By Eric Schweibenz
On November 24, 2009, the International Trade Commission issued its opinion on the issues of remedy, the public interest, and bonding in Certain Liquid Crystal Display Modules, Products Containing Same, and Methods Using the Same (Inv. No. 337-TA-634).

By way of background, the Complainant in this investigation is Sharp Corporation (“Sharp”) and the Respondents are Samsung Electronics Co., Ltd., Samsung Electronics America, Inc. (“SEAI”), and Samsung Semiconductor, Inc. (“SSI”) (collectively, “Samsung”).  The Commission instituted this investigation based on a March 4, 2008 complaint filed by Sharp alleging violations of Section 337 based on the importation into the U.S., the sale for importation, and the sale within the U.S. after importation of certain liquid crystal display devices, products containing same, and methods for using the same by reason of infringement of certain claims of U.S. Patent Nos. 6,879,364 (the ‘364 patent), 6,952,192 (the ‘192 patent), 7,304,703 (the ‘703 patent), and 7,304,626 (the ‘626 patent).  On June 12, 2009, Chief ALJ Paul J. Luckern issued an Initial Determination (“ID”) finding a violation of Section 337.  See our June 16 and August 7 posts for more details.  On September 9, 2009, the Commission issued a notice of its determination not to review the ID and requested written submissions on the issues of remedy, the public interest, and bonding.  See our September 11 post for more details.

On November 9, 2009, the Commission issued a notice of Final Commission Determination of Violation; Issuance of a Limited Exclusion Order and Cease and Desist Orders; and Termination of the Investigation.  See our November 10 post for more details.  Specifically, the Commission determined that the appropriate form of relief is both 1) a limited exclusion order prohibiting the unlicensed entry of LCD devices, including display panels and modules, and products containing the same that infringe one or more of (i) claims 5-7 of the ‘364 patent; (ii) claims 1 and 4 of the ‘192 patent; (iii) claims 1-2, 6-8, 13-14, and 16-17 of the ‘703 patent; and (iv) claims 10, 17, and 20 of the ‘626 patent, where the infringing LCD devices are manufactured abroad by or on behalf of, or are imported by or on behalf of, related business entities, or successors or assigns; and (2) cease and desist orders prohibiting SEAI and SSI from conducting any of the following activities in the United States:  importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), and soliciting U.S. agents or distributors for, LCD devices, including display panels and modules, and products containing the same that infringe one or more of the aforementioned claims of the patents-in-suit.

In its opinion, the Commission adopted ALJ Luckern’s analysis as to how the EPROMs factors support inclusion in the relief of downstream Samsung products, including computer monitors, that contain infringing LCD devices.  With respect to bonding, the Commission noted its agreement with ALJ Luckern’s determination that 100 percent bond is appropriate in this matter.  In particular, the Commission held in the opinion that “[w]e see no reason to deviate from our practice of imposing a 100 percent bond where there is insufficient evidence in the record to determine a reasonable royalty rate, and the record indicates that the calculation of a price differential is impractical.”   The Commission also determined in its opinion that the public interest factors do not preclude issuance of the limited exclusion order or the cease and desist order.  In this respect, the Commission noted that   “[n]othing in the evidentiary record indicates that Sharp and others cannot meet the demand for the types of LCDs devices at issue” and “the ALJ found that there were numerous LCD suppliers who could supply the U.S. market.”  The Commission noted that it included a certification provision in the limited exclusion order allowing importation of Samsung-branded TVs, computer monitors, and professional displays that contain other manufacturers’ LDC panels and modules, e.g., those LCD devices not produced by, or on behalf of, Samsung.  According to the opinion, this certification provision “will ease the burden both on legitimate trade and on U.S. Customs’ enforcement of the exclusion order.”