Commission Opinions

Commission Enters Final Determination in Certain Digital Televisions (337-TA-617)

By Eric Schweibenz
|
May
05
Further to our April 14 post, on April 23, 2009, the Commission issued the public version of its confidential April 10 Opinion affirming ALJ Charneski’s finding that Respondents Vizio, Inc., AmTran Technology Co., Ltd., Syntax-Brillian Corp., Taiwan Kolin Co., Ltd., Proview International Holdings, Ltd., Proview Technology (Shenzhen) Co., Ltd., Proview Technology, Ltd., TPV Technology, Ltd., TPV International, Top Victory Electronics Co., Ltd., and Envision Peripherals, Inc. (“Respondents”) violated section 337 as a result of inducing infringement of U.S. Patent No. 6,115,074 held by Funai Electric Co., Ltd. of Japan and Funai Corp. of Rutherford, NJ (“Funai”).  The Commission reversed ALJ Charneski’s finding, however, that certain respondents directly infringed the ‘074 patent. The ‘074 patent is directed to a method and apparatus for decoding a datastream of MPEG compatible packetized information to provided decoded program data for use in changing the channel on digital televisions (“DTVs”).  According to the Opinion, the Commission found that substantial evidence does not support the ALJ’s inference that the TPV and Proview respondents directly infringe claim 23 of the ‘074 patent by testing their DTVs in the United States.  With respect to inducement, the Commission rejected Respondents’ argument that they did not possess the requisite intent since they did not make the semiconductor chipsets that perform the infringing method.  Instead, the Commission determined that there was inducement since Respondents select and combine the chipsets with other components in designing their DTVs, which they market for the specific purpose of receiving ATSC-compliant broadcast signals.  The Commission also rejected Respondents’ argument that their introduction of “work-around” products demonstrated a good faith effort to avoid infringement because Respondents relied on a claim construction of “suitable for use” that is contrary to the well-known and ordinary meaning of the disputed language.  The Commission then made additional findings supporting the ALJ’s conclusion that Respondents knew or should have known that their acts would cause their customers to infringe, including:  (1) Prior to filing its complaint with the Commission, Funai contacted each of the Respondents to offer licenses; (2) Respondents were aware that the ‘074 patent had been designated as essential to practice the ATSC standard since before the investigation; and (3) Respondents continued to sell the older “legacy” DTVs after the investigation began. On the remedy issue, the Commission agreed with the ALJ that a limited exclusion order with a certification provision directed to the infringing products is appropriate given the difficulty that U.S. Customs and Border Protection would otherwise have in determining whether the imported DTVs of Respondents contain infringing chipsets, and because Respondents were not required to prove that they import non-infringing models to support the inclusion of a certification provision.  The Commission also adopted the ALJ’s recommendation to issue cease and desist orders against the domestic respondents because they have commercially significant inventories of accused DTVs in the United States. The Commission found that the statutory public interest factors do not preclude issuance of the remedial orders because (1) the concerns raised by Respondents regarding the government-mandated switch from analog to digital television broadcasts and the current economic environment for domestic businesses and consumers do not implicate the public health and welfare; (2) Respondents’ argument that an exclusion order will cause DTV prices to rise is speculative, and any adverse effects on consumers resulting from issuing relief to Funai would be minimal given the range of DTVs manufactured by Funai and its licensees; and (3) any adverse effect on either consumers or businesses is outweighed by the benefit to Funai and to competitive conditions generally in the United States in protecting and enforcing valid intellectual property rights. Finally, the Commission declined to adopt the ALJ’s recommendation to set a bond of 100% of entered value, instead finding a bond of $2.50 per infringing product appropriate based on Funai’s own license agreements.
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Commission Enters Final Determination In Certain Semiconductor Chips With Minimized Chip Package Size (337-TA-605)

By Eric Schweibenz
|
Jun
11
Further to our May 22 post, on June 3, 2009, the International Trade Commission issued the public version of its Opinion in Certain Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-605).  In the Opinion, the Commission reversed ALJ Theodore R. Essex’s finding that respondents Spansion, Inc., Spansion, LLC (collectively “Spansion”), Qualcomm, Inc. (“Qualcomm”), ATI Technologies (“ATI”), Motorola, Inc. (“Motorola”), STMicroelectronics N.V. (“ST”), and Freescale Semiconductor, Inc. (“Freescale”) (collectively “Respondents”) had not violated Section 337.  Specifically, the Commission reversed ALJ Essex’s finding that Respondents’ semiconductor chip packages and assemblies did not infringe certain claims of complainant Tessera, Inc.’s (“Tessera”) U.S. Patent Nos. 5,852,326 (the “‘326 patent”) and 6,433,419 (the “‘419 patent”).  Additionally, the Commission reversed ALJ Essex’s determination that Tessera had waived its indirect infringement arguments, and found that Respondents had in fact contributorily infringed the ‘419 patent.  The Commission also modified ALJ Essex’s invalidity analysis, although it affirmed his ultimate conclusion that the asserted patents are not invalid.  Finally, the Commission denied Tessera’s request for a “tailored” General Exclusion Order (“GEO”) and instead issued (1) a Limited Exclusion Order (“LEO”) covering Respondents’ unlicensed infringing chip packages and Motorola‘s downstream products that incorporate Respondents’ unlicensed infringing chip assemblies and (2) cease and desist orders directed to those Respondents that maintain commercially significant inventory of infringing goods in the United States. By way of background, the patents-in-suit are directed to semiconductor chip assemblies that use “solder balls” to connect the semiconductor chip’s package substrate to a printed circuit board.  In particular, the asserted patents address certain problems caused by unwanted stress on the semiconductor chip package due to the differing rates of thermal expansion (“DTE”) of the materials used to construct the semiconductor chip, the package substrate, and the printed circuit board, respectively. The asserted claims require that the package substrate terminals be “moveable” with respect to the semiconductor chip.  Based on prosecution history estoppel, ALJ Essex construed the “moveable” limitation to require that “in the operation of the assembly, the terminals are capable of being displaced relative to the chip by external loads applied to the terminals, to the extent that displacement appreciably relieves mechanical stresses, such as those caused by DTE which would be present in the electrical connections absent such displacement.”  ALJ Essex included the “external loads” requirement in his construction because during prosecution Tessera had disclaimed the natural movement of the package substrate terminals due to the thermal expansion itself – the invention was directed to specific structures that allowed the terminals to move in response to the thermal expansion of other components, in order to reduce the strain caused by DTE.  Thus, in order to show infringement, Tessera needed to show that (1) the package substrate terminals are capable of being displaced with respect to the chip by external loads and (2) the displacement caused by the external loads appreciably relieves mechanical stresses caused by DTE. In order to demonstrate infringement, Tessera had its expert, Dr. Qu, perform two separate experiments on Respondents’ accused packages.  Dr. Qu began by creating “baseline” packages to compare to the accused packages.  These baseline packages were purposely made rigid, so that there would be minimal movement between the terminals and the chip.  ALJ Essex objected to these baseline packages, concluding that the baseline packages were “artificially stiff” and thus were guaranteed not to move as much as the accused packages.  But the Commission disagreed and held that the baseline packages needed to be artificially stiff in order for Dr. Qu to perform a meaningful infringement analysis.  The accused packages – which moved under external loads – needed to be compared to baseline packages that did not move under external loads, in order to determine if the accused packages moved in such a way that they relieved the mechanical stresses caused by DTE and infringed the asserted patents.  Thus, the Commission held that Dr. Qu’s use of the “artificially stiff” baseline packages was appropriate and necessary. Dr. Qu’s first experiment was to compare the behavior of the accused packages to the behavior of the baseline packages during “thermal cycling,” i.e., systematically raising and lowering the temperature to simulate real-world conditions.  He found that the accused packages were more reliable and attributed this increased reliability to the accused packages’ superior ability to move under external loads.  However, for this experiment, the Commission agreed with ALJ Essex and found that Dr. Qu had failed to demonstrate infringement. Regarding Dr. Qu’s second experiment, the Commission found that it did prove infringement, and reversed ALJ Essex’s non-infringement determination.  According to the Commission, the second experiment did not have the same problem as the first experiment because it eliminated the uncertainty caused by the differing coefficient of thermal expansion of the accused packages and the baseline packages.  Accordingly, the Commission reversed ALJ Essex and found that the accused packages infringed the ‘326 and ‘419 patents. In addition to reversing ALJ Essex’s finding of no direct infringement, the Commission also reversed his finding that Tessera had waived its indirect infringement arguments and found that Respondents contributorily infringed the asserted claims of the ‘419 patent.  ALJ Essex had based his finding of waiver on the fact that Tessera had not set forth any argument on indirect infringement in its initial post-hearing brief, as required by the ground rules in the investigation.  The Commission noted, however, that the Commission Investigative Staff had discussed indirect infringement in its initial post-hearing brief.  According to the Commission, this preserved the issue even though Tessera itself had not discussed it.  The Commission went on to find that Respondents contributorily infringed the ‘419 patent because there were no substantial non-infringing uses for the accused packages. Additionally, while the Commission modified ALJ Essex’s validity findings, such modifications did not change the ultimate conclusion that the asserted patents were valid.  Specifically, the Commission found that ALJ Essex had misapplied the “on-sale” bar provision of 35 U.S.C. § 102(b) by comparing the date of sale of a prior art device to the conception date of the asserted patents, rather than the “date of the application for patent in the United States” as mandated by the statute.  35 U.S.C. § 102(b).  By making this faulty comparison, ALJ Essex determined that the device was not 102(b) prior art because it was not on sale more than one year before the conception date.  The Commission reversed this finding because the device was on sale more than one year before the application date.  Further, the Commission reversed ALJ Essex’s finding that the reference was not prior art under 35 U.S.C. § 102(g) because it was not “made in this country.”  The Commission found that the prior art device had in fact been constructively reduced to practice in the U.S. through the filing of a U.S. patent covering the device.  Nevertheless, even though it ruled that the device could be considered prior art under 102(b) and 102(g), the Commission found that it did not anticipate the claims of the ‘326 and ‘419 patents and thus did not invalidate them.  Accordingly, the Commission did not disturb ALJ Essex’s ultimate determination that the asserted patents are not invalid. Finally, with respect to remedy, the Commission denied Tessera’s request for a “tailored” GEO and instead issued an LEO covering Respondents’ infringing chip packages and Motorola’s downstream products containing infringing chip packages.  From the beginning of the investigation, Tessera had been requesting that all downstream products – including those from entities other than the named Respondents – be subject to an LEO.  However, after the investigation began, the Federal Circuit issued its opinion in Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340 (Fed. Cir. 2008), in which the court held that only named respondents could have their downstream products excluded under an ITC LEO.  Thus, in responding to the Commission’s Notice of Review, Tessera for the first time requested a “tailored” GEO, which would allow it to exclude the downstream products of non-respondents despite the Federal Circuit’s holding in Kyocera.  The Commission was willing to consider this late request because of the intervening change in the law, but it ultimately held that Tessera was not entitled to a GEO because Tessera could not meet the heightened burden of showing a difficulty in identifying the source of infringing products or a danger that Respondents might circumvent an LEO.  Accordingly, the Commission denied Tessera’s request for a GEO and instead issued an LEO reaching Respondents’ infringing chip packages and named-respondent Motorola’s downstream products.  The Commission also entered cease and desist orders directed to those Respondents that maintain commercially significant inventory of infringing goods in the U.S., namely Motorola, Qualcomm, Freescale, and Spansion.
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ITC Modifies Certain Claim Constructions And Remands Investigation To ALJ Essex In Certain Refrigerators (337-TA-632)

By Eric Schweibenz
|
Jul
08
On July 8, 2009, the U.S. International Trade Commission issued a Notice of its decision to modify certain claim constructions made in the final initial determination; an Order remanding the case to Administrative Law Judge Theodore R. Essex to make findings regarding infringement, validity, and domestic industry that are consistent with the modified claim constructions; and an Opinion setting forth the modified claim constructions in Certain Refrigerators and Components Thereof(Inv. No. 337-TA-632).

