By way of background, the Complainants in this investigation are Apple Inc. and NeXT Software, Inc. (collectively “Apple”). The Respondents are High Tech Computer Corp., HTC America Inc., and Exedea, Inc. (collectively, “HTC”).  The four patents-at-issue are: U.S. Patent Nos. 5,481,721 (the ‘721 patent), 6,275,983 (the ‘983 patent), 6,343,263 (the ‘263 patent), and 5,946,647 (the ‘647 patent).

In the ID, ALJ Charneski found that HTC infringed asserted claims 1, 2, 24, and 29 of the ‘263 patent and asserted claims 1, 8, 15, and 19 of the ‘647 patent in violation of Section 337.  As to the remaining claims and patents, the ALJ determined that Complainants had not established that HTC infringed claim 3 of the ‘647 patent or the asserted claims of the ‘983 and ‘721 patents.

‘263 patent

The ‘263 patent is directed to the transmission of data to and from a computer, more particularly to a system for performing real-time signal processing of data that is serially transmitted to and from a computer. Independent claims 1 and dependent claims 2, 24, and 29 were asserted in the investigation. The disputed terms in the ‘263 patent included “realtime” and “device handler.” The ALJ agreed with Apple, that the term “realtime” means “within a defined, upper bounded time limit.” As to “device handler,” the ALJ adopted the construction asserted by both Apple and the Commission Investigative Staff (OUII), construing the term to mean “software associated with an interface device that sets up dataflow paths, and also presents data and commands to a realtime signal processing subsystem.”

Both HTC and the OUII contended that several limitations of independent claim1 were not met by HTC’s accused products. ALJ Charneski disagreed, determining that the accused HTC products met each limitation of claims 1, 2, 24, and 29 of the ‘263 patent.

ALJ Charneski also found that Apple’s domestic industry products satisfied the technical prong of the domestic industry requirement with respect to the ‘263 patent.

HTC and the OUII challenged the ‘263 patent’s validity, arguing that an AT&T VCOS system (“VCOS”) and U.S. Patent No. 5,790,781 to Cox (“Cox”) anticipated and rendered obvious the asserted claims of the ‘263 patent. The OUII also challenged the validity of dependent claim 24 as indefinite. In response, Apple asserted that VCOS and Cox were “fundamentally different from the ‘263 patent, and in the same way as the art cited and overcome during prosecution.” Apple also asserted that the language of dependent claim 24 was definite. ALJ Charneski determined that both VCOS and Cox failed to disclose several elements of the asserted claims of the ‘263 patent. VCOS failed to disclose the “realtime API” and “device handler” limitations of the asserted claims. The ALJ further determined that Cox was not prior art against claim 1 as it was not conceived and reduced to practice before the priority date of the ‘263 patent. In addition, Cox did not disclose the “realtime API” and “device handler program” elements of the asserted claims. As to claim 24, the ALJ determined that the relevant claim language was not insolubly ambiguous.

‘983 patent

The ‘983 patent is directed to systems and methods of enabling object-oriented applications to access in an object-oriented manner a procedural operating system having a native procedural interface.  Independent claims 1 and 7 of the ‘983 patent were asserted in the investigation. The disputed phrases in the ‘983 patent included “to selectively load required object-oriented methods into the executable program memory during runtime before invocation of the object-oriented methods,” “a procedural operating system, having a native interface,” and “means for making determinations during runtime execution if object-oriented methods to be invoked are present in the executable program memory.” With regard to the phrase “to selectively load required object-oriented methods into the executable program memory during runtime before invocation of the object-oriented methods,” ALJ Charneski rejected both parties’ and the OUII’s constructions, construing the phrase to mean “physically or virtually copying, or transferring, required object-oriented methods into the executable memory during runtime before invocation of the object-oriented methods as needed, where those methods do not include or cover classes.” As to the phrase “a procedural operating system, having a native interface,” the ALJ adopted Apple’s construction, construing the phrase to mean “an operating system having a procedural interface that includes procedural functions which are called to access services.” Concerning the means plus function phrase, “means for making determinations during runtime execution if object-oriented methods to be invoked are present in the executable program memory,” the ALJ again agreed with Apple, construing the structure of the claim term to mean “a computer processor configured to perform the function of element 308 in Fig. 3, as described in the ‘983 patent specification at col. 8, lns. 55-59 and col. 9, lns. 62-65.”

As to infringement, the ALJ found that the accused HTC products did not infringe the ‘983 patent. According to the ID, Apple had not shown that the HTC accused products included the “executable program memory,” “means for making determinations during runtime execution if object-oriented methods to be invoked are present in the executable program memory,” or “to selectively load required object-oriented methods” elements of claim 1. Nor had Apple shown that the HTC accused methods met the “means for making determinations” or “selectively loading the object-oriented methods” elements of claim 7.

