Commission Opinions

Nov

ITC Issues Public Version Of Opinion on Remedy, Public Interest, and Bonding In Certain Lighting Control Devices (337-TA-776)

By Eric Schweibenz

Nov

On November 8, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion on remedy, public interest, and bonding in Certain Lighting Control Devices Including Dimmer Switches and Parts Thereof (IV) (Inv. No. 337-TA-776). By way of background, the investigation is based on a complaint filed by Lutron Electronics Co., Inc. (“Lutron”) alleging violation of Section 337 in the importation into the U.S. and sale of dimmer switches that infringe U.S. Patent Nos. 5,248,919 (the ‘919 patent) and 5,637,930 (the ‘930 patent). See our June 13, 2011 post for more details. ALJ Essex’s initial determination (“ID”) granted-in-part Lutron’s motion for summary determination based on the remaining respondents being in default. The ID concluded that all defaulting respondents met the importation requirement and that each of the defaulting respondents’ accused products infringed at least one claim of both asserted patents. As explained in our October 19, 2012 post, the Commission issued a Notice indicating that it determined to vacate all portions of the ID relating to the ‘919 patent as moot because the patent expired. The Commission determined not to review the remainder of the ID. Based on the notice, the Commission also determined to issue both: (i) a general exclusion order (“GEO”) prohibiting the unlicensed entry of lighting control devices including dimmer switches and parts thereof that infringe certain claims of the ‘930 patent; and (ii) cease and desist orders prohibiting Respondents from importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), and soliciting U.S. agents or distributors for, dimmer switches that infringe certain claims of the ‘930 patent. The Commission further determined that a bond in the amount of 100% is required during the Presidential review period. We now provide additional details. According to the opinion, in the ID the ALJ recommended a limited exclusion order (“LEO”) rather than a GEO because he did not find it necessary to prevent circumvention of an LEO, or that there is a pattern of violation of Section 337 where it is difficult to identify the source of the infringing products. However, the Commission considered additional evidence and arguments provided by Lutron in favor of a GEO. Specifically, Lutron asserted that previous Commission investigations related to the same subject matter (see Inv. Nos. 337-TA-599, 337-TA-676, and Inv. Nos. 681) “have not deterred a steady stream of infringers from entering the U.S. market” and that the numerous entrants and potential entrants demonstrate the necessity of a GEO. Lutron provided evidence (not available when argued previously to the ALJ) of 21 actual infringing entities and 12 potential entrants into the market, asserting that this large number necessitates a GEO in order to prevent Lutron from coming back to the Commission “for a fifth, sixth, or seventh time to seek the remedy it deserves.” The Commission Investigative Staff (“OUII”) agreed with the ALJ and argued that an LEO is sufficient in this case as there is no demonstration of evasive activity or particularly low barriers to entry into the U.S. market that usually warrant a GEO. The Commission found Lutron’s evidence to satisfy both provisions of Section 337(d)(2) necessary to issue a GEO against defaulting respondents. The Commission was particularly persuaded by Lutron’s evidence “showing significant and increasing demand for infringing products, widespread U.S. marketing and distribution networks with multiple intermediaries, a large number of non-respondent foreign manufacturers/distributors, and frequent name change for foreign manufacturers/distributors.” The Commission also determined that the barrier for entering the dimmer switch market is relatively low, contrary to OUII’s argument. In addition, the Commission found that the ALJ misstated Section 337(d)(2) and used an improper evidentiary standard. Specifically, the ALJ was looking for “a pattern of circumvention,” when only “circumvention” is required, and the Commission determined that circumvention was proved by Lutron’s evidence of parties violating the consent orders from the previous investigations. Lutron also argued that cease and desist orders against respondents with a “commercially significant inventory” in the United States should be issued, and provided evidence in relation to Respondents Elemental, American Top, Big Deal, and Zheijiang Yuelong. OUII agreed that cease and desist orders against these respondents would be appropriate. Lutron and OUII agreed with the ALJ’s recommendations that there were no public interest concerns that would preclude entry of the remedies recommended by the ALJ and that a 100% bond is appropriate because none of the respondents participated in discovery to allow a realistic price determination or allocation of a royalty rate. The Commission agreed on these issues as well, stating “there will be no negative impact on public health, safety, and welfare” and that a 100% bond is appropriate in circumstances such as this were “reliable information is unavailable due to the inability to conduct discovery of defaulting respondents.” Therefore, the Commission determined to issue a GEO, cease and desist orders against particular defaulting respondents, and a 100% bond on covered products. With this opinion, the investigation has been terminated.

Nov

ITC Issues Public Version Of Opinion In Certain Protective Cases (337-TA-780)

By Eric Schweibenz

Nov

On November 19, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Protective Cases and Components Thereof (Inv. No. 337-TA-780). By way of background, the investigation is based on a complaint filed by Otter Products, LLC (“Otter”) alleging violation of Section 337 by the importation and sale of certain protective cases and/or components thereof for cellular phones, mobile music players and/or tablet computers by Griffin Technology, Inc. (“Griffin”) and others that infringe U.S. Patent Nos. 7,933,122; D600,908; D617,784; D615,536; D617,785; D634,741 and D636,386; and U.S. Trademark Registrations 3,788,534; 3,788,535; 3,623,789 and 3,795,187. See our June 27, 2011 post for more details. ALJ Essex’s Initial Determination (“ID”) found a violation of Section 337 by numerous defaulting respondents with respect to the asserted patents and trademarks. In the ID, the ALJ noted that undisputed evidence showed that each of the defaulting respondents satisfied the importation requirement, and that their accused products literally infringed the asserted patents and trademarks. ALJ Essex also found a violation of Section 337 by Griffin with respect to the Griffin Survivor for the iPad 2 and the Griffin Explorer for the iPhone 4 which literally infringe the asserted claims of the ‘122 patent, but that the Griffin Survivor for the iPod Touch did not literally infringe. See our July 18, 2012 post for more details. As explained in our November 5, 2012 post, the Commission issued a notice indicating that it determined to reverse the ALJ’s finding that the Griffin Survivor for the iPod Touch does not literally infringe the asserted claims of the ‘122 patent. The Commission adopted ALJ Essex’s findings in all other respects. Based on the notice, the Commission also determined to issue: (1) a general exclusion order (“GEO”) prohibiting the unlicensed entry of protective cases and components thereof that infringe the asserted patents and trademark registrations; (2) cease and desist orders prohibiting the defaulting U.S. respondents from conducting various activities that would infringe the asserted patents and trademark registrations; and (3) a cease and desist order prohibiting Griffin from conducting various activities that would infringe the ‘122 patent. The Commission also determined that a bond corresponding to varying percentages of an article’s entered value would be required for temporary import during the Presidential review period. With respect to Griffin, a bond in the amount of 12.45% is required for tablet cases, and no bond is required for non-tablet cases; for defaulting respondents, a bond in the amount of 331.8% for tablet cases and 245.53% for non-tablet cases is required; and for all other infringing products, a bond of 100% of the entered value of the product would be required. We now provide additional details. According to the opinion, in the ID the ALJ found that the Griffin Survivor for the iPod Touch does not infringe the asserted claims of the ‘122 patent because the “tab” on the right side of the stretchable cushion layer that fits into a corresponding “groove” in the hard shell cover of the case is identical to the structure identified in the specification as a “switch pad,” and the “groove” is really an opening for the iPod’s controls. According to ALJ Essex, the “tab” covers the volume up an down buttons on the phone and needs to be able to press down to activate the buttons, so the “tab” is capable of moving through the “groove” and does not “fit into the corresponding groove” as required by the claims. The ALJ also found that the “groove” covers a substantial portion of the depth of the case and is therefore not “narrow” as required by the claims. However, the Commission agreed with the Commission Investigative Staff (“OUII”) that the ALJ erred in his application of the construction of the claim term “groove” to the accused product. Specifically, the Commission determined that “because the ALJ found, in part, that certain features of the accused device look like features in the patent not specifically labeled as ‘grooves,’ he concluded that they could not meet the groove limitation, and effectively re-construed the claim term.” The Commission found that the record evidence shows that the features in the Griffin Survivor for the iPod Touch that Otter’s expert identified as meeting the “tab/groove” limitation satisfy that limitation, and the mere fact that the feature may also resemble a feature described in the ‘122 patent as “switch pad” and “switch opening” does not change the fact that the feature meets the claim limitation. The Commission also agreed with the OUII that just because a tab is “capable of moving through” a groove does not mean that the tab does not fit snugly in the groove, and that for an opening to be “narrow” it must be substantially longer than it is wide – it has nothing to do with the depth of the case. The Commission agreed with ALJ Essex and the OUII that a GEO is warranted under both Section 337(d)(2)(A) and (B). In particular, the Commission noted the ALJ’s findings that respondents named in the investigation appear to have changed product boxing, companies selling infringing protective cases frequently change their names to avoid detection, a significant number of manufacturers produce infringing products, it would be easy for even more suppliers to enter the market, and it is difficult to identify the source of the infringing products. The Commission also accepted the ALJ’s recommendation to issue cease and desist orders directed to Griffin and the defaulting domestic respondents that extend to their Internet activities. Further, the Commission agreed with Otter and the OUII that the public interest factors are not implicated in the investigation. Finally, the Commission determined that ALJ Essex correctly calculated the bond amount for Griffin and for the defaulting respondents based on price differentials, adopting his recommendation except with respect to the defaulting respondents’ non-tablet cases. For those cases, the Commission set the bond amount to 245.53% instead of the 195.12% recommended by the ALJ on account of his finding that some of the defaulting respondents’ products did not infringe, resulting in a new price differential and a higher bond amount. With its opinion, the Commission terminated the investigation.

Nov

ITC Issues Public Version Of Opinion In Certain Automated Media Library Devices (337-TA-746)