The investigation was instituted on February 21, 2008, based on the complaint of Whirlpool Corp., Whirlpool Manufacturing Corp., Whirlpool Patent Corp., and Maytag Corp. (collectively “Whirlpool”).  The respondents are LG Electronics Corp., Inc., LG Electronics, USA, Inc., and LG Electronics Monterrey, Mexico S.A. de C.V. (collectively “LG”).

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Commission Issues Public Version Of Opinion Issuing General Exclusion Order In Certain Hair Irons (337-TA-637)

By Eric Schweibenz
|
Jul
21
Further to our July 7 post, on July 20, 2009 the International Trade Commission issued the public version of its Opinion issuing a General Exclusion Order (“GEO”) in Certain Hair Irons and Packaging Thereof (Inv. No. 337-TA-637).  In this investigation, Complainant Farouk Systems, Inc. (“FSI”) accused several respondents of infringing FSI’s CHI® trademark.  The respondents either signed consent orders or were found in default. In the Opinion, the Commission cited to the Federal Circuit’s Kyocera decision and stated that parties must meet the “heightened requirements of Section 337(d)(2)(A) or (d)(2)(B)” before the ITC has the authority to issue a GEO.  The Commission agreed with ALJ Charneski’s findings that there has been a pattern of violation of FSI’s CHI ® trademark and that it is difficult to identify the source of infringing goods.  The Commission therefore agreed that the statutory requirements of section 337(d)(2)(B) had been met, and that a GEO was appropriate.  In particular, the Commission found:  (1) FSI has initiated 21 lawsuits in district courts, which have failed to stop the infringement; (2) FSI has monitored thousands of offers for sale of infringing hair irons and attempted to shut down websites or online offers originating in the United States; (3) it is difficult to identify the source of the infringing products because companies infringing FSI’s trademark are deliberately misrepresenting their products as those of FSI; (4) infringers are mismarking the country of origin to increase confusion; and (5) the products are distributed over the Internet, which lends itself to anonymity. The Commission found the GEO would not be contrary to the public interest since the respondents remain free to sell hair irons without infringing the CHI® trademark.  Finally, the Commission imposed a bond of 100% of the value of the infringing goods during the Presidential review period.
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ITC Issues Public Version Of Opinion Denying Request To Stay Enforcement Of Remedial Orders In Certain Semiconductor Chips With Minimized Chip Package Size (337-TA-605)

By Eric Schweibenz
|
Jul
29
On July 29, 2009, the International Trade Commission issued the public version of its Opinion in Certain Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-605) denying a motion to stay enforcement of a limited exclusion order and cease and desist orders pending appeal of the Commission’s final determination of a violation of section 337 by Spansion, Inc. and Spansion, LLC (“Spansion”); Qualcomm, Inc. (“Qualcomm”); ATI Technologies (“ATI”); STMicroelectronics N.V. (“ST”); and Freescale Semiconductor, Inc. (“Freescale”) (collectively “Respondents”). As explained in our July 21 post, on July 17, the Commission issued an order denying Respondents’ motion for a stay.  In the July 29 Opinion, the Commission applied the four-prong test used by courts to determine whether to grant a preliminary injunction (as applied by the Federal Circuit) in considering whether to issue a stay pending appeal.  The four-prong test requires that the movant demonstrate: (1) a likelihood of success on the merits of the appeal; (2) irreparable harm to the movant absent a stay; (3) that the issue of a stay would not substantially harm the other parties; and (4) that the public interest favors a stay.  The Commission noted with respect to the first prong that it may find it satisfied if “the Commission has ruled on ‘an admittedly difficult question.’” With respect to the first prong, the Respondents argued that the issues of validity and infringement present admittedly difficult questions.  Regarding the validity issue, Respondents argued that this case presents a difficult legal question because the Commission’s determination that the asserted claims are not invalid is in conflict with the USPTO’s final rejection of all the claims of the asserted patents during reexamination proceedings.  In the Opinion, the Commission disagreed, stating that although the USPTO has rejected the claims, “none of the claims of either patent have been cancelled,” and until all appeals from the reexamination proceedings have been exhausted and the USPTO issues a certificate canceling the claims, “the patents are presumed valid and enforceable.”  The Commission noted that it is unlikely that the full examination process will be completed before the patents expire.  The Commission further disagreed with Respondents’ assertion that the USPTO’s final rejections are inconsistent with the Commission’s determination that the claims are not invalid since the USPTO applies a “preponderance of the evidence” standard, while the Commission applies a “clear and convincing evidence” standard when determining the validity of claims. Regarding infringement, the Commission disagreed with Respondents’ argument that the Commission’s reversal of the ALJ’s finding of non-infringement meant that the issue of infringement was “an admittedly difficult legal question.”  The Commission explained that “[i]t is the Commission, not the ALJ, that is tasked with making any final decisions regarding whether or not there is a violation of Section 337 in a given investigation.”  Thus, as set forth in the Opinion, the fact that the Commission reversed the ALJ on the issue of infringement “cannot, in and of itself, lead to a conclusion that there is an ‘admittedly difficult legal question.’” With respect to the second prong, the Commission acknowledged that Respondents will suffer some harm from the exclusion order, but went on to state “[w]e do not believe, however, that this harm rises to the level of irreparable harm.”  The Commission’s determination in this regard was based on the fact that the limited exclusion order will not bar any downstream products, and the “vast majority of Respondents’ infringing semiconductor chips are imported into the U.S. inside downstream products, which are manufactured overseas.”  The Commission further stated that “any harm that Respondents would suffer due to the limited exclusion order and cease and desist orders could be avoided if Respondents take a license from Tessera, as respondent Motorola has already done.” With respect to the third prong, the Commission found that, if a stay were granted, Tessera will be seriously harmed because “Tessera would essentially be denied the relief to which it is entitled under Section 337 during the pendency of the appeal” and the ‘326 and ‘419 patents expire on September 24, 2010, which will be just a few months after the expected completion of the appeal. With respect to the fourth prong, the Commission found that the public will not be harmed by the lack of competition because “there are many licensed sources for the packaged semiconductor chips of the type at issue and there is no evidence that Tessera’s licensees would be able to adequately supply the U.S. market once Respondents’ products are excluded.”  The Commission further stated that, contrary to Respondents’ argument, there is “no harm caused by conflicting rulings between the USPTO and the Commission because the Commission does not make final binding rulings on any action relating to patents, including determining their validity.” Upon consideration of the four-prong test, the Commission denied Respondents’ motion for a stay pending the outcome of any appeal of the Commission’s final determination.
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Commission Grants Petitions For Reconsideration And Issues Revised Limited Exclusion Order And Opinion In Certain Silicon Microphone Packages (337-TA-629)

By Eric Schweibenz
|
Aug
21
On August 18, 2009, the International Trade Commission issued an Order granting the private parties’ petitions for reconsideration in Certain Silicon Microphone Packages and Products Containing Same (Inv. No. 337-TA-629).  In connection with this Order, the Commission also issued a revised notice and limited exclusion order and a revised opinion in view of the parties’ petitions for reconsideration.  Please note that Oblon Spivak represents Respondent MEMS Technology Berhad (“MemsTech”) in this matter. In the Order, the Commission explained that both Complainant Knowles Electronics, LLC (“Knowles”) and MemsTech filed petitions for reconsideration on June 26, 2009.  Specifically, both Knowles and MemsTech requested that the Commission remove any reference in the opinion, notice, and limited exclusion order to claim 10 of the asserted ‘089 patent since the Commission had already determined that such claim was invalid.  Further, Knowles requested that the Commission reconsider certain wording in its June 12, 2009 opinion stating that MemsTech’s “chamber chip” products are not covered by the limited exclusion order.  MemsTech asked the Commission to strike the language “and products containing the same” from the limited exclusion order.  According to the Order, the Commission Investigative Staff opposed Knowles’ petition for reconsideration. Regarding Knowles’ request, the Commission removed certain language contained in its June 12, 2009 opinion and issued a revised opinion that added a sentence concerning MemsTech’s “chamber chip” products.  With respect to MemsTech’s petition, the Commission removed all instances of the wording “and products containing the same” from the limited exclusion order.  Finally, the Commission agreed to remove all references in the opinion, notice, and exclusion order to claim 10 of the asserted ‘089 patent. For further information regarding this investigation, please see our February 19, March 16, June 15, and July 21 posts.
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Commission Releases Public Version Of Opinion Denying Motion To Stay Enforcement Of Remedial Orders In Certain Digital Television Products (337-TA-617)