ALJ Charneski also determined that Apple had not satisfied the technical prong of the domestic industry requirement with respect to the ‘983 patent. Specifically, Apple’s domestic industry products failed to meet the “selective loading” limitation of claims 1 and 7.

HTC only argued invalidity of the ‘983 patent under Apple’s proposed claim constructions. Apple’s proposed constructions eliminated the limitation of “selectively loading the object-oriented methods.” Because the ALJ construed claims 1 and 7 to require this selective loading of methods, the ALJ determined that HTC’s invalidity contentions were “no longer in play” and HTC had not shown that claims 1 and 7 of the ‘983 patent were invalid.

‘647 patent

The ‘647 patent is directed to a system and method for performing computer-based actions on structures identified in computer data. Independent claims 1 and 15 and dependent claims 3, 8, and 19 of the ‘647 patent were asserted in the investigation. The disputed terms and phrases in the ‘647 patent include “linking actions to the detected structures”/“linking at least one action to the detected structure,” and “input device.” With respect to the phrases “linking actions to the detected structures” and “linking at least one action to the detected structure,” ALJ Charneski sided with Apple, construing the phrases to mean “linking detected computer structures to computer subroutines that cause the CPU to perform a sequence of operations on the particular structures to which they are linked” and “linking a detected structure to at least one computer subroutine that causes the CPU to perform a sequence of operations on the particular structures to which it is linked,” respectively. As to the term “input device,” the ALJ adopted HTC’s and the OUII’s construction, giving it its plain and ordinary meaning “computer hardware but not computer software.”

Using these constructions, ALJ Charneski determined that the HTC accused products satisfied every claim element of claims 1 and 8 of the ‘647 patent and therefore directly infringed. The ALJ determined that the HTC accused products did not infringe claim 3 which required that “the input device receives the data from an application running concurrently.” According to the ID, Apple only identified software as such an “input device,” but the ALJ determined that software alone was not an “input device,” thus HTC did not infringe literally. ALJ Charneski also determined that HTC did not infringe claim 3 under the doctrine of equivalents. Finally, the ALJ determined that HTC’s customer’s use of the HTC products satisfied every claim element of method claims 15 and 19, and HTC induced infringement of those claims.

As to domestic industry, the ALJ determined, and HTC did not contest, that Apple satisfied the technical prong of the domestic industry requirement with respect to claims 1, 4, 8, 15, and 19 of the ‘647 patent.

HTC and the OUII challenged the validity of the ‘647 patent. Specifically, HTC argued that the asserted claims of the ‘647 patent were anticipated or rendered obvious by the Perspective System and Handbook (“Perspective”), the NeXTSTEP reference manual and NeXTSTEP System (“NeXTSTEP”), and/or U.S. Patent No. 5,859,636 to Pandit (“Pandit”). The OUII argued that Perspective anticipated and/or rendered the ‘647 patent obvious and, in the alternative, that Pandit anticipated the asserted claims of the ‘647 patent. Apple responded that neither Perspective, NeXTSTEP, or Pandit disclosed all elements of the asserted claims. Moreover, Apple argued that Pandit was not prior art. ALJ Charneski agreed with Apple, determining that HTC and the OUII had not shown the asserted claims of the ‘647 patent were anticipated or rendered obvious by Perspective, NeXTSTEP, or by Pandit. Specifically, Perspective failed to disclose elements of independent claims 1 and 15 that required “linking actions to the detected structure,” “enabling the selection of a linked action,” and “performing the selected action on the selected structure.” As to NeXTSTEP, the ALJ determined that HTC had not identified a proper NeXTSTEP “system” nor could it contend that the individual references from different versions of NeXTSTEP constituted a single system. Moreover, ALJ Charneski found that NeXTSTEP did not disclose “detecting structures,” “linking actions to detected structures,” or “enabling the selection of a detected structure.  With respect to the Pandit reference, the ALJ determined that Pandit was not prior art because the inventors conceived and reduced to practice the inventions of the ‘647 patent well before Pandit’s filing date. The ALJ added that, in addition to not being prior art, Pandit did not disclose “detecting structures” or “enabling the selection of a detected structure and a linked action.”