By Eric Schweibenz

Nov

On November 19, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion with respect to U.S. Patent Nos. 6,328,766 (the ‘766 patent) and 6,353,581 (the ‘581 patent) in Certain Automated Media Library Devices(Inv. No. 337-TA-746). By way of background, the complainant in this matter is Overland Storage, Inc. (“Overland”) and the remaining respondents are BDT AG, BDT-Solutions GmbH & Co. KG, BDT Products, Inc., BDT Automation Technology (Zhuhai FTZ) Co., Ltd., and BDT de México, S. de R.L. de C.V. (collectively, “BDT”). The ‘766 patent and the ‘581 patent are directed to automated media library devices, also known as tape libraries. In his Initial Determination (“ID”) of no violation, Chief ALJ Charles E. Bullock determined that (1) the ‘766 and ‘581 patents are not infringed by BDT; (2) the patents are not invalid except for claim 15 of the ‘581 patent; and (3) a domestic industry in the United States exists for the ‘766 patent, but not for the ‘581 patent. See our July 27, 2012 post for more details. As we reported earlier, the Commission determined to review the ID in part. With respect to the ‘766 patent, the Commission determined to review the contributory infringement, validity and patent exhaustion issues. Regarding the ‘581 patent, the Commission determined to review construction of the claim term “linear array,” as well as the infringement, validity, domestic industry and patent exhaustion issues. See our September 21, 2012 post for more details. Our October 31, 2012 post provides a summary of the Commission’s determinations. We now provide additional details. The ‘766 Patent Overland accused BDT of contributory infringement based on the activities of IBM and DELL, although the ALJ determined that Overland did not prove that BDT had the requisite knowledge to support a finding of contributory infringement. On review, Overland argued that the ALJ used the wrong scienter requirement, and that “only induced infringement requires a showing that the infringer had the specific intent to induce infringement.” BDT asserted that this argument should be waived as never presented to the ALJ, and the Commission agreed. The Commission reviewed the evidence of record and affirmed the ALJ’s finding that Overland was unable to meet the requirements of contributory infringement. In relation to validity, the Commission determined to review the ALJ’s finding that certain IBM documents related to various IBM tape libraries which do not qualify as printed publications and thus prior art because they were not proved to be publicly accessible. The ALJ’s finding was based on the copyright dates of the documents, and Overland reiterated that this alone is not evidence of public availability. BDT asserted that it provided substantial additional evidence of public availability including testimony from IBM employees and unalterable database records showing shipment of these documents. The Commission agreed with BDT that there was clear and convincing evidence that all but one subset of these documents were publicly available as of the critical date, relying heavily on the testimony of the corroborating IBM witnesses. Since most of these documents are now available as prior art, the Commission remanded the investigation to the ALJ to “resolve the issue of whether any of the IBM documents that qualify as prior art anticipate, or in combination with their associated IBM tape library and/or the ‘090 patent, render obvious the asserted claims.” The ‘581 Patent The Commission determined to review the ALJ’s claim construction of “linear array.” The ALJ determined that “linear array” meant “one arrangement of media element storage locations [or cells] in one straight line in one dimension.” The parties’ primary disagreement was as to whether the linear array was limited to one dimension or not. Overland’s position was that other arrangements should be encompassed, even though the patent “shows only ‘a single line, or a one-dimensional, array of cells/storage locations.’” BDT argued that the limitation “linear array” excludes circular arrangements as well as vertical arrangements. The Commission modified the ALJ’s construction to remove reference to the “one dimension” based on the ordinary meaning of the words and review of the specification and prosecution history, where only the “continuous closed loop arrangement” was explicitly disclaimed. Therefore, linear array is construed to mean “media element storage locations [or cells] arranged in one or more straight lines.” In light of this modification, the Commission reconsidered the ALJ’s infringement determination and found that the accused products meet the limitation of “linear array.” However, the Commission ultimately affirmed the ALJ’s finding of noninfringement because the accused products do not satisfy the limitation of a “manually movable towards said door” mail slot. Furthermore, the Commission also reconsidered the ALJ’s validity determination in light of the modified interpretation of “linear array.” Although the first prior art reference was found to “undisputedly” disclose a “linear array,” it failed to show any connection between the rack and moveable cartridge holder and thus does not teach that the cartridge holder is “coupled” to the rack. The Commission determined that the remaining references also failed to show this “coupled” feature, and thus, the ‘581 patent is not invalid. In relation to domestic industry, the ALJ found that Overland’s products did not meet the technical prong of the domestic industry requirement in relation to the ‘581 patent, and thus did not consider the economic prong. However, the Commission reversed this determination based on Overland’s expert testimony and remanded the case to the ALJ for evaluation of the economic prong. Patent Exhaustion BDT set forth a defense of patent exhaustion for both patents, asserting that Overland’s license to IBM constituted a first sale. The ALJ rejected this defense because, although the license constitutes a sale, it occurred after BDT’s allegedly infringing activities. The Commission affirmed with modified reasoning, determining that the license was not a first sale in relation to BDT, because BDT were upstream suppliers of infringing goods and these sales would not be covered by the license.

Nov

ITC Issues Public Version of Opinion in Certain Polyimide Films (337-TA-772)

By Eric Schweibenz

Nov

On November 21, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Polyimide Films, Products Containing Same, and Related Methods (Inv. No. 337-TA-772). By way of background, this investigation is based on a complaint filed by Kaneka Corporation (“Kaneka”) alleging violation of Section 337 in the importation into the U.S. and sale of certain polyimide films, products containing the same, and related methods that infringe U.S. Patent Nos. 6,264,866 (“the ‘866 patent”), 6,746,639 (“the ‘639 patent”), 7,018,704 (“the ‘704 patent”), and 7,691,961 (“the ‘961 patent”). The Respondents in this investigation are SKC Kolon PI, Inc. and SKC, Inc. (collectively, “SKC”). See our April 4, 2011 post for more details. On May 10, 2012, ALJ Robert K. Rogers Jr. issued the subject ID finding no violation of Section 337 by SKC with respect to the above-listed patents. See our June 25, 2012 post for more details regarding the public version of the ID. After examining the record of the investigation, including the ID and the parties’ petitions for review and responses thereto, the Commission determined to partially review and partially vacate the ID. Our August 3, 2012 post provides a summary of the Commission’s determinations. We now provide additional details on the Commission’s determinations of whether Kaneka satisfied the technical prong of the domestic industry requirement in relation to the ‘866 patent and the infringement finding in relation to the ‘961 patent. The ‘866 Patent The Commission was particularly interested in whether the ALJ’s analysis of the technical prong of the domestic industry requirement in relation to the limitation “increasing the temperature in a step-wise fashion” was satisfied by the evidence provided at the evidentiary hearing. The Commission summarized the parties’ dispute as “whether ‘intermittent or occasional’ infringement is a ‘substantial investment’ in the articles covered by the patent.” Kaneka argued that satisfying the domestic industry requirement with only intermittent or occasional activity was sufficient because the standard is the same as that for infringement. SKC disagreed that the standards are the same in light of the very different underlying policies, and asserted that the only relevant time for consideration is the time of filing the complaint because Kaneka only asserted an industry that exists, not an industry in the process of being established. The Commission modified the ALJ’s finding of no domestic industry. Specifically, the Commission determined that arguments as to the “intermittent or occasional” aspects of the device are relevant only to consideration of the economic prong of the domestic industry requirement, and that the inquiry for the technical prong is limited to a comparison of the claim language with the product offered to satisfy the domestic industry requirement. In carrying out this comparison, the Commission found that Kaneka failed to satisfy the “while adjusting” limitation of the ‘866 patent, and thus, the technical prong of the domestic industry requirement was not met. Thus, the ALJ’s initial determination was affirmed. The ‘961 Patent The Commission asked for briefing on a very specific issue in relation to the ‘961 patent, namely, whether a person skilled in the art would require all replicates of film samples to be within the claimed range, and whether any statistical concepts of variance would be applied to the claimed range. This issue is important because Kaneka could only prove infringement of some of SKC’s products by averaging the values of the samples to meet the required claim limitations. Kaneka argued that this approach is precisely how one skilled in the art would evaluate replicates; i.e., by considering average values from a group with relatively low standard deviations. SKC’s position is that where there are only a small number of replicates, those skilled in the art would require that all replicates be within the claimed range in order to consider the test results reliable. The Commission notes that Kaneka’s own expert made statements that the data from the tests was unreliable. Since there was no other information in the record, the Commission agreed with the ALJ that Kaneka failed to prove infringement for the accused products that relied on this testing. Thus, the ALJ’s initial determination was affirmed.

Feb

ITC Issues Public Version Of Opinion In Certain Incremental Dental Positioning Adjustment Appliances (337-TA-562)

By Eric Schweibenz

Feb

On February 19, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Incremental Dental Positioning Adjustment Appliances and Methods of Producing Same (Inc. No. 337-TA-562). By way of background, this investigation is based on a complaint filed by Align Technology, Inc. (“Align”) alleging violation of Section 337 in the importation into the U.S. and sale of incremental dental positioning adjustment appliances by reason of infringement of certain claims of U.S. Patent Nos. 6,685,469; 6,450,807; 6,394,801; 6,398,548; 6,722,880; 6,629,840; 6,699,037; 6,318,994; 6,729,876; 6,602,070; 6,471,511; and 6,227,850. The Respondents in this investigation are OrthoClear, Inc.; OrthoClear Holdings, Inc.; and OrthoClear Pakistan Pvt, Ltd. (collectively, the “Respondents”). ALJ Rogers terminated the original investigation based on a consent order, which prohibited “the importation, sale for importation, and sale in the United States after importation of incremental dental positioning adjustment appliances referenced in the complaint and any other articles manufactured in violation of the asserted patents or trade secrets.” On March 1, 2012, Align filed a complaint seeking an enforcement proceeding under Commission Rule 210.75. See our March 5, 2012 post for more details. The complaint alleged that successors and officers of the original Respondents violated the consent order by continuing to practice prohibited activities by “importing, offering for sale, and selling for importation into the United States digital datasets.” According to the enforcement complaint, the digital datasets are used to manufacture dental appliances in the U.S. The Notice of Institution of an Enforcement Proceeding stated that the threshold issue is whether the accused digital datasets are within the scope of the consent order. On November 28, 2012, ALJ Rogers issued Order No. 57 (not yet publicly available), determining that the accused digital datasets fall within the consent order’s “articles manufactured” provision. On December 21, 2012, the Commission determined to review Order No. 57. In the opinion, the Commission determined that the digital datasets were electronic transmissions not covered by the consent order. The Commission noted two prior investigations where the accused products included both hardware and software components. In both of the previous investigations, the Commission included express language excluding electronic transmissions in the cease and desist orders. The Commission noted in the opinion that the consent order in the present investigation was akin to the cease and desist orders issued in the cited investigations. Accordingly, the Commission held that “a consent order should, like a cease and desist order, contain explicit language including electronic transmissions where such coverage is intended.” Based on this holding, the Commission determined that the digital datasets at issue were not covered by the consent order because the consent order did not have express language including electronic transmissions. Therefore, the Commission found no violation of the consent order and terminated the investigation.

Feb

ITC Issues Opinion and Order In Certain Ground Fault Circuit Interrupters (337-TA-739)

By Eric Schweibenz

Feb

On February 22, 2013, the International Trade Commission (the “Commission”) issued its opinion and order in Certain Ground Fault Circuit Interrupters and Products Containing Same (Inv. No. 337-TA-739). By way of background, the Complainant in this investigation is Leviton Manufacturing Co., Inc. (“Leviton”), which alleged violation of Section 337 with respect to certain ground fault circuit interrupters and products containing the same that infringe certain claims of U.S. Patent Nos. 7,463,124; 7,737,809; and 7,764,151. The remaining respondents are: Zhejiang Trimone Electric Science & Technology Co. Ltd.; Fujian Hongan Electric Co, Ltd.; TDE, Inc.; Shanghai ELE Manufacturing Corp.; Orbit Industries, Inc.; American Electric Depot Inc.; and Shanghai Jia AO Electrical Co. (collectively, the “Respondents”). On December 20, 2011, ALJ Bullock issued an initial determination (“ID”) finding no violation of Section 337 on the grounds that Leviton had not sufficiently shown that a domestic industry exists with respect to the three asserted patents and/or articles protected by those patents. See our February 24, 2012 post for more details. On June 8, 2012, the Commission issued an opinion that reversed the ID and found a violation of Section 337. With respect to remedy, the Commission issued a general exclusion order and a cease and desist order. See our June 14, 2012 post for more details. According to the Commission’s opinion, Hubbell Incorporated (“Hubbell”) filed a motion on December 21, 2012 requesting Commission approval for its outside counsel to subscribe to the administrative protective order (“APO”) entered in this investigation. Hubbell was not a named party to the original investigation. Nonetheless, Hubbell filed two separate appeals to the U.S. Court of Appeals for the Federal Circuit challenging the Commissions general exclusion order and requesting a declaration that Hubbell’s products are beyond the general exclusion order. Hubbell argued that access to the confidential information disclosed in this investigation is necessary in order to prosecute its two appeals. As an initial matter, the Commission noted that the burden is on the requester to clearly demonstrate a compelling reason for granting access to confidential information. First, the Commission addressed Hubbell’s argument that it was a “party” to the investigation. The Commission noted that the APO prohibits disclosure of confidential information to “any person other than... outside counsel for parties to this investigation.” The Commission noted that Commission Rule 210.3 explicitly defines both “party” and “investigation.” The Commission found that both definitions clearly did not include Hubbell; accordingly, the Commission determined that Hubbell was not a party to the investigation. Second, the Commission considered whether Hubbell’s first appeal, which challenged the Commission’s general exclusion order, established a compelling reason for granting Hubbell’s motion. The Commission determined that Hubbell was unlike the non-parties granted access to confidential information in Certain Baseband Processor Chips, Inv. No. 337-TA-543, because Leviton objected to allowing access and Hubbell has not shown that the general exclusion order at issue has or is likely to adversely affect Hubbell. Additionally, the Commission held that Hubbell lacks standing to bring its first appeal because: 1) Hubbell has suffered no actual injury, 2) any prospective injury is merely speculative, 3) Hubbell’s fear of exclusion is not causally connected to the Commission’s general exclusion order, 4) the Federal Circuit cannot redress the injury in question., and 5) Section 337 does not confer Hubbell standing. Third, the Commission considered whether Hubbell’s second appeal, which challenged the Commission’s denial of its petition to modify the general exclusion order, established a compelling reason for granting Hubbell’s motion. The Commission determined, for the same five reasons stated above, that Hubbell lacks standing to bring its second appeal. Central to the Commission’s determination was the fact that the Commission has not found that Hubbell’s products infringe the patent claims at issue. Fourth, the Commission determined that neither appeal concerns final, appealable action relating to the relief Hubbell seeks. The Commission held that the Federal Circuit lacks the jurisdiction for appellate review because the Commission has not made a final adjudication concerning any particular Hubbell product. Lastly, the Commission found that Hubbell has not demonstrated the need for the confidential information. The Commission noted that Hubbell has already filed several papers making extensive arguments before the Federal Circuit without the confidential information. Further, the Commission held that Hubbell provided only scant arguments to support its need for access to the confidential information. Based on the above findings, the Commission denied Hubbell’s motion.

