According to the Order, ALJ Essex reviewed the memoranda submitted by B&N in support of its motion (joined by Respondent Inventec Corp. (“Inventec”)) for summary determination that U.S. Patent No. 5,889,522 is invalid, as well as those submitted by Complainant Microsoft Corp. (“Microsoft”) and the Commission Investigative Staff (“OUII”) in opposition, and found that summary determination was inappropriate because every aspect of B&N’s motion was opposed by Microsoft and OUII and genuine issues of material fact remain.  The ALJ denied B&N’s motion (also joined by Inventec) for summary determination of noninfringement of U.S. Patent No. 6,597,233 on the same grounds.

In the Order, ALJ Rogers noted that AT&T’s motion included neither a copy of the subpoena nor AT&T’s response to it in contravention of Ground Rule 3.5(b) requiring any discovery-related motion to “have appended to it the pertinent parts of the discovery request and all objections and answers thereto.”  The ALJ stated that AT&T’s violation of Ground Rule 3.5(b) “renders it impossible to determine the reasonableness of the document requests or the burden presented by the document requests.”

In the Order, ALJ Rogers granted a joint motion filed by Complainants Remy International, Inc. and Remy Technologies LLC and Respondent Electric Motor Service, Inc. to terminate the investigation based on a settlement agreement.  The Commission Investigative Staff (“OUII”) initially opposed the motion because the parties did not file a public version of the settlement agreement; however, after the parties filed a supplement to their motion that included a public version of the agreement, the OUII supported the motion.  After reviewing the confidential and non-confidential versions of the agreement, ALJ Rogers granted the motion.

According to the Order, Complainant Femina Pharma Inc. (“Femina”) moved to terminate the investigation based on withdrawal of the complaint under Commission Rule 210.21(a)(1).  Respondents Merck & Co., Inc., Schering Plough Corporation, Organon Inc., and N.V. Organon and the Commission Investigate Staff did not oppose the motion.  Because Femina filed its motion prior to the evidentiary hearing and there were no extraordinary circumstances to justify denying of the motion, ALJ Pender issued an Initial Determination granting the motion.

According to the Order, SKC argued that the asserted claims of the ‘961 patent were invalid in light of prior art polyimide films manufactured and sold by E.I. DuPont de Nemours and Company (“DuPont”) more than a year before the earliest priority date asserted by Complainant Kaneka Corporation (“Kaneka”).  SKC pointed to Kaneka’s interrogatory responses indicating that the inventors of the ‘961 patent conceived of the inventions therein “in early 2003” and reduced the inventions to practice “in or about the Summer of 2003,” and contended that the undisputed facts show that some of DuPont’s Kapton® film products manufactured prior to September 2001 meet each limitation set forth in the asserted claims as construed by Kaneka.  SKC relied on samples of Kapton® 200HN and Kapton® 200FPC that were tested using a protocol developed by SKC based on the ‘961 patent, and a report submitted by its expert witness.

Kaneka argued in response that genuine issues of material fact precluding summary determination exist with respect to the methods and results of the testing of the DuPont films, specifically regarding the calculation of the molecular orientation axis (MOA) and the coefficient of linear expansion (CLE) in claims 1, 2 and 6-8, and the calculation of the tear propagation resistance (TPR) in claims 9-10 and 12-14.

ALJ Rogers agreed with Kaneka that a genuine issue of fact exists as to whether the measurements for the MOA, CLE and TPR were correctly determined for the DuPont films, and therefore denied the motion.

By way of background, the investigation is based on a May 6, 2011 complaint filed by Linex alleging violation of Section 337 in the importation into the U.S. and sale of certain products and components that infringe U.S. Patent Nos. 6,757,322 and RE42,219.  See our May 10, 2011 post for more details.

According to the Order, Respondents sought documents and testimony from Linex sufficient to establish the figures and factors used to calculate the licensing-based expenses on which Linex intends to rely to establish a domestic industry or, alternatively, to preclude Linex from presenting evidence of any licensing-based expenses for which it has not provided a basis for its calculation.  Respondents also sought to preclude Linex from relying on any expenses that were disclosed after the November 2, 2011 contention interrogatory response deadline.  The Commission Investigative Staff supported the motion to the extent that supplemental information Linex indicated it intended to provide did not render the motion moot.

ALJ Pender denied the motion, noting that Respondents failed to identify the pertinent document requests or deposition topics in contravention of Ground Rule 3.5.  The ALJ also found that while Respondents attached a notice of deposition to their motion, they failed to identify the deposition topics for which the witness was designated.  Further, while Respondents’ motion stated that their contention interrogatories on the issue of domestic industry include Apple Inc.’s Interrogatory Nos. 46, 47, 61, 72-75 and 77-78, Respondents failed to attach Linex’s responses to these interrogatories except for Interrogatory No. 46, which ALJ Pender pointed out is not a contention interrogatory.  Thus, Respondents provided no basis to preclude Linex from relying on expenses disclosed after the contention interrogatory response deadline.

