04
Nov
By Eric Schweibenz
Further to our September 23, 2013 post, on October 24, 2013, ALJ Thomas B. Pender issued the public version of his Initial Determination on Violation of Section 337 and Recommended Determination on Remedy and Bond (“ID”) (dated September 23, 2013) in Certain Electronic Devices, Including Mobile Phones and Tablet Computers, and Components Thereof (Inv. No. 337-TA-847).  Due to the large size of the ID, we have split the document into part 1 and part 2.  

By way of background, the investigation is based on a complaint filed by Nokia Corp.; Nokia, Inc.; and Intellisync Corporation (collectively, “Nokia”) alleging violation of Section 337 by HTC Corp.; HTC America, Inc.; and Exedea, Inc. (collectively, “HTC”)  in the importation into the U.S. and sale of certain electronic devices that infringe one or more claims of certain patents.  See our May 3, 2012 and June 7, 2012 posts for more details on Nokia’s complaint and the notice of investigation, respectively.  On August 7, 2012, ALJ Pender granted Google, Inc. status as an Intervenor, but denied status as a respondent.  See our August 10, 2012 post for more details. 

In the ID, ALJ Pender found that a violation of Section 337 has occurred in connection with the asserted claims of U.S. Patent Nos. 7,415,247 (the ‘247 patent) and 6,393,260 (the ‘260 patent) but that no violation has occurred in connection with asserted claim 1 of U.S. Patent No. 5,884,190 (the ‘190 patent).  ALJ Pender further found that an industry in the U.S. exists with respect to the ‘247 and ‘260 patents, but does not exist with respect to the ‘190 patent. 

As an initial matter, ALJ Pender addressed HTC’s argument that it was an abuse of discretion to strike the testimony of Dr. Caloyannides, HTC’s expert on issues of non-infringement and invalidity.  ALJ Pender issued an order striking Dr. Caloyannides’s direct and rebuttal witness statements about which Nokia did not have an opportunity to cross-examine Dr. Caloyannides because Dr. Caloyannides failed to make himself available for Nokia to complete cross-examination due to a business conflict that he stated made him unavailable for the final two days of trial.  HTC argued that this order was an abuse of discretion because “absent confusion caused by comments made by counsel for Complainant Nokia and the ALJ when Dr. Caloyannides first raised his unavailability to testify, HTC would have ensured that Dr. Caloyannides was available to complete his testimony within the scheduled time period for the hearing.”  ALJ Pender determined that all of HTC’s arguments were unpersuasive and, accordingly, rejected HTC’s assertion that ALJ Pender abused his discretion by striking Dr. Caloyannides’s witness statements that were not subject to cross-examination by Nokia.

The ‘190 Patent

Nokia asserted claim 1 of the ‘190 patent against HTC.  ALJ Pender first construed the claim terms “operation mode,” “first operation mode,” and “second operation mode.”  ALJ Pender determined that “operation mode” refers to a type of air-interface technology (e.g., GSM or LTE) and not a specific operating frequency band within the air-interface technology.  ALJ Pender then determined that the steps of method claim 1 are “grammatically and logically written to require that they be performed in the order drafted.” 

Regarding infringement, Nokia alleged that HTC induced infringement of claim 1 by end users of HTC’s accused products.  ALJ Pender held that Nokia failed to prove that anyone has directly infringed claim 1 of the ‘190 patent.  Even assuming that Nokia could have proved direct infringement, ALJ Pender held that Nokia failed to prove induced infringement because Nokia failed to prove that HTC had the specific intent to cause the direct infringement.

As to validity, ALJ Pender rejected HTC’s arguments that three different references anticipated the ‘190 patent.  Similarly, ALJ Pender rejected both of HTC’s obviousness arguments.  Accordingly, ALJ Pender held that the ‘190 was not invalid.

The parties had stipulated that the technical prong of the domestic industry requirement would rise and fall with Nokia’s infringement allegations.  Accordingly, ALJ Pender held that the domestic industry products do not practice the ‘190 patent.