Mar

ITC Issues Public Version Of Opinion In Certain Wiper Blades (337-TA-816)

By Eric Schweibenz

Mar

On March 4, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion (dated March 1, 2013) in Certain Wiper Blades (Inv. No. 337-TA-816).

By way of background, Chief ALJ Charles E. Bullock issued Order No. 63 granting Respondents Corea Autoparts Producing Corporation, CAP America, and PIAA Corporation USA’s (collectively, “CAP”) motion for summary determination of non-infringement of all asserted claims of U.S. Patent No. 6,675,434 for the accused CAP wiper blades. See our February 20, 2013 post for more details.

Mar

ITC Issues Public Version Of Opinion In Certain Microprocessors (337-TA-781)

By Eric Schweibenz

Mar

On March 4, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion (dated February 20, 2013) in Certain Microprocessors, Components Thereof, and Products Containing Same (Inv. No. 337-TA-781). By way of background, ALJ David P. Shaw found that Respondents Intel Corporation, Componentes Intel de Costa Rica S.A., Intel Malaysia Sdn. Bhd, Intel Products (Chengdu) Ltd., Intel Products (Shanghai) Ltd., Apple Inc., and Hewlett-Packard Company (collectively, “Respondents”) did not violate Section 337 by reason of infringement of the asserted claims of U.S. Patent Nos. 8,023,241 (the ‘241 patent); 7,916,444 (the ‘444 patent); and 7,609,500 (the ‘500 patent). ALJ Shaw also determined that claims 20 and 28–31 of the ‘241 patent and claims 29, 31, 33, and 36 of the ‘444 patent are invalid. Further, ALJ Shaw found that Complainant X2Y Attenuators, LLC (“X2Y”) satisfied the domestic industry requirement with respect to all of the patents-in-suit. See our January 25, 2013 and February 19, 2013 posts for more details. In the opinion, the Commission first addressed X2Y’s claim construction challenges. Specifically, X2y challenged ALJ Shaw’s construction of three claim terms: “electrode,” “portion,” and “perimeter edge.” The Commission affirmed ALJ Shaw’s construction of “electrode” and “perimeter edge,” but reversed ALJ Shaw’s determination that the claim term “portion” was indefinite. The Commission held that “portion” means something between nothing and all. Given this plain and ordinary meaning, the Commission determined that the claim is not invalid for indefiniteness. Second, the Commission ruled on ALJ Shaw’s noninfringement determination. The Commission noted that X2Y conceded noninfringement based upon the adopted claim construction for the “electrode” claim term. The Commission reversed ALJ Shaw’s noninfringement determination based on his finding that the accused products lacked “capacitance.” ALJ Shaw imposed the “capacitance” limitation as a global limitation that was not tied to any particular claim term. The Commission held that such a global application constituted error. The Commission stated that inclusion of a “capacitance” limitation is inconsistent with the claim constructions argued for by Respondents and adopted by ALJ Shaw. Third, the Commission reviewed and vacated ALJ Shaw’s finding that the patent claims at issue would be anticipated or obvious if the ALJ would have adopted X2Y’s claim construction. The Commission held it was unnecessary to reach issues based on X2Y’s claim construction because it has adopted ALJ Shaw’s claim construction of “electrode.” Lastly, the Commission reviewed and vacated ALJ Shaw’s determination that X2Y demonstrated a domestic industry under section 337(a)(2)(C). ALJ Shaw found a domestic industry under section 337(a)(2)(A), (B), and (C). The Commission held that the issue of X2Y’s domestic industry under section 337(a)(2)(C) is not dispositive under either construction of the term “electrode.” Based on the foregoing findings, the Commission affirmed ALJ Shaw’s finding of no Section 337 violation and terminated the investigation.

Apr

ITC Issues Public Version Of Opinion on Remedy, Public Interest, and Bond In Certain Digital Photo Frames And Image Display Devices (337-TA-807)

By Eric Schweibenz

Apr

On March 27, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion on remedy, public interest, and bond in Certain Digital Photo Frames and Image Display Devices and Components Thereof (Inv. No. 337-TA-807). By way of background, the investigation is based on an August 24, 2011 complaint and a September 14, 2011 letter supplementing the complaint filed by Technology Properties Limited, LLC (“TPL”) alleging violation of Section 337 in the importation into the U.S. and sale of certain digital photo frames and image display devices and components thereof that infringe certain claims of its patents. See our September 23, 2011 post for more details on this investigation. Although the original Notice of Investigation named twenty respondents, fourteen were terminated from the investigation based on consent order stipulations and settlement agreements. The remaining six respondents, Nextar Inc., WinAccord Ltd., WinAccord U.S.A., Inc., Aiptek International Inc., and Pandigital, Inc. were found to be in default (collectively, “Defaulting Respondents”). The Commission determined not to review any of the initial determinations, and requested briefing from TPL regarding its proposed remedy and bonding requirements. According to the opinion, TPL requested a limited exclusion order (“LEO”) covering each of the Defaulting Respondents’ products, supported by the allegations set forth in its complaint. Since the Commission determined that the requirements of Section 337(g)(1) and ITC rule 210.17 (related to the requirements for relief against defaulting parties) were met, the Commission issued the requested LEO. TPL also asked the Commission to issue cease and desist orders against each of the Defaulting Respondents. The Commission agreed, concluding that the defaulting domestic respondents maintain commercially significant inventories of the infringing products in the United States based on inference and evidence produced by TPL. Although the Commission declined to draw a negative inference against the non U.S. defaulting respondents regarding domestic inventories, TPL’s complaint included various factual allegations related to this issue. Since Section 337(g)(1) specifically states that the Commission “shall presume the facts in the complaint to be true and shall, upon request, issue a cease and desist order…,” the Commission found sufficient evidence to warrant issuing a cease and desist order against the non U.S. defaulting respondents as well. According to the opinion, TPL argued that the LEO and cease and desist orders would have no negative impact on the public interest. The Commission agreed, noting that there is no indication that the infringing products would affect public health and welfare or competitive conditions in the United States. Although TPL argued that importation of infringing products under bond is not permitted for defaulting respondents, the Commission determined that this is inconsistent “with the Commission’s practice of permitting importation under bond during the period of Presidential review by respondents found in default under section 337(g)” and cited to various investigations where this occurred. Therefore, the Commission concluded that all Defaulting Respondents were permitted to import products under a bond. Since there was “little or no evidence” of pricing in the record, and the various settlement agreements included different royalty rates, no “reliable price information is available” and therefore the Commission determined to set the bond in the amount of 100%.

Apr

ITC Issues Opinion Reversing Initial Determinations And Remanding For Further Proceedings In Certain Wiper Blades (337-TA-816)

By Eric Schweibenz

Apr

On April 24, 2013, the International Trade Commission (the “Commission”) issued its opinion in Certain Wiper Blades (Inv. No. 337-TA-816). In the opinion, the Commission reversed two of Chief ALJ Charles E. Bullock’s Initial Determinations (“ID”). By way of background, the investigation is based on a complaint filed by Robert Bosch LLC (“Bosch”) alleging violation of Section 337 in the importation and sale of certain “flat” or “beam-type” wiper blade devices that infringe one or more claims of the asserted patents. See our October 27, 2011 post for more details. As explained in our November 2, 2012 post, the Commission determined to review Order Nos. 51 and 52 and the claim constructions these orders turned upon. We now provide the details of the Commission’s opinion. The first ID, issued as Order No. 51 on October 2, 2012, found that claims 1-6 and 8-10 of U.S. Patent No. 6,611,988 (the ‘988 patent) and all claims of U.S. Patent Nos. 6,553,607 (the ‘607 patent), 6,836,926 (the ‘926 patent) and 6,973,698 (the ‘698 patent) were invalid as indefinite under § 112. See our October 5, 2012 post for more details. The Commission reviewed the claim construction of the terms “securing means” and “means for securing” in the ‘607 patent. Respondents argued that the patent specification did not disclose sufficient structure that corresponded to the means, asserting that the parenthetical reference numbers in the claim rendered the claim indefinite as it referred to only a partial structure. The Commission disagreed, holding that the parenthetical reference numbers did not limit the claims in a manner contrary to the disclosure in the specification. In other words, the Commission took a more expansive view of “securing means,” construing it as components working in cooperation and rendering the claim valid. Respondents also argued that the term “considerably shallower” in the ‘988 patent was “insolubly ambiguous” as there was no standard for measuring what was “considerably shallower.” The Commission disagreed, noting that the patent drawings illustrate what was intended, and that this was reinforced by Bosch’s expert. As such, one of skill in the art would understand what is claimed in light of the specification. Although Respondents argued that the term “where Fwf is an actual contact force exerted on the wiper blade by the wiper arm (18) in condition when it is pressed against its window” in the ‘926 patent was indefinite as it could only be determined by placement on a windshield, the Commission disagreed. Specifically, the Commission reiterated relevant case law holding that “the test for indefiniteness does not depend on a potential infringer’s ability to ascertain the nature of its own accused product to determine infringement, but instead on whether the claim delineates to a skilled artisan the bounds of the invention.” The phrases “wiper strip having a center section and two end sections, said contact force of said wiper strip being greater in said center section than at least one of said end two sections,” and “a concave curvature that is sharper than the sharpest curvature of a spherically curved window in a region of a wiping field that can be swept across by said wiper blade” from the ‘698 patent were also found to be definite by the Commission. Although Respondents argued that the “wiper strip” and “sharpest curvature” aspects were ambiguous and dependent on environmental factors, the Commission found Bosch’s arguments that these terms are understood in the relevant field to be persuasive. As such, the Commission reversed the ALJ’s summary determination of invalidity. The second ID, issued as Order No. 52 on October 25, 2012, found that Respondents Danyang UPC Auto Parts Co., Ltd., Pylon Manufacturing Corp., and Scan Top Enterprise Co., Ltd.’s accused products do not infringe the asserted claims of the ‘988 and ‘926 patents, or the asserted claims of U.S. Patent Nos. 6,944,905, 7,293,321 and 7,523,520. See our October 29, 2012 post for more details. According to the opinion, the ALJ found that the asserted patents were not infringed based on his construction of the term “support element” or “supporting element.” Specifically, the ALJ found that the specifications “disclaimed” the use of brackets to hold the wiper blades. Therefore, the use of “brackets that appear to be substantially different in appearance and function from the brackets typical in the prior art” in the Michelin blades prevented a finding of infringement. However, the Commission noted that criticism is not sufficient to rise to the level of clear disavowal, and the statements pointed to in the asserted patents mostly discuss the costly or expensive support bracket design of the prior art requiring a rigid and complicated frame. Therefore, the Commission held that any disavowal would be limited to those systems, not the very different “bracket” employed by Michelin. As such, the Commission construed “support element” to have its plain and ordinary meaning and reversed the ALJ’s ID of no infringement. Based on these reversals, the Commission remanded the case to ALJ Bullock for further proceedings.