The complaint alleges that the following entities (collectively, the “Proposed Respondents”) unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain dimmable compact fluorescent lamps (CFLs) and products containing same that infringe one or more claims of U.S. Patent Nos. 5,434,480 (“the ‘480 patent”) and 8,035,318 (“the ‘318 patent”):

• SK America, Inc. d/b/a/ Maxlite of Fairfield, New Jersey
• U Lighting America Inc. of San Jose, California
• Golden U Lighting Manufacturing (Shenzhen) Co., Ltd. of China
• Feit Electric Company, Inc. of Pico Rivera, California
• General Electric Company of Fairfield, Connecticut
• Xiamen Topstar Lighting Co. Ltd. of China
• Technical Consumer Products, Inc. of Aurora, Ohio
• TCP China of China
• TCP (Shanghai) Tiancanbao Lighting Electrical Appliance Co., Ltd. of China
• Shanghai Jensing Electron Electrical Equipment Co., Ltd. of China
• Shanghai Qiangling Electronics Co. Ltd. of China
• Zhejiang Qiang Ling Electronic Co. Ltd. of China

According to the complaint, the ‘480 patent is directed to “circuitry for electronic ballasts that power dimmable CFLs with the ballasts providing a high power factor and low harmonic distortion” which allows for improved dimmable CFL performance.  The ‘318 patent is directed to “an electronic ballast for enabling a full range of dimming of a CFL.”  Both patents address deficiencies in ballast circuitry that cause visible flicker during the dimming operation in dimmable CFLs.

The complaint identifies Mr. Bobel as the inventor of the ‘480 and ‘318 patents and the founder, CEO and chief engineer of Neptun, a “manufacturer of energy conservation lighting products such as LED, induction and compact fluorescent, including dimmable CFLs … designed for residential, commercial, outdoor and other infrastructure lighting applications.”  The complaint defines SK America, Inc. d/b/a/ Maxlite, U Lighting America, Inc., Feit Electric Company, Inc., General Electric Company, and Technical Consumer Products, Inc. as importers, distributors and/or sellers of infringing dimmable CFLs manufactured abroad, namely in China.  The complaint also defines Golden U Lighting Manufacturing (Shenzhen) Co., Ltd., Xiamen Topstar Lighting Co. Ltd., TCP-China, TCP (Shanghai) Tiancanbao Lighting Electrical Appliance Co., Ltd., Shanghai Jensing Electron Electrical Equipment Co., Ltd., Shanghai Qiangling Electronics Co. Ltd., and Zhejiang Qiang Ling Electronic Co. Ltd. as manufacturers of infringing dimmable CFLs in China.

Regarding the technical prong of domestic industry requirement, Neptun asserts that it is in the business of developing, designing and manufacturing in the U.S. dimmable CFLs which practice the ‘480 and ‘318 patents, such as Neptun’s dimmable CFL R30 product.  With respect to the economic prong, Neptun points to substantial investments in labor, capital, research and development, and marketing for over 15 different models of dimmable CFLs that it currently sells in the United States.  Neptune also adds that not only is it is a licensee of the ‘480 patent, but the ‘480 patent has been licensed to another dimmable CFL manufacturer.

With respect to potential remedy, the complaint asks the Commission to issue permanent cease and desist orders and a permanent limited exclusion order forbidding entry into the U.S. of all infringing dimmable CFLs that are manufactured, imported or sold for importation by or on behalf of the Proposed Respondents.

By way of background, the investigation is based on a complaint filed by Linex on May 6, 2011 alleging violation of Section 337 in the importation into the U.S. and sale of certain products and components that infringe U.S. Patent Nos. 6,757,322 and RE42,219.  See our May 10, 2011 post for more details.

According to the Order, Respondents contended that after repeated and unexplained delays, Linex produced a privilege log with document descriptions insufficient to maintain a claim of privilege, and that when questioned on such entries, Linex provided a revised log that altered document authors from non-lawyers to lawyers and added lawyers as document recipients for some of the entries at issue.  Respondents argued that Linex’s alterations to entries in its revised privilege log, as well as numerous entries that still do not provide a sufficient description to maintain a claim of privilege, raised serious concerns about the integrity of Linex’s privilege claims.  Linex opposed the motion, arguing that its revised log provided ample support for Linex’s privilege claims.  The Commission Investigate Staff supported the motion in part.