The ‘260 Patent

Nokia asserted claims 6, 8, 10, and 11 of the ‘260 patent against HTC.  As an initial matter, ALJ Pender construed several means-plus-function claim elements by identifying the corresponding structure from the specification. 

Regarding infringement, ALJ Pender divided his analysis based on the accused product’s transceiver.  ALJ Pender held that the accused products with the Magellan RF transceivers infringed the ‘260 patent.  Specifically, ALJ Pender determined that the accused products with the Magellan RF transceiver contained structure satisfying the “balance adjustment means.”  ALJ Pender held that the accused products with the Odyssey RF transceivers did not infringe the ‘260 patent because these products did not contain structure satisfying the “balance adjustment means.”
 
As to invalidity, HTC did not argue that any of the asserted claims were invalid; therefore, ALJ Pender held that the asserted claims of the ‘260 Patent are not invalid.

Similarly, HTC did not dispute that Nokia practices the ‘260 patent.  ALJ Pender noted that Nokia’s domestic industry products contain some of the same RF transceiver chips and baseband chips that were at issue with regard to infringement.  Accordingly, ALJ Pender held that Nokia’s domestic industry products with Magellan RF transceivers satisfy the technical prong of the domestic industry requirement.

The ‘247 Patent

Nokia asserted claims 2, 18, 19, 21, and 23 of the ‘247 patent against HTC.

Regarding infringement, ALJ Pender held that the accused products infringe claims 18, 19, 21, and 23 of the ‘247 patent.  However, the accused products do not infringe claim 2 of the ‘247 patent.  ALJ Pender determined that the accused products directly infringed apparatus claims 18, 19, 21, and 23.  Unlike the apparatus claims, claim 2 is a method claim, which Nokia argued that HTC induced its customers to infringe.  ALJ Pender held that Nokia’s evidence of direct infringement, the accused products’ user manuals, was insufficient to prove direct infringement because the accused products are general-purpose computing devices with a variety of non-infringing purposes and, therefore, do not necessarily infringe the assert method claim.  Even assuming that Nokia could have demonstrated direct infringement, ALJ Pender held that Nokia failed to prove induced infringement because Nokia failed to prove that HTC had the specific intent to cause the direct infringement.

As to invalidity, HTC did not argue that any of the asserted claims were invalid; therefore, ALJ Pender held that the asserted claims of the ‘247 Patent are not invalid.

Similarly, HTC did not dispute that Nokia practices the ‘247 patent.  ALJ Pender noted that Nokia’s domestic industry products contain some of the same RF transceiver chips and baseband chips that were at issue with regard to infringement.  Accordingly, ALJ Pender held that Nokia’s domestic industry products satisfy the technical prong of the domestic industry requirement.

Domestic Industry

As noted above, ALJ Pender determined that the technical prong of the domestic industry requirement is satisfied with respect to the ‘260 and ‘247 patents.  Regarding the economic prong of the domestic industry requirement, the ID noted that the parties stipulated to the fact that Nokia has established the economic prong of the domestic industry requirement.  In light of this stipulation and the evidence Nokia presented demonstrating significant expenditures in plant, equipment, labor, capital, engineering, and R&D, ALJ Pender determined that Nokia satisfied the economic prong of the domestic industry requirement for all three patents-at-issue.  Accordingly, ALJ Pender held that the ‘260 and ‘247 patents satisfy the domestic industry requirement.  However, the ‘190 patent does not satisfy the domestic industry requirement.

Remedy and Bond

ALJ Pender recommended that the Commission issue a limited exclusion order and a cease and desist order.  Specifically, ALJ Pender recommended that the limited exclusion cover all of the infringing articles imported, sold for importation, or sold after importation by HTC and its “affiliated companies, parents, subsidiaries, or other related business entities, or their successors or assigns.”  ALJ Pender further recommended a cease and desist order based on a finding that HTC possesses a commercially significant amount of infringing products in the United States.  Regarding bond, ALJ Pender recommended bond be set at 100% because the wide range of prices for the domestic industry products and accused products made any price comparison impracticable.
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