May

ITC Issues Public Version Of Opinion Affirming No Violation of Section 337 In Certain Wireless Communication Devices (337-TA-745)

By Eric Schweibenz

May

On May 8, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion affirming-in-part and reversing-in-part the Remand Initial Determination (“RID”) in Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof (Inv. No. 337-TA-745), although the ultimate conclusion of no violation of Section 337 was affirmed. By way of background, the Complainant in this investigation is Motorola Mobility, Inc. (“Motorola”) and the Respondent is Apple Inc. (“Apple”). On May 16, 2012, ALJ Pender issued the public version of an Initial Determination (“ID”) finding a violation of Section 337 as to U.S. Patent No. 6,246,697, but no violation of Section 337 with respect to U.S. Patent Nos. 6,272,333, 6,246,862 (the ‘862 patent), and 5,636,223. See our May 31, 2012 post for more details on the ID. On September 17, 2012, the Commission issued the public version of its opinion affirming-in-part, reversing-in-part and remanding-in-part the findings in the ID. Specifically, the Commission remanded the case to the ALJ with respect to the ‘862 patent. See our September 20, 2012 post for more details on the Commission’s decision. On December 18, 2012, ALJ Pender issued his RID finding no violation of Section 337 as to the ‘862 patent. In particular, the ALJ determined that although claim 1 of the ‘862 patent was infringed by the accused products, it was invalid as anticipated by U.S. Patent No. 6,052,464 to Harris (“Harris”). The ALJ further found that claim 1 was not invalid for obviousness in light of Harris in combination with the knowledge of one of ordinary skill in the art or in combination with U.S. Patent No. 5,894,298 to Hoeksma (“Hoeksma”). See our January 2, 2013 post for more details on the RID. As reported in our March 4, 2013 post, after examining the RID, the petitions for review filed by Motorola and Apple, and the responses, the Commission determined to review the RID in-part. We now provide the details of the Commission’s opinion. Claim Construction In the RID, the ALJ construed the limitation “touch sensitive input device” in the ‘862 patent to have its plain and ordinary meaning, but specified that this was not limited to a touchscreen or touch pad (i.e., included physical keypads). The Commission agreed that “touch sensitive input device” should have its plain and ordinary meaning, but reversed the RID to the extent that this meaning included keypads. Specifically, the Commission noted that the specification described the touch sensitive input device as an improvement over conventional user interfaces (such as keypads), and dependent claims stated that the user interface could further include a keypad. As such, the Commission concluded that the patentee intended a keypad to be a separate element, and thus not included in the “touch sensitive input device” element. Infringement The Commission affirmed the RID’s finding that Apple’s accused products literally infringe the ‘862 patent. The key element was “a sensor … to disable communication of the input signal to the processing section when the portable communication device is positioned in close proximity to a user, thereby preventing inadvertent actuation of the touch sensitive input device.” However, the details of the Commission’s reasoning are redacted in the public version of the opinion. Anticipation The RID found that the ‘862 patent was anticipated by Harris’s disclosure of either push-button keys or a “touch writable display.” However, since the Commission altered the construction of the term “touch sensitive input device” to exclude keypads, the Commission reversed the determination that the push-buttons anticipated the ‘862 patent. The Commission also determined that the “touch writable display” did not anticipate the ‘862 patent as the orientation of this display did not clearly meet the other elements of the claim as required to prevent inadvertent actuation. Obviousness In the RID, the ALJ found that Apple failed to prove obviousness by clear and convincing evidence. However, the Commission reversed this determination after considering the additional briefing on this issue. The prior art included examples of mobile telephones with touch-sensitive screens subject to inadvertent actuation, and Apple argued that the problem to be solved by the ‘862 patent was well known in the art. Although Motorola presented some evidence of secondary considerations based on praise by those skilled in the art and commercial success, the Commission did not consider the “slim evidence” provided sufficient to overcome the “strong showing of prima facie obviousness in this case.” Therefore, the Commission determined that the ‘862 patent was invalid as obvious over Harris either in view of the common general knowledge or in view of Hoeksma. As such, the Commission affirmed the RID’s finding of no violation of section 337 with respect to the ‘862 patent.

Jun

ITC Issues Public Version Of Opinion Affirming No Violation Of Section 337 In Certain Devices For Improving Uniformity Used In A Backlight Module (337-TA-805)

By Eric Schweibenz

Jun

On May 17, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Devices for Improving Uniformity Used in a Backlight Module and Components Thereof and Products Containing Same (337-TA-805). By way of background, the Complainants in this matter are Industrial Technology Research Institute and ITRI International, Inc. (collectively, “ITRI”) and the Respondents are LG Corporation, LG Electronics, Inc., and LG Electronics U.S.A., Inc. (collectively, “LG”). ITRI alleged that LG violated Section 337 by the importation and/or sale of LCD televisions and monitors that infringed claims 6, 9, and 10 of U.S. Patent No. 6,883,932 (the ‘932 patent). See our September 12, 2011 post for more details about this investigation. ALJ Essex’s Initial Determination (“ID”) in this case found no infringement and no domestic industry, and therefore ALJ Essex did not reach the issues of invalidity and unenforceability. See our November 6, 2012 post for more details. The Commission remanded-in-part the investigation back to ALJ Essex to consider the parties’ invalidity and unenforceability arguments and make appropriate findings. As described in our March 13, 2013 post, ALJ Essex issued a Remand Initial Determination (“RID”) finding that the ‘932 patent is invalid under 35 U.S.C. § 102 and that no violation of Section 337 has occurred in this investigation. The Commission determined to review certain aspects of the ID and RID, and we now provide details of the opinion. Claim Construction ITRI petitioned for review of the ID’s claim construction of the phrase “structured arc sheet.” However, the Commission affirmed the construction of “structured arc sheet” set forth in the ID as “a sheet constructed in the shape of an arc,” adopting the construction proposed by LG and the Commission Investigative Staff (“OUII”). Infringement ITRI also petitioned for review of the ID’s finding that the accused products do not infringe the ‘932 patent. On review, the Commission affirmed the finding of no infringement, although expressed slightly different reasoning than that adopted by the ALJ in the ID. Validity The Commission reviewed the RID’s findings on anticipation in relation to two references, the Yao and Katoh patents. Although the Commission ultimately agreed with ALJ Essex’s determination that Yao anticipated the asserted claims, the Commission held that “some clarification of the analysis is warranted with respect to the ALJ’s characterization of [ITRI’s expert]’s testimony.” Specifically, the Commission determined that ITRI’s expert’s testimony does not equate to the “admission” as relied on by the ALJ, but still provided sufficient support for the finding that Yao discloses the element of “two structured arc sheets” and anticipated the ‘932 patent. The RID found that the Katoh patent did not anticipate the ‘932 patent, and thus the dispute between the parties centered on whether or not Katoh disclosed “a plurality of light sources.” On review, the Commission agreed with LG that certain embodiments of Katoh did disclose a plurality of light sources. However, based on the post-hearing briefing, the Commission agreed with ITRI that LG failed to prove by clear and convincing evidence that the location of the two structured arc sheets, required to be “mounted at the periphery of the light source,” was adequately shown in Katoh. As such, Katoh did not anticipate the ‘932 patent. Domestic Industry The ID found that ITRI met the economic prong of the domestic industry requirement through its licensee, but failed to satisfy the technical prong of the test. Although disagreeing somewhat with the ALJ’s reasoning, the Commission agreed that ITRI has failed to satisfy the technical prong of the domestic industry requirement. In light of the reasons above, the Commission affirmed the finding of no violation of Section 337 with respect to the ‘932 patent.

Jul

ITC Issues Public Version of Opinion In Certain Electronic Devices Including Wireless Communication Devices, Portable Music And Data Processing Devices, And Tablet Computers (337-TA-794)