By Eric Schweibenz
|
Aug
24
Further to our July 29 post, on August 21, 2009, the International Trade Commission released the public version of its opinion denying certain Respondents’, including Vizio, Inc., TPV International (USA), Inc., and Envision Peripherals, Inc. (collectively, “Respondents”), joint motion to stay enforcement of a limited exclusion order (“LEO”) and cease and desist orders (“C&D Orders”) in Certain Digital Television Products and Certain Products Containing Same and Methods of Using Same (Inv. No. 337-TA-617). By way of background, on April 10, 2009, the Commission terminated this investigation with a finding of violation of Section 337 by reason of infringement of claims 1, 5, and 23 of U.S. Patent No. 6,115,074 (the “‘074 patent”).  See our April 14 and May 5 posts for more information.  In connection with its Final Determination, the Commission issued an LEO against the Respondents, and C&D Orders directed to Vizio, TPV USA, and Envision, among others. On June 2, 2009, Respondents filed a joint motion to stay the LEO and C&D Orders pending appeal of the Commission’s determination to the Federal Circuit.  Complainants Funai Electric Co., Ltd. and Funai Corporation (“Funai”) and the Commission Investigative Staff opposed Respondents’ joint motion.  In the opinion, the Commission evaluated the four-prong test as applied by the Federal Circuit in considering whether to issue a stay pending appeal.  Specifically, in connection with a motion to stay, the moving party must demonstrate (1) a likelihood of success on the merits of the appeal; (2) irreparable harm to the movant absent a stay; (3) that issuance of a stay would not substantially harm other parties; and (4) that the public interest favors a stay. Regarding likelihood of success on the merits, the Commission rejected Respondents’ argument that an admittedly difficult question was presented since all of the asserted ‘074 patent claims currently at issue in the investigation were rejected by the U.S. Patent and Trademark Office (“USPTO”) during reexamination proceedings.  According to the Commission, the “PTO examination procedures have distinctly different standards, parties, purposes, and outcomes compared to civil litigation” and “the two forums take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions.”  More particularly, the Commission noted that in litigation a challenger who attacks the validity of patent claims must overcome the presumption of validity with clear and convincing evidence that the patent is invalid.  In contrast, during USPTO reexamination proceedings the standard of proof is a preponderance of evidence, there is no presumption of validity, and the examiner is not attacking the validity of the patent but it conducting a subjective examination of the claims in light of the prior art.  Lastly, the Commission noted that USPTO’s final office action in connection with the ‘074 patent reexamination proceedings “is not a final decision” since Funai has a number of additional opportunities to reverse the reexamination results. With respect to irreparable harm to Respondents, the Commission determined that “Respondents could experience some harm if the remedial orders are not stayed” but Respondents did “not provide any evidence to substantiate their claim that they would be irreparably harmed, and the harm they allege is far from certain.” As to harm to Funai, the Commission determined that “[i]f the Commission’s orders are stayed and Respondents are allowed to continue importing and selling infringing products, Funai will likely lose sales and a share of the market for digital televisions.” Regarding the public interest, the Commission rejected Respondents’ arguments noting that there is “no evidence that other digital television producers cannot meet the demand in the U.S. market.”  The Commission also determined that “the public interest favors the protection of intellectual property.”  Lastly, the Commission found that “Funai has not raised any public interest arguments that the Commission did not already consider when it issued the remedial orders in this investigation.”
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Commission Issues Public Version Of Its Opinion Reversing Remand Initial Determination In Certain R-134a Coolant (337-TA-623)

By Eric Schweibenz
|
Sep
23
Further to our August 4 post, on September 21, 2009, the Commission issued the public version of its opinion reversing Chief ALJ Paul J. Luckern’s April 1, 2009 Remand Initial Determination (“RID”) in Certain R-134a Coolant (Otherwise Known as 1,1,1,2-Tetrafluoroethane) (Inv. No. 337-TA-623).  In the opinion, the Commission determined to reverse the RID’s finding of nonobviousness of claim 1 of U.S. Patent No. 5,559,276 (the ‘276 patent). By way of background, this investigation was instituted in December 2007 based on a complaint filed by INEOS Fluor Holdings Ltd., INEOS Fluor Ltd. and INEOS Fluor Americas LLC (collectively, “INEOS”).  INEOS’ complaint alleged violations of Section 337 by respondents Sinochem Modern Environmental Protection Chemicals (Xi’an) Co. Ltd., Sinochem Ningbo Ltd., Sinochem Environmental Protection Chemicals (Taicang) Co., Ltd., and Sinochem (U.S.A.) Inc. (collectively, “Sinochem”) in the importation into the U.S., the sale for importation, and the sale within the U.S. after importation of certain R-134a coolant (otherwise known as 1,1,1,2-tetrafluoroethane) by reason of infringement of certain patents, including the ‘276 patent.  See our April 6 post for more details. On December 1, 2008, ALJ Luckern issued a final initial determination (“ID”) that Sinochem infringed the ‘276 patent and the domestic industry requirement had been met.  ALJ Luckern further determined that Sincochem failed to establish that the ‘276 patent was invalid or unenforceable.  Following submissions by the parties, the Commission reviewed the ID with respect to invalidity and issued an order on January 30, 2009 remanding the investigation to the ALJ for further proceedings related to anticipation and obviousness because the disposition of these issues was unclear from the ALJ’s ID.  On April 1, 2009, ALJ Luckern issued his RID concluding that Sinochem’s arguments regarding anticipation and obviousness arguments were waived under the ground rules and, alternatively, that the arguments were without merit.  As explained in our June 3 post, on June 1, 2009, the ITC determined to review the RID in its entirety. In the opinion, the Commission determined that it was necessary to consider Sinochem’s arguments relating to certain party admissions and the state of the prior art “because the admissions and background are relevant to a key factor in the obviousness analysis –  ‘the scope and content of the prior art’ under Graham v. John Deere Co., 383 U.S. 1 (1966).”  The Commission further determined that “the ALJ should have considered arguments and evidence relating to the state of the prior art at the time of invention in conjunction with his analysis of the specific remand references.” With respect to what one of ordinary skill in the art would know about production of R-134a, the Commission determined that “no party disagrees with the ALJ’s finding that the two reactions at issue were known in the prior art and that it was recognized that the reactions could be performed in sequence to create R-134a.”  According to the opinion, the “‘276 patent itself acknowledges this fact” and “also discloses that the concept of recycling a portion of the product stream was known in the prior art, albeit with reference to a different method of production of R-134a.”  The opinion further notes that it is “undisputed that a person of ordinary skill in the art would have had a reason to recycle unconverted 1,1,1-trifluoro-2-chloroethane for further reaction with hydrogen fluoride.” According to the opinion, however, it was disputed “whether it was known in the art to perform the method in two separate reaction zones, and it was further disputed whether it was known to perform reaction (1) at a temperature ‘below that used in reaction (2).’”  First, based on admissions made by INEOS’ expert and references described in the ‘276 patent, the Commission determined that carrying out the reaction sequence in two separate reaction zones was known in the prior art.  Second, regarding the dispute whether one of ordinary skill in the art would have known to run reaction (1) at a temperature lower than reaction (2), the Commission determined that the “record contains several pieces of evidence that clearly show that the claimed temperature relationship was known to one skilled in the art.” Accordingly, the Commission determined that “without even consulting any of the remand references, one of ordinary skill in the art would have knowledge of all of the elements in claim 1, and would know how to combine the known elements to produce R-134a.”  The Commission therefore held that “claim 1 of the ‘276 patent would have been obvious to one of ordinary skill in the art based upon the scope and content of the prior art, the trial testimony, most of which was undisputed, and the disclosures in the ‘276 patent itself.”
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ITC Issues Public Version Of Its Opinion On Civil Penalties In Certain Ink Cartridges (337-TA-565)

By Eric Schweibenz
|
Sep
28
Further to our August 18 post, on September 24, 2009, the International Trade Commission issued the public version of its opinion on civil penalties in Certain Ink Cartridges and Components Thereof (Inv. No. 337-TA-565). By way of background, and as explained in our June 22 post, on June 19, 2009, the Commission issued a notice determining not to review the April 17, 2009 Enforcement Initial Determination (“EID”) issued by Chief ALJ Paul J. Luckern finding violations of the Commission’s cease and desist orders and a consent order issued in the underlying investigation.  While the Commission determined not to review the ALJ’s finding of violations of its remedial orders, the Commission requested separate briefing concerning the imposition of civil penalties. In the opinion, the Commission “determined to adopt the ALJ’s analysis and recommendations on penalties with respect to the Mipo Respondents and Apex Respondents but has determined to impose a lesser penalty on the Ninestar Respondents.”  In this respect, the opinion noted that the Mipo Respondents and Apex Respondents defaulted in the enforcement phase of the investigation, and the Ninestar Respondents did not dispute importation of the covered products. Regarding the Ninestar Respondents’ non-infringement argument concerning permissible repair, the Commission determined that this defense was waived because the Ninestar Respondents “failed to raise it in their prehearing statement, response to the complainants’ interrogatories, posthearing brief or reply brief or at the hearing.”  With respect to the Ninestar Respondents’ argument that they should not be held liable under the Fifth Amendment because the remedial orders did not give them notice that remanufactured cartridges would be covered by such orders, the Commission determined that “the Ninestar Respondents had adequate notice of what is prohibited by the orders, and in fact, that they actually knew that their refilled cartridges that were first sold abroad are covered products.” As to its analysis in the opinion regarding civil penalties, the Commission determined that it reviews the ALJ’s remedy recommendations de novo and applies the following six-factor EPROMS test: (1) the good or bad faith of the respondent; (2) the injury to the public; (3) the respondent’s ability to pay; (4) the extent to which respondent has benefitted from its violations; (5) the need to vindicate the authority of the Commission; and (6) the public interest. The Commission found that “the Ninestar Respondents acted in bad faith.”  With respect to the injury to the public, the Commission determined that the “ALJ’s conclusion that the domestic industry and, consequently, the public, were injured to a degree warranting the imposition of a significant penalty against respondents, is supported by the record.”  Regarding the Ninestar Respondents’ ability to pay, the Commission determined that the “Ninestar Respondents did not introduce accounting records or demonstrate any reason why the maximum penalties should not be imposed” and thus the ability to pay would not be viewed as “any limitation on the amount of penalties to be imposed.”  The Commission further determined that “the Ninestar Respondents received significant intangible benefits, as well as the more obvious financial gains from their violations.”  The Commission also determined that “there is an interest in vindicating the authority of the Commission in this case, particularly in light of the Ninestar Respondents’ bad faith.”  Finally, the Commission determined that the “public interest at issue in this case, as in most section 337 investigations, is the protection of intellectual property rights” and “the Ninestar Respondents should not complain if their business suffers if a severe penalty is imposed in response to their misconduct.”  Regarding the appropriate penalty, the Commission determined to impose joint and several civil penalties against the Ninestar Respondents in the amount of $11,110,000.  According to the opinion, this penalty “should be sufficient to deter future violations by the Ninestar Respondents and others considering violating the Commission’s orders.” The Commission determined to adopt the ALJ’s analysis and recommendations on penalties with respect to the Mipo Respondents and the Apex Respondents.  Thus, the Commission affirmed imposition of joint and several civil penalties against the Mipo Respondents in the amount of $9,700,000, and against the Apex Respondents in the amount of $700,000.
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ITC Issues Public Version Of Its Opinion In Certain Cigarettes (337-TA-643)