ALJ Pender agreed with Respondents, finding that Linex’s privilege log did not comply with the requirements of Ground Rule 4.10.1 and did not provide the level of detail necessary to substantiate its claims of privilege.  Specifically, the ALJ found that Linex’s revised privilege log (1) failed to include a date for each withheld document, (2) included miscellaneous “Custodian” information that masked the required identification of the author(s)/sender(s) of each document, (3) included miscellaneous “Mentions” information that masked the required identification of the copy recipient(s) of each document, (4) repeatedly and improperly identified an entity rather than a person as the author/sender/recipient, (5) failed to identify the sender/recipient by position and entity with which they are employed or associated, (6) failed to specifically identify any author/sender/recipient as an attorney or foreign patent agent, and (7) failed to provide a certification that all elements of the claimed privilege have been met and not waived with respect to each document.  ALJ Pender also found that Linex’s generic document descriptions (e.g., “confidential document created for the purposes of seeking and/or providing legal advice for litigation”) did not provide the detail necessary to assess Linex’s privilege claims.

While Respondents sought a finding that Linex waived its privilege claims, ALJ Pender instead ordered Linex to produce a privilege log that complies with Ground Rule 4.10.1, and to produce any documents on its log for which Linex cannot substantiate its claim of privilege.

According to the Order, Openwave contended that RIM’s aforementioned defenses were inadequately pled and should be stricken.  Specifically, Openwave asserted that RIM’s factual support for each of these defenses is insufficient to meet the requirements of Commission Rule 210.13 or the heightened pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure.  RIM opposed the motion, arguing that it fully complied with Commission Rules and the ALJ’s precedent in pleading each defense with “as much specificity as possible,” and with the heightened particularity under Rule 9(b) when necessary.  The Commission Investigative Staff (“OUII”) also opposed the motion, arguing that the specificity sought by Openwave with respect to RIM’s defenses of non-infringement and invalidity is not required at this stage.  However, OUII asserted that RIM failed to sufficiently plead patent misuse, inequitable conduct, prosecution history estoppel, lack of standing, lack of candor and abuse of process, express license, patent exhaustion, first sale, incorporation and reservation, but stated that RIM should be allowed to supplement its response before these defenses are stricken.

In the Order, ALJ Rogers emphasized that Commission Rule 210.13(b) provides that affirmative defenses shall be pleaded with “as much specificity as possible in the response,” and explained that the heightened pleading standard required by Rule 9(b) of the Federal Rules of Civil Procedure applies to affirmative defenses of inequitable conduct.  ALJ Rogers further determined that RIM’s affirmative defenses of non-infringement and invalidity should not be stricken, noting that Openwave “fails to cite any decision in which a court or the Commission struck a non-infringement or validity defense from the pleadings” and reiterating that Rule 210.13(b) “encourages, but does not require, respondents to include … a showing of non-coverage … and/or a showing of how any prior art renders each asserted claim invalid or unenforceable.”

ALJ Rogers agreed with Openwave that RIM’s affirmative defense of inequitable conduct failed to name the specific individual involved in the alleged inequitable conduct, failed to allege facts showing that anyone knew of the alleged inequitable conduct, and failed to identify which claims the allegedly withheld references were relevant to, and thus held this defense to be inadequately pled.  However, the ALJ determined that RIM’s unopposed motion to amend its response to supplement this affirmative defense should be granted, and therefore RIM’s inequitable conduct defense would not be stricken.

As to RIM’s affirmative defense that Openwave should be denied relief under the doctrines of patent misuse, estoppel, acquiescence, waiver, contract or unclean hands, ALJ Rogers held that the motion to strike these defenses (except patent misuse) would be denied because “Openwave has not shown that RIM could have provided more specific pleadings.”  However, the ALJ agreed with Openwave and OUII that RIM had not set forth facts sufficient to support a finding of patent misuse.

Finally, ALJ Rogers determined that the language of RIM’s affirmative defenses of prosecution history estoppel, lack of standing, express or implied license, patent exhaustion/first sale, lack of candor and abuse of process is improper boilerplate language and these defenses would therefore be stricken.  The ALJ stated, “[w]hile I appreciate that certain facts in this investigation will almost exclusively be in the hands of Openwave, RIM has failed to identify any particularized information which led it make the allegations in its Third, Fourth, Twelfth, Thirteenth, and Sixteenth Affirmative Defenses.”