By Eric Schweibenz

Jul

On July 5, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers(Inv. No. 337-TA-794). Due to the large size of the opinion and the attachments thereto, we have separated it into part 1, part 2, and part 3. By way of background, the Complainants in this investigation are Samsung Electronics Co., Ltd. and Samsung Telecommunications America, LLC (collectively, “Samsung”). On September 14, 2012, ALJ E. James Gildea issued an Initial Determination (“ID”) finding no violation of Section 337 with respect to U.S Patent Nos. 7,706,348 (the ‘348 patent); 7,486,644 (the ‘644 patent); 7,450,114 (the ‘114 patent); and 6,771,980 (the ‘980 patent) by Respondent Apple Inc. (“Apple”). Specifically, ALJ Gildea found that the ‘348, ‘644, and ‘980 patents were valid but not infringed and that the ‘114 patent was both invalid and not infringed. The ALJ also found that the economic prong of the domestic industry requirement was satisfied with respect to each of the patents, but that the technical prong was not satisfied for any of the patents. On November 19, 2012, the Commission determined to review the ID in its entirety and issued a notice requesting written submissions from the parties and the public on certain issues, including the assertion of FRAND-related patents at the Commission, and on the issues of remedy, public interest and bond. See our November 20, 2012 post for more details. On March 13, 2013, the Commission issued another notice requesting written submissions from the parties and the public on various additional topics, including some FRAND-related topics. See our March 21, 2013 post for more details. As set forth in its notice reporting the opinion, the Commission determined that Apple had violated Section 337 in connection with the importation and sale of wireless communication devices, portable music and data processing devices, and tablet computers that infringe certain claims of the ‘348 patent, but not with regard to the other patents. The Commission issued a limited exclusion order and a cease and desist order directed at Apple, and terminated the investigation. See our June 6, 2013 post for more details on the notice and submissions received. We now provide additional details on the opinion. The ‘348 Patent The Commission modified ALJ Gildea’s claim construction of several terms. More particularly, the ALJ relied on the dictionary definition of “puncture” as “to pierce with as if with a pointed instrument or object” to construe the term “puncturer.” However, the Commission determined that this construction is “incorrect and unhelpful in resolving the dispute between the parties,” since it was inconsistent with how the term was used in the ‘348 patent. Rather, the Commission adopted the construction proposed by Samsung and the Commission Investigative Staff (“OUII”) where “puncturer” means hardware or software used for excluding, suppressing, ignoring, or skipping bits from a codeword, explaining that this construction is based on the specification of the ‘348 patent. The modified construction of “puncturer” and “punctured” adopted by the Commission was instrumental in the finding that Apple infringes the ‘348 patent. The Commission adopted the ALJ’s findings with regard to the remaining elements of the claims, which was that Apple failed to refute the allegations of infringement with all other elements. Although the Commission reviewed the validity arguments independently, it agreed with the ALJ that Apple had failed to prove by clear and convincing evidence that any of the asserted references either anticipated the ‘348 patent or rendered it obvious. The Commission relied on the “machine or transformation” test in concluding that the ‘348 patent was not invalid under 35 U.S.C. § 101. Apple also asserted affirmative defenses based on Samsung’s participation in standards-setting organizations, alleging that (1) Samsung forfeited its rights to exclusion or cease-and-desist orders based on its FRAND commitments, and (2) Samsung failed to disclose the ‘348 and ‘644 patents, rendering them unenforceable. The Commission solicited additional comments on the first FRAND affirmative defense and considered this issue at length, ultimately determining that Apple was unable to prove by a preponderance of the evidence that its FRAND defense precludes the Commission from finding a violation of Section 337. The opinion includes an appendix of select submissions received in response to the Commission’s request for comments on the relationship between a FRAND undertaking and the right to obtain an exclusion and/or cease-and-desist order. In order for the second FRAND affirmative defense to be successful, it would have been necessary for Apple to prove that (1) Samsung had a duty to disclose essential patents; (2) the ‘348 and ‘644 patents are essential patents; (3) that Samsung breached its disclosure duty by failing to disclose these patents in a timely manner; and (4) appropriate circumstances exist to hold these patents unenforceable. The Commission rejected this defense, noting that Apple itself has questioned whether or not the ‘348 and ‘644 patents are actually essential. The Commission also noted that it is unclear what the requirements of a “timely disclosure” are, and that the policy concerns underlying this defense do not apply here, as Samsung has already licensed its declared-essential patents (including the ‘348 and ‘644 patents) to more than 30 companies. In light of the revised construction of the terms “puncturer” and “puncturing,” the Commission held that Samsung was able to meet the technical prong of the domestic industry requirement based on at least two groups of products. The ‘644 Patent The Commission agreed with the ALJ’s determination that the Apple products do not infringe the ‘644 patent because they do not “extract[ ] a 60-bit rate-matched block.” The Commission also adopted the ALJ’s findings with regard to invalidity in their entirety, concluding that Apple had not shown that the ‘644 patent was obvious by clear and convincing evidence. Apple also alleged that the’644 patent was unenforceable due to inequitable conduct at the U.S. Patent Office and based on Samsung’s FRAND commitments (discussed above in relation to the ‘348 patent). The Commission affirmed the ALJ’s finding that Apple had not demonstrated inequitable conduct by clear and convincing evidence because it had not proved that the allegedly withheld references were material to patentability. The Commission also agreed with the ALJ that Apple had not sufficiently shown its additional challenges based on inventorship and patent exhaustion. Lastly, the Commission also agreed with the ALJ that Samsung had not demonstrated that its products met the technical prong of the domestic industry requirement in relation to the ‘644 patent. The ‘980 Patent The Commission modified the ALJ’s construction of the phrase “executing a dialing program…,” but this modification had no effect on the Commission’s conclusion that Apple did not meet this element of the ‘980 patent and thus there was no infringement. Since the Commission adopted the ALJ’s findings of no infringement, it declined to address validity of the ‘980 patent. Lastly, the Commission determined that Samsung did not prove that the technical prong of the domestic industry requirement was met in relation to the ‘980 patent. The ‘114 Patent The Commission adopted the ALJ’s findings with regard to no infringement of the ‘114 patent, noting that Samsung’s expert testimony was not persuasive. The Commission also adopted the ALJ’s determinations in relation to validity, with the ultimate conclusion that the ‘114 patent was invalid as anticipated and obvious. Lastly, the commission also adopted the ALJ’s determination that Samsung did not prove that the technical prong of the domestic industry requirement was met in relation to the ‘114 patent. Economic Prong of the Domestic Industry Requirement The Commission considered the economic prong of the domestic industry requirement for all four asserted patents. Although Apple challenged whether the cost of foreign repair and replacement parts and repackaging costs could properly be considered in the domestic industry analysis, the Commission concluded that this “does not negate the fact that Samsung has invested millions of dollars domestically relating to protected articles.” As such, the Commission found that the economic prong of the domestic industry requirement for each of the four patents was met. Remedy, Public Interest, and Bond The Commission determined to issue a limited exclusion order and cease-and-desist order against Apple in relation to articles that infringe the ‘348 patent. The Commission concluded that these remedies would have no adverse effect on the public health and welfare or competitive conditions in the United States. However, the Commission included a provision that allows Apple to provide replacement parts for a period of two years. The Commission determined that, if a bond is set, it should be set at zero percent because Samsung did not show a need for protection by bond. Commissioner Pinkert Dissent Commissioner Pinkert dissented on public interest grounds from the determination to issue an exclusion order and cease and desist order. Specifically, Commissioner Pinkert considered that Samsung’s FRAND obligations are relevant to public interest considerations and weigh against issuing a limited exclusion order and cease-and-desist order.

Jul

ITC Issues Opinion Reversing Determination Of No Section 337 Violation In Certain Kinesiotherapy Devices (337-TA-823)

By Eric Schweibenz

Jul

On July 12, 2013, the International Trade Commission (“the Commission”) issued the public version of its opinion reversing ALJ Thomas B. Pender’s finding of no violation of Section 337 in the Initial Determination (“ID”) in Certain Kinesiotherapy Devices and Components Thereof (Inv. No. 337-TA-823). By way of background, this investigation is based on a December 2, 2011 complaint filed by Standard Innovation Corporation and Standard Innovation (US) Corp. (collectively, “Standard Innovation”) alleging violation of Section 337 in the importation into the U.S. and sale of certain kinesiotherapy devices and components thereof that infringe one or more claims of U.S. Patent Nos. 7,931,605 and D605,779. See our December 6, 2011 post for more details on Standard Innovation’s complaint. In the ID, ALJ Pender found that the accused products infringed the asserted claims and that the claims were not invalid. However, he found that Standard Innovation was unable to meet the economic prong of the domestic industry requirement, and thus there was no violation of Section 337. See our February 11, 2013 post for more details. As explained in our March 27, 2013 post, the Commission determined to review the ID in its entirety, requesting briefing on the economic prong of the domestic industry requirement and remedy. We now provide additional details on the opinion. Claim Construction The Commission affirmed the ALJ’s claim construction determinations except for the phrase “generally tear drop shaped.” In the ID, ALJ Pender determined that this phrase should simply be given its plain and ordinary meaning without limitation, dismissing Respondents’ argument that Standard Innovation had disclaimed bulbous, hook, or round shapes. The Commission agreed that this phrase should be given its plain and ordinary meaning, and also agreed that Standard Innovation had not disclaimed bulbous or hook shapes. However, the Commission held that Standard Innovation disclaimed round shapes based on its discussion of the problems with round shapes during prosecution. Infringement Although the ALJ found that Standard Innovation had waived infringement by providing only a cursory page of citations, the Commission disagreed. The Commission “recognize[d] the importance of the ALJ’s ground rules,” but since infringement was largely uncontested, brief citations to the record were sufficient in this case. Furthermore, in light of the Commission’s modified interpretation of what shapes could be encompassed by “generally tear drop shaped,” one of Respondents’ products was found no longer to infringe the ‘605 patent. Validity The Commission agreed with the ALJ that Respondents had failed to prove anticipation or obviousness by clear and convincing evidence as none of the three references disclosed the preamble limitation of a device “dimensioned to be worn by a woman during intercourse.” Although Respondents raised a new argument regarding obviousness in their contingent petition for review, the Commission simply noted that “arguments not raised below may not be raised in a petition for review,” and this argument was therefore waived. Domestic Industry The ALJ found that the economic prong of the domestic industry requirement was not met, partially because Standard Innovation’s primary argument was that it purchased components for its products in the U.S. (although the products were assembled in China) and the ALJ found that these expenditures did not relate to an investment in plant or equipment by Standard Innovation or its manufacturer. On review, Standard Innovation urged that foreign production can satisfy the economic prong of the domestic industry requirement if “coupled with activities and investments in the United States.” This position was supported by the Commission Investigative Staff, who also stated that the ALJ “applied an overly rigid standard in assessing the domestic industry requirement.” The Commission reversed the ALJ’s determination that the economic prong was not met, citing case law where purchases from U.S. subcontractors have been allocated to the domestic industry, and holding that Standard Innovation’s investments in its subcontractors and/or manufacturers can be considered to meet the economic prong of the domestic industry requirement. The Commission also specifically noted that “the reality of today’s marketplace is that many products are assembled overseas.” Since the technical prong of the domestic industry requirement was essentially uncontested, the Commission also determined that the technical prong was met. Remedy, Public Interest, and Bond The Commission determined to issue a general exclusion order, noting that Standard Innovation adequately documented the difficulty in identifying the source of infringing goods. The Commission also held that a cease and desist order directed to the remaining domestic respondents was appropriate, and that these remedies would have no adverse effects on the public health and welfare. Lastly, the Commission determined that if a bond is set, it should be set at zero percent because the infringing product is actually sold at a higher average price than Standard Innovation’s primary product.

Aug

ITC Issues Public Version Of Opinion In Certain Toner Cartridges (337-TA-829)

By Eric Schweibenz

Aug

On July 29, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion on remedy and bond in Certain Toner Cartridges and Components Thereof (Inv. No. 337-TA-829). By way of background, the investigation is based on a January 23, 2012 complaint filed by Canon Inc., Canon U.S.A., Inc., and Canon Virginia, Inc. (collectively, “Canon”) alleging violation of Section 337 in the importation into the U.S. and sale of certain toner cartridges and components thereof, including but not limited to photosensitive drums, that infringe one or more claims of U.S. Patent Nos. 5,903,803 and 6,128,454. See our January 25, 2012 post for more details. As summarized in the opinion, sixteen respondents were found in default, the complaint was withdrawn as to one respondent, and all other remaining respondents were terminated by consent order. Canon filed a motion for summary determination that it satisfied the economic prong of the domestic industry requirement, together with a later motion for summary determination of violation with respect to the defaulting respondents. ALJ David P. Shaw granted these motions and issued an initial determination (“ID”) on violation together with his recommendation that a general exclusion order (“GEO”) and cease and desist orders (“CDO”) be issued with an imposition of a 100 percent bond. See our March 6, 2013 and March 18, 2013 posts for more details. According to the opinion, the Commission determined not to review the ID granting summary determinations and solicited submissions on remedy, the public interest, and bond. The Commission received submissions from Canon, the Commission Investigative Staff (“OUII”), and several non-parties. The Commission determined that a GEO directed to all defaulting respondents was appropriate. The GEO prohibits the entry of infringing toner cartridges and components thereof into the United States. The Commission explained that the factual requirements for issuance of a GEO were met because the evidence showed that the defaulting respondents typically do business under multiple names and change corporate profiles, making it possible to circumvent a limited exclusion order. Canon also was able to prove a widespread pattern of infringement combined with difficulty in identifying the source of the infringing products. The Commission also determined to issue CDOs against both the foreign and domestic respondents ordering the defaulting respondents to cease and desist from importing, selling, marketing, advertising, distributing, transferring, and soliciting U.S. agents and distributors for infringing products. The Commission found that Canon was able to prove that the foreign defaulting respondents maintain domestic inventories and are part of a common enterprise together with the domestic defaulting respondents. As such, a CDO against all defaulting respondents was appropriate. The Commission explained that, as argued by Canon and the OUII, the remedial orders in this investigation would not harm the public interest, as there was no evidence that domestic demand could not be met by Canon. Lastly, the Commission determined to impose a 100 percent bond as reliable price information was not available (since Canon was unable to obtain discovery from the defaulting respondents), and the information that was available showed a wide variety of prices. As such, a 100 percent bond was most appropriate to account for the various price differentials between the respondents.