By Eric Schweibenz
|
Oct
06
Further to our September 22 post, on October 1, 2009, the International Trade Commission issued a public version of its opinion in Certain Cigarettes and Packaging Thereof (Inv. No. 337-TA-643). By way of background, on February 3, 2009, ALJ Gildea issued an Initial Determination (“ID”) finding that Respondent Alcesia SRL (“Alcesia”) violated Section 337 by reason of infringement of various U.S. Trademark registrations owned by Complainant Phillip Morris USA (“PM USA”).  As explained in our April 16 post, on April 9, 2009, the Commission issued a notice indicating it’s determination to review, in its entirety, ALJ Gildea’s ID. In the opinion, the Commission found in favor of PM USA, issuing a general exclusion order directed to gray market cigarettes bearing the Marlboro®, Virginia Slims®, and Parliament® trademarks. Specifically, the Commission adopted the ID’s finding that PM USA did not authorize gray market sales of the cigarettes at issue, and that substantially all of the gray market cigarettes in this case were materially different from the authorized US market cigarettes.  In doing so, the Commission affirmed ALJ Gildea’s finding that the lack of an English-language Surgeon General warning satisfied the material difference requirement under gray market infringement law.  It declined to adopt, however, the ID’s finding that the gray market cigarettes are materially different because they are susceptible to seizure under the Imported Cigarette Compliance Act.  The Commission took no position on whether Phillip Morris USA’s lack of quality control over gray market cigarette distribution, storage, and transportation constituted a material difference. The Commission found that consumer confusion was likely to occur based on (1) the fact that the marks on both the PM USA cigarettes and the cigarettes sold by Alcesia are identical for use on the exact same types of goods, (2) the strength, length of exclusivity, and fame of the PM USA trademarks at issue, and (3) the record evidence of at least on instance of actual confusion as to the source of the cigarettes sold by Alcesia. Regarding remedy, the Commission issued a general exclusion order.  Describing the necessity of such a remedy, the Commission cited multiple factors, including: widespread unauthorized use, a pattern of violation, established demand, the ready supply abroad, the low barrier to entry and low capital investment required for starting such an online retail website, high profit margins, and the difficulty of identifying infringing products.  Further, the Commission noted that a general exclusion order was warranted in view of the respondents’ “general willingness to avoid the legal consequences of their actions.” The Commission also determined that “it would be simple for Alcesia and the defaulting respondents to quickly create new entities and shift their operations to new websites, enabling them to bypass a limited exclusion order.” The Commission further determined that the public interest factors did not preclude the issuance of a general exclusion order in this investigation.  Also, the Commission “determined to set the bond amount at 100 percent of the entered value of gray market cigarettes.”
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ITC Issues Opinion On Remedy, The Public Interest, And Bonding In Certain Composite Wear Components (337-TA-644)

By Eric Schweibenz
|
Nov
30
On November 24, 2009, the International Trade Commission issued the public version of its opinion on the issues of remedy, the public interest, and bonding in Certain Composite Wear Components and Products Containing Same (Inv. No. 337-TA-644).  The ITC also issued on November 24 a notice of Issuance of Limited Exclusion Order and Cease and Desist Order; Termination of the Investigation. By way of background, the Complainant in this investigation is Magotteaux International S/A and Magotteaux, Inc. (collectively “Magotteaux”) and the respondents are Fonderie Acciaierie Rioale S.P.A. (“FAR”), AIA Engineering Ltd., and Vega Industries (collectively, the “AIAE Respondents”).  FAR was terminated from the investigation on the basis of a settlement agreement.  On May 8, 2009, ALJ Theodore R. Essex issued an Initial Determination (“ID”) finding (i) the AIAE Respondents in default under Commission Rule 210.16(a)(2) based on failure to participate in discovery; (ii) the AIAE Respondents’ conduct in the investigation warranted adverse inferences under Commission Rule 210.17; and (iii) that the AIAE Respondents were in violation of Section 337 on that basis.  See our July 8 and July 21 posts for more details.  On July 7, 2009, the Commission issued a notice determining not to review the ID, and requesting written submissions regarding the form of remedy, if any, that should be ordered.  The parties to the investigation and the Commission Investigative Staff filed submissions and response submissions concerning remedy, the public interest, and bonding on July 22, 2009, and July 30, 2009, respectively. In its November 24 opinion and notice, the Commission determined that the appropriate form of relief is a limited exclusion order and a cease and desist order.  Specifically, the “limited exclusion order prohibits the unlicensed entry for consumption of composite wear components and products containing same that are covered by one or more of claims 12-13 and 16-21 of the ‘998 patent and that are manufactured abroad by or on behalf of, or are imported by or on behalf of, AIA Engineering Limited or Vega Industries or any of their affiliated companies, parents, subsidiaries, or other related business entities, or their successors or assigns.  The cease and desist order covers products that infringe claims 12-13 and 16-21 of the ‘998 patent and is directed to defaulting domestic respondent Vega Industries and any of its principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled (whether by stock ownership or otherwise) and majority owned business entities, successors, and assigns.”  The Commission also determined that the public interest factors did not preclude issuance of the limited exclusion order or the cease and desist order.
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ITC Issues Opinion On Remedy, The Public Interest, And Bonding In Certain Liquid Crystal Display Modules (337-TA-634)

By Eric Schweibenz
|
Nov
30
On November 24, 2009, the International Trade Commission issued its opinion on the issues of remedy, the public interest, and bonding in Certain Liquid Crystal Display Modules, Products Containing Same, and Methods Using the Same (Inv. No. 337-TA-634). By way of background, the Complainant in this investigation is Sharp Corporation (“Sharp”) and the Respondents are Samsung Electronics Co., Ltd., Samsung Electronics America, Inc. (“SEAI”), and Samsung Semiconductor, Inc. (“SSI”) (collectively, “Samsung”).  The Commission instituted this investigation based on a March 4, 2008 complaint filed by Sharp alleging violations of Section 337 based on the importation into the U.S., the sale for importation, and the sale within the U.S. after importation of certain liquid crystal display devices, products containing same, and methods for using the same by reason of infringement of certain claims of U.S. Patent Nos. 6,879,364 (the ‘364 patent), 6,952,192 (the ‘192 patent), 7,304,703 (the ‘703 patent), and 7,304,626 (the ‘626 patent).  On June 12, 2009, Chief ALJ Paul J. Luckern issued an Initial Determination (“ID”) finding a violation of Section 337.  See our June 16 and August 7 posts for more details.  On September 9, 2009, the Commission issued a notice of its determination not to review the ID and requested written submissions on the issues of remedy, the public interest, and bonding.  See our September 11 post for more details. On November 9, 2009, the Commission issued a notice of Final Commission Determination of Violation; Issuance of a Limited Exclusion Order and Cease and Desist Orders; and Termination of the Investigation.  See our November 10 post for more details.  Specifically, the Commission determined that the appropriate form of relief is both 1) a limited exclusion order prohibiting the unlicensed entry of LCD devices, including display panels and modules, and products containing the same that infringe one or more of (i) claims 5-7 of the ‘364 patent; (ii) claims 1 and 4 of the ‘192 patent; (iii) claims 1-2, 6-8, 13-14, and 16-17 of the ‘703 patent; and (iv) claims 10, 17, and 20 of the ‘626 patent, where the infringing LCD devices are manufactured abroad by or on behalf of, or are imported by or on behalf of, related business entities, or successors or assigns; and (2) cease and desist orders prohibiting SEAI and SSI from conducting any of the following activities in the United States:  importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), and soliciting U.S. agents or distributors for, LCD devices, including display panels and modules, and products containing the same that infringe one or more of the aforementioned claims of the patents-in-suit. In its opinion, the Commission adopted ALJ Luckern’s analysis as to how the EPROMs factors support inclusion in the relief of downstream Samsung products, including computer monitors, that contain infringing LCD devices.  With respect to bonding, the Commission noted its agreement with ALJ Luckern’s determination that 100 percent bond is appropriate in this matter.  In particular, the Commission held in the opinion that “[w]e see no reason to deviate from our practice of imposing a 100 percent bond where there is insufficient evidence in the record to determine a reasonable royalty rate, and the record indicates that the calculation of a price differential is impractical.”   The Commission also determined in its opinion that the public interest factors do not preclude issuance of the limited exclusion order or the cease and desist order.  In this respect, the Commission noted that   “[n]othing in the evidentiary record indicates that Sharp and others cannot meet the demand for the types of LCDs devices at issue” and “the ALJ found that there were numerous LCD suppliers who could supply the U.S. market.”  The Commission noted that it included a certification provision in the limited exclusion order allowing importation of Samsung-branded TVs, computer monitors, and professional displays that contain other manufacturers’ LDC panels and modules, e.g., those LCD devices not produced by, or on behalf of, Samsung.  According to the opinion, this certification provision “will ease the burden both on legitimate trade and on U.S. Customs’ enforcement of the exclusion order.”
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ITC Issues Public Version Of Opinion In Certain Flash Memory Controllers (337-TA-619)

