By Eric Schweibenz
Further to our March 28, 2011 post, on April 27, 2011, ALJ Gildea issued the public version of the Initial Determination (“ID”) in Certain Electronic Devices, Including Mobile Phones, Portable Music Players, and Computers (Inv. No. 337-TA-701).

According to the ID, ALJ Gildea determined that no violation of Section 337 had occurred by Apple in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain electronic devices, including mobile phones, portable music players, or computers by reason of infringement of U.S. Patent Nos. 6,518,957 (the ‘957 patent), 6,714,091 (the ‘091 patent), 6,834,181 (the ‘181 patent), 6,895,256 (the ‘256 patent), or 6,924,789 (the ‘789 patent).  ALJ Gildea also determined that a domestic industry exists that practices the ‘789 patent, but not the ‘091 patent, the ‘181 patent, and the ‘256 patent.

The Asserted Patents and The Accused Devices

U.S. Patent No. 6,714,091

The ‘091 patent discloses a voltage controlled oscillator assembly that regulates the output power of one or more oscillators.  Nokia alleged that claims 1-12 of the ‘091 patent are infringed by the iPhone 3G, 3GS and 4; the iPad WiFi and WiFi+ 3G; and the iPod Touch.

All of the asserted claims of the ‘091 patent claim that “the output power is controlled by applying a variable current bias.”  Nokia argued that the accused products infringe because, during design of the chips it was possible to choose different current biases; that is, “variable” requires only a capability to be changed during design, not an action during operation.  The ALJ rejected this as contrary to the specification and prosecution history of the patent.  Based on this rejection of Nokia’s theory, the Apple products were held to not infringe.

U.S. Patent No. 6,834,181

The ‘181 patent discloses a mobile communication device, mechanically designed for combining an antenna and a speaker in a common chamber, in order to reduce the size of the device, which enhances the bass tone of the speaker.  Nokia alleged that claims 1-6 and 8 of the ‘181 patent are infringed by the iPhone 3G, 3GS and 4.

All of the asserted claims require (1) a housing structure, (2) a common chamber for carrying a speaker and radio frequency component, and (3) multiple acoustic chambers in the common chamber.  While ALJ Gildea found that the accused devices all contained elements (1) and (2), he held that they did not have multiple acoustic chambers “wherein the sum of the volumes of said multiple acoustic cavities provide a speaker chamber having a acoustic volume tor provide a desired acoustic characteristic from the speaker.”  ALJ Gildea agreed with Apple that the accused products do not have cavities that are connected in order to sum the volume.

U.S. Patent No. 6,895,256

The ‘256 patent discloses a mobile phone that includes a camera and a processor that enables the device to send and receive camera signals via the internet.  Nokia alleged claims 1 and 16 of the ‘256 patent were infringed literally, or under the doctrine of equivalents, by the iPhone 3GS and 4; and the 4th Generation iPod Touch.

The ‘256 patent uses the terms “mobile terminal” and “mobile phone” interchangeably.  Based on this usage, ALJ Gildea held that the iPod Touch was not a “mobile terminal” since it could only communicate over very short distances.

As for the iPhones, Nokia alleged they include a single-chip camera module that provides a control bus signal and an integrated mobile terminal processor that is responsive to that control bus signal, as required by all the asserted claims.  ALJ Gildea agreed with Apple that none of its image sensors provide a control bus signal as understood in the art.  Therefore, there is no literal infringement of the claims.

Nokia also argued that the transfer of information from the single-chip camera module to the integrated mobile terminal processor constituted infringement under the doctrine of equivalents.  ALJ Gildea rejected this allegation as it was supported only by general statements by Nokia’s witnesses without providing any rationale or particularized analysis.

U.S. Patent 6,924,789

The ‘789 patent discloses a user interface with keypad (or keymat) able to provide two types of user input – through keys that actuate a respective switch and through an “integrally disposed impedance sensor” that would permit a user to, for example, control a focus on a display of the electronic apparatus.  Nokia alleged the iPod Classic and iPod Nano 5th Generation infringed claim 5 of the ‘789 patent under the doctrine of equivalents.

Claim 5 of the ‘789 patent states that the keymat and impedance sensor are “coextensive” which was construed to mean “having the same spatial boundaries.”  Apple presented evidence that the sensors beneath the wheel of the iPod did not extend to the edge of the wheel and were, therefore, not coextensive.  Nokia, however, presented evidence that the gap was minimal.  ALJ Gildea found that Nokia proved infringement under the doctrine of equivalents.

Later in the ID, ALJ Gildea agreed with Apple that claim 5 of the ‘789 patent is anticipated by the “110 Application.”

This was the only claim held invalid by ALJ Gildea, despite Apple raising a number of invalidity defenses, including anticipation, obviousness, and failure to disclose the best mode against some or all of the claims of each asserted patent.

Domestic Industry

ALJ Gildea held that Nokia established the economic prong of the domestic industry requirement for all of the asserted patents.  However, ALJ Gildea determined that only the ‘789 was practiced by Nokia in the United States and thus Nokia failed to establish the technical prong of the domestic industry requirement for the ‘091 patent, the ‘181 patent, and the ‘256 patent.

Remedy and Bond

Nokia and the Commission Investigative Staff asked for a limited exclusion order should the Commission find a violation.  Apple argued that a limited exclusion order is not warranted because Nokia’s domestic industry is waning.  In the alternative, Apple asked the Commission to impose a quarterly reporting requirement on Nokia.

ALJ Gildea recommended that in the event the Commission finds a Section 337 violation, a limited exclusion order and cease and desist order should issue.  ALJ Gildea further recommended that if the Commission deems a reporting requirement appropriate, an annual, rather than quarterly, reporting requirement should be considered.

The parties also differed on bond.  Nokia argued for a 100% bond because prices fluctuated widely making it impossible to use price comparisons as a basis for determining the bond, and because it would be inappropriate to base a bond on reasonable royalty due to Nokia’s cross-license agreement.  Apple argued for a lower bond – 1% to be exact – owing to the fact that Nokia’s request relies “solely on unsworn attorney argument.”  They also argued that Nokia’s phones undersell Apple’s phones and thus a price differential analysis would be inappropriate.

ALJ Gildea found that both parties had submitted insufficient information to determine a bond rate.  He suggested that if the Commission finds a violation they should require the parties to re-submit arguments on bond.

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