Sep

ITC Issues Public Version Of Opinion Finding No Section 337 Violation In Certain Products Having Laminated Packaging (337-TA-874)

By Eric Schweibenz

Sep

On September 3, 2013, the International Trade Commission (the “Commission”) issued the public version of its opinion on whether the economic prong of the domestic industry requirement was met in Certain Products Having Laminated Packaging, Laminated Packaging, and Components Thereof (Inv. No. 337-TA-874). By way of background, the investigation is based on a complaint and amended complaint filed by Lamina Packaging Innovations LLC (“Lamina”) alleging violation of Section 337 in the importation into the U.S. and sale of certain products having laminated packaging, laminated packaging and components thereof that infringe one or more claims of U.S. Patent Nos. 6,207,242 and 7,348,067. See our February 21, 2013 post for more details. The Notice of Investigation in this case instructed the presiding ALJ to “hold an early evidentiary hearing, find facts, and issue an early decision, as to whether the complainant has satisfied the economic prong of the domestic industry requirement.” See our March 25, 2013 post for more details on the ITC’s notice of investigation. Although ALJ Theodore R. Essex stated that the instruction was “of questionable legality,” he issued an Initial Determination (“ID”) finding that Lamina failed to meet the economic prong of the domestic industry requirement. See our July 15, 2013 post for more details on ALJ Essex’s ID in this matter. As summarized in our August 8, 2013 post, the Commission determined to review the ID, including reviewing the issue of instructing the ALJ to issue a 100-day ID. We now provide additional details from the opinion. Authority To Issue Initial Determination Within 100 Days According to the opinion, ALJ Essex relied on the Constitution, the Administrative Procedure Act (“APA”), and Commission rules to argue that the 100-day process imposed was unlawful. The Commission determined that the constitutional arguments lacked support in either the text of the Constitution or in governing precedent, and stated that “none of the ID’s citations stand for the proposition that the Constitution requires more process than was provided here.” Arguments based on the APA were also dismissed, with the Commission noting, inter alia, that “a Commission ALJ lacks the authority to conduct such an inquiry so as to repudiate or nullify the Commission’s own application of its procedural rules.” Similarly, the Commission determined that there was no conflict with its existing rules, noting that even if there was, the Commission is able to alter or waive procedural rules. The Commission ended by explaining that, regardless of its basis for doing so, there was no substantial prejudice to Lamina (since Lamina was able to obtain information from its licensees, to take third party discovery, and could have moved to extend the proceedings if necessary), and without substantial prejudice, there can be no challenge of a procedural determination. Economic Prong of Domestic Industry Requirement According to the opinion, Lamina relied on the investment and employment undertaken by its licensees to meet the economic prong of the domestic industry requirement, since it does not produce any articles itself. However, the Commission agreed with the ALJ that Lamina’s showing on this front was insufficient. Specifically, Lamina’s arguments were based on the “mistaken premise that it ought to be able to capture its licensees’ expenditures related to products…placed in laminated packages rather than the expenditures related only to the laminated packages themselves.” Additional arguments put forth attempting to segregate the expenses were considered waived, as they were not presented to the ALJ in Lamina’s post-hearing brief. Furthermore, Lamina “failed to explain how the claimed expenditures are significant as required by the statute,” and was unable to prove that the manufacturing underlying the expenditures took place in the United States. Although licensing expenses can be used to meet the economic prong of the domestic industry requirement in some circumstances, Lamina “did not show that its expenditures were connected to licensing, as opposed to the antecedent litigation that led to the licenses.” The Commission also agreed with the ALJ that Lamina had not known that these expenditures were substantial, as the substantiality is judged in the context of the industry in question. For completeness, the Commission addressed Lamina’s argument that it was in the process of establishing a domestic industry with respect to licensing, although they agreed with the ALJ that this argument had been waived. In short, the Commission found that Lamina was only able to show vague discussions, and that the “lack of interest…to settle with Lamina for any significant value” indicated there was no domestic industry in the process of being established. As such, the Commission agreed with the ALJ that the economic prong of the domestic industry requirement was not met, and the investigation was terminated with a finding of no violation of Section 337.

Oct

ITC Issues Opinion In Certain Video Game Systems and Wireless Controllers (337-TA-770)

By Eric Schweibenz

Oct

On October 28, 2013, the International Trade Commission (the “Commission”) issued its opinion in connection with its review of ALJ Bullock’s Remand Initial Determination in Certain Video Game Systems and Wireless Controllers and Components Thereof (Inv. No. 337-TA-770). By way of background, on April 27, 2011 the Commission instituted this investigation based on Creative Kingdom’s (“CK”) complaint alleging that Nintendo Co. Ltd and Nintendo America, Inc. (collectively, “Nintendo”) violated Section 337 of the Tariff Act of 1930, as amended, by infringing certain claims of U.S. Patent Nos. 7,500,917 (the ‘917 patent), 7,896,742 (the ‘742 patent), 7,850,527 (the ‘527 patent) and 6,761,637 (the ‘637 patent). The accused products were gaming systems and related components and software including the Wii Remote, Wii MotionPlus, Wii Remote Plus, Nunchuk, Wii consule, and Wii U Console (collectively the “accused products”). See our March 23, 2011 and April 21, 2011 posts for more details on the complaint and notice of investigation. After a Final ID, and a Commission review of some of the issues of the Final ID, the Commission remanded the case to the ALJ and on May 7, 2013 the ALJ issued a Remand ID (“RID”) finding no violation of section 337. See our October 12, 2012 post for more details on the Final ID, our November 12, 2012 post for more information about the Commission’s prior opinion, and our May 19, 2013 post for more details on the RID. On July 8, 2013, after a petition by CK to review the RID, the Commission determined to review the following issues: (1) whether the accused products directly infringed claim 7 of the ‘917 patent, (2) whether the Wii MotionPlus and Nunchuck accessories, which are independently sold, contributorily infringe claim 24 of the ‘742 patent, (3) non-obviousness of claim 24 of the ‘742 patent, and (4) whether the technical prong of the domestic industry requirement was met with respect to the ‘917 and ‘742 patents. Seeour July 10, 2013 post for more details on the Commission notice to review the RID. Additionally, the Commission was already in the process of reviewing the following issues from the Final ID: (1) whether the accused products directly infringe claim 24 of the ‘742 patent, (2) whether the asserted claims of the ‘917 and ‘742 patents are valid under the enablement requirement, (3) whether the asserted claims of the ‘917 and ‘742 patents are valid under the written description requirement, and (4) whether the ‘917 and ‘742 patents meet the economic prong of the domestic industry requirement. Infringement The Commission reviewed the ALJ’s RID finding of non-infringement of claim 7 of the ‘917 patent. The Commission specifically assessed whether the accused products met the following limitations of claim 7: (i) “toy wand,” (ii) “a pair of first motion sensors configured to generate a first signal,” (iii) “a first signal in response to a first motion”/ “a second signal in response to a second motion,” and (iv) “a first command to control a first play effect based on the first signal”/ “a second command to the at least one receiver to control a second play effect based on the second signal.” The Commission found that the accused products satisfied the first three limitations, but did not satisfy the fourth. In assessing the fourth limitation, the Commission adopted the ALJ’s construction of the term “command,” which required that the data representing the “command” must control the play effect itself. The Commission found that the accused products did not meet this limitation and thus did not infringe claim 7 of the ‘917 patent. The Commission also reviewed the ALJ’s RID finding of infringement of claim 24 of the ‘742 patent. Nintendo challenged the ALJ’s finding and argued that the ALJ erred by not applying the Commission’s opinion in Certain Electronic Devices with Image Processing Systems, Components Thereof, and Associated Software, Inv. No. 337-TA-724 (Dec. 21, 2011) to determine if the accused products infringed claim 24 at the time of importation. Additionally, Nintendo asserted that the accused products do not meet certain limitations of claim 24. The Commission found that claim 24 of the ‘742 patent does apply to the Wii system as imported because the claim is directed to a device and not a method of performing tasks. Additionally, the Commission found that claim 24 does not require that the playing of a single game on the Wii console has to meet all of the limitations of claim 24. The Commission also found that the Wii Remote practiced the limitation of “moving, shaking, twisting, waving or pointing . . . in a particular manner” but that the accused products did not “activate or control one or more play effects.” Therefore, the Commission found that the accused products did not meet every limitation of claim 24 of the ‘742 patent and did not infringe. Because the accused products did not directly infringe claim 24 of the ‘742 patent, the Commission reviewed whether or not the accused products contributorily infringed. While CK presented evidence that the MotionPlus and Nunchuk accessories have no substantial use other than attaching to the Remote Plus and controlling play effects in an interactive video game, CK failed to provide evidence to show that Nintendo met the knowledge requirement of contributory infringement. Therefore, the Commission found that there was no contributory infringement. Validity The Commission reviewed the ALJ’s finding in the Final ID that claim 7 of the ‘917 patent was invalid for lack of enablement because the specification did not enable one of skill in the art to make and use the claimed invention using other types of sensors besides tilt sensors. The Commission looked to independent claim 6 of the ‘917 patent, that claim 7 depends on, which discloses “a pair of first motion sensors” and “a second motion sensor.” The specification stated that the sensors could be “mercury or micro-ball tilt sensors” but also listed a longer list of other sensors that could be used. The Commission found that the specification did not disclose how other sensors could be substituted or added in order to transmit signals and create the desired effect. Additionally, Nintendo’s witness testified that it took him six months of R&D and experimentation to substitute an accelerometer for a tilt sensor in a wand, and that even then it did not perform exactly as desired. Therefore, the Commission decided that substantial experimentation would need to be done to practice the full scope of the claimed invention and that claim 7 of the ‘917 patent was not enabled and thus invalid. The Commission also reviewed the ALJ’s finding in the Final ID that claim 24 of the ‘742 patent was invalid for lack of enablement. The ‘742 patent was a continuation of the ‘917 patent and the points of novelty in claim 24 of the ‘742 patent were the modularity of the two controllers, and the fact that the two controllers sense different motions. The Commission found that because claim 24 requires using various sensors to generate the input signals that respond to different motions, the specification had to supply this information in order for the claim to be enabled. However, because the specification of the ‘742 patent disclosed only using tilt sensors and did not indicate how to substitute or add other sensors, claim 24 of the ‘742 patent was invalid for lack of enablement. Additionally, the Commission reviewed the ALJ’s finding in the final ID that the asserted claims of the ‘917 and ‘742 patent were invalid for failing to meet the written description requirement. The Commission found that even though one of ordinary skill in the art may have known that other sensors could be used in handheld devices, this did not satisfy the requirement because the specification did not explain how to use these sensors to practice the claim. Therefore, the Commission determined that the asserted claims of the ‘917 and ‘742 patent were invalid because they did not meet the written description requirement. Obviousness The Commission reviewed the ALJ’s finding in the RID that the ‘742 patent was not obvious in light of the combined disclosures of the Slifer, Han, and Nitta, as well as the Willner, Slifer, and Goschy, patents. The Commission found that Nintendo had not shown by clear and convincing evidence that one would be motivated to combine the Slifer, Han, and Nitta patents because of the use of switches versus motion sensors and because of the use of portable versus tethered controllers in the patents. Additionally, the Commission found that one would not be motivated to combine the Willner, Slifer, and Goschy patents because of the use of one hand versus two hands to operate the devices in the patents and because the Willner controller was not disclosed to work with video game consoles. Domestic Industry The Commission also reviewed the ALJ’s determination in the Final ID that CK failed to satisfy the economic prong of the domestic industry requirement and the ALJ’s determination in the RID that the toy wand met each limitation of claim 1 of the of ‘742 and ‘917 patents. As to the technical prong, the Commission found that the toy wand, and not the wand in combination with an interactive play environment, met all of the limitations of claim 1 of the ‘742 and ‘917 patents. In assessing the economic prong of the domestic industry requirement, the Commission reviewed CK’s assertions that even if only the toy wand practices the patents, the “article protected by the patent” could be extended to include the entire MagiQuest attraction based on the “article of commerce” theory. The Commission rejected this theory because CK does not assemble or process the imported wands in the US, and because the domestic activities in cases where the “article of commerce” theory was successful had a direct relationship to the exploitation of the patented invention. Here, however, the Commission found that most everything in the MagiQuest attraction was far removed from the patented technology. The Commission also reviewed CK’s assertions that it has significant employment in plant and equipment, significant employment of labor and capital, a substantial investment in exploitation of the patents via engineering and research, and a substantial investment in exploitation of the patent via licensing related to the ‘742 and ‘917 patents. The Commission found that CK did not satisfy the plant and equipment prong because rent payments for the MagiQuest attraction was too far removed from the articles protected from the patent, and because it was unclear what equipment actually related to the toy wands. The Commission additionally found that CK did not meet the labor and capital prong because there was insufficient evidence regarding which operational activities at the gaming facility related to the wand and relevant receivers and software in MagiQuest versus the entire attraction. The Commission further found that CK did not meet the research and development prong because it did not identify whether the research and development was for the technical aspects of the game relating to the patents at issue, or the entire attraction in general. Lastly, the Commission found that CK did not meet the licensing prong because agreements were fixed-price construction contracts and not license agreements, and because there was no nexus between the activities leading up to the agreements and the licensing of the patents at issue. For the above reasons, the Commission found that CK did not meet the economic prong of the domestic industry requirement. Overall, the Commission found that the accused products did not infringe claim 7 of the ’917 patent or claim 24 of the ‘742 patent, that claim 24 of the ‘742 patent is not obvious, and that claim 7 of the ‘917 patent and claim 24 of the ‘742 patent are both invalid for lack of enablement and lack of a written description. The Commission also found that the domestic industry requirement had not been met for either the ‘917 or the ‘724 patents.