By Eric Schweibenz
|
Dec
01
Further to our October 26 post, on November 24, 2009, the International Trade Commission issued the public version of its opinion determining that there has been no violation of Section 337 in Certain Flash Memory Controllers, Drives, Memory Cards, and Media Players and Products Containing Same (Inv. No. 337-TA-619). By way of background, this investigation was instituted on December 12, 2007, based on the complaint of SanDisk Corp. (“SanDisk”).  According to the opinion, several of the named respondents either settled out of the investigation or defaulted.  The remaining respondents include:  Phison Electronics Corp., Silicon Motion Inc., Skymedi Corp., Power Quotient International Co., Ltd., Power Quotient International (HK) Co., Ltd., Syscom Development Co., Ltd., PQI Corp., Kingston Technology Corp., Kingston Technology Company, Inc., MemoSun, Inc., Transcend Information Inc., Transcend Information Maryland, Inc., Imation Corp., Imation Enterprises Corp., Memorex Products, Inc., Apacer Technology Inc., Apacer Memory America, Inc., Dane Memory S.A., Deantusaiocht Dane-Elec TEO, Dane-Elec Corp. USA, LG Electronics U.S.A., Inc., and LG Electronics, Inc. On April 10, 2009, ALJ Charles E. Bullock issued an Initial Determination (“ID”) finding no violation of Section 337 had occurred in the importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain flash memory controllers, drives, memory cards, and media players and products containing same, in connection with claims 17, 24, and 30 of U.S. Patent No. 6,763,424 (the ‘424 patent) and claim 8 of U.S. Patent No. 7,137,011 (the ‘011 patent).  The ID further determined that SanDisk satisfied the domestic industry requirement for both the ‘424 and ‘011 patents.  See our April 14 post for more details.  On August 24, 2009, the ITC issued a notice determining to review in part the ID.  See our August 25 post for more details.  On October 23, 2009, the ITC issued a notice determining that there was no violation of Section 337. In its opinion, the Commission determined to reverse ALJ Bullock’s finding that claim 17 of the ‘424 patent does not cover single-page updates.  Specifically, the Commission held that “the claim language as a whole, the specification, and Federal Circuit precedent compel construing the claim term ‘updating pages of original data within any of the metablock component blocks less than all the pages within the block’ to mean ‘updating fewer than all the pages of a block within the metablock’ and specifically including single-page updates.” The Commission also reversed ALJ Bullock’s finding that the claim term “reading and assembling data from the first and second plurality of pages” as recited in claim 20 of the ‘424 patent excludes the so-called table method as disclosed in Figure 12.  More particularly, the Commission found that “the ALJ’s claim construction improperly limits the scope of the claim term ‘reading and assembling’ to one embodiment (reverse-read method) disclosed in the ‘424 patent while ignoring a second embodiment (table method) disclosed in the patent.  Accordingly, we reverse the ALJ’s claim construction and find that the claim term ‘reading and assembling’ encompasses both the reverse-read and table methods.” In its opinion, the Commission affirmed ALJ Bullock’s finding that the accused products do not infringe the asserted claims of the ‘424 patent and “because we find no infringement of the ‘424 patent, we decline to reach the issue of invalidity.”
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ITC Issues Public Version Of Opinion In Certain Probe Card Assemblies (337-TA-621)

By Eric Schweibenz
|
Dec
15
On December 10, 2009, the International Trade Commission issued the public version of its opinion in Certain Probe Card Assemblies, Components Thereof and Certain Tested DRAM and NAND Flash Memory Devices and Products Containing Same (Inv. No. 337-TA-621).  As explained in our November 13 post, the ITC determined that there has been no violation of Section 337 in investigation. By way of background, this investigation was instituted on December 19, 2007, based on the complaint of FormFactor, Inc. (“FormFactor”) of Livermore, California alleging violation of Section 337 by way of infringement of certain claims of U.S. Patents No. 6,615,485 (the ‘485 patent), 6,509,751 (the ‘751 patent), 7,225,538 (the ‘538 patent), 5,994,152 (the ‘152 patent), 6,624,648 (the ‘648 patent), and 7,168,162 (the ‘162 patent).  On December 5, 2008, Respondents Phicom Corp. and Phiam Corp. (collectively, “Phicom”) jointly filed a motion for partial summary determination that certain claims of the ‘648 are invalid as indefinite under 35 U.S.C. § 112.  ALJ Charles E. Bullock granted this motion on February 11, 2009 in Order No. 46.  Subsequently, on June 29, 2009, ALJ Bullock issued his initial determination (“ID”) finding no violation of Section 337 by Respondents Micronics Japan Co., Ltd. and MJC Electronics Corp. (collectively, “Micronics”) and Phicom.  See our July 23 post for more details.  On September 14, 2009, the Commission issued a notice determining to review in part the ID.  See our September 22 post for more details. The ‘751 Patent In the opinion, the Commission reversed ALJ Bullock’s determination that Japanese Patent Application Publication H10-31034 to Amamiya et al. does not anticipate the asserted claims of the ‘751 patent under 35 U.S.C. § 102.  Specifically, the Commission determined that Amamiya discloses each and every limitation of the asserted claims of the ‘751 patent. The Commission also reversed in part the ID’s conclusion that Phicom’s accused products do not infringe claims 1-3, 12, 24, and 25 of the ‘751 patent and modified the ID’s conclusion of law to read as follows:  “Respondents Micronics’ accused products do not infringe claims 1-3, 12, 24, and 25 of U.S. Patent No. 6,509,751 in violation of 35 U.S.C. § 271(a).  Respondent Phicom’s (old) Type B and Type C accused products infringe claims 1-3, 12, 24, and 25 of U.S. Patent No. 6,509,751 in violation of 35 U.S.C. § 271(a); Phicom’s new Type B and Type C accused products do not infringe.”  According to the opinion, the Commission’s decision finding Phicom’s (old) Type B and Type C accused products to infringe “will not change the ID’s conclusion that there is no violation of section 337 in this investigation in light of our determination, explained earlier, that the Amamiya reference anticipates the ‘751 patent.” The ‘152 Patent Regarding the ‘152 patent, the Commission modified the ALJ’s finding in the ID that no analysis is needed regarding invalidity arguments related to anticipation and obviousness of the asserted claims that depend from claim 21.  According to the opinion, Federal Circuit precedent requires that each claim of a patent shall be presumed valid independently of the validity of other claims, and dependent or multiple dependent claims are presumed valid even though dependent upon an invalid claim.  Accordingly, the Commission “decline[d] to adopt the ID’s statement that ‘no analysis is needed’” and further determined “to take no position with respect to the validity of claims 22, 23, 28-30, and 33-35 that depend from claim 21 of the ‘152 patent.” The ‘648 Patent With respect to the ‘648 patent, the Commission affirmed ALJ Bullock’s determination that certain claims were invalid as indefinite under 35 U.S.C. § 112.  Specifically, ALJ Bullock determined in the ID that the limitations “probe card means for providing electrical contacts to a tester” in claim 20 and “probe card means for providing an interface to a semiconductor tester” in claim 34 were indefinite.  In its opinion, the Commission rejected FormFactor’s argument that the patent specification provides a definition of “tester” since the cited portion “appears in the ‘Background of the Invention’ and is therefore not discussed as part of the invention; was not raised at the hearing on claim construction; and – most importantly – provides no clear definition of ‘tester.’”  The Commission further rejected FormFactor’s argument that Figure 7 of the ‘648 patent provided corresponding structure to the limitations at issue since “Figure 7 does not concern semiconductor testing.”
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ITC Issues Public Version Of Opinion In Certain Laser Imageable Lithographic Printing Plates (337-TA-636)

By Eric Schweibenz
|
Dec
28
On December 23, 2009, the Commission issued the public version of its opinion in Certain Laser Imageable Lithographic Printing Plates (Inv. No. 337-TA-636).  On November 30, 2009, the Commission issued a notice determining that a violation of Section 337 had occurred in this investigation and the appropriate form of relief is a limited exclusion order. By way of background, the Complainant in this investigation is Presstek, Inc. (“Presstek”) and the Respondents are VIM Technologies, Ltd., Hanita Coatings RCA, Ltd., Guaranteed Services & Supplies, Inc., AteCe Canada, Spicers Paper, Inc., and Recognition Systems, Inc. (collectively, “Respondents”).  The patents-in-suit are U.S. Patent Nos. 5,339,737 (the ‘737 patent) and 4,487,338 (the ‘338 patent), which are both generally directed to lithographic printing plates suitable for imaging with low-to-moderate power levels of near-infrared laser radiation.  On July 24, 2009, ALJ Gildea issued a final initial determination (“ID”) finding the domestic industry requirement satisfied and finding that a violation of  Section 337 occurred in the importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain laser imageable lithographic printing plates by reason of infringement of one or more of Claims 1, 10, and 27 of the ‘737 patent, and one or more of Claims 20, 21, and 23 of the ‘338 patent.  See our August 13 post for more details.  On September 24, 2009, the Commission issued a notice determining to review in part the ID by modifying ALJ Gildea’s claim construction but otherwise affirming the ultimate determination of a violation of Section 337.  See our September 25 post for more details. Claim Construction In the opinion, the Commission noted that the ALJ found that Respondents waived and/or abandoned claim construction arguments with regard to three claim limitations at issue: (1) “the second layer also being partially transmissive to said radiation,” (2) “the substrate comprises a material that reflects imaging infrared radiation” from the ‘737 patent, and (3) “the substrate comprises means for reflecting imaging radiation” from the ‘338 patent.  The Commission determined in the opinion that while the “ALJ noted that he substantively considered the ‘partially transmissive’ limitation,” the ALJ “did not note the same with respect to the other two limitations, nor did he provide any substantive analysis of the other two limitations.”  In this respect, the Commission “substantively considered Respondents’ proposed constructions and supplemented the ALJ’s claim construction analysis.” Regarding “the second layer also being partially transmissive to said radiation” limitation, the Commission determined that “the ALJ’s construction is correct because it applies the ordinary meaning of the words used in the claim, as they would be understood by a person of ordinary skill in the art” and Respondents “fail to demonstrate any reason to read limitations from the preferred embodiment into the claim, or any reason why a person of ordinary skill in the art would understand the claim to require them.” With respect to “the substrate comprises a material that reflects imaging infrared radiation” limitation, the Commission determined that “Respondents’ attempt to import a result of the claimed structure into the claim is improper” and “the plain language of the claim merely requires that the substrate includes reflective material that reflects radiation back to the overlying radiation absorbing layer, as the ALJ concluded.” As to “the substrate comprises means for reflecting imaging radiation” limitation, the Commission determined that “Respondents once again argue that the ALJ’s construction of the claim term ignores ‘the purpose of the invention.’”  However, the Commission found that the “perceived purpose of the limitation should not be added to the construction of this claim term” and “the function of the means-plus-function claim, to reflect radiation, is clearly set out in the claim itself and properly part of the ALJ’s construction.” Remedy In its opinion, the Commission determined that “the appropriate remedy is a limited exclusion order directed towards Respondents’ products found to infringe the asserted claims of the ‘737 and ‘338 patents, and issues, herewith, a limited exclusion order.”  Additionally, the Commission determined not to issue cease and desist orders “because the record evidence fails to show that Respondents keep sufficient inventories of the accused products in the United States.” Public Interest According to the opinion, the “facts of this investigation do not implicate the public interest factors” and indeed “the public interest favors the protection of United States intellectual property rights by excluding infringing imports.”  Further, the Commission determined that the record evidence (i) “establishes that demand in the United States for laser imageable lithographic printing plates can be met by Presstek and its legitimate competitors,” and (ii) “does not indicate that an exclusion order on this type of product – laser imageable lithographic printing plates – raises any particular public interest concerns.” Bond Regarding the need for the appropriate amount of bond during the 60-day Presidential review period, the Commission determined that “Presstek has failed to establish a need for a bond amount” and thus “no bond is required for infringing products imported during the period of Presidential review.”
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ITC Issues Public Version Of Opinion In Certain Semiconductor Chips With Minimized Chip Package Size (337-TA-630)