‘721 patent

The ‘721 patent is directed to a method and apparatus for the distribution of objects and the sending of messages between objects that are in different processes. Independent claims 1 and dependent claims 5 and 6 of the ‘721 patent were asserted in the investigation. The disputed terms and phrases in the ‘721 patent include “first processing means”/“second processing means,” “proxy,” “operating system based message,” and “dynamic binding.” As to the terms “first processing means” and “second processing means,” Apple argued that the “processing means” terms should be construed as “a processor.” HTC and the OUII contended, and ALJ Charneski agreed, that these terms were means plus function terms and the functions and structures of those terms are construed as proposed by HTC and OUII. As to the term “proxy,” the ALJ agreed with Apple, construing it to mean “an object that acts as a local receiver for objects in the local process on behalf of another object.” In doing so, the ALJ rejected HTC and the OUII’s revised construction of “proxy” which would have added a new limitation of “unicity.” The ALJ determined that “unicity” was not related to the claims, was found nowhere in the language of HTC’s construction, and represented an untimely change of position. Concerning the phrase “operating system based message,” ALJ Charneski again adopted Apple’s construction, construing the phrase to mean “a message that is based, or dependent, on an operating system.” Finally, with respect to the term “dynamic binding,” the ALJ chose a construction similar to that proposed by HTC, construing it to mean “permitting messages to be bound to the actual methods to be invoked depending on the class of the receiver, allowing objects of any classes that implement a given method to be substituted for the target object at run time.”

Regarding infringement, the ALJ found that the accused HTC products did not infringe the ‘721 patent. According to the ID, Apple had not shown that the HTC accused products included the required “first processing means,” “second processing means,” or dynamic binding” limitations of independent claim 1.

Although HTC did not brief the technical prong of the domestic industry requirement with respect to the ‘721 patent, the OUII argued against Apple, alleging that Apple did not prove such requirement was met. ALJ Charneski agreed, determining that Apple had only relied on “a processor” to meet the first and second “processing means” limitations of the claims. Apple had not construed structures for those terms under a means plus function construction and had thus failed to prove it practiced the asserted claims of the ‘721 patent.

As with the ‘983 patent, HTC only argued invalidity of the ‘721 patent under Apple’s proposed claim constructions. The ALJ determined that because the terms “first processing means” and “second processing means” were construed in agreement with HTC and the OUII as means plus function terms, HTC had not shown that its cited references and combinations of references would anticipate or render obvious the asserted claims of the ‘721 patent.

Remedy and Bond

Having found a violation of Section 337 as to the ‘263 and ‘647 patents, ALJ Charneski recommended that the ITC issue a limited exclusion order directed to certain personal data or mobile communications devices or related software found to infringe the ‘263 and ‘647 patents. The ALJ did not recommend a cease and desist order, finding it unnecessary because HTC inventories of accused products in the US are for testing purposes only, are not approved by the US government, and are not for sale. In addition, the ALJ noted that HTC surrenders all title and interest to its commercial products when they arrive and are warehoused in the US. The ALJ also recommended that a bond not be required during the Presidential review period.

By way of background, the Complainants in this investigation are Apple Inc. and NeXT Software, Inc. (collectively “Apple”).  The Respondents are High Tech Computer Corp., HTC America Inc., and Exedia, Inc. (collectively, “HTC”).  The patents-at-issue are: U.S. Patent Nos. 5,481,721 (the ‘721 patent), 6,275,983 (the ‘983 patent), 6,343,263 (the ‘263 patent), and 5,946,647 (the ‘647 patent).  

In the notice, ALJ Charneski found that there is a violation of Section 337.  Specifically, ALJ Charneski determined, inter alia, that (i) “Respondents’ accused products infringe asserted claims 1, 2, 24, and 29 of the ‘263 patent and asserted claims 1, 8, 15, and 19 of [the] ‘647 patent,” (ii) “[i]t has not been shown by clear and convincing evidence that any asserted claim of the ‘263, ‘647, ‘983, and the ‘721 patents is invalid,” and (iii) “[t]he domestic industry requirement is satisfied with respect to the ‘263 and the ‘647 patents.”

We will provide additional information after the public version of the ID issues in its entirety.

After reviewing the confidential and non-confidential versions of the agreements, ALJ Charneski granted the joint motion filed by Apple and Nokia.

