10
May
By Eric Schweibenz
On May 9, 2011, the International Trade Commission (the “Commission”) issued a notice determining to review an Initial Determination (“ID”) issued by ALJ Carl C. Charneski on April 7, 2011 finding that Complainants Apple Inc. and NeXT Software, Inc. (collectively, “Apple”) have satisfied the economic prong of the domestic industry requirement in Certain Personal Data and Mobile Communications Devices and Related Software (337-TA-710).  On review, the Commission determined to modify the ID on the basis that the disputed issue is moot.

By way of background, the Commission instituted this investigation on April 6, 2010, based on Apple’s complaint alleging a violation of Section 337 by Respondents High Tech Computer Corp., HTC America Inc., and Exedia, Inc. (collectively, “HTC”).  According to the May 9 notice, several patents originally asserted by Apple in the investigation were earlier asserted by Apple against Nokia Corp. and Nokia Inc. (collectively, “Nokia”) in Inv. No. 337-TA-704.  On motion by the Commission Investigative Staff (“OUII”) and by the Respondents in both investigations, Chief ALJ Paul J. Luckern transferred Apple’s assertion of overlapping patents against Nokia from the 704 investigation into the 710 investigation.

On February 18, 2011, Apple moved for summary determination that the economic prong of the domestic industry requirement was satisfied by virtue of, inter alia, Apple’s research and development (“R&D”) and engineering activities.  On March 3, 2011, Nokia filed an opposition to Apple’s motion, which HTC subsequently joined.  OUII also opposed Apple’s motion.  OUII argued that the Commission’s opinion in Certain Printing and Imaging Devices and Components Thereof, Inv. No. 337-TA-690 (Feb. 17, 2011), requires a context-dependent analysis of the marketplace, which Apple had not provided.  See our February 22, 2011 post for more details on the Commission opinion in the 690 investigation.  On March 9, 2011, Apple filed a reply noting that the Printing and Imaging Devices opinion had been released only the day before Apple filed its motion.  The reply also clarified Apple’s factual assertions so as to provide context for the engineering and R&D expenditures.

On April 6, 2011, ALJ Charneski granted Apple’s motion as an ID.  The ALJ held that to “the extent that the Staff argues that a context-dependent analysis is required by the Commission in the Printing and Imaging Devices case, the Staff is wrong.”  ALJ Charneski distinguished the Printing and Imaging Devices opinion on the basis that, among other things, the products there “were no longer sold and were never manufactured in the United States.”

On April 8, 2011, OUII petitioned for review of the ID.  OUII noted that the ID, after stating that a context-dependent analysis was unnecessary, proceeded to perform such a context-dependent analysis using information included in Apple’s reply.  OUII recommended that the ID be modified to remove the suggestion that a context-dependent analysis is unnecessary.

On April 15, 2011, Apple filed an opposition agreeing with OUII that ALJ Charneski performed the appropriate context-dependent inquiry, but arguing that as a result Commission review was inappropriate.  Nokia and HTC neither petitioned for review of the ID nor responded to OUII’s petition.

According to the May 9 notice, after reviewing the record of the investigation, the Commission determined to review the ID and, upon review, to modify it.  In particular, the Commission determined to strike certain language from the ID relating to ALJ Charneski’s analysis of OUII”s argument relating to the Printing and Imaging Devices opinion and its effect on the instant investigation.  The notice states that “the Commission has determined that the issue raised by [OUII] is moot.”  According to the notice, “[t]here is no dispute that Apple has satisfied the economic prong of the domestic industry requirement; there is only a now-academic dispute about the methodology the ALJ should have followed in reaching his unchallenged conclusion.”  Accordingly, the Commission determined to modify the ID to remove the discussion relating to this “now-academic dispute.”
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