By Eric Schweibenz
|
Feb
26
On February 24, 2010, the Commission issued the public version of its opinion in Certain Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-630).  On December 29, 2009, the Commission issued a notice determining that a violation of Section 337 did not occur in this investigation.  Seeour December 30, 2009 post for more details. By way of background, this investigation was instituted on January 14, 2008, based on the complaint of Tessera, Inc. of San Jose, California. (“Tessera”).  Originally, Tessera named eighteen respondents in the complaint, but after the termination of several respondents based on settlement agreements, consent orders and defaults, the following Respondents remained in the investigation:  Acer, Inc., Acer America Corporation, Nanya Technology Corporation, Nanya Technology Corporation U.S.A., Powerchip Semiconductor Corporation, Elpida Memory, Inc., Elpida Memory (USA), Inc., ProMOS Technologies, Inc., Kingston Technology Co., Inc., Ramaxel Technology Ltd., Centon Electronics, Inc., and SMART Modular Technologies, Inc.  The patents-in-suit are U.S. Patent No. 5,663,106 (the ‘106 patent), U.S. Patent No. 5,679,977 (the ‘977 patent), and U.S. Patent No. 6,133,627 (the ‘627 patent), which are generally directed to semiconductor chip packages and a process for encapsulating certain semiconductor chip packages.  On August 28, 2009, ALJ Theodore R. Essex issued his initial determination (“ID”), finding no violation of Section 337 had occurred based on the importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain semiconductor chips with minimized chip package size and products containing same in connection with certain claims of the patents-in-suit.  Further, ALJ Essex determined that a domestic industry exists that practices the patents-in-suit.  See our September 1, 2009 and October 1, 2009 posts for more details.  On October 30, 2009, the Commission issued a notice determining to review in part the ID.  See our November 2, 2009 post for more details.  Claim Construction In the opinion, the Commission reversed the ALJ’s constructions of the claim terms “top layer” and “thereon” as recited in claim 1 of the ‘106 patent.  Regarding the claim term “top layer,” the Commission found that the ALJ erred in construing this claim term as “an outer layer of the chip assembly upon which terminals are fixed,” and requiring that “the ‘top layer’ is a single layer” because the word “outer” improperly broadened the claim, while the requirement that the “top layer” be a single layer improperly narrowed the claim. With regard to the ALJ’s construction of the claim term “thereon,” the Commission noted that although the ALJ construed the claim term in accordance with its ordinary meaning to require “disposing the terminals on the top surface of the top layer,” the ALJ nevertheless erred in applying a narrow meaning of the claim term by requiring the terminals to be “‘on or upon’ -on the top of - the ‘top layer.’”  The Commission found that the “scope of the claim is broad enough to compass locating terminals on other surfaces of the ‘top layer’ other than the top surface, such as the bottom or side surfaces.” Infringement In the opinion, the Commission reversed the ALJ’s finding that the accused μBGA products did not meet all the limitations of asserted claim 1 of the ‘106 patent.  In particular, the Commission determined that the ALJ incorrectly identified the elastomeric layer in the accused μBGA products as the “top layer” despite the fact that “the ‘106 patent itself identifies the polyimide layer as the ‘top layer’ and distinguishes between the ‘top layer’ and the ‘elastomeric layer’.”  Thus, the Commission determined that when the “top layer” is properly identified as the polyimide layer then each limitation of asserted claim 1 of the ‘106 patent is met.  Notwithstanding its determination, the Commission ruled that the accused μBGA products did not infringe claim 1 of the ‘106 patent because the ALJ found that they were licensed products and therefore were non-infringing under the doctrine of patent exhaustion. In addition, the Commission affirmed the ALJ’s finding that the accused wBGA products did not infringe the asserted claims of the ‘106 patent.  In this regard, the Commission rejected Tessera’s theory of infringement that required the claimed “top layer” to include the solder mask layer, because “the patent continually depicts [these layers] as separate and distinct components.” With regard to the ALJ’s finding of non-infringement of the ‘977 and ‘627 patents, the Commission affirmed the ALJ’s determination that the direct loading testing methodology employed by Tessera’s expert fails to prove infringement.  In particular, the Commission determined “that the record lacks sufficient evidence to show that direct loading methodology as employed in this investigation proves infringement.”  Such lack of evidence included, for example, “a showing that the demonstrated stress relief in the solder balls of the accused packages was due to terminal-to-chip displacement caused by the applied external load.” Anticipation According to the opinion, the Commission agreed with the ALJ’s finding that the 1989 Motorola OMPAC 68-pin chip package (“OMPAC”) does not anticipate the ‘977 and ‘627 patents under section 102(b)’s on-sale bar because “the record evidence supports the ALJ’s finding that the OMPAC package was an experimental prototype and the ‘sale’ from Citizen Watch to Motorola was subject to a confidentiality agreement.”  The Commission did, however, “modify the ALJ’s decision to clarify that the ‘invention date’ of the patent had no bearing on the section 102(b) on-sale bar analysis.” Validity and Domestic Industry Analyses Regarding the ‘106 Patent Finally, the Commission affirmed the ALJ’s validity and domestic industry analyses pertaining to the asserted claims of the ‘106 patent without comment.
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ITC Issues Public Version Of Opinion Finding No Violation in Certain Variable Speed Wind Turbines (337-TA-641)

By Eric Schweibenz
|
Mar
05
Further to our January 9, 2010 post, on March 2, 2010, the ITC issued the public version of its opinion finding that there has been no violation of Section 337 in Certain Variable Speed Wind Turbines and Components Thereof (Inv. No. 337-TA-641). By way of background, the Complainant in this investigation is General Electric Co. (“GE”) and the Respondents are Mitsubishi Heavy Industries, Ltd., Mitsubishi Heavy Industries America, Inc. (“MHIA”), and Mitsubishi Power System, Inc. (“MPSA”) (collectively, “MHI”).  On August 7, 2009, ALJ Carl C. Charneski issued the Initial Determination (“ID”) finding that a violation of Section 337 had occurred by Mitsubishi Heavy Industries, Ltd. and MPSA with respect to claim 121 of the asserted ‘039 patent, and claim 15 of the asserted ‘985 patent.  ALJ Charneski further determined in the ID that there was no violation with respect to these claims by MHIA.  Additionally, ALJ Charneski determined in the ID that there was no violation of Section 337 by any party with respect to claims 5, 7, and 8 of the asserted ‘221 patent.  See our October 29, 2009 post for more details.  On October 8, 2009, the Commission issued a notice determining to review the ID, except the issue of importation and the intent finding underlying the ALJ’s inequitable conduct determination.  See our October 8, 2009 post for more details.  The imported products are variable speed wind turbines and the specialized power circuits that allow them to safely adapt to modern power grids.  The patents-in-suit each deal with problems encountered with attaching the turbines to the power grids. In its opinion, the Commission reversed the ALJ’s determination of violation of Section 337 with respect to the ‘039 and ‘985 patents, and affirmed the ALJ’s determination of no violation with respect to the ‘221 patent.  The Commission also found no infringement of the ‘039 and ‘221 patents, and that GE failed to satisfy the domestic industry requirement with respect to the ‘985 patent. The ‘039 Patent The Commission first reviewed the ALJ’s determination that the phrase “inverter controller means” of claim 121 was not a means-plus-function claim term.  ALJ Charneski had reasoned that sufficient structure was present in claim 121 because one of ordinary skill in the art would understand the meaning of “inverter controller,” relying on the testimony of GE’s expert.  However, the Commission found that the testimony did not establish that one of ordinary skill would know how to program the computer to achieve this function other than by looking at the specification, and thus claim 121 falls under 35 U.S.C. 112 ¶ 6.  The Commission also reviewed the ALJ’s determination that the phrase “inverter for supplying output electricity” did not contain a limitation that the inverter be located on the grid- or line-side of the generator (as opposed to the generator-side), finding that the term “output” indicates that the claim phrase in fact refers to an inverter on the line-side from which the electricity for the grid emerges. The Commission then reviewed the ALJ’s determination that the accused products practice claim 121 literally, finding that the converter control unit (“CCU”) in the imported turbines does not perform the function of the “inverter controller means” because it is not responsive to a power factor control signal within the meaning of the patent, and does not operate using a structure that is the same or equivalent to the power factor controller and inverter control unit disclosed in the patent.  The Commission also found that the accused products do not literally meet the “inverter for supplying output electricity” limitation because the inverter in the imported turbines is not on the line-side of the generator and does not supply output AC to the grid. Regarding the doctrine of equivalents, the Commission found that the CCU in the accused products was not equivalent to the claimed “inverter controller means” limitation, agreeing with MHI that its CCU operates differently because it controls the active switches of the rotor-side converter and did not perform the claimed function of controlling the active switches of an inverter for supplying output energy.  The Commission also found that the MHI CCU was not equivalent to the claimed “inverter for supplying output electricity,” agreeing with MHI that the rotor-side inverter was not equivalent to the grid-side inverter because the former does not supply output AC electricity despite supplying reactive power, and because the rotor-side inverter supplies power at an angle that varies. The Commission reversed ALJ Charneski’s determination that GE satisfied the domestic industry requirement for the ‘039 patent.  Because it was undisputed that there was no difference between the GE products and MHI products for the purposes of analyzing whether the products were covered by the ‘039 patent, the Commission found that GE had not satisfied the technical prong of the domestic industry requirement for the same reasons that it found that MHI did not literally infringe claim 121. Although the Commission affirmed ALJ Charneski’s determination that claim 121 was adequately described in the specification, it noted that ALJ Charneski analyzed written description under an incorrect claim construction.  According to the Commission, once “inverter control means” was understood as a means-plus-function claim, then it was construed as possessing the corresponding structure of the specification and equivalents thereof, and thus was adequately described in the patent.  The Commission took no position on enablement because the parties did not focus their arguments on the issue. With respect to obviousness, the Commission did not take issue with ALJ Charneski’s analysis that none of the prior art suggested output of electricity at a desired power factor angle in response to a power factor control signal, or how to achieve this. The ‘221 Patent The Commission reviewed ALJ Charneski’s determination that the term “predetermined value” in claim 5 is not dependent solely on the value of current, finding ALJ Charneski’s construction erroneous in light of the plain language of the claim, the specification, and expert testimony.  The Commission instead construed “predetermined value” as a value of current, and thus found that claim 5 requires the turbine to measure current or an adequate proxy thereof to determine whether the current has declined to a level previously decided upon. Next, the Commission reviewed ALJ Charneski’s determination that the accused products literally met each limitation of claims 5, 7 and 8, particularly the “predetermined value” limitation of the “emergency unit” in independent claim 5.  The Commission reversed ALJ Charneski on the grounds that the imported turbines did not measure an adequate proxy for current as required by the claims.  The Commission also reversed ALJ Charneski’s determination of infringement under the doctrine of equivalents, finding no evidence that the accused products achieve the release of rotor current feed-in when the current drops to a predetermined value “in the sense that it coincides with a decline to a predetermined value of current.” As to the domestic industry requirement, the Commission affirmed ALJ Charneski’s determination that GE did not prove that it satisfied the “releasing” limitation of claim 5, either literally or under the doctrine of equivalents.  Thus, GE did not satisfy the technical prong of the domestic industry requirement, and the Commission therefore found no violation of Section 337 with respect to the ‘221 patent. The ‘985 Patent The Commission did not review ALJ Charneski’s finding of no deceptive intent by the patentee in failing to name Thomas Wilkins as an inventor of the ‘985 patent, and thus determined that GE did not commit inequitable conduct.  However, MHI argued that GE lacked standing to assert the ‘985 patent based on ALJ Charneski’s finding that Wilkins was a proper inventor who was improperly left off the final patent application.  The Commission disagreed, finding that although Wilkins was an unnamed inventor and GE provided no showing that he had an obligation to assign the patent to GE (nor did GE join Wilkins as a party to the investigation), Wilkins is nevertheless not named on the patent and therefore lacks such legal title as to make him a co-owner of the patent.  The Commission further found that Wilkins has an equitable interest that can be perfected to legal title upon application to the USPTO or through correction by a district court under 35 U.S.C. § 256, but that the Commission lacked the authority to correct inventorship under any statutory provision. The Commission reviewed the ALJ’s determination that the limitation “shunt current from the inverter and generator rotor” in claim 15 cannot require a crowbar or other shunting circuit between the rotor and the rotor-side converter, finding that the shunt circuit cannot be within the inverter and still shunt current “from” the inverter, and thus construing the term to mean that the shunt circuit is not located within the converter.  Because the shunt circuit in GE’s turbine did not shunt current from the inverter because it was located within the inverter, the Commission found that GE did not literally satisfy this requirement of claim 15.  The Commission further found that GE did not satisfy the function/way/result test for equivalence, in particular because of the manner by which the switches inside the GE inverter shunt the circuit.  Moreover, the Commission noted that the purpose of the shunt was to protect the inverter from high currents, whereas the components that the ‘985 patent sought to protect were being subjected to high current in the GE turbines.  Thus, the Commission found that GE did not practice the asserted claim of the ‘985 patent and therefore did not satisfy the domestic industry requirement with respect thereto.  The Commission took no position on the other disputed issues raised with respect to the ‘985 patent.
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Commission Issues Public Version Of Remand Opinion In Certain Refrigerators (337-TA-632)

