named respondents, essentially transforming a limited exclusion order into a general exclusion order.

In Order No. 12, ALJ Luckern stated that Commission Rule 210.12(a)(9)(viii) rule only requires a showing for each person “named as violating section 337,” it does not require a showing, at the pre-filing stage, that non-named parties violate Section 337.  With respect to scope, ALJ Luckern maintained that contrary to Respondents’ arguments, the integrated circuits and chipsets at issue in the investigation were not limited to those manufactured by Panasonic.  Finally, concerning Respondents limited exclusion order argument, ALJ Luckern stated that Section 337 prohibits the importation into the U.S. of articles that infringe a patent, and under 35 U.S.C. §271(a), any “use” by Respondents of an infringing article, whether manufactured by a Respondent or a non-party constitutes infringement.  Ultimately, ALJ Luckern determined that interlocutory appeal was not proper because Respondents did not present any controlling question of law or policy for review on which there is substantial ground after difference of opinion, and because Respondents did not establish that immediate appeal would materially advance the investigation or that subsequent review was inadequate.

In Order No. 13, ALJ Luckern considered Motion No. 709-22 requesting a stay of the investigation pending ITC review of Order No 10.  The ALJ considered four factors (1) the stage of the investigation, (2) the issues in question and trial of the case, (3) the risk of undue prejudice or clear tactical advantage to any party, and (4) the efficient use of ITC resources.  Concerning the first factor, ALJ Luckern noted that discovery in the investigation was well under way and a hearing date was already set.  With regard to the second factor, the ALJ stated that Respondents had not shown the question on review would simplify any issues in the investigation enough to support a stay.  ALJ Luckern noted that the issue on review, the granting of a motion to amend, correcting typographical errors and adding a dependent claim, was much narrower and less significant than, for example, validity.  In connection with the third factor, ALJ Luckern determined that the prejudice to Freescale should a stay be granted would be both significant and specifically identifiable.  The ALJ also noted that he had issued repeated orders during the investigation consistently interpreting the scope of the investigation and Respondents’ responsibilities.  Finally, with respect to the fourth factor, the ALJ noted that a stay could add costs to the investigation by extending the time of investigation.  After considering these four factors, ALJ Luckern determined that a stay was not warranted.
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