07
Dec
By Eric Schweibenz
On December 1, 2010, ALJ E. James Gildea issued the public version of Order No. 58 (dated November 18, 2010) in Certain Electronic Devices, Including Mobile Phones, Portable Music Players, and Computers (Inv. No. 337-TA-701).  In the Order, ALJ Gildea made an Initial Determination (“ID”) granting Complainants Nokia Corporation and Nokia, Inc.’s (collectively “Nokia”) motion for summary determination that the economic prong of the domestic industry requirement has been satisfied.

According to the Order, Nokia argued that a number of demonstrative products practice the six asserted patents in this Investigation.  Respondent Apple, Inc. (“Apple”) opposed the motion, arguing that (1) for at least three of the six asserted patents, Nokia discontinued sales of its products and was no longer carrying on any substantial domestic activities related thereto; (2) genuine issues of material fact, a failure evidence, and/or credibility concerns existed regarding each of the domestic investments claimed by Nokia for each of the asserted patents; (3) Nokia asserted new contentions regarding previously undisclosed research and development expenditures for one of its products and the number of units held in inventory; and (4) Nokia’s claimed expenditures on the payment of warranty claims, including service and repair, were without merit because Nokia’s research and development expenditures should be disregarded.  The Commission Investigative Staff supported Nokia’s motion.

ALJ Gildea declined as a matter of law to give credence to Apple’s “pro forma objections” that Nokia failed to give a precise accounting or provide underlying documentation for sworn witness testimony, and likewise rejected Apple’s objections and arguments concerning the point in time when a domestic industry must be measured, observing that “[t]here are no hard and fast rules with respect to domestic industry, and the threshold for meeting the economic prong is relatively low” since “the examination of domestic industry is not solely jurisdictional,” but instead entails “whether the Commission may provide a remedy.”  ALJ Gildea noted that while it was not clear whether all of the evidence relating to program costs and “swap” inventory figures for one of Nokia’s products was timely disclosed, that evidence that was consequently not considered did not affect the outcome of Nokia’s motion.  In particular, ALJ Gildea found that the timely disclosure of the existence of a domestic warehouse that maintains a “swap” inventory of the Nokia products is relevant to proving on-going warranty repair activity.  Taken as a whole, ALJ Gildea found that (1) the research and development expenditures for various models of the Nokia products demonstrated a sufficiently focused and concentrated effort to support a finding of a substantial investment in exploitation of the patents-in-suit; (2) the undisputed facts showed that the Nokia products were being developed, sold, repaired/under warranty, and/or maintained in inventory in the U.S. at the time the Complaint was filed; and (3) while Nokia’s domestic industry in the products in question may be waning, it currently maintains at least some of the aforementioned activities.  However, ALJ Gildea made no finding at this time as to whether the Nokia products practice the asserted patents.
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