By Eric Schweibenz
|
Mar
17
Further to our February 15, 2010 post, on March 11, 2010, the International Trade Commission issued the public version of its Opinion on Remand in Certain Refrigerators and Components Thereof (Inv. No. 337-TA-632). By way of background, the Complainants in this investigation were Whirlpool Corp., Whirlpool Manufacturing Corp., Whirlpool Patents Co., and Maytag Corp. (collectively, “Whirlpool”) and the Respondents were LG Electronics Corp., Inc., LG Electronics, USA, Inc., and LG Electronics Monterrey, Mexico S.A. de C.V. (collectively, “LG”).  At issue were two types of refrigerator products imported by LG:  side-by-side refrigerators and French door refrigerators. The investigation was instituted on February 26, 2008.  On February 26, 2009, ALJ Theodore R. Essex issued his initial determination (“ID”), finding no violation of Section 337 with respect to United States Patent No. 6,082,130 (the ‘130 patent).  Upon review, the Commission modified the ID’s claim construction and remanded the investigation to the ALJ to make findings regarding infringement, validity, and domestic industry consistent with the Commission’s claim constructions.  See our July 8, 2009 post for more details. On October 9, 2009, ALJ Essex issued his initial determination on remand (“RID”), finding no violation of Section 337.  Specifically, in the RID, ALJ Essex determined that: (1) the accused refrigerators do not infringe the asserted claims of the ‘130 patent literally or under the doctrine of equivalents; (2) claims 1, 2, 4, 6, and 9 of the ‘130 patent are invalid under 35 U.S.C. § 103 for obviousness, but that claim 8 of the ‘130 patent is not invalid under 35 U.S.C. § 103; and (3) a domestic industry exists.  On December 14, 2009, the Commission issued a notice determining to review the RID.  See our December 16, 2009 post for more details. In its February 12 notice, the Commission affirmed the RID’s determination of no violation of the ‘130 patent and terminated the investigation.  The Commission modified a portion of the ALJ’s implied construction of certain claim terms, reversed-in-part the RID’s determination of non-infringement, and affirmed the RID’s determination of obviousness.  The March 12 opinion  set forth the Commission’s detailed bases for its final determination regarding claim interpretation, infringement, obviousness, and domestic industry. Claim Construction In his RID, the ALJ had concluded that independent claim 1 (the sole asserted independent claim of the ‘130 patent) was not infringed because the ice storage bin on the accused LG refrigerators “’does not have an auger that moves ice pieces from the ice storage bin through the bottom opening for dispensing from the ice storage bin’”  According to the final determination, the ALJ impliedly construed claim 1 as requiring that: (1) the ice pieces must “‘always be moving down as a result of the movement of the auger’”; and (2) “gravity may play no part in the passage of the ice pieces through the bottom opening when the auger is in a horizontal orientation as opposed to a vertical orientation.”  In its opinion, the Commission explained that neither of the ALJ’s implied constructions was justified based on the Commission’s previous claim construction rulings.  Furthermore, the Commission found that the ALJ’s implied constructions were contrary to the ordinary meaning of the claim language itself as well as to the specification of the ‘130 patent.  The Commission thus found that the claim limitation “the auger moves ice pieces from the ices storage bin through the bottom opening for dispensing . . .” does not require that the auger move ice from the storage bin in a continually downward direction and does not preclude the assistance of additional force (such as gravity) to effect movement of ice from the storage bin. In the RID, the ALJ found that “the ice crushing region” in dependent claims 6 and 8 meant “an area defined by the circumference of the rotating ice crushing blades.”  Based on that construction, the ALJ concluded that claims 6 and 8 also were not infringed by the LG accused products.  In its opinion, the Commission concluded that the ALJ’s interpretation of “the ice crushing region” was directly contradictory to the language of claims 6 and 8 of the ‘130 patent, which defines “the ice crushing region” as “the ice storage bin” or “the lower ice bin,” respectively.  The Commission concluded that “the ice crushing region” should be construed as “‘an area defined by the ice storage bin (claim 6) or the lower ice bin member (claim 8) through which ice pieces must pass before being dispensed from the ice storage bin.’” Infringement Based on its modified claim construction, the Commission reversed a portion of the ALJ’s determination of non-infringement.  In particular, it found that the accused LG side-by-side models infringe independent claim 1 and dependent claims 2, 4, 6, and 9, of the ‘130 patent.  The Commission found that, in the side-by-side models, the “’auger moves ice pieces from the ice storage bin through the bottom opening for dispensing from the ice storage bin.’”  The Commission observed that the side-by-side LG models operates in similar fashion to the preferred embodiment described in the ‘130 patent. The Commission affirmed the ALJ’s finding that the accused side-by-side model refrigerators do not infringe claim 8 of the ‘130 patent for at least two reasons: (1) they do not have an ice crushing region that is located “below the ice storage region”; and (2) they do not have “a lower ice bin member connected to the lower edge of the upper ice bin member.” Regarding the accused French door model, the Commission affirmed the ALJ’s finding that this model did not infringe any of the six asserted claims of the ‘130 patent.  With respect to independent claim 1, the Commission noted that the claim term “freezer compartment” means “a section of a refrigerator cabinet kept at a below-freezing temperature, having an opening that provides access to the interior and a closure member that allows access to the access opening.”  Under this construction, the “freezer compartment” must be a part of the refrigerator cabinet.  The Commission concluded that the ice box of LG’s French Door model is not a part of the refrigerator cabinet, and thus, it does not infringe either literally or under the doctrine of equivalents.  Since independent claim 1 was not infringed by the French Door model, the other asserted claims of the ‘130 patent, each of which depend from claim 1, likewise were determined by the Commission not to infringe. Invalidity The Commission affirmed the ALJ’s finding that claims 1, 2, 4, 6, and 9 of the ‘130 patent are invalid for obviousness, and affirmed the ALJ’s finding that claim 8 is not invalid for obviousness.  In his RID, the ALJ concluded that these claims were obvious in light of the Hitachi reference combined with other prior art that was well known prior to the 1998 filing date of the ‘130 patent.  The Commission agreed. Specifically, the Commission found (and the parties did not dispute) that the Hitachi reference disclosed every element of claim 1 other than an “ice maker mounted in the freezer” or an “ice storage bin below the ice maker.”  The Commission further found that the ALJ properly applied the KSR standard for obviousness.  In relevant part, the Commission concluded that, prior to 1998, automatic ice makers were well known in the art, and that persons of ordinary skill would be motivated to combine such prior art ice makers to improve the Hitachi invention.  Similarly, claim 2 was held to be invalid as obvious over the combination of the Hitachi reference and the Gould reference.  Likewise, claims 4, 6 and 9 were held to be invalid as obvious over the combination of the Hitachi reference with other prior art teachings and knowledge in the industry.  Finally, the Commission concluded that claim 8 was not invalid as obvious over the Hitachi reference. The Commission rejected Whirlpool’s contention regarding secondary considerations of non-obviousness.  The Commission found that Whirlpool had failed to demonstrate any nexus between the patentable features of  the ‘130 patent claims and any alleged commercial success of its refrigerators.  The Commission also found that there was insufficient evidence of copying, long-felt need, or failure of others.  Accordingly, the Commission concluded that evidence of secondary considerations failed to overcome the ALJ’s finding that claims 1, 2, 4, 6 and 9 are invalid for obviousness. Domestic Industry Finally, the Commission affirmed the ALJ’s determination that Whirlpool had satisfied the domestic industry requirement.
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ITC Reverses and Remands Initial Determination In Certain Hybrid Electric Vehicles (337-TA-688)