Jan

ITC Issues Public Version of Opinion in Certain Computers and Computer Peripheral Devices (337-TA-841)

By Eric Schweibenz

Jan

On January 9, 2014, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Computers and Computer Peripheral Devices, and Components Thereof, and Products Containing the Same (Inv. No. 337-TA-841). By way of background, this investigation was instituted on May 2, 2012 based on a complaint filed by Technology Properties Limited, LLC (“TPL”) alleging violation of Section 337 by a number of Respondents by reason of infringement of certain claims in U.S. patent Nos. 6,976,623 (the ‘623 patent), 7,162,549 (the ‘549 patent), 7,295,443 (the ‘443 patent), 7,522,424 (the ‘424 patent), 6,438,638 (the ‘638 patent), and 7,719,847 (the ‘847 patent). Seeour March 29, 2012 and April 30, 2012 posts for more details on TPL's complaint and the Notice of Investigation, respectively. On August 2, 2013, ALJ Theodore R. Essex issued the Initial Determination (“ID”) finding a violation of Section 337 with respect to the ‘623 patent, but not with respect to the ‘549, 424, 623, or ‘847 patents. See our August 8, 2013 post for more details on the notice of ID. The Commission determined to review the ID in its entirety. In its October 24, 2013 Notice, the Commission solicited briefing from the parties on remedy, the public interest, and bonding, as well as on five specific questions. The ‘623 Patent The ‘623 patent is directed to a device into which several different types of memory cards can be plugged in at the same time, where the memory cards are “accessible in parallel to transfer data from the” first card to the second card. ALJ Essex found a violation of Section 337 as to the ‘623 patent. The main issue addressed by the Commission is whether the patentee’s amendments to the claims, and explanations of those amendments, constitute disavowal as to the patent scope with regard to what is meant by “accessible in parallel.” In earlier briefings, the Respondents proposed a construction of “accessible in parallel” as “each transmitting or receiving data simultaneously at a given point in time,” arguing that due to an extensive file history, TPL had disavowed switching between two memory cards from the scope of “accessible in parallel.” TPL argued for the plain and ordinary meaning of the term, or as an alternative, for “capable of concurrent read/write access.” ALJ Essex found that the prosecution history did not disavow claim scope, finding that the language meant only that it be possible for the cards to be in their respective slots simultaneously. In its opinion, the Commission reversed ALJ Essex and adopted the Respondents’ proposed claim construction, finding that ALJ Essex’s construction failed to take into account TPL’s statements in the prosecution history distinguishing the ‘623 patent from prior art. Based upon the Commission’s claim construction, the Commission found that there was no dispute that the accused products use the “disclaimed prior art switching circuitry.” Accordingly, the Commission found that the accused products do not infringe the asserted claims of the ‘623 patent. The ‘443, ‘424, and ‘847 Patents The ‘443, ‘424, and ‘847 patents (“the mapping patents”) share a common specification and are directed to “universal” memory card readers or adapters. The asserted claims of the mapping patents are also substantially similar, and the only dispute before the Commission was with respect to the “mapping” limitations in each claim. No party challenged ALJ Essex’s claim construction of “to map,” and the Commission only reviewed whether, based on the claim construction, the accused products and domestic industry products met the claim limitation. The accused products are memory card readers designed to accommodate only SD and MMC cards. The Respondents had argued, and ALJ Essex had found, that the claimed mapping does not occur because MMC and SD cards operate in substantially the same way. Additionally, in their petitions for review, the parties contended that ALJ Essex’s comparison of four-bit data-bus SD versus MMC was inconsistent. The Commission reversed ALJ Essex’s determination that TPL failed to show that the accused products can transfer data to or from SD cards with a four-bit-bus, finding that TPL demonstrated, by a preponderance of the evidence, operation of the accused products in a four-bit-bus mode, which is all that is ordinarily required for apparatus claims. Accordingly, TPL did not have to demonstrate actual use of the accused products in four-bit-bus mode. As such, the Commission vacated a paragraph of the ID stating that TPL had only shown one-bit-bus operation of the SD card. The Commission, however, affirmed the remainder of ALJ Essex’s analysis of the accused products, affirming ALJ Essex’s determination that a “card reader does not need to perform the claims ‘mapping’ to accommodate SD and MMC card types in the same slot.” Invalidity Based On The ‘928 Publication The Commission also reviewed ALJ Essex’s determination that the asserted memory patent claims were not invalid as anticipated. ALJ Essex found that while the’928 Publication is prior art, the Respondents’ arguments in support of invalidity were too cursory to be preserved. The Commission sustained the ALJ’s application of his ground rules that the Respondents’ briefing was too cursory to clearly and convincingly demonstrate invalidity in view of the ‘928 Publication. The Commission also affirmed the ALJ’s determination that the respondents failed to demonstrate that the mapping patents were invalid in view of an additional European Patent and its U.S. counterpart. The dispute regarding these additional patents was whether a SIM card is a “memory card” or “memory media card” within the scope of the patent claims. ALJ Essex concluded that a SIM card is not a memory card. The Commission found that Respondents failed to meet their burden to demonstrate that a person of skill in the art would have understood the claimed “memory media card” to encompass a SIM card. The ‘549 Patent The ’549 patent is directed towards systems and methods in which a “controller chip” determines whether the memory card itself has a controller, and if it does not, the “flash adapter” uses “firmware” to “manage error correction” in the memory card. The accused products were memory card readers that can read “xD” cards in addition to other types of carsd. The principal question was whether detecting the presence of an xD card is sufficient to detect whether a memory card contains a controller. ALJ Essex concluded that sensing an xD card was not detecting a controller and that TPL failed to demonstrate infringement. TPL did not petition for review of ALJ Essex’s finding of non-infringement as to the ‘549 patent and the Commission affirmed this finding of non-infringement. The Domestic Industry Requirement The Commission also reviewed the domestic industry question of whether a showing of articles, protected by the asserted patents, is necessary in order for TPL to demonstrate the existence of a domestic industry under 337(a)(3)(C). Based substantially on the legislative history of the 1988 Act adding subparagraph 337(a)(3)(C), the Commission’s practice had previously been not to require a complainant to demonstrate the existence of articles practicing the asserted patents in the case of a licensing-based domestic industry. In the opinion, the Commission looked to the Federal Circuit’s decisions in InterDigital I, InterDigital II, and Microsoft to determine whether there was an articles requirement for subparagraph 337(a)(3)(C). Based on InterDigital II, the Commission found that the Federal Circuit held that there is an articles requirement for subparagraph 337(a)(3)(C). The Commission also stated that, while InterDigital II requires the existence of an article practicing the patent, the article does not need to be made in the United States. Additionally, the Commission found that in Microsoft the Federal Circuit also held that there is an articles requirement for subparagraph 337(a)(3)(C), at least with regard to domestic industries based upon engineering and research and development. According to the opinion, TPL argued that there is no articles requirement for licensing industries, but did not explain what the “articles” would be in the present investigation, and if they are not present, why they should be excused. The Respondents argued that there should be a distinction between patent-holders who license their patents to enable the production of protected articles, and patent-holders who license to others that already manufacture articles practicing the patent. The Respondents based their argument on the position that an “article protected by” the patent must be a product that either came to market or is expected to come to market “under the umbrella of the asserted patent that the product commercializes.” After reviewing the parties’ arguments, the Commission found that TPL’s arguments were not persuasive, and rejected the Respondents’ invitation to impose a production-driven requirement on licensing-based domestic industries. As to the Respondents’ arguments, the Commission found that the plain meaning of “protected by” did not support the Respondents’ position. Additionally, the Commission found that the Respondents’ position was untenable because it singled out subparagraph 337(a)(3)(C) for special treatment, and invited an inquiry in every investigation as to the motivations of the complainant-licensor, and its licensees, which would be needlessly burdensome and costly to the complainant, its licensees, and the Commission, as well as unreasonably subjective and unwarranted in view of the statutory language and legislative history. The Commission also found that the Respondents confused the domestic industry test with the test for a complainant in the process of establishing domestic industry, and that there was no reason, or legislative intent, to apply this higher burden to showing that a domestic industry exists. Based on the Commission’s determination that a complainant alleging the existence of a domestic industry under subparagraph 337(a)(3)(C) must show the existence of articles, the Commission addressed whether TPL demonstrated the existence of articles. The Commission found that TPL failed to demonstrate the existence of articles practicing the asserted patents. With respect to the ‘623 patent, TPL relied on its’ licensees memory card readers as articles, but the Commission found that TPL failed to demonstrate that these products met the “accessible in parallel” limitation of the ‘623 patent. Accordingly, the Commission found that TPL failed to demonstrate the existence of protected articles practicing the ‘623 patent. For the mapping patents, TPL relied on certain OnSpec products. OnSpec, however, ceased to exist in 2008, and even though TPL sells a small number of OnSpec products, the Commission affirmed ALJ Essex’s determination, and adopted his reasoning, that TPL cannot avail itself of OnSpec’s investments. The Commission stated that, nonetheless, that TPL could have demonstrated the existence of a domestic industry by identifying protected articles that practice the mapping patents and by relying in TPL’s own investments in the mapping patents. The Commission, however, affirmed ALJ Essex’s conclusion that TPL’s arguments were too minimal to meet TPL’s burden of establishing the existence of articles practicing the mapping patents. Therefore, the Commission found that TPL could not demonstrate the existence of a domestic industry. Dissenting Views of Commissioner Aranoff Commissioner Shara L. Aranoff dissented from the Commission’s finding that TPL was required to establish the “technical prong” of the domestic industry requirement in order to show a domestic industry based on licensing activities. Commissioner Aranoff specifically stated that, under subparagraph 337(a)(3)(C), the complainant is not required to prove the existence of articles protected by the relevant patent or other intellectual property right. Commissioner Aranoff based her dissent on the legislative history and congressional intent in the adoption of subparagraph 337(a)(3)(C), previous Commission findings, and the Federal Circuit’s holdings in InterDigital I, InterDigital II, and Microsoft. Commissioner Aranoff found that the Commission’s long-standing interpretation of subparagraph 337(a)(3)(C) has always been in contrast with its practice under 337(a)(3)(A) and 337(a)(3)(B), where a complainant is required to prove that it produces articles that practice at least one claim of each asserted patent. Commissioner Aranoff further argued that the Federal Circuit’s language in InterDigital II was ambiguous on the issue of an articles requirement. Additionally, Commissioner Aranoff argued that the articles requirement established in Microsoft does not address a technical prong requirement for licensing-based industries. Commissioner Aranoff also stated that there should be different proof requirements for industries based on licensing and those based on investment in research and development. Overall, Commissioner Aranoff noted that implementing an articles requirement for a complainant establishing domestic industry under subparagraph 337(a)(3)(C) will end up being advantageous to speedy infringers and well-financed patent assertion entities while harming inventors, small businesses, and start-ups.

