27
Sep
By Eric Schweibenz
On September 22, 2016, ALJ David P. Shaw issued Order No. 23 denying Respondents Diebold Inc. and Diebold Self-Service Systems’ (collectively, “Diebold”) motion to strike untimely infringement contentions by Complainants Nautilus Hyosung, Inc. and Nautilus Hyosung America Inc. (collectively, “Nautilus”) in Certain Automated Teller Machines, ATM Modules, Components Thereof, and Products Containing the Same (Inv. No. 337-TA-989).

By way of background, this investigation is based on a complaint filed by Nautilus alleging violation of Section 337 in the importation into the U.S. and sale of certain automated teller machines, ATM modules, components thereof, and products containing same that infringe one or more claims of U.S. Patent Nos. 7,891,551; 7,950,655; 8,152,165; and 8,523,235.  See our February 9, 2016 and March 10, 2016 posts for more details on the complaint and Notice of Investigation, respectively.

According to the Order, Diebold sought to strike Nautilus’ allegation of contributory infringement against a specific component—the CCDM module—contained within accused ATMs that was added on the last day of discovery.  Nautilus replied that it had timely pursued discovery regarding Diebold’s importation practices to inform its infringement allegations, and that “[u]ntil late in the discovery period, Diebold stated that it imported the Accused Products in fully-assembled form (i.e., Diebold’s ATMs containing the CCDMv2 module).”  Such fully-assembled ATMs were accused of directly infringement by Nautilus, though it also plead indirect infringement in its complaint. According to Nautilus, “[l]ate in the discovery period ... Diebold changed its tune and stated that is [sic] ‘usually’ only imported the CCDMv2 modules for incorporation into its ATMs in the United States.”  This change in position allegedly necessitated Nautilus’ clarification of its indirect infringement allegation to specify that the importation of the CCDMv2 modules are acts of contributory infringement.  Nautilus updated its interrogatory responses seasonably when this new information came to light, as required by Ground Rules.

ALJ Shaw agreed with Nautilus and denied Diebold’s motion, noting that Nautilus alleged contributory infringement against the CCDM module “from the inception of this investigation” and that the CCDM module has been “central” to the investigation from the outset.  The ALJ noted, however, Diebold’s assertion of the possibility of prejudice to non-party Wincor, from which Diebold purchases the modules.  ALJ Shaw stated that “[a]lleging that Diebold engages in contributory infringement by importing or selling a CCDM module is not the same as alleging contributory infringement against a CCDM module itself,” and that it is not clear whether Nautilus has alleged the latter, or what elements would be comprised by such an allegation.  In any event, the ALJ clarified that the rulings contained in Order No. 23 pertain to Nautilus’ ability to make an allegation of contributory infringement against Diebold in connection with Diebold’s importation or sale of ATMs or modules, not an allegation of contributory infringement by a module itself.



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