By way of background, the Commission instituted this investigation on October 12, 2010.  The Complaint named 24 Respondents: Ninestar Image Co. Ltd. (a/k/a Ninestar Technology Co., Ltd.), Ninestar Image Int’l, Ltd., Seine Image International Co., Ltd., Ninestar Technology Company, Ltd., Ziprint Image Corporation, Nano Pacific Corporation, IJSS Inc. (d/b/a TonerZone.com Inc. and Inkjet Superstore), Chung Pal Shin (d/b/a Ink Master), Nectron International, Inc., Quality Cartridges Inc., Direct Billing International Incorporated (d/b/a Office Supply Outfitter and The Ribbon Connection), E-Toner Mart, Inc., Alpha Image Tech, ACM Technologies, Inc., Virtual Imaging Products Inc., Acecom Inc-San Antonio (d/b/a inksell.com), Ink Technologies Printer Supplies, LLC (d/b/a Ink Technologies LLC), Jahwa Electronics Co., Ltd., Huizhou Jahwa Electronics Co., Ltd, Copy Technologies, Inc., Laser Toner Technology, Inc., C & R Services, Inc., Print-Rite Holdings Ltd., and Union Technology Int’l, (M.C.O.) Co. (collectively, the “Respondents”), alleging a violation of U.S. Patent Nos. 5,337,032, 5,634,169, 5,758,233, 5,768,661, 5,802,432, 5,875,378, 6,009,291, 6,078,771, 6,397,015, 6,459,876, 6,816,692, 6,871,031, 7,139,510, 7,233,760, and 7,305,204 (“the asserted patents”).  See our October 7, 2010 post for more details.  All of the asserted patents relate to monochrome toner cartridges used in Lexmark laser printers.

On December 23, 2010, ALJ Charneski granted a joint motion to terminate the investigation as to Print-Rite.  See our December 23, 2010 post for more details.  In February 2011, all 23 remaining respondents were found to be in default.  See our February 24, 2011 post for more details.  Lexmark filed a motion for summary determination as to these 23 defaulting respondents seeking, inter alia, a general exclusion order and cease and desist orders.  The Commission Investigative Staff (“OUII”) supported Lexmark’s motion.

Importation

In the ID, the ALJ provided a list of key nomenclature provided by Lexmark and used in the printing supplies industry.  The ALJ then determined that Lexmark, in its complaint, satisfied its burden of establishing importation by the 23 defaulting respondents.

Domestic Industry

ALJ Charneski determined that Lexmark met the economic prong of the domestic industry requirement.  Lexmark relied on expenditures for facilities, employees, and activities that, according to the ID, sometimes overlapped with the production of non-domestic industry products.  The OUII, while agreeing that Lexmark met the economic prong, asserted that Lexmark had not broken these expenditures down for each patent individually. The OUII provided such apportionment for Lexmark.

Regarding the technical prong, the ALJ determined that, based on the report of Lexmark’s expert, Lexmark’s domestic products practice at least one claim of the asserted patents.

Infringement and Validity

Relying on the report of Lexmark’s expert and a declaration submitted by Lexmark, ALJ Charneski agreed with Lexmark and the OUII that the accused defaulting respondents’ products infringe the asserted patents’ claims.

Because the asserted patents were presumed valid and no respondents contested their validity or enforceability, the ALJ found no issue of material fact existed as to this issue.

Accordingly, ALJ Charneski determined that Lexmark was entitled to summary determination of violation.

Remedy and Bonding

As to remedy, the ALJ determined that a general exclusion order was warranted.  ALJ Charneski found that because manufacturers and sellers of infringing cartridges seek to mask their identities, limited exclusion orders would likely be circumvented.  The ALJ noted that six of the defaulting respondents do business under more than one name, that others had created an array of confusingly similar subsidiaries, and that there existed a practice of labeling and selling Lexmark-compatible laser toner cartridges under other OEM-brand names.  The ALJ also stated that there was a pattern of violation of Section 337.  For this, the ALJ cited evidence provided by Lexmark that market conditions are conducive to a pattern of violations, that the 23 defaulting respondents have sold for importation or after importation infringing cartridges, that there are 1,283 toner cartridge manufactures in China and 5,000 remanufacturers worldwide, that there are no significant technical and financial barriers to entry into the market, and that remanufacturers do not attempt to limit their procurement to empty cartridges first purchased in the US.  Finally, the ALJ observed that, in this market, it is difficult to identify the source of the infringing products.  In the ID, the ALJ noted that the cartridges are easily sold over the Internet by entities that obfuscate their identities and change business.  ALJ Charneski also indicated that some manufactures and sellers seek to mask the source of the cartridges, while others mark clone cartridges as remanufactured and offer customized labeling which can be used to mislead OEMs as to their source.  In addition, the ALJ revealed that Lexmark  had offered evidence of counterfeiting.  Accordingly, the ALJ recommended that the Commission issue a general exclusion order.

ALJ Charneski also recommended a cease and desist order as to all domestic respondents and respondents Ninestar, Ninestar Image Int’l, and Seine Image (collectively, the “Ninestar Respondents”).  The defaulting domestic respondents were presumed to have a commercially significant inventory worthy of a cease and desist order.  As to the Ninestar Respondents, Lexmark presented evidence that the Ninestar Respondents sent significant amounts of toner cartridges to respondent Ziprint in the US.