Feb

ITC Issues Public Version Of Opinion In Certain Wireless Devices with 3G Capabilities (337-TA-800)

By Eric Schweibenz

Feb

On February 19, 2014, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Wireless Devices with 3G Capabilities and Components Thereof (Inv. No. 337-TA-800). By way of background, this investigation is based on a July 26, 2011 complaint filed on behalf of InterDigital Communications, LLC, InterDigital Technology Corporation, and IPR Licensing (collectively, “InterDigital”) alleging violation of Section 337 by Respondents Huawei Technologies Co., Ltd., FutureWei Technologies, Inc. d/b/a Huawei Technologies (USA), ZTE Corp., ZTE (USA) Inc., and Nokia (collectively, “Respondents”) in the importation into the U.S. and sale of certain wireless devices with 3G capabilities and components thereof that infringe one or more claims of several U.S. patents. See our July 28, 2011 post for more details on the complaint. Further, as summarized in our July 2, 2013 post, ALJ David P. Shaw issued an initial determination (“ID”) finding no violation of Section 337 based on a finding that the accused products do not infringe some claims, and although some claims in other patents were found to be infringed, these claims were determined to be invalid. The Commission determined to review the ID in its entirety. In its September 4, 2013 notice, the Commission solicited briefing from the parties on only a single issue related to domestic industry. See our September 10, 2013 post for more details. As reported in our January 3, 2014 post, the Commission determined to affirm in part and modify in part ALJ Shaw’s ID. We now provide details of the opinion. The opinion addresses patents related to wireless communication devices with Third Generation (“3G”) cellular capabilities and components thereof falling within one of two groups. The first group, the “Power Ramp-Up” patents, included U.S. Patent Nos. 7,706,830 (the ‘830 patent) and 8,009,636 (the ‘636 patent), generally related to the way in which a subscriber unit gains access to a cellular code division multiple access (“CDMA”) system. The second group, the “Power Control” patents, included U.S. Patent Nos. 7,502,406 (the ‘406 patent) and 7,706,332 (the ‘332 patent), generally related to automatic power control for a CDMA system. The Power Ramp-Up Patents ALJ Shaw’s construction of the claim term “successively sends transmissions” was challenged by InterDigital on the basis that the ALJ improperly restricted the plain meaning of the word “transmission.” According to InterDigital, “transmission” means “RF emissions” or “signals,” not “codes shorter than a regular length code,” as construed by the ALJ. The Respondents counter-argued that the ALJ’s interpretation was supported by the intrinsic evidence, expert testimony, and related recent case law. According to the opinion, the Commission agreed with Respondents, and adopted the ALJ’s construction of this term to mean “transmits to the base station, one after the other, codes that are shorter than a regular length code.” Under this claim construction, the ALJ found that the accused products did not meet the limitation of “successively sends transmissions,” and InterDigital challenged the finding of no infringement. The Commission determined that the ALJ’s finding of no infringement was correct, but modified his reasoning to clarify the difference between short codes that do not modulate data (i.e., the codes relevant to the claim term “successively sends transmissions”) and longer codes that could modulate data. Since the accused products do not send short codes that do not modulate data, the finding of no infringement was affirmed. The Power Control Patents ALJ Shaw adopted the Respondents’ proposed construction of the term “power control bit” to mean “single-bit power control information transmitted at an APC data rate equivalent to the APC update rate,” although the ALJ noted that the specifications of the Power Control patents did not use this term. InterDigital challenged the ALJ’s construction, asserting that the plain and ordinary meaning “binary information relating to power control” was the correct construction. Again, the Respondents counter-argued that the ALJ’s interpretation was supported by intrinsic and extrinsic evidence. The Commission determined that the ALJ correctly construed “power control bit” to mean “single-bit power control information,” but found that including the element “transmit at an APC data rate equivalent to the APC update rate” unduly limited the construction in a manner not warranted by the specification. However, this modification did not alter the determination that the accused products did not meet the “power control bit” limitation, and the Commission affirmed the ALJ’s determination that the accused products did not infringe the power control patents. In addition, the Commission adopted without opinion the ALJ’s finding that additional patents (U.S. Patent Nos. 7,970,127, 7,536,013, and 7,616,970) were invalid in view of prior art.

Mar

ITC Issues Public Version Of Opinion In Certain Rubber Resins (337-TA-849)

By Eric Schweibenz

Mar

On February 26, 2014, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Rubber Resins and Processes for Manufacturing Same (Inv. No. 337-TA-849). Due to the size of the opinion, we have divided it into part 1 and part 2. By way of background, this Investigation is based on a May 21, 2012 complaint filed on behalf of SI Group, Inc. (“SI”) alleging violation of Section 337 by a number of Respondents in the importation into the United States, sale for importation, or sale after importation of certain rubber resins by reason of misappropriation of trade secrets. See our May 22, 2012 and June 22, 2012 posts for more details on SI’s complaint and Notice of Investigation, respectively. On June 17, 2013, ALJ Rogers issued his initial determination (“ID”) finding a violation of Section 337, determining that valid trade secrets were misappropriated and that SI demonstrated a valid domestic industry that was injured as a result of the misappropriation. See our June 28, 2013 post for more details on the notice of ID issued by ALJ Rogers. As explained in our September 12, 2013 post, the Commission determined to review the ID in its entirety. In its January 15, 2014 notice, the Commission explained that it was determining to affirm in part and reverse in part the ID and terminating the investigation. See our January 16, 2014 post. We now provide details of the opinion, although most of the substance of the opinion has been redacted. Trade Secret Misappropriation The Commission provided a brief overview of the law of trade secrets, noting that the elements of misappropriation require (1) the existence of a process that is protectable as a trade secret (i.e., that is of economic value, not generally known or readily ascertainable, and has been kept secret); (2) that the complainant owns the trade secrets; (3) that the complainant disclosed the trade secret to respondent while in a confidential relationship or respondent wrongfully acquired the trade secret; and (4) that the respondent has used the trade secret, causing injury to the complainant. The Commission provided a detailed analysis of whether or not the asserted trade secrets could be protectable as trade secrets. The Commission affirmed the ALJ’s findings of no trade secret where the information was disclosed in the literature, generally known, proven to be readily ascertainable via reverse engineering, or did not provide economic value. However, numerous aspects of SI’s process were determined to be trade secrets by the ALJ, and most of these findings were affirmed by the Commission. In particular, the Commission agreed with the ALJ that particular combinations of steps or elements and the overall process were protectable as trade secrets, even if particular steps or elements within the combination were known. That being said, the Commission reversed the ALJ’s findings as to what constituted a trade secret in several instances. The Commission affirmed and adopted all the ALJ’s findings with respect to Respondents’ access to the trade secrets through two high-level employees who signed confidentiality and noncompetition agreements but left to work for Respondents, and thus Respondents wrongfully took SI’s trade secrets by unfair means. This conclusion was supported by strong evidence of copying in one of the employee’s notebooks that was “exact to the thousandth decimal point.” In light of the Commission’s modified determination as to what information constituted a trade secret, the Commission analyzed the technical proofs of misappropriation for each alleged trade secret and reversed the findings of misappropriation in situations where the information was no longer determined to be a protectable trade secret. However, Respondents were determined to have misappropriated numerous individual trade secrets, as well as the trade secret of the overall process. Domestic Industry According to the opinion, in order to find a Section 337 violation based on trade secret misappropriation, SI must show actual substantial injury (or threat thereof) to a domestic industry from the misappropriation. The Commission affirmed the ALJ’s findings as to the existence of a domestic industry based on SI’s resin manufacturing facility and substantial investment in research and development. The Commission also agreed with the ALJ that Respondents have substantially injured the rubber resin industry in the U.S. based on sales information reflecting Respondents’ penetration into the market. In addition to actual injury, the Commission also determined that there is substantial threat to injure or destroy SI’s domestic industry. One particular product, SL-7015, was determined by the ALJ not to result “in any injury or threat to injury to the domestic industry” as the record was devoid of evidence regarding misappropriation of trade secrets related to this product. Although SI argued that it consistently accused this product, the Commission agreed with the ALJ that SI failed to identify any trade secrets for this product or accuse Respondents of misappropriating any specific process. As such, the Commission determined there was no Section 337 violation with respect to this product. Remedy and Bond The Commission determined that Sino Legend ZJG, SLHG Ltd., Sino Legend Marshall Islands, PMI, Red Avenue Hong Kong, Sino Legend HGL, Shanghai Lunsai, and Red Avenue BVI were in violation of Section 337 and subject to a ten year limited exclusion order. The Commission explained that issuance of an exclusion order would not affect the public interest, since it would not have a detrimental impact on domestic production of these products. The Commission also affirmed the ALJ’s recommendation that a bond be entered at 19% of the stated value ($0.22 per pound of imported resin).

ITC Issues Public Version Of Opinion on Remedy, Public Interest, and Bonding In Certain Lighting Control Devices (337-TA-776)

ITC Issues Public Version Of Opinion In Certain Protective Cases (337-TA-780)

ITC Issues Public Version Of Opinion In Certain Automated Media Library Devices (337-TA-746)

ITC Issues Public Version of Opinion in Certain Polyimide Films (337-TA-772)

ITC Issues Public Version Of Opinion In Certain Incremental Dental Positioning Adjustment Appliances (337-TA-562)

ITC Issues Opinion and Order In Certain Ground Fault Circuit Interrupters (337-TA-739)

ITC Issues Public Version Of Opinion In Certain Wiper Blades (337-TA-816)

ITC Issues Public Version Of Opinion In Certain Microprocessors (337-TA-781)

ITC Issues Public Version Of Opinion on Remedy, Public Interest, and Bond In Certain Digital Photo Frames And Image Display Devices (337-TA-807)

ITC Issues Opinion Reversing Initial Determinations And Remanding For Further Proceedings In Certain Wiper Blades (337-TA-816)

ITC Issues Public Version Of Opinion Affirming No Violation of Section 337 In Certain Wireless Communication Devices (337-TA-745)

ITC Issues Public Version Of Opinion Affirming No Violation Of Section 337 In Certain Devices For Improving Uniformity Used In A Backlight Module (337-TA-805)

ITC Issues Public Version of Opinion In Certain Electronic Devices Including Wireless Communication Devices, Portable Music And Data Processing Devices, And Tablet Computers (337-TA-794)

ITC Issues Opinion Reversing Determination Of No Section 337 Violation In Certain Kinesiotherapy Devices (337-TA-823)

ITC Issues Public Version Of Opinion In Certain Toner Cartridges (337-TA-829)

ITC Issues Public Version Of Opinion Finding No Section 337 Violation In Certain Products Having Laminated Packaging (337-TA-874)

ITC Issues Opinion In Certain Video Game Systems and Wireless Controllers (337-TA-770)

ITC Issues Public Version of Opinion in Certain Computers and Computer Peripheral Devices (337-TA-841)

ITC Issues Public Version Of Opinion In Certain Wireless Devices with 3G Capabilities (337-TA-800)

ITC Issues Public Version Of Opinion In Certain Rubber Resins (337-TA-849)

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