By Eric Schweibenz
|
Apr
06
On April 2, 2010, the ITC issued a notice and opinion reversing and remanding ALJ Theodore R. Essex’s initial determination (“ID”) in Certain Hybrid Electric Vehicles and Components Thereof (Inv. No. 337-TA-688). By way of background, this investigation follows litigation between the parties in the U.S. District Court for the Eastern District of Texas (“EDTX”) in which certain Toyota hybrid vehicles were found to infringe U.S. Patent No. 5,343,970.  On March 3, 2010, ALJ Essex issued Order No. 6, which granted, on the basis of claim preclusion, Complainant Paice LLC’s (“Paice”) motion for summary determination of infringement, validity and enforceability, and denied Respondents Toyota Motor Corp., Toyota Motor North America, and Toyota Motor Sales, USA, Inc.’s (collectively, “Toyota”) cross-motion for summary determination terminating the investigation.  See our March 29, 2010 post for more details.  The parties contend that the district court’s ruling in Paice LLC v. Toyota Motor Corp. et al., C.A No. 2:04-cv-211-DF, should be afforded preclusive effect in this investigation, but disagree as to the operation and effect of the preclusion.  Having examined the record, the ID, Toyota’s petition for review, and Paice’s and the OUII’s responses thereto, the ITC determined to reverse the ID “because the variant of claim preclusion successfully urged upon the ALJ by Paice and the [OUII] constitutes legal error.”  The ITC remanded the ID to the ALJ “to determine whether and to what extent arguments regarding infringement and validity are barred by the doctrine of issue preclusion.” Citing the Restatement (Second) of Judgments (1982) (“Restatement”) to define the scope of claim preclusion, the ITC observed that “the only claim presented in this investigation is Paice’s, . . . and if the doctrine is to be applied at all in this investigation (upon which we take no position), it is to be applied against Paice.”  The opinion provided in relevant part:
For present purposes, it is sufficient to note that if this investigation is part of the same “claim” as the district court action, and if no exception to claim preclusion applies, then this investigation is precluded altogether.  If this investigation is not part of the same “claim” as the district court action, or if an exception to claim preclusion exists, then claim preclusion does not apply at all.
Since ALJ Essex found that claim preclusion does not bar Paice from seeking relief from the ITC, the ITC held that the ALJ erred as a matter of law by barring only re-litigation of certain issues.  The ITC rejected Paice’s and the OUII’s argument that references in the Restatement to “parts” and “phases” of a claim means that claim preclusion does not operate against Paice’s claim as a whole, stating that “[t]he Restatement is quite clear that each ‘part’ of a claim for its purposes is each theory of relief maintained on the same series of transactions, and not, as Paice and the [OUII] believe, any issue of any action,” and that “‘phases’ refers, essentially, to different actions in which different theories of relief are advanced.” The ITC also took issue with what Paice deemed binding Federal Circuit authority for its arguments.  First, the ITC found that Paice selectively quoted from Young Engineers, Inc. v. ITC, 721 F.2d 1305 (Fed. Cir. 1983), and thus misapplied that case’s holding, which merely “reiterates the basic function of claim preclusion to prevent a succession of lawsuits on a common claim” and “does not support a policy of encouraging serial filings by preventing a defendant from mounting a defense in subsequent actions.”  Second, the ITC observed that Farrel Corp. v. ITC, 949 F.2d 1147 (Fed. Cir. 1992), involved issue preclusion, not claim preclusion, and the brief discussion of res judicata in that case is therefore irrelevant to the claim preclusion matter in the instant investigation.  The third case relied upon by Paice is KSM Fastening Systems, Inc. v. H.A. Jones Co., 776 F.2d 1522 (Fed. Cir. 1985), which discusses preclusion in the context of contempt proceedings and like Farrel and Young Engineers, uses the term res judicata to include issue preclusion.  The ITC found that none of these cases support Paice’s theory of one-way operation of claim preclusion against Toyota.
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ITC Issues Public Version of Opinion In Certain Coaxial Cable Connectors (337-TA-650)

By Eric Schweibenz
|
Apr
16
On April 14, 2010, the International Trade Commission issued the public version of its Opinion vacating the October 13, 2009 final initial determination (“ID”) by ALJ E. James Gildea that a domestic industry exists under Section 337(a)(3)(C) in Certain Coaxial Cable Connectors and Components Thereof and Products Containing Same (Inv. No. 337-TA-650).  Additionally, the Commission affirmed in part, reversed in part, and remanded on a number of other issues included in the ID. By way of background, the Complainant in this investigation is John Mezzalingua Associates, Inc. d/b/a PPC, Inc. (“PPC”) and the Respondents are Fu Ching Technical Industry Co. Ltd.,  Gem Electronics, Inc. (collectively, “Respondents”), Hanjiang Fei Yu Electronics Equipment Factory, Zhongguang Electronics, Yangzhou Zhongguang Electronics Co., Ltd., and Yangzhou Zhongguang Foreign Trade Co., Ltd. (collectively, the “Defaulting Respondents”).  The investigation was instituted on May 30, 2008.  On October 13, 2009, ALJ Gildea issued the ID, finding that no violation of Section 337 had occurred in connection with Respondents’ importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain coaxial cable connectors by reason of infringement of U.S. Patent No. 5,470,257 (the ‘257 patent).  The ID further found that the Defaulting Respondents were in violation of Section 337 for reasons of infringement of the ‘257 patent, U.S. Patent Nos. 6,558,194 (the ‘194 patent); D440,539 (the ‘539 patent); and D519,076 (the ‘076 patent).  See our November 10, 2009 post for more details. On December 14, 2009, the Commission issued a notice determining to review the ID in part.  Specifically, the Commission determined to review “(1) the findings and conclusions relating to whether a violation of section 337 has occurred with respect to the ‘257 patent, including the issues of claim construction, infringement, validity, and domestic industry and (2) the ID’s finding that PPC has met the domestic industry requirement for the ‘539 patent.”  See our December 16, 2009 post for more details. Infringement and Validity In the Opinion, the Commission affirmed the ALJ’s conclusion that the Respondents did not infringe either of the asserted claims of the ‘257 patent.  The Commission agreed with the ALJ’s claim construction and the application of that construction to the Respondents’ accused products. With respect to the Defaulting Respondents, the Commission likewise adopted the ALJ’s determination that their accused products did infringe the asserted claims of the ‘257 patent.  The Commission also affirmed the ALJ’s conclusion that the Respondents had failed to prove that the asserted claims of the ‘257 patent were invalid. Domestic Industry The ID had concluded that PPC’s product met the technical prong of the domestic industry requirement for the ‘257 patent.  The Commission reversed.  In its Opinion, the Commission concluded that the ALJ had incorrectly construed the claim term “engagement means.”  The Commission also found that PPC’s commercial product lacked an “engagement means” or anything substantially equivalent to an “engagement means” (as construed by the Commission).  Consequently, the Commission reversed the ALJ’s finding that PPC meets the domestic industry for the ‘257 patent, and concluded that none of the respondents had violated Section 337 with respect to the ‘257 patent. The remaining issue was whether PPC had satisfied the domestic industry requirement with respect to the ‘539 design patent.  With respect to the technical prong, the ALJ found, and the Commission agreed, that this requirement was satisfied based upon PPC’s licensee’s sale of a product that practices the patent. With respect to the economic prong, the ALJ had found that PPC satisfied this requirement as well based upon PPC’s “substantial investment in enforcement of the ‘539 design patent” and litigation expenses arising from such enforcement activities.  PPC relied solely upon its own expenses associated with litigation involving the ‘539 design patent, asserting that these expenses constituted a substantial investment in the exploitation of the ‘539 design patent through licensing under Section 337(a)(3)(C). The Commission concluded that patent infringement litigation activities alone do not satisfy Section 337(a)(3)(C).  The Commission further noted, however, that such litigation activities could satisfy Section 337(a)(3)(C) if a complainant can (1) prove that these activities are related to licensing, (2) the activities pertain to the patent at issue, and (3) prove the associated costs for such activities. In support of its decision, the Commission relied upon its construction of Section 337(a)(3)(C), which provides in relevant part that “an industry in the United States shall be considered to exist if there is in the United States . . . . substantial investments in . . . exploitation [of the patent], including engineering, research and development, or licensing.”  The Commission found that notably absent from the express language of the statute was any mention of “litigation” as a type of exploitation, and that litigation was merely “a small step beyond mere ownership.”  On the other hand, the Commission noted that licensing is clearly within the realm of “exploitation” under Section 337(a)(3)(C). The Commission next addressed the question of whether litigation activities that are related to licensing may be considered “exploitation” within the meaning of Section 337(a)(3)(C).  The Commission concluded that it could.  Turning again to statutory history and construction, the Commission observed that “the plain language of the statute does not limit the type of licensing activities that the Commission can consider.”  To that end, the Commission found that, in assessing whether the domestic industry requirement has been met, “we will also consider licensing activities for which the sole purpose is to derive revenue from existing production.”  The Commission explained that in order to show a substantial investment in exploitation through licensing, a complainant must prove that:
  • each asserted activity is related to licensing; and
  • the licensing activities pertain to the particular patent(s) at issue.
Such licensing activities may include, by way of example, sending cease and desist letters; filing patent infringement litigation; conducting settlement negotiations; and negotiating, drafting and executing licenses.  A complainant must also clearly link each asserted activity to licensing efforts involving the asserted patent.  In addition, the investment in exploitation by licensing must be “substantial.”  This requires showing evidence of the costs incurred in connection with each asserted activity. Turning to the facts involved in this investigation, the Commission found that PPC’s litigation activities and costs, including any relevant costs associated with settlement negotiations and the drafting and negotiating of licensing agreements, may be related to licensing if, for instance, the patentee and accused infringer were in licensing negotiations before suit was filed or while suit was ongoing; if the patentee made a concerted effort to license the patent; or if the patentee had an established licensing program.  Since the record was not fully developed on these points, the Commission ordered a remand for further proceedings. Remedy The Commission entered a general exclusion order against the Defaulting Respondents with respect to the ‘194 patent, citing evidence of a pattern of violation of Section 337 and difficulty in identifying the source of the infringing goods.  The Commission also entered a limited exclusion order with respect to the ‘076 patent.  The Commission also concluded that these exclusion orders were in the public interest.
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