Finally, with regard to bonding, because the ALJ determined that there is a broad range of differences between new or properly remanufactured ink cartridges and improperly cloned or remanufactured cartridges, a reliable price differential could not be obtained. Accordingly ALJ Charneski recommended bond for importation be set at 100% during the Presidential review period.

By way of background, this Investigation was based on a March 28, 2011 complaint filed by Nokia Corporation of Finland, Nokia Inc. of White Plains, New York, and Intellisync Corporation of White Plains, New York alleging violation of Section 337 by Apple Inc. of Cupertino, California through its infringement of U.S. Patent Nos. 7,209,911; 6,212,529; 6,141,664; 7,558,696; 6,445,932; 5,898,740; and 7,319,874.  See our April 26, 2011 post for more details.

In the Order, ALJ Charneski granted a joint motion filed by Complainants and Apple to terminate the Investigation in its entirety based on a settlement agreement and license agreement.

In Order No. 4, ALJ Charneski set October 29, 2012 as the target date for completing this investigation (which is approximately 18 months after institution of the investigation).  ALJ Charneski determined that “an 18-month target date is reasonable given the complexity of the technology and the number of patents and claims in issue in this investigation.”  ALJ Charneski further determined that an initial determination on any violation of Section 337 shall be due on June 29, 2012.

In Order No. 5, ALJ set the procedural schedule which provides for submission of disputed claim terms and proposed claim constructions and a twenty-day evidentiary hearing commencing on March 5, 2012.

According to the Order, HTC did not dispute that the individuals at issue were not identified on HTC’s witness list.  ALJ Charneski divided the HTC witnesses into three groups.  The first group included witnesses testifying only concerning the authentication of documents.  ALJ Charneski determined that individuals within this group could testify, given the limited nature of their testimony, and Apple would not suffer undue prejudice, due to Apple’s ability to cross-examine these witnesses.  ALJ Charneski determined that a second group of HTC witnesses may not testify at the hearing due to the substantive nature of their expected testimony and the HTC’s failure to include these individuals on HTC’s witness list.  The court was unable to locate the subject declarations of a third group of HTC witnesses, and therefore deferred ruling on these witnesses until the April 15, prehearing conference.

By way of background this Investigation was based on an August 5, 2010 complaint filed by Invacare Corporation of Elyria, Ohio (“Invacare”) alleging violation of Section 337 by Medical Depot, Inc., d/b/a Drive Medical Design and Manufacturing of Port Washington, New York and Shanghai Shunlong Physical Therapy Equipment Co., Ltd. of Shanghai, China (collectively “Respondents”) through their infringement of U.S. Patent Nos. 6,983,495; 6,997,082; 7,302,716; and 7,441,289.  See our September 13, 2010 post for more details.

In the Order, ALJ Charneski granted a joint motion filed by Invacare and Respondents to terminate the Investigation in its entirety based on a settlement agreement and consent order stipulation.

According to the Order, Apple’s motion argued that HTC’s subpoena of non-party Brian Holtz should be quashed because (1) Mr. Holtz was not identified on HTC’s September 30, 2010, witness list; (2) HTC did not seek leave to add Mr. Holtz as a witness after the September 30 deadline; (3) HTC did not have good cause to so move; and (4) Apple would be substantially prejudiced if the subpoena were not quashed.

ALJ Charneski determined, as an initial matter, that Apple did not have standing to move to quash the subpoena because Apple had not demonstrated a personal right or privilege with respect to the subject matter of the non-party witness.  However, ALJ Charneski was concerned that HTC intended to go beyond its original purported reason for calling Mr. Hortz to authenticate a manual, and additionally rely upon Mr. Holtz to establish the publication of the manual.  ALJ Charneski stated it was not his intention to require the appearance of a non-party witness to testify at the hearing, only to have that witness’ testimony be disallowed upon objection.  Accordingly, ALJ Charneski noted that this matter would be addressed at the upcoming prehearing conference on April 15, 2011.

According to the Order, HTC asserted that “Apple has not identified any one object that performs the required claim limitations.”  In response, Apple, contended that HTC’s motion should be denied because it relied exclusively on a new theory that HTC never disclosed during discovery and it raised numerous issues of fact which precluded summary determination.  The Commission Investigative Staff agreed with Apple that HTC’s motion should be denied on the grounds that genuine issues of material fact exist.

ALJ Charneski determined that “HTC has not carried its burden of proving that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law,” and on this basis denied HTC’s motion.