According to Order No. 35, Complainant Microsoft Corporation (“Microsoft”) sought to preclude Respondent TiVo Inc. (“TiVo”) from offering testimony or documents at the evidentiary hearing from its expert/fact witness Peter Hallenbeck regarding a product called SuperGuide, arguing that TiVo never served an expert report describing his opinions that TiVo intends to proffer, and that TiVo never indicated that the SuperGuide product was relevant to the asserted patents.  TiVo responded that it had in fact provided Microsoft with adequate notice of the substance of Mr. Hallenbeck’s testimony, and that he would only testify as a fact witness to discuss his personal knowledge of the development of electronic program guides.  The Commission Investigate Staff (“OUII”) agreed with Microsoft that Mr. Hallenbeck should be precluded from offering expert opinions, but agreed with TiVo that he should be allowed to provide non-expert testimony regarding the SuperGuide product.  ALJ Gildea denied the motion, finding that TiVo’s listing of Mr. Hallenbeck as a “Former SuperGuide employee” on its witness list, and listing the SuperGuide product in its Notice of Prior Art and Mr. Hallenbeck as a “Person with Knowledge” regarding that product constituted adequate notice to Microsoft.  The ALJ also noted that TiVo was bound by its representations that it would not elicit expert testimony from Mr. Hallenbeck at the evidentiary hearing.

According to Order No. 36, TiVo sought to preclude Microsoft from asserting an infringement theory allegedly disclosed for the first time in its pre-hearing brief.  Microsoft countered that TiVo was to blame for the late disclosure because it had obfuscated discovery with respect to source code.  The OUII supported the motion in part.  ALJ Gildea granted the motion in part, limiting Microsoft’s expert to the theories and analyses set forth in his expert reports and deposition testimony, and acknowledging that there is some dispute as to what extent Microsoft’s expert disclosed the theories at issue during expert discovery.  The ALJ observed that the source code at issue was undisputedly in Microsoft’s possession by June 2011, that Microsoft was obliged to review the code TiVo produced to determine its relevance, and that Microsoft had declined to apprise the ALJ that TiVo was providing allegedly inadequate interrogatory responses or unprepared corporate witnesses by bringing a motion to compel, request supplemental discovery responses, or seek leave to file an additional or supplemental expert report.  ALJ Gildea advised Microsoft to be prepared to point to specific passages in its expert’s report(s) and/or deposition transcript(s) to refute any objections raised by TiVo or the OUII, and advised TiVo to be equally prepared and not interrupt the hearing with unsupported objections.

According to Order No. 37, Microsoft sought to preclude TiVo from relying upon allegedly false, hearsay information that was provided to TiVo’s expert after the close of fact discovery regarding the operation of a feature of the accused devices.  TiVo and the OUII opposed the motion.  ALJ Gildea denied the motion, finding that the question of whether TiVo’s expert relied on dubious information in forming his non-infringement opinion is a matter best reserved for cross-examination and rebuttal.  The ALJ noted that to the extent TiVo should open the door, Microsoft may present appropriate evidence for cross-examination, including relevant source code.

According to Order No. 38, TiVo filed a series of motions in limine seeking to preclude Microsoft and/or its expert from (1) relying on a previously undisclosed theory regarding why the ‘258 patent was not anticipated, (2) relying on third party documents with the ATT_ITC Bates prefix, (3) relying on documents produced after the close of discovery, (4) relying on any new evidence of secondary considerations outside the scope of Microsoft’s corporate representative’s deposition testimony, (5) testifying on matters not disclosed in experts reports or deposition, and (6) relying on certain declarations.  ALJ Gildea denied each of TiVo’s motions, correspondingly finding that (1) Microsoft’s expert report and its response to TiVo’s Interrogatory No. 68 provided adequate notice of Microsoft’s validity contention (noting TiVo’s failure to previously address any concerns it had regarding the level of detail in Microsoft’s disclosures or expert submissions through affirmative discovery or motion practice), (2) it is premature to put a blanket ban on all such third party documents without affording Microsoft an opportunity to lay a proper foundation or show that the documents are self-authenticating, (3) the documents at issue were previously precluded in Order No. 25, (4) TiVo’s arguments relate to the sufficiency of the evidence and not its admissibility, and that Microsoft’s corporate representative is a fact witness whose testimony is not limited as would be the case with an expert witness, (5) the scope of Microsoft’s expert testimony was previously addressed in Order No. 36, and (6) the parties came to an agreement and the motion in limine was withdrawn.

According to Order No. 39, Microsoft sought to preclude TiVo from offering undisclosed expert testimony from Dr. Ben Bederson, arguing that the expert report submitted by Dr. Bederson concerned the validity of a patent which was terminated from the investigation.  TiVo argued in response that Microsoft “surprised” TiVo with a new infringement theory based on software code after the exchange of expert reports (which it has moved to preclude), requiring TiVo to list Dr. Bederson as a rebuttal witness on that software code.  OUII supported the motion in part, asserting that if Microsoft is permitted to introduce a section of code purportedly prohibited by Ground Rule 5, then Dr. Bederson should be permitted to provide belated rebuttal opinions on the interpretation of that section of code.  ALJ Gildea granted the motion, finding that Dr. Bederson’s rebuttal testimony is unnecessary in light of Order No. 36.